The Supreme Court has ruled that cheque bounce complaints under Section 138 NI Act must be filed only in the court where the payee’s bank home branch is located, clarifying jurisdiction after the 2015 amendment and preventing forum shopping.
The Supreme Court slammed the appellate court’s “shocking” move of cancelling bail and issuing an NBW against a woman despite her appeal pending for eight years. Citing serious procedural lapses and her medical condition, the Court ordered her immediate release on interim bail.
The Supreme Court flagged the “staggeringly high” pendency of cheque bounce cases in metro courts and issued fresh guidelines for quicker resolution. The new rules allow voluntary compromises, graded penalties, and probation benefits to ease the strain on the judicial system.
The Supreme Court directs all states and union territories to file status reports on cheque bounce cases, reviewing the Special Courts pilot study for speedy disposal under Section 138 of the NI Act.
The Supreme Court clarifies that under Section 138 of the NI Act, jurisdiction for cheque bounce cases lies with the payee’s bank branch, not the deposit location.
Kerala High Court ruled that notice served to a relative isn’t valid under Section 138(b) of the NI Act. Conviction quashed due to lack of proper legal notice to the accused.
Section 138 of the Negotiable Instruments Act, 1881provides for the legal recourse when a cheque is dishonoured due to insufficient funds or other reasons, and a legal action can be taken.
