Citation: Criminal Appeal No. 2287 of 2009
Date: August 1, 2014
Bench: Justice Vikramajit Sen & Justice C. Nagappan
Reported: (2014) 9 SCC 129
Facts: The Supreme Court’s decision in Dashrath Rupsingh Rathod v. State of Maharashtra & Anr. (2014) 9 SCC 129 arose from a series of appeals challenging the territorial jurisdiction of criminal courts in dishonour-of-cheque prosecutions under Section 138 of the Negotiable Instruments Act, 1881. The complainant had presented a dishonoured cheque at one jurisdiction, but the drawer contended that the complaint should only lie where the drawer’s bank—that is, drawee bank—had dishonoured the cheque. The trial court, located at the place of presentation, initially assumed jurisdiction, but this was reversed by the Bombay High Court, which held that only the court within whose territorial limits the drawee bank branch resided had jurisdiction. The appeals culminated before the Supreme Court to resolve conflicting interpretations nationwide.
Issues: The case presented two primary issues for Supreme Court determination. First, whether territorial jurisdiction in Section 138 NI Act cases arises where the cheque was dishonoured by the drawee bank—or whether other acts such as presentation, issuance of statutory notice, or delivery of the instrument could independently confer jurisdiction—thereby enabling forum shopping. Second, whether the offence under Section 138 is a continuing offence such that jurisdiction could lie in multiple places where constituent acts occurred, or must be confined to a single, legally coherent venue.
Law: Section 138 NI Act makes dishonour of cheque a statutory criminal offence, contingent upon several procedural stages: issuance, presentation, dishonour, statutory notice, and failure of payment within 15 days. Section 177 CrPC mandates that offences be tried where they are committed. Prior precedent—especially K. Bhaskaran v. Sankaran Vaidhyan Balan (1999)—had treated Section 138 as a continuing offence, allowing a complaint to be filed in any jurisdiction where any component act occurred, including where the cheque was issued, presented, dishonoured, notice issued, or payment default occurred. While Bhaskaran sought to broaden access to justice, it inadvertently encouraged forum shopping and fragmented jurisdictional consistency.
Application: The Supreme Court, in a Bench including Justices T.S. Thakur, Vikramajit Sen, and C. Nagappan, undertook a detailed statutory analysis. It held that a Section 138 offence is not a continuing offence under Section 179 CrPC. Rather, the offence stands completed only at a single location—where the cheque is dishonoured by the drawee bank. The Supreme Court emphasized that “the return of the cheque by the drawee bank would alone constitute commission of the offence under Section 138 of the Act of 1881 and would indicate the place where the offence is committed,” making that the sole venue for trial. The Court expressly overruled the multiple-jurisdiction approach of Bhaskaran, remarking that acts of presentation, notice issuance, or payment default are merely steps toward offence completion and cannot independently confer jurisdiction.
Regarding ongoing cases filed in courts lacking the proper territorial connection, the Court directed that such cases be returned to the complainant to refile them in the correct jurisdiction within 30 days, provided they were not time-barred. Evidence-recording under Section 145(2) had begun in some cases; the Court permitted those to proceed to avoid retrials and procedural upheaval.
This approach aligned Section 138 enforcement with Section 177 CrPC’s territorial logic, reduced litigation over jurisdiction, and eliminated opportunities for forum shopping, ensuring that only the branch of the drawee bank where dishonour occurred had the proper venue for trials.
Conclusion: In Dashrath Rupsingh Rathod, the Supreme Court conclusively held that territorial jurisdiction in dishonoured cheque cases under Section 138 lies exclusively in the court within whose limits the drawee bank branch resides. That is where the offence is committed, when the cheque is dishonoured—presentation, notice, or issuance locale bears no independent relevance. The Court’s direction to return improperly filed cases to be re-presented in appropriate courts streamlined judicial administration and fairness. This unanimous ruling has since remained a touchstone in territorial jurisdiction jurisprudence under the NI Act. Subsequently, recognizing certain practical difficulties for complainants, Parliament enacted the Negotiable Instruments (Amendment) Act, 2015, introducing Section 142(2), which moderates the strict rule by allowing jurisdiction at the branch of the payee’s bank where the cheque was presented for collection, thereby partly tempering Dashrath Rupsingh Rathod’s rigid jurisdictional stance