Re­cov­er­ing cheque-bounce money to get more te­dious

Consumer Voice - - In The News -

The Supreme Court has ruled that the ju­ris­dic­tion of cheque-bounce cases has to be the lo­ca­tion where the cheque bounced, mean­ing the bank of the per­son who is­sued the cheque – and not the bank lo­ca­tion of the com­plainant.

Ear­lier, a case un­der Sec­tion 138 of Ne­go­tiable In­stru­ments Act could be ini­ti­ated by the holder of the cheque at his place of business or res­i­dence. Now, a bench of jus­tices TS Thakur, Vikramjit Sen and C Na­gap­pan have ruled that the case has to be ini­ti­ated at the place where the branch of the bank on which the cheque was drawn is lo­cated. Al­ter­na­tively, the holder of the cheque may in­sti­tute a case un­der Sec­tion 420 (cheat­ing) at the place of his res­i­dence or where he or­di­nar­ily car­ries out business. “If the payee suc­ceeds in es­tab­lish­ing that the in­duce­ment for ac­cept­ing a cheque which sub­se­quently bounced had oc­curred where he re­sides or or­di­nar­ily trans­acts business, he will not have to suf­fer the tra­vails of jour­ney­ing to the place where the cheque has been dis­hon­oured,” the bench clar­i­fied.

The bench said: “In this anal­y­sis, we hold that the place, si­tus or venue of ju­di­cial in­quiry and trial of the of­fence must log­i­cally be re­stricted to where the drawee bank is lo­cated.

“An in­ter­pre­ta­tion should not be im­parted to Sec­tion 138 which will ren­der it as a de­vice of ha­rass­ment, that is, by send­ing no­tices (about the bounc­ing of cheque un­der Sec­tion 138) from a place which has no ca­sual con­nec­tion with the trans­ac­tion it­self, and/or by pre­sent­ing cheques at any of the banks where the payee may have an ac­count.”

Re­fer­ring to the rapid in­crease in in­sti­tu­tion of cases un­der Sec­tion 138 after it was made a crim­i­nal of­fence, the bench said, “It is also now man­i­fest that traders and busi­ness­men have be­come reck­less and in­cau­tious in ex­tend­ing credit where they would hereto­fore have been ex­tremely hes­i­tant, solely be­cause of the avail­abil­ity of re­dress by crim­i­nal pro­ceed­ings.”

The judge­ment will ap­ply ret­ro­spec­tively. In ef­fect, lakhs of cases pend­ing in var­i­ous courts across the coun­try will wit­ness in­ter­state trans­fer of cheque-bounc­ing cases. How­ever, the court said that in those cases where record­ing of ev­i­dence has started after is­suance of sum­mons to the ac­cused, the same would con­tinue to be tried at the place they were in­sti­tuted at.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.