SC Raps Banks for Filing Cheque Bounce Cases in Distant Courts

Expressing displeasure over the "misuse of law" and "harassment" meted out to small-time borrowers by financial institutions and banks by lodging cheque bounce cases at distant locations in the country, the Supreme Court on Thursday said it would examine the issue and settle the law.

- Press Trust Of India

A bench of Justices Surya Kant and Joymalya Bagchi expressed shock over a case in which one Golla Naraesh Kumar Yadav sought the transfer of a case lodged by Kotak Mahindra Bank before the chief judicial magistrate at Chandigarh to a court of metropolitan magistrate in Adoni of Kurnool district in Andhra Pradesh.

Appearing for Yadav, the bench was informed by advocate P Mohith Rao that the bank has lodged the case at Chandigarh despite all transactions having taken place in Andhra Pradesh, which is creating difficulties for the petitioner.

He said that the borrower of the credit facilities from the bank regularly paid the loan instalment but the case was lodged due to a small default.

The bench asked the counsel appearing for the bank as to why the complaint was lodged against Yadav in Chandigarh when the entire transaction had taken place in Andhra Pradesh.