In a detailed and often intense hearing, the Supreme Court on Friday settled a long-standing confusion about where cheque dishonour cases should be tried after the 2015 amendments to the Negotiable Instruments Act. The bench led by Justice J.B. Pardiwala took up multiple transfer petitions filed by Jai Balaji Industries Ltd. seeking to move a case from Bhopal to Kolkata, arguing that earlier proceedings there had already reached the evidence stage.
The Court’s judgment not only resolves this case but also provides a significant interpretation of the law that affects lakhs of cheque bounce matters across India. As one lawyer remarked during the hearing, “This clarity was overdue, otherwise every litigant was stuck between two cities.”
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Background
The dispute began with a cheque of Rs. 19,94,996, issued by Jai Balaji Industries to HEG Ltd., which bounced in June 2014 due to insufficient funds. Following the statutory notice and reply, HEG initially filed a complaint in Kolkata, where the magistrate even recorded the complainant’s evidence.
However, once the 2015 NI Act Amendment came into force-changing jurisdiction to the location of the payee’s bank branch-the Kolkata court returned the complaint. HEG refiled the case in Bhopal, where it maintains its bank account. Jai Balaji objected, arguing that since evidence had already begun in Kolkata, the complaint could not legally be moved.
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Court’s Observations
The bench delivered an exhaustive explanation of jurisdiction law-almost a crash course in the history of Section 138 litigation.
Justice Pardiwala walked through earlier landmark rulings: Bhaskaran, Harman Electronics, and the influential Dashrath Rupsingh Rathod, which had drastically limited jurisdiction to the place of the drawee bank.
But Parliament reversed that position in 2015.
Highlighting this, the Court said the amendment “was a conscious legislative response” to restore convenience for the payee. The bench observed, “The Explanation to Section 142(2)(a) introduces a legal fiction ensuring that delivery of a cheque at any branch is deemed delivery at the home branch.”
This means payees cannot indulge in forum shopping by depositing cheques at distant branches; jurisdiction is fixed at the home branch of the payee, regardless of which branch actually received the cheque.
The Court also emphasised that delivery and presentment are two different acts:
- Delivery covers handing over the cheque to the payee or their bank.
- Presentment refers to presenting the cheque to the drawee bank for payment.
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Because the 2015 amendment focuses on delivery, account-payee cases fall under Section 142(2)(a), fixing jurisdiction at the payee’s bank branch.
The bench said candidly, “We cannot assume Parliament intended to revive the very confusion that Dashrath sought to limit. The amended provision must be read harmoniously to avoid abuse.”
Decision
The Supreme Court ultimately held that Bhopal-the location of the complainant HEG Ltd.’s bank branch-has the correct jurisdiction to try the case.
The Court rejected Jai Balaji Industries’ attempt to shift proceedings back to Kolkata, noting that the legislative amendment applied squarely and left no room for transferring the case based on earlier partial evidence recording.
With this, the transfer petitions were dismissed, and the Supreme Court confirmed that the complaint will continue before the Judicial Magistrate First Class, Bhopal.
Case Title: Jai Balaji Industries Ltd. & Ors. vs. M/s HEG Ltd.
Case No.: Transfer Petition (Criminal) No. 1099 of 2025 (with connected T.P. Nos. 1100, 1101, 1102)
Case Type: Criminal Transfer Petition (Cheque Dishonour / NI Act – Section 138 Jurisdiction)
Decision Date: 2025
