Cheque Bounce Territorial Jurisdiction in India 2026: Section 142(2), Payee Home Branch, Multiple Cheques & Jai Balaji Industries

This issue matters because a cheque-bounce complaint filed in the wrong court can lose years in transfer or jurisdiction litigation. It is also a common defence point where a payee has deposited a cheque through a branch chosen for convenience, where parties operate in different States, or where several cheques connected with the same transaction are presented in different places.

For the full statutory sequence—dishonour, notice, limitation and complaint procedure—see our Section 138 cheque-bounce guide.

1. The statutory starting point: Section 142(2)

The 2015 amendment to the Negotiable Instruments Act inserted Section 142(2) after major uncertainty created by earlier case law. The current scheme distinguishes between a cheque presented through an account and one presented otherwise than through an account.

• Section 142(2)(a): where a cheque is delivered for collection through an account, jurisdiction is tied to the branch of the bank where the payee or holder in due course maintains the account.
• Section 142(2)(b): where a cheque is presented otherwise than through an account, jurisdiction is tied to the branch of the drawee bank where the drawer maintains the account.

Most modern commercial cheques are deposited through a bank account, so clause (a) is the provision that most frequently determines forum.

2. Jai Balaji Industries: the 2025 Supreme Court clarification

In Jai Balaji Industries Ltd. v. M/s HEG Ltd., 2025 INSC 1362, decided on 28 November 2025, the Supreme Court examined the post-2015 jurisdiction framework in depth. The Court held that for an account-payee cheque delivered for collection through an account, territorial jurisdiction lies with the court where the branch in which the payee maintains the account is situated.

The Court rejected an interpretation that would allow jurisdiction to shift merely because the payee physically deposited the cheque at another branch for convenience. The statutory fiction is directed to the payee’s home branch. This interpretation was intended to reduce forum shopping and create a predictable jurisdiction rule.

Official judgment: Jai Balaji Industries Ltd. v. M/s HEG Ltd., 2025 INSC 1362.

3. What is the ‘home branch’?

The relevant branch is ordinarily the branch where the payee’s account is maintained. It is not necessarily:

• the branch where the cheque was handed over;
• the branch where the payee happened to deposit it;
• the branch nearest to the complainant’s office;
• the branch that processed the cheque internally; or
• the drawee bank’s branch, if the cheque was deposited through the payee’s account.

In practical filing, the complaint should plead the account number, bank, branch and branch address clearly. The pay-in slip, bank statement, return memo and account records should be consistent with the chosen territorial forum.

4. Can a payee create jurisdiction by depositing at a different branch?

After Jai Balaji Industries, a complainant should not assume that a convenient collection branch can manufacture territorial jurisdiction. If the account is maintained at Branch A but the cheque is physically deposited at Branch B under a core-banking arrangement, the legal analysis must focus on where the account is maintained, not merely where the cheque entered the banking system.

This is particularly important for corporate payees with multiple collection centres and for banks that accept deposits across branches.

5. What if the cheque is presented otherwise than through an account?

Section 142(2)(b) addresses this different situation. If the cheque is presented otherwise than through an account, jurisdiction lies where the drawer’s drawee bank branch is situated. Counsel should therefore identify the actual mode of presentation rather than assuming every cheque falls under Section 142(2)(a).

6. Multiple cheques arising from one transaction

Multiple cheques do not automatically become one cause of action merely because they arise from the same commercial relationship. In a January 2026 Supreme Court decision, the Court reiterated that separate dishonours of distinct cheques can create separate causes of action where each cheque goes through the statutory sequence of presentation, dishonour, notice and failure to pay.

That does not mean each cheque can be filed anywhere. Territorial jurisdiction for each complaint must still satisfy Section 142(2) and Section 142A. Where the cheques are deposited through the same account, the statutory scheme generally points toward the same home-branch forum.

7. Section 142A and concentration of cases

Section 142A was introduced to stabilise cases affected by the 2015 jurisdiction amendment and to provide continuity in the allocation of Section 138 matters. It should be read together with Section 142(2), especially when there are multiple pending complaints involving the same drawer and payee.

Before filing a fresh complaint, check whether earlier Section 138 complaints between the same parties are already pending and whether the statutory concentration rule applies.

8. Jurisdiction where parties are in different States

The drawer’s residence, registered office or place where the underlying contract was signed does not, by itself, decide Section 138 territorial jurisdiction. Those facts may be relevant to other proceedings, but Section 138 complaints are governed by the specific statutory rule in Section 142(2).

Example: a Delhi company supplies goods to a buyer in Jaipur; the buyer’s bank is in Jaipur; the seller maintains its account at a bank branch in South Delhi and deposits the cheque through that account. The Section 138 forum ordinarily follows the seller-payee’s home branch under Section 142(2)(a), subject to the exact facts and mode of collection.

9. Can jurisdiction be challenged after summons?

Yes, but strategy matters. A jurisdiction objection should be raised promptly and supported by bank documents. A vague assertion that the accused lives elsewhere is not enough. The relevant evidence can include:

• payee bank statement;
• account-opening or branch certificate;
• cheque deposit slip;
• bank return memo;
• branch code and address;
• collection details; and
• earlier complaints between the parties.

If the factual foundation is undisputed and the complaint is clearly filed in a court lacking statutory jurisdiction, the accused may consider an appropriate challenge before the trial court or High Court. If the dispute turns on contested banking facts, the court may require a fuller record.

10. Transfer petitions are different from jurisdiction objections

A court may possess jurisdiction yet a party may still seek transfer for convenience, common trial management, safety, multiplicity or connected proceedings. Transfer is therefore conceptually different from saying the original court lacked statutory competence.

Jai Balaji Industries itself arose in transfer proceedings and is important because the Supreme Court used the occasion to settle the territorial-jurisdiction rule.

11. Complaint drafting checklist

1. State that the cheque was delivered for collection through the complainant’s account.
2. Identify the exact branch where that account is maintained.
3. Give the branch address and local court jurisdiction.
4. Attach or refer to the deposit and return records.
5. Explain earlier complaints, if any, between the same parties.
6. Do not rely on the accused’s residence as the primary jurisdiction fact.
7. Do not create jurisdiction by choosing a random collection branch.

12. Defence checklist for wrong jurisdiction

1. Obtain the complainant’s stated bank branch from the complaint.
2. Compare it with the branch shown in bank records.
3. Check whether the cheque was presented through an account.
4. Identify the payee’s actual home branch.
5. Check earlier Section 138 cases and Section 142A.
6. Raise the point early and specifically.

13. Frequently asked questions

Where is a cheque-bounce complaint filed when the cheque is deposited through an account?

Ordinarily, before the court within whose local limits the branch where the payee or holder in due course maintains that account is situated.

If I deposit the cheque at another branch, can I file there?

Not merely for that reason. Jai Balaji Industries clarifies that the home branch where the payee maintains the account is the key statutory location.

Does the drawer’s address decide jurisdiction?

No. The NI Act contains a special territorial-jurisdiction rule under Section 142(2).

Can several bounced cheques lead to separate complaints?

Yes. Distinct cheques dishonoured separately can create separate causes of action, but each complaint must still satisfy the jurisdiction provisions.

Can a wrong-jurisdiction complaint be transferred instead of dismissed?

The answer depends on stage, statutory provisions and the procedural route invoked. Jurisdiction and discretionary transfer should not be confused.

Conclusion

Territorial jurisdiction under Section 138 is now significantly clearer than it was a decade ago. The practical rule is document-driven: identify the presentation mode, identify the account through which the cheque was collected, identify the branch where that account is maintained, and then map that branch to the competent court. After Jai Balaji Industries, the home-branch test should be treated as a threshold filing check in every account-presented cheque case.

Legal information notice: This article is for general legal education and is not legal advice or solicitation. Jurisdiction can depend on the precise banking and procedural record.