The Negotiable Instruments (Amendment) Ordinance, 2015 - Avoidable Confusion?

Lately, there has been a lot of confusion on what the Territorial Jurisdiction would be in cases of complaints u/s 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the NI Act, 1881). With matters being transferred to different Courts after the Judgment of the Hon'ble Supreme Court in Dasrath Rupsingh Rathod vs. State of Maharashtra &Anr. (Crl. Appeal No. 2287 of 2009), there has been lot of confusion as to what the jurisdiction would be in cases covered u/s 138 of the NI Act, 1881.

Section 142 of the Negotiable Instrument Act, reads as under:

"142 Cognizance of offences. —Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974)—

(a) no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;

(b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138: 24 [Provided that the cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period.]

(c) no Court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under section 138."

Prior of the Dasrath Rupsingh Rathod(supra), the question of Territorial Jurisdiction was considered by the Hon'ble Supreme Court in K. Bhaskaran vs. SankaranVaidhyanBalan&Anr. AIR 1999 SC 3762 wherein the Hon'ble Supreme Court after duly considering Sections 177, 178 & 179 of the Criminal Procedure Code, held that the Territorial Jurisdiction in cases of Section 138 of the NI Act, could be made out on 5 considerations, which are as follows:

Drawing of the cheque Presentation of the cheque to the bank Returning the cheque unpaid by the drawee bank Giving notice in writing to the Drawer of the Cheque demanding payment of the cheque amount Failure of the drawer to make payment within 15 days of receipt of the Notice Thereafter, the Hon'ble Supreme Court in the case of Dasrath Rupsingh Rathod(supra) changed the concept of Territorial Jurisdiction for dishonor of cheques and limited it only to those Courts, within whose local jurisdiction the offence was committed, i.e., where the cheque is dishonored by the bank on which it is drawn. However, the only rider was for...