SC sets guidelines for trying cheque bounce cases

SC sets guidelines for trying cheque bounce cases New Delhi, Dec 14: The Supreme Court has held that only a lower court in whose jurisdiction an offence of cheque bounce is committed will try the case. Setting the guideline, the Apex court said complainants, including financial institutions and banks, while filing cheque bounce cases, should ensure that no inconvenience is caused to the accused. There are numerous instances where complaints are being filed at more than one place to harass an accused, the court observed while hearing a petition challenging the territorial jurisdiction of a court to try an offence under the Negotiable Instruments Act, 1881. Refusing the contentions of one such complainant, a Bench headed by Justice S B Sinha said the principle that a debtor must seek the creditor should not be applied in cheque bounce cases. "We cannot, as things stand today, be oblivious of the fact that a banking institution holding several cheques signed by the same borrower can not only present the cheque for its encashment at four different places but also may serve notices from four different places so as to enable it to file four complaint cases at four different places. "This only causes grave harassment to the accused. It is, therefore, necessary in a case of this nature to strike a balance between the right of the complainant and the right of an accused vis-a-vis the provisions of the Code of Criminal Procedure," the Bench said. According to Sinha, "Jurisdiction of the court to try a criminal case is governed by the provisions of the Criminal Procedure Code and not on common law principle. "It is one thing to say that a presumption is raised that notice is served but it is another thing to say that service of notice may not be held to be of any significance or may be held to be wholly unnecessary," he added. The observations were made by the apex court during the hearing of a case between Harman Electronics and National Panasonic India (NPI) under the Negotiable Instruments Act. Harman Electronics and NPI had entered into a transaction in Chandigarh and a cheque issued by the former at Chandigarh was dishonoured in the city itself. However, NPI had filed a complaint in Delhi after issuing a notice to Harman in Chandigarh, asking the company to pay Rs five lakh from New Delhi. The company then questioned the jurisdiction of the court of Additional Sessions Judge, New Delhi, in the case. The trial court had held that it had jurisdiction to entertain the complaint as the notice was sent to the accused from Delhi and the complainant was having its registered office in Delhi. The Apex court while holding the judgement in favour of the company said the Delhi High Court had no jurisdiction to try the case and the same should be transferred to the court of competent jurisdiction. Bureau Report

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