The jurisdiction for filing a cheque bouncing complaint under Section 138 of the Negotiable Instruments Act, 1881 has been simplified and clarified following recent amendments. After years of ambiguity, the law now firmly establishes that a complaint can be filed in the jurisdiction of the court where the complainant’s bank account or home branch is located.
Key Legal Framework
Under normal criminal trials, the burden of proof lies with the complainant or prosecution. However, Section 115, read with Section 139 of the Negotiable Instruments Act, shifts this burden to the accused
in cheque bounce cases. The accused is required to disprove the transaction in question, as the complainant does not need to establish their case beyond reasonable doubt.
Section 138 outlines that an offense is committed when a cheque drawn by a person is dishonoured due to insufficient funds or if the amount exceeds the agreed limit in the account. Punishment for this offense includes imprisonment for up to two years, a fine of twice the cheque amount, or both.
Conditions for Applicability of Section 138
- The cheque must be presented to the bank within six months of issuance or its validity period, whichever is earlier.
- The payee or holder must issue a written demand for payment within 30 days of receiving notice of dishonour from the bank.
- The drawer must fail to pay the amount within 15 days of receiving such notice.
Legal Process in Cheque Bounce Cases
The key stages in handling a cheque bounce case include:
- Filing a Complaint: Initiated under Section 138 of the Negotiable Instruments Act.
- Pre-Summoning Evidence: Sworn statement under Section 202 of the CrPC.
- Summoning the Accused: Under Section 204 of the CrPC.
- Recording Plea: Framing of notice under Section 251.
- Complainant Evidence: Presentation of evidence and witnesses post- summoning.
- Statement of the Accused: Recorded under Section 313 of the CrPC.
- Defense Evidence: Presented under Sections 315 and 311 of the CrPC.
- Arguments: Final arguments by both parties.
- Judgment: Pronouncement by the court.
Notable Provisions
- Section 139: Presumes that the holder of a dishonored cheque received it for a legally enforceable debt or liability, unless proven otherwise by the accused.
- Section 148: Empowers appellate courts to order deposit of at least 20% of the fine or compensation awarded by the trial court during an appeal. This amount must be deposited within 60 days, extendable by another 30 days upon sufficient cause.
Compoundable Nature of Offenses
Offenses under Section 138 are bailable and compoundable. This means that the matter can be resolved amicably between the parties even after the complaint is filed.