Section 142(2)(a): Cheque Dishonour Complaints Must Be Filed at Payee's Home Branch Jurisdiction

The HC held that under Section 142(2)(a) of the Act, the home branch where the payee holds the account is the proper jurisdiction for filing a cheque dishonour complaint, even if the cheque was presented at another branch. The trial court erred by returning the complaints without considering the affidavit submitted by the petitioner detailing the account particulars and without affording an opportunity to produce evidence, violating natural justice. The HC allowed the petitions and restored the matters to the trial court for further proceedings in accordance with law.

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ISSUES:

Whether the Court where the payee or holder in due course maintains the bank account has jurisdiction to try an offence under Section 138 of the Negotiable Instruments Act, 1881, when the cheque is presented for collection at a different branch of the same bank.Whether the trial Court was correct in returning the complaints on the ground that the cheques were issued, presented, and dishonoured at a different location, without considering the affidavit filed by the complainant regarding the home branch of its bank account.Whether the trial Court's order returning the complaints without giving an opportunity to produce proof of account particulars violates principles of natural justice.

RULINGS / HOLDINGS:

The Court held that under Section 142(2)(a) of the Negotiable Instruments Act, 1881, "the home branch where [the payee] holds his account shall be deemed to be the branch where the cheque is presented for collection," thus conferring jurisdiction to try the offence to the Court within whose local jurisdiction the home branch is situated.The trial Court erred in returning the complaints on jurisdictional grounds without referring to the affidavit filed by the petitioner and without giving an opportunity to produce proof of account particulars.The impugned orders returning the complaints were found to be "violative of principles of natural justice and contrary to Section 142(2) of the Act," and therefore were quashed.

RATIONALE:

The Court applied Section 142(2) of the Negotiable Instruments Act, 1881, as amended by Amendment Act No. 26/2015, which restricts the jurisdiction to try offences under Section 138 to courts within whose local jurisdiction the relevant bank branch is situated.The Explanation to Section 142(2)(a) clarifies that if a cheque is delivered for collection at any branch of the payee's bank, the cheque shall be deemed to have been delivered to the branch where the payee maintains the account, thereby establishing jurisdiction.The Court emphasized adherence to procedural fairness by requiring the trial Court to consider the affidavit filed by the complainant and to provide an opportunity to produce evidence before deciding on jurisdictional issues, reflecting principles of natural justice.There was no dissent or doctrinal shift; the Court followed established statutory interpretation and precedent, including reliance on judgments affirming the home branch jurisdiction principle.

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