1. C o n f l i c t o f J u r i s d i c t i o n
Section 138 of Negotiable Instruments Act
Soundararajan.R
5th year learner
Symbiosis International University
soundararajan.r@outlook.com

2. Outline of the Presentation
 Essentials
 Guidelines framed by SupremeCourt of India
 Clarification by Bombay High Court – ‘At Par’
cheques
 Speedy disposal – Recommendation by
Law Commission of India
 Directions by Supreme Court
 Legislative measures- Jurisdictional conflict
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3. List of Authorities
o Bhaskaran v. ShankaranVidhyan Balan
o Dashrath Rupsingh Rathod v. State of Maharashtra
o Ramanbhai Mathurbhai Patel v. State of Maharashtra
o Indian Bank Association & ors v. Union of India
o 18th Law Commission Report
o Negotiable Instruments (Amendment) Bill, 2015
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4. Essentials to set the Criminal law in
Motion
 Cheque must be presented within a period of six months or
within the period of its validity [ validity -3 months as per RBI
guidelines]
 The payee or holder in due course should give a notice to
the drawer, within thirty days of the receipt of information
from the bank regarding the dishonor of cheque .
 Drawer fails to make the payment within fifteen days of
the receipt of the said notice.
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5. Bhaskaran v. Sankaran Vaidhyan Balan
 The offence under Section 138 can be completed only with the
concatenation of the following five acts:
i. Drawing of the cheque
ii. Presentation of the cheque to the bank
iii. Returning the cheque unpaid by the drawee bank
iv. Giving notice in writing to the drawer of the cheque
demanding payment of the cheque amount
v. Failure of the drawer to make payment within 15 days of the
receipt of the notice
 Held- upon the completion of the offence, any Court,
within whose jurisdiction, any one acts took place, would
have the requisite jurisdiction
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6. Dashrath Rathod v. State of Maharashtra
Jurisdictional Issue
 Proceedings are to be filed at the place where the
cheque is dishonoured
 Where recording of evidence has commenced will
continue where currently filed
 The re-filing of pending cases where service remains
incomplete
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7. Ramanbhai Mathurbhai Patel v.
State of Maharashtra
 Supreme Court judgment not applicable to
Multi City Cheques
 Bombay High Court held that dishonour of “AT
PAR” Cheque cases can be filed to the Court
within whose local jurisdiction the nearest
available branch of bank
 SLP - dismissed as ‘withdrawn’ by the appellant
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8. Negotiable Instruments (Amendment) Bill, 2015
B i l l n o . 1 5 1 o f 2 0 1 5
 The offence u/s 138 will be enquired into and tried only by
a court within whose local jurisdiction the bank branch of
the payee, where the payee presents the cheque for
payment is situated.
 If more than one case is filed against the same person
before different courts, the case will be transferred to the
court with the appropriate jurisdiction.
 Lok Sabha on 13 May 2015 passed The Negotiable
Instruments (Amendment) Bill, 2015 by voice vote.
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9. 18th Law Commission Report
Fast Track Magisterial Courts for Dishonoured Cheque
Cases
 Over 38 lacs sec.138 pending cases
 Cheque bouncing cases need to be speedily
disposed of through this measure lest litigants may
lose faith in the judicial system.
 The commercial circles should have confidence that
we have quite faster judicial system.
 Centre & State should allocate appropriate funds
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10. Indian Bank Association & ors V.
Union of India & ors
Directions
 Five directions were issued for speedy and
expeditious disposal of cases u/s 138 N.I.Act.
1. Scrutinize – Cognizance – Issue Summons
2. Summons – posts & e-mail –if unserved, follow up
must be taken
3. Compounding – orders at earliest
4. Bail Bond- notice u/s 251 Cr.P.C
5. Evidence – time limit 3 months
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11. Observations
 It is evident that there is lack of clarity w.r.t
138 cases.
 Complainant will not be able to file multiple
complaints in different courts.
 Need to determine the jurisdictional conflict
& completion of offence u/s 138 through
Legislation.
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