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Informist, Friday, Nov. 28, 2025

 

NEW DELHI – The Supreme Court Friday held that the jurisdiction to try a complaint in a cheque dishonour case is vested in the court within whose local jurisdiction the payee maintains his bank account. The court was hearing a plea by Jai Balaji Industries Ltd. against the transfer of a cheque dishonour case against the company by HEG Ltd. from Kolkata to Bhopal.

 

The metropolitan magistrate in Kolkata had transferred the case to Bhopal in 2016, as HEG held its account with the State Bank of India's Bhopal branch. The Supreme Court said it found no force in Jai Balaji Industries' argument that the jurisdiction to try the complaint under the Negotiable Instruments Act was vested in the court within whose local limits the drawee bank was situated when the cheque was dishonoured.

 

However, the Supreme Court bench allowed the case to be transferred back to Kolkata, as the apex court had previously allowed cheque dishonour cases to remain in courts where the proceedings had reached the evidence stage to "obviate and eradicate legal complications", despite such courts not being vested with jurisdiction.

 

The court transferred the case to the jurisdiction of the Kolkata metropolitan magistrate and directed that the proceedings be resumed from the stage where the court had transferred the case to Bhopal in 2016.

 

The top court said it was aware that the jurisdiction to try the complaint lay exclusively with the judicial magistrate in Bhopal. If the matter had remained pending at the stage prior to the recording of evidence, there would have been no difficulty in accepting the deemed transfer of the complaint from Kolkata to Bhopal.

 

The apex court said the Kolkata court had returned the complaint when it had already reached the stage of recording evidence. "We are of the considered opinion that allowing the parties to contest the complaint afresh before the JMFC (judicial magistrate first class), Bhopal, would amount to a procedural impropriety that may prove to be detrimental to the case," the apex court said.

 

Jai Balaji Industries had issued a cheque to HEG in 2014. The cheque, drawn on the State Bank of Bikaner and Jaipur, Kolkata branch, was deposited at the SBI Bhopal branch. However, the cheque was dishonoured for insufficient funds, upon which HEG issued a statutory notice demanding payment. However, Jai Balaji 

Industries took the defence that the cheque had been issued as a "security deposit" and not in discharge of any enforceable debt. HEG then filed a case against Jai Balaji Industries in Kolkata's court.
 

Friday, shares of Jai Balaji Industries ended 0.3% higher at INR 68.75 on the National Stock Exchange, and those of HEG closed 1.1% lower at INR 527.70.  End 

 

Reported by Surya Tripathi

Edited by Saji George Titus

 

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