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        2022 (8) TMI 1049 - HC - Indian Laws

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        Territorial jurisdiction for cheque dishonour complaints follows the payee's account branch when presented for collection through that account. Section 142(2)(a) of the Negotiable Instruments Act, 1881 provides territorial jurisdiction to the court within whose local limits the branch of the bank ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                            Territorial jurisdiction for cheque dishonour complaints follows the payee's account branch when presented for collection through that account.

                            Section 142(2)(a) of the Negotiable Instruments Act, 1881 provides territorial jurisdiction to the court within whose local limits the branch of the bank where the payee or holder in due course maintains the account is situated, where a cheque is delivered for collection through that account. The statutory rule applies to cheques presented through the payee's account and does not create any jurisdictional distinction between bearer cheques and account payee or crossed cheques. Where the cheque is collected through the relevant account and dishonour intimation is received through that branch, the complaint is triable in that court.




                            Issues: Whether a complaint under section 138 of the Negotiable Instruments Act, 1881 was triable at the place where the payee maintained the account when the cheque was delivered for collection through that account, and whether any distinction between bearer cheque and account payee cheque affected territorial jurisdiction.

                            Analysis: Section 142(2)(a) of the Negotiable Instruments Act, 1881 confers jurisdiction on the court within whose local jurisdiction the branch of the bank where the payee or holder in due course maintains the account is situated, where the cheque is delivered for collection through an account. The statutory text does not create any jurisdictional distinction between bearer cheques and account payee or crossed cheques. The cheque was presented through the petitioner's account at Hojai, and dishonour intimation was also received through that bank branch, bringing the matter within the territorial jurisdiction of the Hojai court.

                            Conclusion: The complaint was triable at Hojai, and the order dismissing it for want of territorial jurisdiction was unsustainable. The petitioner succeeded and the matter was remanded for decision in accordance with law.

                            Ratio Decidendi: For a cheque presented for collection through the payee's account, territorial jurisdiction under section 142(2)(a) lies with the court where that account is maintained, and the cheque's character as bearer or crossed does not alter that jurisdictional rule.


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                            ActsIncome Tax
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