Dishonour of Cheque – Territorial Jurisdiction

The issue of territorial jurisdiction under Section 138 Negotiable Instruments Act was considered by the Hon’ble Supreme Court in K. Bhaskaran v. Shankaran Vaidhyan Balan, (1999) 7 SCC 510. The Hon’ble Supreme Court observed that the following five acts are essential to constitute an offence under Section 138 of the NI Act and if these five different acts were done in five different localities, any one of the Courts exercising jurisdiction in one of the five local areas can become the place of trial for offence under Section 138 of the Act:
“(1) Drawing of the cheque;
(2) Presentation of the Cheque to the Bank;
(3) Return of the Cheque unpaid by the Drawee Bank;
(4) Giving notice in writing to the drawer of the cheque demanding payment of the cheque amount; and
(5) Failure of the drawer to make payment within 15 days of the receipt of notice.” Ram Chandra Agarwal v. State of U.P., 2013 (82) ACC 886.

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Filed under Negotiable Instruments Act, Territorial Jurisdiction

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