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The Supreme Court of India has recently delivered a landmark judgment concerning the jurisdiction of cheque dishonour cases under Section 138 of the Negotiable Instruments Act, 1881 (NI Act). The ruling, delivered by a bench comprising Justices J.B. Pardiwala and R Mahadevan, unequivocally establishes that such cases must be filed at the location where the payee's bank account is situated. This decision effectively prevents the accused, the drawer of the cheque, from seeking a transfer of the case to a court of their convenience, typically their place of business or residence, based on arguments of hardship or logistical difficulties. The judgment arose from Transfer Petition (Crl.) No. 608 of 2024, along with connected matters, highlighting the significance and the potential impact of this ruling on a multitude of ongoing and future cheque dishonour cases across the country. The genesis of the case lies in a dispute between M/s Shri Sendhur Agro & Oil Industries, a Coimbatore-based proprietorship, and Kotak Mahindra Bank Ltd. The petitioner, M/s Shri Sendhur Agro & Oil Industries, had availed an overdraft facility from the respondent bank, Kotak Mahindra Bank, at its Coimbatore branch. Subsequently, upon failing to meet the repayment obligations, Kotak Mahindra Bank initiated legal proceedings under Section 138 of the NI Act. Critically, the bank filed the complaint in Chandigarh, where the bank had presented the dishonoured cheque for collection. This strategic decision by the bank to file in Chandigarh became the central point of contention. The petitioner challenged the jurisdiction of the Chandigarh court, arguing that the entirety of the financial transaction, including the issuance of the cheque and the underlying business dealings, had transpired in Coimbatore. The petitioner further contended that the complainant bank's action of presenting the cheque in Chandigarh was arbitrary and strategically motivated to create an undue disadvantage for the accused. Specifically, the petitioner cited practical impediments to defending the case in Chandigarh, including language barriers, the substantial distance requiring extensive travel, and the associated financial burden. These factors, according to the petitioner, constituted a significant impediment to their ability to effectively present their defense. The petitioner invoked Section 406 of the Criminal Procedure Code (CrPC) seeking a transfer of the case from Chandigarh to Coimbatore, aiming to mitigate these perceived hardships and ensure a fair opportunity to defend their case. The Supreme Court's meticulous examination of the case revolved around several pivotal legal questions. First and foremost, the Court scrutinized the determination of jurisdiction in cheque dishonour cases, specifically addressing whether the complaint should be filed where the cheque is presented for collection or where the drawer of the cheque maintains their account. Secondly, the Court delved into the permissible scope of transfer petitions under Section 406 of the CrPC, assessing the extent to which an accused can legitimately seek a transfer of a cheque dishonour case based solely on claims of personal inconvenience. Finally, the Court undertook a careful interpretation of Section 142(2) and 142-A of the NI Act, evaluating whether the bank's right to choose the jurisdiction under Section 142(2) supersedes or overrides the accused's plea for a transfer based on personal inconvenience. The Supreme Court, in its detailed and well-reasoned judgment, dismissed the transfer petitions and unequivocally upheld the jurisdiction of the Chandigarh court, effectively affirming the bank's right to choose the jurisdiction where the cheque was presented for collection. The Court firmly stated that jurisdiction in cheque dishonour cases is decisively determined by the location of the bank where the payee maintains their account, and not by the location where the drawer's bank is situated. This pronouncement provides much-needed clarity and reinforces the principle that the payee's bank location holds paramount importance in determining jurisdiction. Furthermore, the Court emphasized that the accused cannot successfully claim inconvenience as a valid ground for seeking a transfer of the case under Section 406 of the CrPC. This aspect of the ruling underscores the need for a strong legal basis, beyond mere inconvenience, to justify a transfer petition. The judgment heavily leaned on the precedent set in Yogesh Upadhaya v. Atlanta Ltd. (2023 SCC OnLine SC 170), which emphatically affirmed that complaints under Section 138 of the NI Act must be filed where the payee's bank is located, as explicitly clarified by the Negotiable Instruments (Amendment) Act, 2015. The Court further elucidated that Section 142-A was deliberately inserted into the NI Act to ensure that multiple complaints arising from dishonoured cheques drawn by the same accused are consolidated in a single court, promoting consistency and efficiency in adjudication. In rejecting the petitioner's argument of personal inconvenience, the Court reiterated the principle that while the transfer power under Section 406 CrPC exists, its exercise must be sparing and judicious. The Court emphasized that the accused cannot unilaterally dictate the forum of litigation based solely on personal inconvenience. To allow such a practice would open the floodgates to frivolous transfer petitions, undermining the efficiency of the legal system and potentially causing undue delay in the resolution of cheque dishonour cases. The arguments presented by both parties provided a comprehensive overview of the contentious issues. The petitioner, M/s Shri Sendhur Agro & Oil Industries, argued that the cheque was drawn, issued, and dishonoured in Coimbatore, and that all prior transactions had been conducted there. They asserted that the complainant bank deliberately filed the case in Chandigarh with the intent to harass and inconvenience the petitioner. The petitioner further contended that attending court proceedings in Chandigarh would impose an unreasonable burden, including travel and language barriers. Additionally, the petitioner pointed out that SARFAESI proceedings for loan recovery were already pending in Coimbatore, arguing that the Chandigarh case constituted an abuse of process. Conversely, Kotak Mahindra Bank Ltd. argued that it was legally entitled to present the cheque at its collection branch in Chandigarh, which rightfully determined the jurisdiction. The bank further stated that the petitioner had defaulted on multiple payments, and that the complaint was a lawful exercise of rights under the NI Act. The bank maintained that the accused's personal inconvenience did not constitute a valid ground for transfer under Section 406 CrPC. The Supreme Court's decision also drew upon several key precedents and legal reasoning. The Court cited Dashrath Rupsingh Rathod v. State of Maharashtra [(2014) 9 SCC 129], which established that the jurisdiction for a cheque dishonour case lies where the cheque is presented and dishonoured. The Court also referenced Bridgestone India Pvt. Ltd. v. Inderpal Singh [(2016) 2 SCC 75], which confirmed the amendments in Section 142(2)(a), restricting jurisdiction to where the payee's bank is located. Furthermore, the Court cited A.E. Premanand v. Escorts Finance Ltd. [(2004) 13 SCC 527], wherein the Supreme Court held that transfer petitions in NI Act cases should be entertained only in extraordinary circumstances. This judgment has significant implications for businesses and individuals involved in financial transactions involving cheques. By clarifying the jurisdiction for cheque dishonour cases, the Supreme Court has provided greater certainty and predictability for both payees and drawers of cheques. The ruling reinforces the importance of carefully considering the location of the payee's bank account when issuing or accepting cheques. The decision also serves as a deterrent against frivolous transfer petitions, ensuring that cheque dishonour cases are adjudicated efficiently and expeditiously. This clarity in the legal framework is crucial for maintaining the integrity of financial transactions and promoting confidence in the banking system. The Supreme Court's judgment is a significant step towards streamlining the resolution of cheque dishonour cases, providing a clear and consistent framework for determining jurisdiction and preventing the misuse of transfer petitions. The ruling is expected to reduce the burden on the courts and ensure that justice is served efficiently, ultimately benefiting both businesses and individuals involved in financial transactions involving cheques.