Case Summary: Jai Balaji Industries Ltd. & Ors. v. M/s HEG Ltd. (2025) | Territorial Jurisdiction Under NI Act Post-2015
A key ruling explaining that cheque dishonour cases must be filed where the payee holds the bank account, settling post-2015 jurisdiction confusion.;
The Supreme Court delivered a landmark ruling clarifying territorial jurisdiction in cheque dishonour cases under Section 138 of the Negotiable Instruments Act, 1881, especially in the context of the amended Section 142(2) inserted by the Negotiable Instruments (Amendment) Act, 2015.
The petitioners, Jai Balaji Industries Ltd., sought transfer of criminal proceedings from the Judicial Magistrate, Bhopal, to a Metropolitan Magistrate, Kolkata, arguing lack of jurisdiction and citing the pre-2015 judgment of Dashrath Rupsingh Rathod v. State of Maharashtra (2014).
The dispute centred only on jurisdiction—whether, post-2015 amendment, a Section 138 case lies where the drawee bank is situated or where the payee’s account is maintained.
Title of the Case: Jai Balaji Industries Ltd. & Ors. v. M/s HEG Ltd.
Citation: 2025 INSC 1362
Court: Supreme Court of India
Judges: J.B. Pardiwala, J. and R. Mahadevan, J.
Date of Judgment: 28 November 2025
Factual Background
Cheque Transaction
- A cheque of ₹19,94,996 was issued by the accused company against an invoice.
- The cheque was drawn on State Bank of Bikaner & Jaipur, Kolkata.
Deposit and Dishonour
- The complainant HEG Ltd. deposited the cheque at its account in SBI, Bhopal, on 19.06.2014.
- The cheque was dishonoured for insufficient funds on 20.06.2014.
Statutory Notice
- Notice was issued on 11.07.2014 and delivered on 14.07.2014.
- The accused replied, alleging cheque was a security cheque.
First Complaint at Kolkata Court
- Complaint was first filed at MM Kolkata in 2014.
- Summons and framing of charge took place; evidence-in-chief was recorded.
Amendment Act, 2015
- After amendment, the complainant requested return of complaint due to the jurisdiction now favouring the place of payee's bank.
- MM Kolkata returned the complaint, permitting re-filing at Bhopal.
Fresh Complaint at Bhopal
- Re-filed as Complaint Case No. RCT 1501046/2017 at JMFC Bhopal.
- Accused objected citing lack of jurisdiction + evidence already began in Kolkata.
The matter eventually reached the Supreme Court via transfer petitions.
Issues Before the Supreme Court
The Court reduced the controversy to two specific questions:
- Post-2015 Amendment, does the court of the drawee bank still have jurisdiction?
- If evidence commenced before one court, can the matter be transferred later to the court of proper jurisdiction?
Historical Legal Context — Evolution of Jurisdiction Under NI Act
The Court devoted significant discussion to the shifting legal landscape of territorial jurisdiction in cheque bounce cases.
1. Pre-Amendment Jurisdiction — K. Bhaskaran v. Sankaran Vaidhyan Balan (1999)
Bhaskaran held that jurisdiction could lie where any of the five components occurred —
(1) drawing cheque
(2) presentation
(3) dishonour
(4) notice
(5) failure to pay
This allowed multiple possible venues.
2. Narrowing View — Harman Electronics v. National Panasonic (2009)
Court held sending of notice = NOT a jurisdictional event; only receipt mattered.
3. Restrictive Rule — Dashrath Rupsingh Rathod v. State of Maharashtra (2014)
Major shift — only the location of the drawee bank had jurisdiction.
Intended to prevent forum shopping.
This caused practical difficulties for complainants across the nation.
Legislative Shift — 2015 Amendment to Section 142
To undo hardship caused by Dashrath, Parliament added:
- Section 142(2)(a): Jurisdiction lies where payee maintains bank account (if deposited through an account)
- Section 142(2)(b): If presented otherwise, jurisdiction is where drawer maintains account
Explanation Clause created legal fiction:
Even if cheque deposited at any branch, deemed delivered at home branch of payee.
Supreme Court’s Analysis & Findings
(A) On Jurisdiction
The Court held:
- The 2015 amendment overrides Dashrath Rupsingh.
- For cheques deposited through bank account → jurisdiction lies where payee’s bank branch is located (Bhopal).
- The Explanation ensures deposit at another branch does not shift jurisdiction.
Thus, jurisdiction validly rests with JMFC Bhopal, not Kolkata.
(B) On Transfer and Stage of Proceedings
Even though evidence had commenced in Kolkata earlier, the Court clarified:
- Once a complaint was returned due to the amended law,
- Fresh filing at the proper jurisdiction court was valid,
- Proceedings at Mumbai do not continue automatically post-amendment.
The mere recording of evidence does not freeze jurisdiction, especially when a statute later rectifies venue clarification.
Thus, there was no basis for transfer to Kolkata.
Conclusion
The Supreme Court in Jai Balaji Industries Ltd. & Ors. v. M/s HEG Ltd. (2025 INSC 1362) reaffirmed the legislative shift brought by the Negotiable Instruments (Amendment) Act, 2015, holding that post-amendment, territorial jurisdiction in cheque dishonour cases under Section 138 of the NI Act lies with the court where the payee or holder in due course maintains the bank account, when the cheque is deposited for collection through an account.
By interpreting Section 142(2) along with its Explanation, the Court clarified that even if a cheque is deposited at any other branch of the payee’s bank, it is legally deemed to have been deposited at the home branch, thereby preventing jurisdictional manipulation while ensuring complainant's convenience.
Click Here to Read the Official Judgment