Kiran Raj

The Supreme Court Division Bench of Justice Sanjay Kumar and Justice Satish Chandra Sharma held that the Judicial Magistrate First Class, Fifth Court, Mangalore, has territorial jurisdiction to entertain complaint cases filed under Section 138 of the Negotiable Instruments Act, 1881. The Court set aside the orders of both the Magistrate and the High Court of Karnataka, which had earlier declined jurisdiction, and directed the Mangalore court to proceed with the matters. It further instructed that the complaint cases be adjudicated expeditiously and in accordance with law. Pending applications, if any, were ordered to stand closed.

The matter concerned the filing of four complaint cases under Section 200 of the Code of Criminal Procedure, 1973, read with Section 138 of the Negotiable Instruments Act, 1881. The appellant alleged that a borrower, Keyur Lalitbhai Rajpopat, had taken a loan of ₹38,50,000 from him, and the respondent, Jagruti Keyur Rajpopat, wife of the borrower, stood as guarantor. The appellant also alleged that the respondent availed financial assistance herself. Four cheques, issued in September 2023 by the respondent, were said to be in discharge of both the borrower’s and her own liabilities.

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The appellant deposited these cheques at the Kotak Mahindra Bank, Opera House Branch, Mumbai, to be credited to his account. The cheques were dishonoured for insufficiency of funds, with intimation to the appellant on 15 September 2023. The appellant then filed four complaint cases, numbered C.C. Nos. 1258, 1259, 1260, and 1261 of 2023, before the Judicial Magistrate First Class, Fifth Court, Mangalore.

On 12 December 2023, the Magistrate returned the complaint cases, directing presentation before the jurisdictional court in Mumbai. The reason cited was that the drawee bank was the Kotak Mahindra Bank, Opera House Branch, Mumbai, and therefore the Mangalore court lacked territorial jurisdiction.

Aggrieved, the appellant filed Criminal Petition Nos. 1237, 1720, 1769, and 1770 of 2024 under Section 482 CrPC before the High Court of Karnataka at Bengaluru. The High Court, by its order dated 5 March 2024, upheld the Magistrate's order, dismissing the petitions.

The appellant then approached the Supreme Court, contending that he maintained his bank account at Kotak Mahindra Bank, Bendurwell Branch, Mangalore. He explained that the cheques were presented at the Opera House Branch, Mumbai, only for collection and credit to his Mangalore account. The appellant argued that the High Court had erred in assuming that he maintained his account at the Mumbai branch, which formed the basis for the finding on jurisdiction.

The respondent filed a counter-affidavit, submitting details of her bank account and an account statement dated 25 November 2024. This statement reflected the appellant’s account number as 0412108431. The appellant produced a certification from the Kotak Mahindra Bank, Bendurwell Branch, Mangalore, confirming that account number 0412108431 was indeed his account in that branch. The respondent’s counsel acknowledged that while the appellant earlier held an account at the Mumbai Opera House Branch, it had been transferred to the Mangalore branch.

With these facts, it became undisputed that, at the time of presenting the cheques, the appellant maintained his account in Mangalore and deposited the cheques in Mumbai only for credit to this account.

The Court referred to the statutory provision governing territorial jurisdiction in cheque dishonour cases. It recorded that "Section 142(2)(a) of the N.I. Act makes it clear that an offence under Section 138 thereof should be inquired into and tried only by a Court within whose local jurisdiction, if the cheque is delivered for collection through an account, the branch of the bank where the payee maintains the account is situated."

The Bench further noted that this provision, as amended in 2015, had been interpreted in Bridgestone India Private Limited vs. Inderpal Singh (2016) 2 SCC 75, wherein "this Court affirmed that Section 142(2)(a) of the N.I. Act vests jurisdiction apropos an offence under Section 138 thereof in the Court where the cheque is delivered for collection, that is, through an account in the Branch of the Bank where the payee maintains that account."

Applying this interpretation, the Court observed: "Therefore, once it is established that, at the time of presentation of the cheques in question, the appellant maintained his account with the Kotak Mahindra Bank at its Bendurwell, Mangalore Branch, he was fully justified in filing his complaint cases before the jurisdictional Court at Mangalore."

The Court held that "The understanding to the contrary of the learned Magistrate at Mangalore was erroneous and completely opposed to the clear mandate of Section 142(2)(a) of the N.I. Act." It further stated that "The High Court proceeded to confirm the erroneous order passed by the learned Magistrate under the wrong impression that the appellant maintained his bank account at the Opera House Branch of the Kotak Mahindra Bank at Mumbai."

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The Supreme Court allowed the appeals, stating: "The appeals are accordingly allowed; setting aside the impugned order dated 05.03.2024 passed by the High Court of Karnataka at Bengaluru as well as the order dated 12.12.2023 passed by the learned Judicial Magistrate First Class, Fifth Court, Mangalore."

It directed: "The learned Judicial Magistrate First Class, Fifth Court, Mangalore, shall entertain and expeditiously adjudicate the complaint cases filed by the appellant in accordance with law."

The Court concluded: "Pending applications, if any, shall stand closed."

Advocates Representing the Parties:

For the Petitioners: Mr. Shailesh Madiyal, Senior Advocate; Mr. Anantha Narayana M.G., AOR; Mr. Shakeer Abbas, Advocate; Mr. M.L. Gopalakrishna, Advocate; Mr. V.C. Shukla, Advocate; Ms. Divija Mahajan, Advocate; Mrs. Rakhi Madiyal, Advocate.

For the Respondents: Mr. Pulkit Prakash, AOR; Mr. Mudit Makhijani, Advocate; Mr. Eeshan Pandey, Advocate; Mr. Arjun Mohan, Advocate; Ms. Arushi Sharma, Advocate; Ms. Ankita Sinha, Advocate.

Case Title: Prakash Chimanlal Sheth v. Jagruti Keyur Rajpopat

Neutral Citation: 2025 INSC 897

Case Number: Criminal Appeal Nos. of 2025 (@ S.L.P.(Crl.) Nos. 5540-5543 of 2024)

Bench: Justice Sanjay Kumar, Justice Satish Chandra Sharma