Jurisdiction of Courts in India over Foreign Cheques under Section 138 of the Negotiable Instruments Act, 1881 (NI Act): Delhi High Court


In a recent ruling by the Delhi High Court in the case titled ‘Right Choice Marketing Solutions Jlt & Ors Vs. State Nct Of Delhi & Anr.’, the question of jurisdiction regarding complaints of dishonoured foreign cheques under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) was addressed. Justice Navin Chawla presided over the case and provided significant insights into the application of relevant legal provisions and precedents.



The case involved a petition filed under Section 482 of the Criminal Procedure Code (CrPC) seeking the quashing of proceedings initiated pursuant to a complaint under Section 138 of the NI Act. The complaint alleged dishonour of foreign currency cheques deposited in India for encashment.


Legal Analysis:

Justice Chawla emphasized the legislative intent behind the insertion of Section 138 into the NI Act, highlighting its purpose to regulate financial transactions and ensure accountability in commercial activities. Notably, the Court emphasized that there exists no distinction between Indian and foreign cheques concerning the application of Section 138 NI Act.

The Court interpreted Section 4 of the CrPC in conjunction with Section 142(2) of the NI Act, concluding that courts in India, specifically within the jurisdiction where a foreign cheque is deposited for encashment, hold the authority to adjudicate on complaints of dishonour under Section 138 NI Act.


Key Findings:

The Court examined the circumstances surrounding the complaint, where the respondent had deposited foreign currency cheques for collection in India, resulting in dishonour due to insufficient funds. Despite initial legal proceedings in Abu Dhabi, subsequent non-compliance led to the presentation of the cheque in New Delhi, prompting a legal dispute over jurisdiction.



The Court affirmed that the amendment to Section 142 of the NI Act in 2015 mandates that the offence under Section 138 is to be exclusively inquired into and tried by courts within the local jurisdiction where the bank branch, through which the cheque is collected, is situated.


Therefore, the Court dismissed the petition seeking to quash the complaint, underscoring that the jurisdictional determination aligns with the legislative intent to ensure accountability and efficacy in the settlement of financial liabilities involving foreign cheques within the Indian legal framework.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. The content may not reflect the most current legal developments and is not guaranteed to be accurate, complete, or up-to-date. Readers should consult a qualified legal professional before taking any action based on the information provided. The authors and publishers disclaim any liability for any loss or damage incurred as a result of reliance on this article. This article does not create an attorney-client relationship.

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