Introduction
The question of where a complaint should be filed in cheque bounce cases under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) has long vexed litigants and courts. In a pivotal 2025 decision in Prakash Chimanlal Sheth vs. Jagruti Keyur Rajpopat, 2025 INSC 897, the Supreme Court of India provided much-needed clarity by establishing that jurisdiction lies with the court where the payee's bank account is maintained, not the branch where the cheque is physically deposited.
Background: The Jurisdictional Confusion
Historically, complainants and legal advisors faced uncertainty about venue selection. When cheques could be deposited at multiple branches—thanks to core banking and digital platforms—the practical question grew complex: Should cases be filed where the deposit occurred, where the payee’s account exists, or where the drawer’s account is located? This confusion led to forum shopping, case returns, and delays in justice.
The Supreme Court’s Ruling Explained
In the 2025 case, the complainant deposited bounced cheques at a Mumbai branch, but his account existed at Kotak Mahindra Bank, Bendurwell, Mangalore. Lower courts erroneously insisted that jurisdiction lay in Mumbai. The Supreme Court examined Section 142(2)(a) of the NI Act, which states:
“If the cheque is delivered for collection through an account, the branch of the bank where the payee maintains the account is situated.”
The Supreme Court overturned prior judgments, ruling that jurisdiction for filing a Section 138 complaint is anchored to the location of the payee’s bank account—regardless of the physical deposit site.
Key Features of the Ruling
Judicial Reasoning and Precedent
The Court’s analysis referenced Bridgestone India Pvt. Ltd. vs. Inderpal Singh, affirming that the law’s plain language prioritizes the payee’s banking location. This resolves lower court inconsistencies and aligns legal practice with the realities of modern banking.
By distinguishing between physical deposit and account maintenance, the Supreme Court recognized core banking’s impact, where deposits are instantly routed to an account regardless of city or branch. Thus, courts must look beyond the deposit location and focus on where the payee actually maintains the account.
Conclusion
The 2025 Supreme Court judgment in Prakash Chimanlal Sheth vs. Jagruti Keyur Rajpopat is a defining moment for cheque bounce litigation under Section 138 NI Act. By affirming that territorial jurisdiction lies where the payee’s account is maintained, the Court has embraced contemporary banking norms, prevented jurisdictional confusion, and made justice more accessible and predictable for all parties
