In case of bounced cheque the magistrate in the place where the cheque was drawn and where the drawee bank is situated has jurisdiction to deal with the complaint
Shree Raj Travels & Tours Ltd. & Ors. Vs. Destination Of The World (Subcontinent) Private Ltd (Delhi High Court)
In a case of bounced cheque, the Delhi high court has ruled that the magistrate in the place where the cheque was drawn and where the drawee bank is situated has jurisdiction to deal with the complaint. The power under the Negotiable Instruments Act is not with the magistrate where the cheque was presented or from where the notice was issued to the offending party. Shree Raj issued some 45 cheques drawn on State Bank of India in Mumbai to Destination of the World in New Delhi. When the payee company presented them to ICICI Bank in Delhi, they were dishonoured by bank for want of funds. The Delhi company sent 15 days’ notice to the Mumbai firm, as required by law before complaining to the magistrate. As the payment was still not made, a complaint was filed before a Delhi magistrate by the Delhi firm against the Mumbai firm and six of its directors. Shree Raj contested the jurisdiction of the Delhi magistrate, arguing that it was Mumbai where the complaint had to be filed as the cheques were drawn on the bank there. Merely because the cheques were presented in Delhi and notice was issued from Delhi did not give the Delhi magistrate jurisdiction. The high court asked the magistrate to return the complaint. It also remarked that due to electronic clearing in recent times, the situation has changed. However, the changed scenario will be taken note of in an appropriate case in future.