Clarifying that non-production of transaction records or ledger accounts and a plausible defence of cheque misuse can successfully rebut the Section 139 presumption, and reaffirming that High Courts may disturb acquittals only in cases of patent perversity.
Summary
| Category | Data |
|---|---|
| Case Name | ACQA/366/2019 of SHRI SAI AGRO Vs RAMCHARAN |
| CNR | CGHC010156442019 |
| Date of Registration | 04-05-2019 |
| Decision Date | 02-09-2025 |
| Disposal Nature | DISMISSED |
| Judgment Author | Hon’ble Shri Justice Deepak Kumar Tiwari |
| Court | High Court Of Chhattisgarh |
| Bench | Single-Judge Bench |
| Precedent Value | Affirms existing precedent |
| Overrules / Affirms | Affirms |
| Type of Law | Criminal Law – Negotiable Instruments Act, 1881 |
| Questions of Law |
|
| Ratio Decidendi |
The complainant failed to establish a legally enforceable debt because no ledger or detailed accounts were produced. The accused’s defence—that the cheque was handed blank to the financier and misused—remained a viable probability, successfully rebutting the statutory presumption under Sections 118/139 of the Negotiable Instruments Act. Following Constable 907 Surendra Singh & another vs State of Uttarakhand (2025 INSC 114), High Courts may only disturb acquittals if there is patent perversity or a clear misreading or omission of material evidence. Applying these principles, the appellate court’s acquittal was held to be a possible view and was upheld. |
| Judgments Relied Upon | Constable 907 Surendra Singh & another vs State of Uttarakhand, 2025 INSC 114 |
| Logic / Jurisprudence / Authorities Relied Upon |
|
| Facts as Summarised by the Court |
The complainant sold a tractor-trolley, granted a rebate, and part-financed the purchase; the balance was payable within 1–2 months. The accused issued a cheque which bounced and failed to pay after notice. At trial, the accused claimed no direct transaction and said the blank cheque was given to the financier and misused. The trial court convicted; the appellate court acquitted; this appeal followed. |
| Citations |
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Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts in Chhattisgarh |
| Persuasive For | Other High Courts |
| Follows | Constable 907 Surendra Singh & another vs State of Uttarakhand, 2025 INSC 114 |
What’s New / What Lawyers Should Note
- Non-production of ledger accounts or detailed transaction records can be fatal to a cheque-bounce complaint.
- A defence that a cheque was handed over blank to a financer and misused is a valid route to rebut the presumption under Section 139.
- High Courts will uphold acquittals unless there is patent perversity or a clear misreading/omission of material evidence.
Summary of Legal Reasoning
- The complainant did not produce any ledger or accounting records to prove an enforceable debt for the amount of the dishonoured cheque.
- The accused’s explanation—that the cheque was blank and given to the financier at the time of purchase of a vehicle in his son’s name—remained a plausible defence, rebutting the statutory presumption under Sections 118/139 NI Act.
- Relying on Constable 907 Surendra Singh & another vs State of Uttarakhand (2025 INSC 114), the court reiterated that a High Court may only interfere with an acquittal if the trial court’s judgment is patently perverse or based on the omission of material evidence.
- The appellate court’s decision to acquit was found to be a reasonable view and therefore maintained.
Arguments by the Parties
Petitioner (Appellant / Complainant)
- The appellate court failed to appreciate the evidence showing the bounced cheque and outstanding balance.
- The trial court’s conviction under Section 138 was supported by documentary evidence and should be restored.
Respondent (Accused)
- There was no direct transaction with the complainant’s firm; the vehicle purchase and financing were in the son’s name.
- Blank cheques were given to the financier and subsequently misused—no enforceable debt existed against the accused.
Factual Background
The complainant, an authorized sub-dealer of tractors, sold a tractor-trolley and granted a rebate. A portion of the purchase price remained outstanding and was to be paid within two months; when the deadline passed, the accused issued a cheque which was dishonoured. After a demand notice, the complainant instituted a Section 138 NI Act complaint. The accused denied liability, claiming misuse of a blank cheque given to the financier, and challenged his conviction through successive appeals.
Statutory Analysis
- Section 138 of the Negotiable Instruments Act provides for criminal liability when a cheque bounces for insufficient funds.
- Section 139 creates a presumption of consideration and enforceable debt once a dishonoured cheque is established.
- Section 118 defines “cheque” and other relevant terms under the Act.
- The judgment underscores that the Section 139 presumption can be rebutted by showing non-existence of debt or misuse of the cheque.
Alert Indicators
- Precedent Followed – The judgment reaffirms the patent-perversity test for High Court interference with acquittals under Section 138.
Citations
- 2025:CGHC:44635
- Constable 907 Surendra Singh & another vs State of Uttarakhand, 2025 INSC 114