Negotiable Instruments Act Does Not Classify Cheques As Bearer Or Account Payee; Jurisdiction Lies Where Cheque Is Delivered For Collection: Gauhati HC

The Gauhati High Court has made it clear that in offences made out under Section 138 of the Negotiable Instruments Act, the territorial jurisdiction of the Court will be where the cheque is delivered for collection. Justice Robin Phukan further added that no classification of cheque, as bearer or cross cheque/account payee cheque is made in the NI Act, for the purpose of jurisdiction."From the word 'any cheque', used in section 138, it can be well inferred that it may be an account payee cheque or a bearer cheque, dishonor of which on account of insufficiency of fund or exceed the amount would amount to an offence and would attract the penalty," it said.The observation was made while dealing with a revision petition against the order of trial court dismissing the Petitioner's complaint on the ground that since cheque of the petitioner is a bearer cheque, the court within whose jurisdiction the accused has an account has the jurisdiction.As per the trial court, case of a cross cheque or account payee cheque, the court within whose jurisdiction the complainant has an account has the jurisdiction and in case of bearer cheque the court where the accused has an account will have the jurisdiction.Disagreeing with this proposition, the High Court held that a cursory perusal of Section 142(2) NI Act makes it abundantly clear that no classification of cheque, as bearer or cross cheque/account payee cheque is made thereunder."As such no classification of cheque can be made for the purpose of jurisdiction, being not provided in the Act".In the present case, the cheque was issued by the defendant in favour of the Petitioner, having his bank account at SBI's Hojai Branch, in discharge of a debt. The same was returned dishonored with an endorsement of 'account closed.' The High Court said,"Being the holder of the cheque, and having his account maintained at State Bank of India, Hojai Branch, the petitioner had presented the cheque there for collection. He received the intimation about dishonor of the cheque in question through the State Bank of India, Hojai Branch. Thus, in view of the provision of section 142(2)(a) of the N.I. Act, the Court at Hojai which has jurisdiction to try the same. There is no quarrel at the Bar in this regard, that in view of section 142(2) (a) of the said Act, the learned court below has the jurisdiction to try the offence. Of course, the position would have been quite different if the petitioner had no account at Hojai."Accordingly, the matter was remanded back to the court below with a direction to proceed with the same in accordance with law.CASE TITLE: NADRESS TU v. THE STATE OF ASSAM AND ANRCitation: 2022 LiveLaw (Gau) 51 Click Here To Read Order

Negotiable Instruments Act Does Not Classify Cheques As Bearer Or Account Payee; Jurisdiction Lies Where Cheque Is Delivered For Collection: Gauhati HC

Padmakshi Sharma

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