Bhaskaran case on dishonour of cheque stands overruled

Supreme Court: Calling in question the decision of 2-judge bench in K. Bhaskaran v. Sankaran Vaidhyan Balan,  (1999) 7 SCC 510, famously known as the Bhaskaran Case on the issue of Territorial Jurisdiction of trial for the Complaint made for dishonor of cheque, the 3-judge bench of T.S. Thakur, Vikramjit Sen and C. Nagappan, JJ held that the liberal approach preferred in Bhaskaran case calls for a stricter interpretation of Section 138 of the Negotiable Instruments Act, 1881 (NIA) precisely because of its misemployment so far as choice of place of suing is concerned. The Court, Bhaskaran Case, had held that the jurisdiction to try an offence under Section 138 NIA could not be determined only by reference to the place where the cheque was dishonoured as the dishonour of the cheque was not by itself an offence under Section 138 NIA and that the offence was completed only when the drawer failed to pay the cheque amount within the period of fifteen days stipulated under clause (c) of the proviso to Section 138 of the Act and held that any court within whose jurisdiction any of the above acts were committed had jurisdiction.

Accepting the judgment of 2-judge bench in Harman Electronics Pvt. Ltd. v. National Panasonic India Pvt. Ltd. (2009) 1 SCC 720(Harman), where it was held that what would constitute an offence is stated in the main provision of Section 138 NIA and the proviso appended thereto, imposes certain further conditions which are required to be fulfilled before cognizance of the offence can be taken, the Court held that in criminal jurisprudence there is a discernibly demarcated difference between the commission of an offence and its cognizance leading to prosecution. It was held that the Harman approach is significant and sounds a discordant note to the Bhaskaran ratio.

In the present case in which Anagha Desai and CS Ashri represented the appellant and respondents, respectively, considering the various judgments of the Supreme Court, the Court overruled the Bhaskaran Ratio and, considering that Section 177 CrPC applies to Section 138 NIA, held that prosecution can be launched only before the Court within whose jurisdiction the dishonour takes place except in situations where such offence is committed along with other offences in a single transaction within the meaning of Section 220(1); read with Section 184 CrPC or is covered by the provisions of Section 182(1); read with Sections 184 and 220 CrPC thereof. Dashrath Rupsingh Rathod v. State of Maharashtra, Criminal Appeal No. 2287 of 2009, decided on 01.08.2014

To read the full judgment, refer to SCCOnLine