Dashrath Rupsingh Rathod v. State of Maharashtra & Anr.
Bench: Constitution Bench — 5 Judges (R.M. Lodha CJ, H.L. Dattu, S.A. Bobde, A.K. Sikri & Rohinton Fali Nariman JJ)
Parties
Facts of the Case
Section 138 of the Negotiable Instruments Act makes dishonour of a cheque a criminal offence. A cheque may be drawn, dishonoured, and presented at different locations. The question of territorial jurisdiction — which court has the power to try Section 138 NI Act offences — had created significant confusion with different High Courts taking different positions. The case presented the Supreme Court with the question of where the cause of action for Section 138 arises — at the place where the cheque was drawn, where the bank is located, where the payee's bank is, or where the notice was sent.
Legal Issues Before the Court
- 1Which court has territorial jurisdiction to try a Section 138 NI Act cheque dishonour complaint?
- 2Does the cause of action arise at the place where the cheque was drawn, where the drawee bank (on whom the cheque was drawn) is located, where the payee's bank is, or where the legal notice was sent?
The Judgment
The Constitution Bench settled the law by holding that for Section 138 NI Act offences, the court at the place where the drawee bank (the bank of the accused drawer) is situated has jurisdiction — because that is where the cheque is dishonoured. The entire cause of action under Section 138 is completed at the place where the bank on which the cheque is drawn is located — the place of dishonour is the place of the offence. Courts at the payee's location or the place of drawing the cheque do not have jurisdiction. This judgment overruled the widespread practice of filing complaints at the payee's location.
Key Principles Laid Down
PLACE OF DISHONOUR = TERRITORIAL JURISDICTION FOR SECTION 138: The court at the place where the drawee bank is situated — i.e., where the cheque was dishonoured — has territorial jurisdiction for Section 138 NI Act complaints. The offence of dishonour is committed at the drawee bank's location.
PAYEE'S LOCATION DOES NOT CONFER JURISDICTION: The place where the payee (the person to whom the cheque was given) is located or the place where the payee deposited the cheque does NOT give that court jurisdiction under Section 138.
OVERRULED MULTI-LOCATION FILING PRACTICE: Before Dashrath Rupsingh, payees could choose to file a Section 138 complaint in the court of the place where they deposited the cheque — which allowed venue shopping and harassment. This practice was overruled.
SUBSEQUENT AMENDMENT (2015): Parliament responded to the practical hardship caused by Dashrath Rupsingh by amending Section 142 NI Act in 2015 — allowing the complainant to file in the court within whose jurisdiction the cheque delivery location falls. The 2015 amendment modified the Dashrath Rupsingh rule for pending and future cases. Both the judgment and the subsequent amendment must be read together for current law.
Impact on Indian Law
Dashrath Rupsingh was a landmark ruling on NI Act jurisdiction — but its impact was largely prospective, as Parliament quickly amended Section 142 in 2015 to modify the jurisdiction rule and allow filing where the cheque was delivered. The case is still important for understanding: (1) the pre-2015 jurisdiction rule; (2) the interplay between constitutional court interpretation and Parliamentary amendment; (3) the transfer provisions for cases filed in the wrong jurisdiction before the 2015 amendment. Any NI Act jurisdiction question now requires reading Dashrath Rupsingh alongside the 2015 amendment.
Frequently Asked Questions
Which court has jurisdiction for Section 138 NI Act cheque bounce cases?
After Dashrath Rupsingh (2014) and the 2015 amendment to Section 142 NI Act: the court within whose jurisdiction the cheque was delivered (i.e., where the payee's bank received the cheque) has jurisdiction. The 2015 amendment modified the strict Dashrath Rupsingh rule (which required filing only at the drawee bank's location) and allows filing at the place of cheque delivery. For cases filed before the 2015 amendment, transitional provisions apply.
Can a Section 138 NI Act complaint be filed anywhere in India?
No. Jurisdiction is territorial and specific. After the 2015 amendment, the complainant can file at the court within whose jurisdiction the cheque was delivered to the payee. This prevents venue shopping at random locations but is more flexible than the strict Dashrath Rupsingh rule. If the cheque was delivered at City A, the complaint must be filed in City A's court — not the accused's city or the complainant's home city.