In a major ruling, the Madras High Court has made it clear that a complaint of cheque dishonour is maintainable only at the place where the drawee bank is situated.
Justice S.Vaidyanathan said as per a Supreme Court ruling and Sections 138 and 142 of the Negotiable Instruments (NI) Act, a complaint is maintainable only at the place where the cheque stood dishonoured.
The Judge passed the order on a petition by one T.Thirumalai Nambi. The petitioner presented a cheque issued by Grishi Mango Products and Exports Tamil Nadu Pvt. Ltd., for encashment at the Karur Vysya Bank at the Tallakulam branch in Madurai. The cheque had been drawn at the bank’s branch at Erode. It was dishonoured stating that the balance in the account was insufficient. Mr.Nambi filed a complaint before the Judicial Magistrate, FTC, Madurai.
In September last year, the Magistrate returned the complaint stating that it should be presented only at Erode.
Counsel argued that though the cheque had been drawn at Erode, it could be presented at any of the branches of the bank. As the cheque was dishonoured at Madurai, that should be considered as the jurisdictional point.
Mr.Justice Vaidyanathan said it was true that the cheque was payable at par at all the bank's branches. However, the amount is to be paid only from the account of the person who had issued the cheque. Before encashing the cheque payable at par, the non-home branch was still required to verify from the home branch as to whether or not there was any impediment in encashing the instrument.
Therefore, the honouring or dishonouring of the cheque would be by the home branch alone. Hence, the place where the drawee branch was situated will be the jurisdiction to try the offence.
The Judge dismissed the petition as he did not find any irregularity in the magistrate's order.
Justice S.Vaidyanathan said as per a Supreme Court ruling and Sections 138 and 142 of the Negotiable Instruments (NI) Act, a complaint is maintainable only at the place where the cheque stood dishonoured.
The Judge passed the order on a petition by one T.Thirumalai Nambi. The petitioner presented a cheque issued by Grishi Mango Products and Exports Tamil Nadu Pvt. Ltd., for encashment at the Karur Vysya Bank at the Tallakulam branch in Madurai. The cheque had been drawn at the bank’s branch at Erode. It was dishonoured stating that the balance in the account was insufficient. Mr.Nambi filed a complaint before the Judicial Magistrate, FTC, Madurai.
In September last year, the Magistrate returned the complaint stating that it should be presented only at Erode.
Counsel argued that though the cheque had been drawn at Erode, it could be presented at any of the branches of the bank. As the cheque was dishonoured at Madurai, that should be considered as the jurisdictional point.
Mr.Justice Vaidyanathan said it was true that the cheque was payable at par at all the bank's branches. However, the amount is to be paid only from the account of the person who had issued the cheque. Before encashing the cheque payable at par, the non-home branch was still required to verify from the home branch as to whether or not there was any impediment in encashing the instrument.
Therefore, the honouring or dishonouring of the cheque would be by the home branch alone. Hence, the place where the drawee branch was situated will be the jurisdiction to try the offence.
The Judge dismissed the petition as he did not find any irregularity in the magistrate's order.
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