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According to Section 138, where any cheque drawn by a person on an account maintained by him is returned by the Bank unpaid for reasons mentioned u/s-138, such person shall be deemed to have committed an offence.
The Supreme Court, in its judgment dated 1st August, 2014, in the case of Dashrath Rupsingh Rathod versus State of Maharashtra and another (Criminal Appeal No. 2287 of 2009) , held that the territorial jurisdiction for dishonour of cheques is restricted to the court within whose local jurisdiction the offence was committed, which in the present context is where the cheque is dishonoured by the bank on which it is drawn.
The main amendment included in this is the stipulation that the offence of rejection/return of cheque u/s 138 of NI Act will be enquired into and tried only by a Court within whose local jurisdiction the bank branch of the payee, where the payee presents the cheque for payment is situated.
G S Rao Introduction: Sections 138 to 142 of Negotiable Instruments Act,1881(NI Act) which deal with offence and prosecution for dishonour cheques were brought into force with effect from April 1, 1989 by Section 4 of the Banking Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988.
The issue of dishnour of ‘At Par” cheques needs attention in view of the fact the cheque really does not travel to the drawee bank’s place unlike in olden days. Now clearances are done through electronic transfers. Keeping this in view, strict interpretation followed in Dashrath Rathod case may be relaxed in public interest. Apex court may also take into view that this relaxation does not result in multiplicity of complaints.
Honourable Supreme Court has held in the case of Dashrath Rupsingh Rathod Vs. State of Maharashtra & Anr. that all the pending cases of cheque bouncing under Negotiable Instrument Act to be transferred to the place from the cheque is issued.
Notice via email also- MM/JM should adopt a pragmatic and realistic approach while issuing summons. Summons must be properly addressed and sent by post as well as by e-mail address got from the complainant.
The Payment and settlement System Act, 2007 was enacted on 20th December, 2007. The whole purpose of this act is to control the transactions which are made electronically. The intention of the government was to introduce of this act to increase the transactions through online instead of cheques.
Under these circumstances, the appeal deserves to be allowed and process in Criminal Case No. 1171/SS/2009 pending before the Court of learned Metropolitan Magistrate 13th Court, Dadar, Mumbai deserves to be quashed, accordingly, quashed against the appellant herein. The appeal is allowed.
According to statistics of Supreme Court; there are over 40 lakh pending cases of cheque bounce in the country. Lack of adequate knowledge has brought most of people in the situation of losing money. Here are some of the remedies a person can opt for while dealing with issues pertaining to return of cheque:
