Territorial Jurisdiction in Section 138 NI Act Cases after the 2015 Amendment: Payee’s Home Branch as the Sole Forum and the Per Incuriam Status of Yogesh Upadhyay

I. Introduction

The Supreme Court’s decision in Jai Balaji Industries Ltd. v. M/s HEG Ltd., 2025 INSC 1362 (Transfer Petition (Crl.) Nos. 1099–1102 of 2025), is a significant clarification of territorial jurisdiction in cheque dishonour prosecutions under Section 138 of the Negotiable Instruments Act, 1881 (“NI Act”).

The case arises from a seemingly narrow procedural question—whether a complaint under Section 138 should be tried at Bhopal or Kolkata. However, the Court (J.B. Pardiwala J., with R. Mahadevan J. concurring) uses the opportunity to:

Clarify the meaning and operation of Section 142(2)(a) NI Act and its Explanation, inserted by the 2015 Amendment;
Settle the conflict generated by earlier Supreme Court decisions, especially Bridgestone, Yogesh Upadhyay and Sendhur Agro;
Declare the view in Yogesh Upadhyay v. Atlanta Ltd. (2023) 19 SCC 404 as per incuriam;
Reaffirm that for account payee cheques delivered for collection, jurisdiction is anchored to the payee’s “home branch”, not to the branch where the cheque is actually deposited; and
Exercise its transfer power in an equitable manner, allowing the case to continue in Kolkata despite the statutory jurisdiction being with Bhopal, to avoid prejudice and duplication given the advanced stage of trial there.

The judgment thus serves both as a doctrinal restatement of the post‑2015 jurisdictional regime under the NI Act and a practical guide for handling pending cases affected by earlier jurisprudential shifts.

II. Background and Factual Matrix

1. Parties and transaction

Accused / Petitioners: Jai Balaji Industries Ltd. (accused company) and its directors.
Complainant / Respondent: M/s HEG Limited.

The dispute arises from a commercial transaction where Jai Balaji Industries Ltd. issued a cheque for Rs. 19,94,996/- to HEG Limited against an invoice dated 23.03.2014.

The cheque was drawn on State Bank of Bikaner and Jaipur, Kolkata (drawer’s bank).
HEG (payee) deposited the cheque on 19.06.2014 in its account at State Bank of India, Bhopal branch (payee’s bank).
The cheque was dishonoured on 20.06.2014 for insufficiency of funds.

HEG then issued the statutory notice dated 11.07.2014 under Section 138 NI Act, which was delivered on 14.07.2014. The accused replied (26.07.2014, received 30.07.2014) claiming the cheque was only a security deposit, not for discharge of a legally enforceable debt.

2. Procedural history

First complaint at Kolkata (pre‑amendment filing)
HEG filed Complaint Case No. 406978 of 2014 on 16.08.2014 before the Metropolitan Magistrate, Kolkata (“MM, Kolkata”). It was registered on 29.01.2015 and:
- Summons were issued on 29.01.2015;
- Charges were framed; the accused pleaded not guilty;
- The complainant’s evidence‑in‑chief by affidavit was taken on record on 27.04.2015.
2015 Amendment intervenes
On 26.12.2015, the Negotiable Instruments (Amendment) Act, 2015 came into force, inserting Section 142(2) and 142A, which restructured territorial jurisdiction for Section 138 cases.
Return of complaint and refiling at Bhopal
On HEG’s request, MM, Kolkata by order dated 28.07.2016 returned the complaint, holding that in view of amended Section 142, it lacked jurisdiction and that the complaint should be filed in the court having jurisdiction over the bank where the payee maintains the account, i.e., Bhopal.

HEG then filed Complaint Case No. RCT 1501046 of 2017 before the Judicial Magistrate First Class, Bhopal (“JMFC, Bhopal”).
Objection to Bhopal jurisdiction and revision
The accused objected to the territorial jurisdiction of JMFC, Bhopal, relying on:
- Provisions of the Code of Criminal Procedure, 1973 (“CrPC”); and
- The proposition that MM, Kolkata, having already commenced recording of evidence under Section 145(2) NI Act, ought not to have returned the complaint.
JMFC, Bhopal rejected these objections. A criminal revision before the Sessions Court, Bhopal is pending.
Transfer Petition before the Supreme Court
The accused moved the Supreme Court under Section 446 of the Bhartiya Nagarik Suraksha Sanhita, 2023 (BNSS) (successor to Section 406 CrPC), read with Order XXXIX of the Supreme Court Rules, seeking transfer of the Bhopal case back to MM, Kolkata. The core questions, as framed by the Court, were:
- (i) Whether, after the 2015 Amendment, the court within whose local jurisdiction the drawee bank is situated still has jurisdiction to try a Section 138 complaint; and
- (ii) Whether, after the 2015 Amendment, a Section 138 complaint can be transferred to the court within whose jurisdiction the drawee bank is situated if evidence under Section 145 has already commenced in that court.

The merits of the underlying commercial dispute were not in issue; the sole controversy concerned territorial jurisdiction and appropriate forum.

III. Summary of the Judgment

1. Core holdings on jurisdiction under Section 142(2)

The Supreme Court comprehensively interprets Section 142(2) NI Act (inserted by the 2015 Amendment) and holds:

For account payee cheques (“delivered for collection through an account” – Section 142(2)(a)):
The sole court having jurisdiction is the one within whose local jurisdiction the branch of the bank where the payee (or holder in due course) maintains the account is situated (the “home branch” of the payee).

The Explanation to Section 142(2)(a) creates a legal fiction: when a cheque is delivered for collection at any branch of the payee’s bank, it is deemed to have been delivered to the payee’s home branch for jurisdictional purposes. Thus, the mere place where the cheque is physically deposited does not create a separate forum.
For non‑account‑payee/bearer cheques (“presented for payment otherwise through an account” – Section 142(2)(b)):
Jurisdiction lies with the court within whose local jurisdiction the branch of the drawee bank where the drawer maintains the account is situated (the drawer’s “home branch”), irrespective of the branch where the cheque is actually presented or dishonoured.
CrPC/BNSS provisions on place of trial are overridden by Section 142(2):
After the 2015 Amendment, the special jurisdictional scheme of Section 142(2) governs Section 138 cases; the general provisions of the CrPC/BNSS (Sections 177–179 CrPC; corresponding BNSS provisions) do not control where the NI Act has specifically “occupied the field”.
Yogesh Upadhyay v. Atlanta Ltd. is held per incuriam:
The Court explicitly states that the jurisdictional position laid down in Yogesh Upadhyay, which gave primacy to the place where the cheque was actually delivered for collection, is inconsistent with the text and scheme of Section 142(2)(a) and its Explanation and is therefore per incuriam.

2. Application to the present case

The cheque was an account payee cheque delivered for collection at SBI, Bhopal (payee’s bank).
Under Section 142(2)(a) read with the Explanation:
- HEG “maintains an account” with SBI, Bhopal;
- Hence, only the court having jurisdiction over SBI, Bhopal—i.e., JMFC, Bhopal—has statutory territorial jurisdiction.
Accordingly, MM, Kolkata did not have statutory jurisdiction to try the complaint under the current scheme of Section 142(2).

3. Transfer direction in light of advanced stage of Kolkata proceedings

Despite holding that Bhopal is the correct forum under Section 142(2), the Court notes that the Kolkata proceedings had already:

Reached summoning, appearance and framing of charge; and
Entered the stage of recording evidence by affidavit under Section 145(2) NI Act before the complaint was returned.

Drawing on the transitional directions in Dashrath Rupsingh Rathod v. State of Maharashtra (2014) 9 SCC 129 (where complaints that had reached the Section 145(2) stage were permitted to continue in the courts where they were pending despite lack of jurisdiction post that judgment), the Court holds that:

Starting afresh in Bhopal would be a “procedural impropriety” and could prejudice the accused;
To “meet the ends of justice”, the case should be transferred back to the MM, Kolkata;
The proceedings shall resume from the stage immediately before the order returning the complaint (28.07.2016).

Thus, the Court allows the transfer petition and orders all connected matters to be disposed of on the same terms, while also directing that the judgment be circulated to all High Courts.

IV. Detailed Analysis

A. Pre‑Amendment Law on Jurisdiction under Section 138 NI Act

1. K. Bhaskaran v. Sankaran Vaidhyan Balan (1999) 7 SCC 510

In Bhaskaran, the Supreme Court first elaborately addressed territorial jurisdiction in Section 138 prosecutions. The Court identified five constituent acts for an offence under Section 138:

Drawing of the cheque;
Presentation of the cheque to the bank;
Returning the cheque unpaid by the drawee bank;
Giving notice in writing to the drawer demanding payment;
Failure of the drawer to make payment within 15 days of receipt of notice.

Relying on Sections 177, 178 and 179 CrPC, particularly Section 178(d), the Court held:

“if the five different acts were done in five different localities any one of the courts exercising jurisdiction in one of the five local areas can become the place of trial… the complainant can choose any one of those courts…” (para 16)

Thus, Bhaskaran created a highly complainant‑centric regime, allowing forum selection at any place where any of the five acts occurred. This was justified on the basis of the composite nature of the Section 138 offence and perceived difficulties in fixing a single locality.

However, this liberal view opened the door to:

Multiple potential fora for a single transaction;
Strategic filing in distant or inconvenient courts to pressure the drawer (forum shopping);
Heavy docketing of Section 138 cases across jurisdictions.

2. Harman Electronics (P) Ltd. v. National Panasonic India (P) Ltd. (2009) 1 SCC 720

Harman Electronics partially curtailed Bhaskaran. There, the cheque was drawn and presented in Chandigarh; the notice was sent from Delhi but received in Chandigarh. The complaint was filed in Delhi solely on the basis that the notice had been sent from there.

The Court drew a crucial distinction between giving notice and receiving notice:

“Issuance of notice would not by itself give rise to a cause of action but communication of the notice would.” (para 13)

Additionally, the Court warned that allowing jurisdiction based merely on the place from which notice was sent would:

“…cause grave harassment to the accused… it is, therefore, necessary… to strike a balance between the right of the complainant and the right of an accused…” (para 21)

Thus, while not overruling Bhaskaran, the Court refused to treat every technical act as jurisdiction‑conferring and emphasised abuse‑prevention.

3. Dashrath Rupsingh Rathod v. State of Maharashtra (2014) 9 SCC 129

The three‑Judge Bench decision in Dashrath Rupsingh dramatically altered the landscape. Re‑examining Bhaskaran, Harman and Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd. (2001) 3 SCC 609, the Court held:

The offence under Section 138 is the dishonour of the cheque by the drawee bank.
The steps in the proviso—notice, non‑payment in 15 days, etc.—are not ingredients of the offence itself; they are “conditions precedent” for prosecution.

As the Court put it:

“the offence in the contemplation of Section 138 of the NI Act is the dishonour of the cheque alone, and it is the concatenation of the five concomitants of that section that enable the prosecution of the offence in contradistinction to the completion/commission of the offence.” (para 10)

Reading Section 138 with Section 177 CrPC, the Court concluded:

“the return of the cheque by the drawee bank alone constitutes the commission of the offence and indicates the place where the offence is committed.” (para 18)

Therefore, jurisdiction was restricted to the court within whose local area the drawee bank (on which the cheque was drawn and where it was dishonoured) is located.

Dashrath Rupsingh also sharply criticised the importation of the civil law concept of “cause of action” into criminal jurisdiction (Section 142 NI Act’s use of that term was treated as relevant only to limitation/cognizance, not to place of trial).

Recognising that countless existing complaints would be affected, the Court provided a transitional arrangement:

“the category of complaint cases where proceedings have gone to the stage of Section 145(2) or beyond shall be deemed to have been transferred… to the court where it is presently pending.” (para 22)

This “saving” clause is later echoed conceptually in Jai Balaji.

B. The 2015 Amendment and the New Jurisdictional Scheme

1. Section 142(2) & 142A NI Act

In response to industry concerns over Dashrath Rupsingh, Parliament enacted the Negotiable Instruments (Amendment) Act, 2015 (in force from 26.12.2015). Section 142 was amended to add sub‑section (2); Section 142A was inserted to deal with pending cases.

Section 142(2) (post‑amendment) provides:

“142. Cognizance of offences.
…
(2) The offence under section 138 shall be inquired into and tried only by a court within whose local jurisdiction,--

(a) if the cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course, as the case may be, maintains the account, is situated; or
(b) if the cheque is presented for payment by the payee or holder in due course, otherwise through an account, the branch of the drawee bank where the drawer maintains the account, is situated.

Explanation.—For the purposes of clause (a), where a cheque is delivered for collection at any branch of the bank of the payee or holder in due course, then, the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or holder in due course, as the case may be, maintains the account.”

Section 142A deems all pending cases to have been transferred to courts having jurisdiction in accordance with Section 142(2).

2. Conceptual building blocks: “drawer”, “drawee”, “payee”, “delivery”, “presentment”

To interpret Section 142(2), the Court revisits key NI Act definitions:

Drawer: Maker of a cheque (Section 7).
Drawee: Person directed to pay under the cheque (typically, the drawee bank) (Section 7).
Payee: Person named in the instrument to whom the money is directed to be paid (Section 7).
Delivery (Section 46): “Making” of a cheque is completed by delivery (actual or constructive) by the drawer; this creates the drawer–payee relationship and the payee’s entitlement.
Presentment for payment (Section 64): A cheque must be presented for payment to the drawee by or on behalf of the holder/payee.

Critically, the Court distinguishes:

Delivery by the payee to his own bank “for collection through an account” — this is still part of the “delivery” chain under Section 46 for account payee cheques; and
Presentment to the drawee bank under Section 64.

This distinction underpins the Court’s reading of Section 142(2)(a) vs 142(2)(b).

3. “Maintains an account” and the significance of the “branch”

Referring to BIJOY KUMAR MONI v. PARESH MANNA 2024 SCC OnLine SC 3833, the Court reiterates that:

“the expression ‘on an account maintained by him with a banker’ describes the relationship between the account holder and the banker… any delegation of authority to manage the account does not alter the intrinsic relationship… It is the company alone which would continue to be the maker of these cheques, and thus also the drawer…” (para 45)

Section 138 speaks simply of an account “maintained by” the drawer with a bank. Section 142(2) adds a further qualifier: “the branch of the bank where [X] maintains the account”. This makes the specific branch—not the bank as an abstract entity—the anchor point for jurisdiction. The Court refers to this as the “home branch”.

Thus, for jurisdiction, it is not enough to say “the payee has an account with SBI”; one must identify “SBI, Bhopal Branch” (for HEG) or “SBBJ, Kolkata Branch” (for Jai Balaji).

C. Conjoint Reading of Section 142(2)(a) and the Explanation

1. Section 142(2)(b): bearer cheques and the drawer’s home branch

The Court first addresses Section 142(2)(b) to show the legislative pattern.

For cheques “presented for payment… otherwise through an account” (typically bearer or over‑the‑counter cheques), jurisdiction lies at:

“the branch of the drawee bank where the drawer maintains the account”.

Because of “payable at par” and Cheque Truncation System (CTS), a cheque may be actually presented or processed at multiple branches. Yet, Parliament fixes jurisdiction to the drawer’s home branch, not the branch where the dishonour technically occurs. This:

Prevents scattered litigation wherever the drawee bank has branches;
Provides certainty and fairness to the drawer; and
Reflects a deliberate departure from the strict “place of offence” (dishonour) test in Dashrath Rupsingh.

2. Section 142(2)(a): account payee cheques and the payee’s home branch

For account payee cheques “delivered for collection through an account”, the text points to:

“the branch of the bank where the payee or holder in due course… maintains the account.”

The Explanation then states that if the cheque is delivered for collection at any branch of the payee’s bank, it shall be deemed to have been delivered to the branch where the payee maintains the account.

The Court stresses that:

The words “delivered” and “for collection through an account” are to be read together;
“For collection through an account” characterises the cheque as an account payee cheque—funds move through bank accounts, not cash over the counter;
Commercial convenience allows the payee to deposit the cheque at any branch; but legally, for jurisdiction, that deposit is deemed to be at the payee’s home branch.

3. The Court’s illustrative scenario

The Court provides a helpful hypothetical, which can be summarised as follows:

Party / Event	Location
Payee’s home branch	Delhi
Drawer’s home branch (drawee bank)	Mumbai
Place where cheque is drawn	Ahmedabad
Account payee cheque: place where payee delivers for collection	Chennai branch of payee’s bank
Bearer cheque: place where cheque is presented for payment	Bangalore branch of drawee bank

Under Section 142(2):

For the account payee cheque (142(2)(a)):
- Despite physical delivery at Chennai, the Explanation deems the cheque to have been delivered at the payee’s home branch (Delhi).
- Jurisdiction: Courts at Delhi.
For the bearer cheque (142(2)(b)):
- Irrespective of actual presentation at Bangalore, jurisdiction is tied to the drawer’s home branch (Mumbai).
- Jurisdiction: Courts at Mumbai.

This example makes clear that:

The location of actual deposit or presentation does not generate fresh fora; and
Jurisdiction is fixed in a single, predictable court: payee’s home branch for account payee cheques, drawer’s home branch for bearer cheques.

D. Reconciling and Critiquing Post‑Amendment Case Law

1. Bridgestone India Pvt. Ltd. v. Inderpal Singh (2016) 2 SCC 75

Bridgestone was the first Supreme Court case applying Section 142(2)(a). The Court paraphrased the provision and observed:

“with reference to an offence under Section 138… the place where a cheque is delivered for collection i.e. the branch of the bank of the payee or holder in due course, where the drawee maintains an account, would be determinative of the place of territorial jurisdiction.” (para 13)

As Jai Balaji notes, this paraphrase presses the phrase “delivered for collection” to the fore, but in context, Bridgestone applied the statute in line with the payee’s home branch logic. The subsequent confusion stems not from its holding, but from later readings that detached “delivered for collection” from the Explanation.

2. Yogesh Upadhyay v. Atlanta Ltd. (2023) 19 SCC 404

In Yogesh Upadhyay, the Court considered transfer of complaints between Nagpur and Delhi. It relied heavily on:

The Statement of Objects and Reasons of the 2015 Amendment; and
The paraphrase in Bridgestone.

It concluded that:

“Section 142(2)(a) of the 1881 Act vests jurisdiction… in the court where the cheque is delivered for collection i.e. through an account in the branch of the bank where the payee or holder in due course maintains an account.” (para 13)

Crucially, however:

The judgment gave primacy to the place of actual deposit (“delivered for collection”), treating the act of deposit itself as jurisdiction‑conferring;
It did not grapple with the Explanation’s deeming fiction that deposit at any branch is legally equivalent to deposit at the payee’s home branch;
It treated the Statement of Objects and Reasons almost as if it could shape or override statutory text.

In Jai Balaji, the Court expressly disapproves this approach on two counts:

Misuse of Statement of Objects and Reasons.
Referring to Devadoss v. Veera Makali Amman Koil Athalur (1998) 9 SCC 286, the Court reiterates that Objects and Reasons cannot be used to determine substantive legal effect of a clear provision; they are only aids to understand background or the “mischief” to be remedied.
Failure to give effect to the Explanation’s deeming fiction.
Ignoring the Explanation allows the payee, by choosing where to deposit the cheque, to manufacture jurisdiction at will—a re‑emergence of the very forum‑shopping mischief criticised in Harman and Dashrath Rupsingh.

Accordingly, Jai Balaji concludes that the position of law in Yogesh Upadhyay is per incuriam—decided in ignorance of a relevant statutory provision (the Explanation) and inconsistent with the NI Act’s scheme.

3. Shri Sendhur Agro & Oil Industries v. Kotak Mahindra Bank Ltd. 2025 SCC OnLine SC 508

Sendhur Agro cited both Bridgestone and Yogesh Upadhyay and attempted to explain Section 142(2)(a). It held:

“when a cheque is delivered or issued to a person with liberty to present the cheque for collection at any branch of the bank where the payee… maintains the account, then the cheque shall be deemed to have been delivered or issued to the branch of the bank in which the payee… maintains the account, and the court of the place where such cheque was presented for collection, will have the jurisdiction…” (para 62)

It went on to say:

“in that view of the position of law, the word ‘delivered’ used in Section 142(2)(a)… has no significance. What is of significance is the expression ‘for collection through an account’… presentation of the cheque will be through the account of the payee… and the said place is decisive to determine the question of jurisdiction.” (para 62)

Jai Balaji carefully reconciles this by reading Sendhur Agro as effectively embedding the notion of “home branch” within “for collection through an account”:

In substance, Sendhur Agro recognises that cheques “through an account” move via the payee’s account maintained at a specific branch;
The deeming fiction ensures that even if physically deposited elsewhere, legally the delivery is to that home branch;
Therefore, the “place where presented for collection” in a legal sense is the payee’s home branch, not the casual branch of deposit.

In this way, Jai Balaji harmonises Sendhur Agro with the home‑branch logic and distinguishes it from the more expansive, deposit‑location‑centric reading in Yogesh Upadhyay.

E. Doctrinal Themes: Interpretation and Abuse‑Prevention

1. Textual and structural analysis

The judgment is anchored in textual fidelity:

It reads Section 142(2)(a) and the Explanation as an integrated whole;
It aligns 142(2)(a) and 142(2)(b) structurally: both use “branch” and “maintains the account” language, signalling a symmetric design—payee’s home branch vs drawer’s home branch.

The Court explicitly warns against elevating an Explanation to override the main provision, or reading phrases (“delivered for collection”) in isolation without their statutory context.

2. Controlled use of Statement of Objects and Reasons

While acknowledging the Objects and Reasons (especially para 5, which speaks of “the bank branch of the payee, where the payee presents the cheque for payment”), the Court holds it cannot supplant clear statutory language. The Objects and Reasons explain the mischief of Dashrath Rupsingh, but cannot justify re‑introducing the earlier mischief of forum shopping.

3. Balancing payee protection and accused’s convenience

The 2015 Amendment is recognised as payee‑protective—moving away from the accused‑centric drawee‑bank rule in Dashrath Rupsingh. However, the Court insists that:

This does not license the complainant to manipulate jurisdiction by arbitrarily choosing deposit locations;
Parliament’s choice of “home branch” and the deeming fiction were meant to achieve both payee convenience and jurisdictional certainty, not open multiple fora.

The judgment thus preserves the core concern articulated in Harman and Dashrath Rupsingh about using Section 138 as “a device of harassment”.

4. Special law vs general criminal procedure

The Court is clear that Section 142(2) NI Act, a special provision, overrides general place‑of‑trial rules in the CrPC/BNSS (Sections 177–179 CrPC and their BNSS equivalents). Attempting to revert to CrPC logic on “cause of action” or “place where offence committed” is unwarranted once Parliament has specified jurisdictional criteria in the NI Act itself.

F. Application to the Present Case and the Transfer Order

1. Determining the correct statutory forum

Applying the clarified principles:

The cheque in question is an account payee cheque—the complainant’s account at SBI, Bhopal was to receive the funds;
Under Section 142(2)(a) read with the Explanation:
- HEG “maintains an account” at SBI, Bhopal (its home branch);
- Even if it could have theoretically deposited at other SBI branches, for jurisdiction, delivery is deemed at Bhopal.
Therefore, JMFC, Bhopal is the statutory court of competent jurisdiction.

The argument that jurisdiction still lies at the drawee bank’s place (Kolkata), based on Dashrath Rupsingh and CrPC concepts, is rejected because:

The 2015 Amendment has shifted the jurisdictional anchor for Section 138;
Section 142(2) is a special rule that now governs; CrPC’s Section 177–178 apply only where no special rule exists.

2. The complication: prior proceedings in Kolkata

However, the unique feature of this case is that:

Before the 2015 Amendment came into force, the Kolkata court had:
- Issued summons;
- Framed charge; and
- Recorded the complainant’s evidence‑in‑chief by affidavit under Section 145.
After the Amendment, MM, Kolkata returned the complaint (28.07.2016); then the complaint was refiled at Bhopal.

The accused now seek to transfer the Bhopal case back to Kolkata, arguing that MM, Kolkata should have retained the case once evidence commenced, akin to the transitional saving in Dashrath Rupsingh.

3. Role of Section 142A and equitable adjustment

Section 142A(1) provides that, notwithstanding anything in CrPC or any judgment:

“all cases transferred to the court having jurisdiction under sub‑section (2) of section 142, as if that sub‑section had been in force at all material times…”

Strictly applied, 142A would:

Deem the complaint to be correctly pending in Bhopal, the court of payee’s home branch.

Yet, the Court is also mindful of:

The advanced stage reached in Kolkata before the complaint was returned;
The potential prejudice of restarting the evidentiary process anew in Bhopal, particularly to the accused;
The precedent in Dashrath Rupsingh where, to avoid “legal complications”, cases at the Section 145(2) stage were allowed to continue in the courts where they were already pending.

Accordingly, the Court reasons that, to “meet the ends of justice”, it is appropriate to allow the matter to proceed in Kolkata:

The case is transferred to MM, Kolkata (using the Supreme Court’s transfer power under Section 446 BNSS / Section 406 CrPC equivalent);
The proceedings will resume from the stage prior to the complaint’s return (i.e., post‑evidence‑in‑chief);
This avoids duplicative effort and potential prejudice while respecting the newly clarified jurisdictional scheme for future cases.

The result is a pragmatic compromise: the Court lays down a payee‑home‑branch rule for all cases but does not undo the procedural progress already made in Kolkata in this one.

V. Simplifying Key Legal Concepts

1. Account payee vs bearer cheque

Account payee cheque: Can be credited only to the bank account of the named payee; funds move from the drawer’s account to the payee’s account through banking channels. These are covered by Section 142(2)(a) (“delivered for collection through an account”).
Bearer / otherwise through an account cheque: Can be encashed over the counter or otherwise, not necessarily via a specific payee account. These fall under Section 142(2)(b) (“presented for payment… otherwise through an account”).

2. Home branch

“Home branch” is not a statutory phrase but an explanatory label used by the Court for:

The specific branch of the bank where the drawer (Section 138) or payee (Section 142(2)(a)) maintains the account.

Jurisdiction under Section 142(2) is tied to this branch, not to any branch of the same bank network.

3. Delivery vs presentment

Delivery (Section 46): The act by which the drawer hands over the cheque to the payee (and, in the account payee context, the payee hands it to his bank for collection). It completes the “making” of the cheque.
Presentment for payment (Section 64): When the cheque is presented to the drawee bank (the bank on which it is drawn) so that the bank can decide whether to honour or dishonour it.

Section 142(2)(a) is concerned with the payee’s delivery of an account payee cheque to his own bank “for collection through an account”; Section 142(2)(b) concerns presentment to the drawee bank “otherwise through an account”.

4. Deeming fiction (Explanation to Section 142(2)(a))

A “deeming” provision tells the court to legally treat something as if it were something else. Here:

If the payee deposits the cheque at any branch of his bank;
The law deems that deposit to have occurred at the branch where he maintains his account (home branch);
Thus, jurisdiction is fixed at the home‑branch court, regardless of where the cheque was physically dropped off.

5. Per incuriam

A decision is per incuriam when rendered in ignorance of a binding statute or binding precedent. Such a decision does not enjoy full precedential authority.

In Jai Balaji, Yogesh Upadhyay is held per incuriam because it failed to consider the Explanation to Section 142(2)(a) and misapplied the statutory scheme, thereby incorrectly allowing multiple jurisdictional fora.

6. Section 145(2) NI Act

Section 145 allows evidence of the complainant to be given by affidavit. Section 145(2) gives the accused a right to apply to have the complainant summoned and cross‑examined. Once proceedings have “reached the stage of Section 145(2)”, they have progressed significantly. Both Dashrath Rupsingh and Jai Balaji treat this stage as a cut‑off for allowing cases to continue in a court even if some later jurisdictional objection arises.

VI. Impact and Significance

1. Settling the law on territorial jurisdiction in Section 138 cases

The judgment firmly establishes that:

For account payee cheques:
- Only the court within whose local limits the payee’s home branch is located has jurisdiction (Section 142(2)(a) + Explanation).
- Depositing the cheque at any other branch of the same bank does not create additional fora.
For bearer/otherwise through account cheques:
- Only the court of the drawer’s home branch (drawee bank branch where drawer maintains account) has jurisdiction (Section 142(2)(b)).

This removes the ambiguity created post‑amendment and ensures a single, predictable forum in both scenarios.

2. Overruling the expansive reading in Yogesh Upadhyay

By explicitly declaring Yogesh Upadhyay per incuriam, the Court:

Prevents complainants from relying on that decision to file cases wherever they happen to deposit the cheque;
Restores coherence between Section 142(2)(a), its Explanation and Parliament’s clear intention to avoid forum manipulation;
Guides High Courts and subordinate courts to align their jurisprudence with the home‑branch model.

3. Guidance for pending and future litigation

Future cases: Complaints must be filed:
- At the payee’s home‑branch court (for account payee cheques); or
- At the drawer’s home‑branch court (for bearer cheques).
Existing cases: Courts must apply Section 142(2) and 142A for transfer/return, but may, in rare cases and under superior court directions, preserve proceedings that have already significantly advanced (particularly beyond Section 145(2) stage) to avoid injustice.
CrPC/BNSS place of trial: These general provisions cannot be invoked to circumvent Section 142(2)’s special jurisdictional rule for Section 138 cases.

4. Practical implications for business and banking

Corporations and financial institutions can plan their litigation strategies knowing that, for account payee cheques, all Section 138 cases must be brought at the payee’s home‑branch court.
They may centralise their receivables in particular branches in cities where they are comfortable litigating, but mere deposit at other branches will not alter jurisdiction.
Drawers can anticipate that for bearer cheques, any Section 138 prosecution will be anchored to their own account’s branch, not to some distant branch used for presentation.

5. Doctrinal clarity and interpretive discipline

Beyond NI Act practice, the judgment reinforces broader principles:

Explanations must be read harmoniously with the main provision and cannot be used to subvert it;
Statements of Objects and Reasons provide context, not binding rules of law;
Special statutes with explicit jurisdictional provisions override general CrPC/BNSS rules on territorial competence.

The directive to circulate the judgment to all High Courts underscores its intended role as a clarificatory and consolidating precedent.

VII. Conclusion

Jai Balaji Industries Ltd. v. M/s HEG Ltd. is a pivotal judgment in the evolving jurisprudence on Section 138 NI Act. It:

Confirms that Section 142(2) and its Explanation create a single, fixed forum for each cheque dishonour case—payee’s home branch for account payee cheques, drawer’s home branch for bearer cheques;
Closes the door on jurisdictional manipulation by deposit at any convenient branch;
Declares Yogesh Upadhyay per incuriam and restores coherence among post‑amendment authorities;
Demonstrates the Court’s willingness to use its transfer powers equitably to protect both procedural regularity and the accused’s rights, especially where cases have already progressed substantially.

In the broader legal context, the judgment exemplifies careful statutory interpretation that respects legislative design, balances competing interests of payees and drawers, and resists the temptation to distort jurisdictional provisions in the name of convenience. For courts, practitioners and commercial actors alike, it now stands as the leading authority on where cheque dishonour prosecutions must be instituted and continued in the post‑2015 regime.