Negotiable Instruments (Amendment) Second Ordinance, 2015

It is widely known that Dashrath Rupsingh Rathod v. State of Maharashtra, (2014) 9 SCC 129 gave rise to a further “territorial jurisdiction conundrum”.

In Bridgestone India, 2015 (13) SCALE 155, decided on 24.11.2015, “in order to overcome the legal position declared by the Court in Dashrath,” attention was drawn to the Negotiable Instruments (Amendment) Second Ordinance, 2015. A perusal of Section 1(2) thereof reveals, that the Ordinance would be deemed to have come into force with effect from 15.06.2015.

It was held, “Section 142(2)(a), amended through the Negotiable Instruments (Amendment) Second Ordinance, 2015, vests jurisdiction for initiating proceedings for the offence under Section 138 of the Negotiable Instruments Act, inter alia in the territorial jurisdiction of the Court, where the cheque is delivered for collection (through an account of the branch of the bank where the payee or holder in due course maintains an account)… Since cheque No. 1950, in the sum of Rs. 26,958/-, drawn on the Union Bank of India, Chandigarh, dated 02.05.2006, was presented for encashment at the IDBI Bank, Indore, which intimated its dishonor to the Appellant on 04.08.2006, we are of the view that the Judicial Magistrate, First Class, Indore, would have the territorial jurisdiction to take cognizance of the proceedings initiated by the Appellant under Section 138 of the Negotiable Instruments Act, 1881, after the promulgation of the Negotiable Instruments (Amendment) Second Ordinance, 2015. The words “…as if that Sub-section had been in force at all material times…” used with reference to Section 142(2), in Section 142A(1), gives retrospectivity to the provision.”

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