Dashrath Rupsingh Rathod vs State Of Maharashtra & Anr (Case Summary)

In this landmark case, the Hon’ble Supreme court’s three judge bench discussed the territorial jurisdiction to file complaints under section 138 of the Negotiable Instruments Act. The court re-considered K. Bhaskaran’s case and significant changes were done in the earlier interpretations.

Table of Contents

Facts of Dashrath Rupsingh Rathod v. State of Maharashtra

This was being used by many complainants and businessmen to exploit the accused in cheque bounce cases by filing cases in multiple jurisdictions and very distant from the drawer’s bank.
The complainants were also planning and choosing to sent legal notices from where they wanted to file the case so that they can pre-plan the jurisdiction of the case.
The SLP was granted leave as the issue was of public importance. The petition was filed as there was massive abuse of the law by the complainants as held in the K. Bhaskaran’s case
The Previous settled law by K. Bhaskaran’s case was that a complaint u/s 138 can be filed anywhere where any act related to the offence occurred.

Issues framed

Whether the complainant should have the discretion to file a complaint under Section 138 of the NI Act at any location where any act constituting the offense occurs?

Judgment of Dashrath Rupsingh Rathod v. State of Maharashtra

The Hon’ble Supreme Court analysed Section 138 of the NI Act along with Section 177-179 of the Code of Criminal Procedure that deals with the jurisdiction.

The Court held that giving choice to the complainant in cheque bounce cases to decide the jurisdiction is harmful and Prosecution in such cases can, therefore, be launched against the drawer of the cheque only before the Court within whose jurisdiction the dishonour takes place except in situations where the offence of dishonour of the cheque punishable under Section 138 is committed along with other offences in a single transaction

The Court while overturning the K. Bhaskaran’s Case held that:

“…The unilateral acts of a complainant in presenting a cheque at a place of his choice or issuing a notice for payment of the dishonoured amount cannot in our view arm the complainant with the power to choose the place of trial. Suffice it to say, that not only on the Principles of Interpretation of Statutes but also the potential mischief which an erroneous interpretation can cause in terms of injustice and harassment to the accused the view taken in the Bhaskaran’s case needs to be revisited as we have done in foregoing paragraphs.”

This Judgment overturned the ratio of the K. Bhaskaran’s case, the complainants were then restricted to file cheque bounce cases in jurisdiction only where only before the Court within whose jurisdiction the dishonour takes place.

(Case overruled the Bhaskaran vs Sankaran)