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Delhi High Court Rules on Jurisdiction Over Foreign Cheques Under Negotiable Instruments Act


In a significant judgment titled Right Choice Marketing Solutions JLT & Ors. v. State NCT of Delhi & Anr.[i] the Hon’ble High Court of Delhi (‘HC’) held that Indian courts have jurisdiction to adjudicate upon a complaint under s. 138 of the Negotiable Instruments Act, 1881 (‘NI Act’), a provision that deals with the dishonour of cheques, even if the cheque has been drawn outside India (‘foreign cheque’).

Brief Facts

  • Right Choice Marketing Solutions JLT (‘Petitioner Company’), a company registered in the United Arab Emirates (‘UAE’) and is the marketing wing of Right Choice Builders Private Limited (‘RCBPL’), a company incorporated in India.

  • Sachin Kumar Parolia (‘Respondent No. 2’) had invested an amount of Emirati Dirham (‘AED’) 600,000/- in RCBPL for returns in the form of interest payments.

  • Respondent No. 2 had, upon the insistence of Petitioner No. 1 and 2, common directors of the Petitioner Company, issued multiple cheques in favour of the Petitioner Company, which was the branch office of RCBPL in Dubai.

  • The entire principal sum was to be repaid after the expiry of one year through a principal cheque of AED 600,000/- (‘Principal Cheque’). However, the Petitioners (Petitioner Company, Petitioner 1 and Petitioner 2) failed to pay the amount.

  • Thereafter, the Petitioners requested Respondent No. 2 not to present the Principal Cheque and instead issued a few post-dated cheques drawn on the National Bank of Abu Dhabi in AED in favour of Respondent No. 2, which were subsequently returned unpaid.

  • Respondent No. 2 filed proceedings before Abu Dhabi Courts of First Instance, and orders were passed against the Petitioners. However, the Petitioners did not comply with the aforementioned orders and continued to reside in India.

  • Respondent No. 2 was thereafter compelled to present the Principal Cheque at their bank in Delhi. However, the same was also dishonoured due to ‘fund insufficiency’. Having no option left, Respondent No. 2 filed a complaint against the Petitioners under s. 138 of the NI Act.

  • The Petitioners, aggrieved by the initiation of the NI Act proceedings, approached HC under s. 482 of the Code of Criminal Procedure, 1973 (‘CrPC’), seeking to quash the NI proceedings as they fell beyond the jurisdictional limits of Indian courts and s. 138 of the NI Act would not be applicable to the present case.


Whether the mere presentation of a foreign cheque in India is sufficient to invoke the provision of s. 138 of the NI Act?


  • The HC dismissed the petition and observed that as per the mandate of s. 138 r/w. s. 142(2) of the NI Act, Indian courts have the jurisdiction to adjudicate a complaint under s. 138 of the NI Act, even though the cheque that had been presented was a foreign cheque.

  • The HC, after examining several provisions of the NI Act, noted that such provisions do not debar complaints to be made under s. 138 of the NI Act, as the offence is deemed to be committed where the cheque is delivered for collection as per provisions of the section.

  • Further, as per the amendment to s. 142 of the NI Act (as amended in 2015), the dishonour is deemed to have taken place where the payee/holder’s bank is located. Therefore, s. 138 r/w. s. 142(2) of the NI Act empowered the Courts in Delhi to adjudicate upon the complaint.

  • Additionally, the jurisdiction in the present case was also established as per the provisions of s. 4 of CrPC. Considering that an offence under the NI Act is to be dealt with as per the provisions of CrPC, the jurisdiction of the court shall be determined by the fact where the cheque is deposited for encashment. Hence, in the present case, the jurisdiction of the Delhi Courts could not have been ousted.

Our Analysis

This judgment marks a significant step toward greater vigilance in financial matters. It underscores the importance and applicability of the legal provisions under the NI Act in cross-border transactions. The HC clarified that a drawer cannot escape his liability to fulfil the obligation entered into while drawing the cheque as per provisions of the NI Act. This judgment reinforces the judiciary's commitment towards the legislature's intent to safeguard faith in financial promises, thereby promoting business, trade, commerce, and industrial activities in India.

End Note

[i] 2024 SCC OnLine Del 2831

Authored by Aditya Gupta, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinion.



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