Complaint under Section 138 NI Act can be filed only at the place where the payee maintains the bank account

The Supreme Court has held that for account payee cheques, a complaint under Section 138 NI Act can be filed only at the place where the payee maintains the bank account (home branch), and not at the place where the cheque is deposited for collection; in doing so, it has declared the earlier ruling in Yogesh Upadhyay v. Atlanta Ltd. (2023) to be per incuriam. ^[1]^[2]^[3]^[4]

Case title and citation

· Case title: Jai Balaji Industries Ltd & Ors v. M/s HEG Ltd ^[3]^[5]

· Citation: 2025 INSC 1362 (Supreme Court of India) ^[3]

· Coram: Justices J.B. Pardiwala and R. Mahadevan ^[1]^[2]

· Date of judgment: 27 November 2025 ^[2]^[5]

· Statutes involved: Sections 138, 142(2) and Explanation to Section 142(2)(a), Negotiable Instruments Act, 1881; Section 46 NI Act (delivery of instruments). ^[1]^[6]^[7]

Case number and parties

· Case number: Criminal Appeal arising out of SLP (Crl.) No. 22472 of 2022 (clubbed matters relating to cheque dishonour under Section 138). ^[8]^[5]

· Appellants (accused/drawer): Jai Balaji Industries Ltd and its officers. ^[3]^[5]

· Respondent (complainant/payee): M/s HEG Ltd, maintaining its bank account at Kolkata (home branch). ^[1]^[3]

Year and background facts

· Year of decision: 2025; the controversy arose out of transactions preceding and following the 2015 NI Act amendment. ^[1]^[5]

· The drawer issued an account payee cheque of about ₹19,94,996 in favour of HEG Ltd; HEG maintained its account at a bank branch in Kolkata but physically deposited the cheque at a branch in Bhopal for collection. ^[1]^[3]

· The cheque was dishonoured; HEG filed a complaint under Section 138 before the Metropolitan Magistrate (MM), Kolkata, which initially proceeded but, after the 2015 amendment introducing Section 142(2) and its Explanation, returned the complaint for want of jurisdiction; the complaint was then re‑filed before the Judicial Magistrate First Class (JMFC), Bhopal. ^[1]^[4]^[5]

Pleadings and issues

· Complainant/payee (HEG Ltd):

o Asserted that Bhopal court had jurisdiction since the cheque was delivered for collection at Bhopal branch and dishonoured there. ^[1]^[3]

o Relied on the 2015 amendment and the wording “where the cheque is delivered for collection through an account” in Section 142(2)(a) to contend that the place of deposit confers jurisdiction. ^[1]^[4]

· Accused/drawer (Jai Balaji Industries Ltd & Ors):

o Contended that only the court within whose jurisdiction the payee maintains the bank account (Kolkata) can try the complaint, because the Explanation to Section 142(2)(a) deems delivery at any branch to be delivery at the home branch. ^[1]^[6]

o Argued that allowing jurisdiction at every place of deposit would revive forum shopping, contrary to the object of the 2015 amendment, and sought transfer/return of complaint accordingly. ^[1]^[4]^[9]

· Core issues framed by the Supreme Court:

o (1) For an account payee cheque delivered for collection through an account, whether territorial jurisdiction lies at the place of deposit or only at the payee’s home branch under Section 142(2)(a) and its Explanation. ^[1]^[5]

o (2) Whether the 2015 decision in Bridgestone India (P) Ltd. v. Inderpal Singh and the later 2023 ruling in Yogesh Upadhyay v. Atlanta Ltd. correctly interpreted Section 142(2)(a). ^[6]^[3]^[5]

Court’s reasoning

· Interpretation of Section 142(2)(a) and Explanation:

o The Court held that the words “delivered for collection through an account” refer to the act of the payee handing over the cheque to the bank where he maintains his account; this stage is different from “presentment for payment otherwise than through an account” in Section 142(2)(b). ^[7]^[5]

o The Explanation to Section 142(2)(a) creates a deeming fiction that if a cheque is delivered at any branch of the bank in which the payee maintains his account, such delivery is deemed to have been made at the payee’s home branch for the legal purpose of determining jurisdiction, even though, commercially, the cheque can be deposited anywhere. ^[1]^[6]^[10]^[7]

· Home branch as exclusive forum:

o On a combined reading, the Court held that jurisdiction in Section 138 complaints relating to account payee cheques vests only in the court where the payee’s home branch is situated; the branch where the cheque is physically deposited is legally irrelevant once the deeming provision is applied. ^[1]^[2]^[4]

o The Court reasoned that any other interpretation would multiply possible forums, permit the payee to choose any place of deposit to fix jurisdiction, and thereby encourage forum shopping, a mischief that Parliament sought to cure through the 2015 amendment and its Statement of Objects and Reasons. ^[1]^[6]^[4]^[9]

· Distinction between delivery and presentment:

o Relying on Section 46 NI Act, the Court distinguished “delivery” (the act that completes making of the instrument by handing it over) from “presentment” (later step of presenting it for payment). ^[6]^[7]^[5]

o For account payee cheques routed through an account, it is the statutory “delivery for collection” to the payee’s own bank that triggers Section 142(2)(a), whereas cheques presented otherwise than through an account fall in Section 142(2)(b), where the place of presentment can govern jurisdiction. ^[10]^[7]^[5]

· Application to the facts:

o Since HEG maintained its account at Kolkata, its home branch was in Kolkata; the notional or deemed delivery under the Explanation thus occurred at Kolkata, irrespective of the physical deposit at Bhopal. ^[1]^[4]^[5]

o Consequently, the competent court for the Section 138 complaint was held to be the court having jurisdiction over the Kolkata home branch, and not the JMFC, Bhopal. ^[1]^[4]^[9]

Citations relied upon

· The Bench examined and clarified earlier precedents including:

o Bridgestone India (P) Ltd. v. Inderpal Singh, (2016) 2 SCC 75 – where the Court had first upheld jurisdiction at the payee’s bank after the 2015 amendment; the present Bench read this as consistent with the home‑branch principle. ^[6]^[7]^[5]

o Dashrath Rupsingh Rathod v. State of Maharashtra, (2014) 9 SCC 129 – pre‑amendment decision restricting jurisdiction to drawer’s bank; referred to primarily to highlight the mischief that led to the 2015 legislative change. ^[11]^[6]

o Various High Court rulings interpreting Section 142(2)(a) and the Explanation were discussed to demonstrate conflicting views and the need for authoritative clarification. ^[11]^[10]^[9]

Case overruled and per incuriam declaration

· The Court expressly held that *_Yogesh Upadhyay v. Atlanta Ltd., (2023) 10 SCC 281_ misread Section 142(2)(a) by treating the place where the cheque was deposited for collection as the jurisdictional court, without giving effect to the Explanation’s deeming fiction. ^[1]^[6]^[3]^[4]

· It declared Yogesh Upadhyay to be per incuriam, as that Bench ignored the Explanation to Section 142(2)(a) and legislative intent, and thereby permitted multiple jurisdictions and forum shopping; accordingly, Yogesh Upadhyay no longer represents good law on Section 138 territorial jurisdiction. ^[1]^[6]^[3]^[9]

Key takeaways for practitioners

· For account payee cheques routed through an account, the complaint under Section 138 NI Act must be filed only where the payee’s home branch is situated, irrespective of the place of deposit or collection. ^[1]^[2]^[4]

· The Explanation to Section 142(2)(a) must be strictly applied as a legal fiction to prevent forum shopping; any earlier view favouring jurisdiction at the place of deposit (including Yogesh Upadhyay v. Atlanta Ltd.) stands overruled and should not be cited as authority. ^[1]^[6]^[3]