Which court has jurisdiction to hear a cheque bounce case under Section 138?

The Negotiable Instruments (Amendment) Act, 2015 inserted Section 142A, which definitively settled jurisdiction after the Supreme Court's controversial ruling in Dashrath Rupsingh Rathod v. State of Maharashtra, (2014) 9 SCC 129.

The current rule (Section 142(2) NI Act, as amended): The offence under Section 138 is deemed to have been committed at the place where the cheque is delivered for collection — that is, the branch of the payee's bank where the cheque is deposited. This determines which Magistrate Court has jurisdiction.

Practical examples:

• A Delhi-based payee deposits a Mumbai-drawn cheque into their Delhi account → jurisdiction: Delhi.
• A Bengaluru supplier deposits a Chennai buyer's cheque into their Bengaluru HDFC account → jurisdiction: Bengaluru.
• A payee in Hyderabad deposits a cheque into their Hyderabad account, even though the drawer's account is in Pune → jurisdiction: Hyderabad.

The drawer's state, the drawer's bank branch, and the place of the transaction are all irrelevant to jurisdiction under the current rule.

The 2015 amendment was accompanied by a transition provision under Section 142A(1)–(2) NI Act. Cases that were already filed in a court that had jurisdiction under the pre-amendment interpretation (drawer's bank city per Dashrath Rupsingh Rathod) were to be transferred to the court of the payee's bank jurisdiction. Transfer applications were to be filed within the prescribed period.

For any case filed after the 2015 amendment came into force (December 2015), the new rule applies from the outset. There are no grandfathering exceptions for post-2015 filings.

Transfer petitions: Where a case was filed in the wrong court (or where jurisdiction is in genuine dispute), the accused can file a transfer petition under Section 407 BNSS before the High Court, or the complainant can apply under Section 142A directly before the Magistrate. Courts have been generally willing to transfer rather than dismiss — the case does not fail merely because it was filed in the wrong court post-2015; it is transferred to the correct court.

Where the same complainant has multiple dishonoured cheques from the same drawer (common in EMI or instalment arrangements), the question arises whether all complaints can be filed in one court or must be split.

General rule: Each dishonoured cheque is a separate offence under Section 138. Separate complaints can be filed for each. However, where the jurisdiction for all cheques is the same (all deposited in the same bank branch city), a consolidated complaint or simultaneous filings in the same court is efficient and avoids multiple parallel proceedings.

Clubbing applications: Where multiple cases are filed in the same court against the same accused for related cheques, the complainant or accused can apply to have them clubbed (heard together) to save costs and ensure consistent outcomes. Courts regularly grant this in high-volume instalment default cases.

Different bank branches in the same city: Where the payee has multiple bank accounts in different branches within the same city (e.g., HDFC Connaught Place and SBI Lajpat Nagar in Delhi), each branch deposit is technically a different place of offence — but practically courts treat them as falling within the same city/Magistrate court jurisdiction.

Modern banking creates edge cases for jurisdiction that courts are still resolving:

Online banking deposits (cheque image truncation): Under the Cheque Truncation System (CTS), cheques deposited through an ATM or mobile banking app are processed digitally at a clearing house. Courts have generally held that jurisdiction runs to the city of the payee's home branch (the bank account branch), not the clearing house location.

NACH/ECS mandate dishonours: An NACH (National Automated Clearing House) or ECS mandate is not a cheque under the NI Act. Dishonour of a NACH mandate is a civil matter (breach of contract, loan agreement) — it does not attract Section 138. The payee must pursue civil recovery or banking ombudsman routes for NACH failures. This is a common mistake that leads to wasted notice costs.

Demand drafts and pay orders: These are instruments drawn by a bank on itself. The drawer is the bank, not the remitter. Section 138 generally does not apply to demand drafts because the 'drawer' (the bank) cannot be prosecuted under Section 138 — the underlying relationship is between the remitter and the payee.

Cheques presented through third-party mobile apps: CTS clearing still runs through bank branches; jurisdiction is the same as the payee's branch city.