Rebuttable Presumption Favors Complainant in Cheque Dishonour In 138 NI Act: SC

This criminal appeal was preferred against the Judgment and Order passed by the High Court of Judicature at Allahabad, Lucknow Bench, allowing the criminal revision petition of Ravindra Pratap Singh (respondent no.2/accused) which reversed the concurrent findings of guilt and conviction made by the Trial Court and confirmed by the Appellate Court. The accused was held guilty under Section 138 of the Negotiable Instruments Act, 1881 (the Act) for the dishonour of a cheque for Rs. 22,00,000/- drawn in favour of the complainant, which was dishonoured on return by writing 'payment stopped by drawer'.

The issues before the Supreme Court is the rebuttable presumptions under Section 118 read with Section 139 of the Negotiable Instruments Act, 1881, in favour of the complainant. The Apex Court examined whether the High Court errored in reversing the concurrent findings of culpability by re-appraising evidence and ignoring these presumptions.

The Supreme Court noted that once the signature on a cheque is admitted, as it is here, a presumption automatically arises that the cheque was issued in discharge of a legally enforceable debt or liability, and the onus is on the accused to adduce a likely defence to meet such a presumption. The Court observed that the accused's explanation that the cheque got lost was not trustworthy, especially in light of the delay in reporting the matter to the police and the fact that the intimation was not translated into an FIR.

On the High Court's focus on the complainant's inability to establish the source of funds, the Supreme Court reiterated that the burden is not on the complainant at the threshold to establish their financial capacity, unless the accused makes a reasonable objection and establishes the lack of capacity of the complainant. The Court drew upon Rohitbhai Jivanlal Patel v. State of Gujarat and Tedhi Singh v Narayan Dass Mahant to reiterate that the prima facie rule benefits the complainant, and the accused has to bring cogent evidence to disprove it. The Court also dealt with the argument that the complaint was not maintainable since the cheque had been issued in the name of a Partnership Firm (M/s Sun Enterprises) which was not made an arrayed party.

Held upon reliance on Sunita Palita v. Panchami Stone Quarry, the Court held that as the signatory of the cheque, who was also one of the Partners in the firm and in charge, was lined up as an accused, the complaint was maintainable. The ruling in Aneeta Hada v. Godfather Travels and Tours Private Limited was entertained but differentiated on the facts of the instant case wherein the signatory himself was the person who held command. The Supreme Court granted the appeal and quashed the Impugned Order of the High Court, thus reinstating the conviction of respondent no.2 as held by the Trial Court and affirmed by the Appellate Court. But, in light of the accused's age and the contentions raised, the Supreme Court amended the punishment to merely a fine of Rs. 32,00,000/- to be deposited by the appellant within a period of four months.

Non-payment within the said duration would lead to reinstatement of the initial punishment of one year simple imprisonment along with a combined fine of Rs. 35,00,000/-.

CORAM: JUSTICE SUDHANSHU DHULIA & JUSTICE AHSANUDDIN AMANULLAH
BETWEEN: ASHOK SINGH VS STATE OF UTTAR PRADESH & RAVINDRA PRATAP SINGH 2025 INSC 427
DOJ: 02-04-2025