The Uttarakhand High Court reaffirms that mere denial or unsupported assertions by the accused are insufficient to rebut the statutory presumptions under the Negotiable Instruments Act, 1881. Proceedings under Section 138 can be maintained against a trustee/president who signs the cheque, even if the trust itself is not made a party. This decision operates as binding authority on subordinate courts within Uttarakhand.
Summary
| Category | Data |
|---|---|
| Case Name | CRLR/322/2025 of MAHANT YOGI LAXMI Vs GYANENDRA SINGH BISHT |
| CNR | UKHC010077242025 |
| Date of Registration | 02-06-2025 |
| Decision Date | 30-10-2025 |
| Disposal Nature | DISMISSED |
| Judgment Author | Hon’ble Mr. Justice Ashish Naithani |
| Court | High Court of Uttarakhand |
| Precedent Value | Binding within jurisdiction |
| Overrules / Affirms | Affirms concurrent findings of both lower courts in appeal and at first instance |
| Type of Law | Criminal Law; Negotiable Instruments Act, 1881 |
| Questions of Law |
|
| Ratio Decidendi |
The Court held that once the complainant establishes foundational facts, the presumption under Sections 118 and 139 of the NI Act operates in their favour. The burden then shifts to the accused to rebut this presumption. Merely denying liability or claiming loss of cheques, without substantive corroborative evidence, is insufficient to rebut the presumption. In the present case, the defence evidence was found to be inconsistent and unsupported by credible records. The Court further clarified that a trustee (or president) who signs the cheque can be prosecuted under Section 138 NI Act, even without impleading the trust as a party. |
| Judgments Relied Upon | Not specifically cited in the judgment |
| Logic / Jurisprudence / Authorities Relied Upon by the Court | Reiteration of the principles regarding statutory presumption and their rebuttal under Sections 118 and 139 NI Act; distinction drawn between oral assertion and rebuttal by credible evidence; principles regarding limited revisional jurisdiction |
| Facts as Summarised by the Court | The accused allegedly borrowed ₹4,00,000 and issued two cheques to discharge the liability. On dishonour with remark “Payment stopped by drawer,” and after a legal notice was refused, the complainant initiated proceedings under Section 138 NI Act. The accused claimed the cheque book was lost prior to the cheques’ presentation and that there was no enforceable debt. Both the trial and appellate courts found this defence unsubstantiated and convicted the accused. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts in Uttarakhand |
| Persuasive For | Other High Courts and may be cited before Supreme Court as persuasive authority |
| Follows | Established principles on statutory presumption and burden of proof under NI Act |
What’s New / What Lawyers Should Note
- Reaffirms that the presumption under Sections 118 and 139 of the NI Act remains unless rebutted by credible, substantive evidence; mere oral assertion or denial is inadequate.
- Clarifies that a trustee or president who signs the dishonoured cheque may validly be prosecuted under Section 138, even if the underlying trust is not impleaded as a separate party.
- Distinguishes between parallel cheque complaints based on individual facts and evidence; acquittal in a similar case does not automatically entitle the accused to relief in another.
- Restates the limited revisional jurisdiction of the High Court—interference is warranted only for manifest perversity, illegality, or gross miscarriage of justice.
Summary of Legal Reasoning
- The Court emphasized that, on proving foundational facts (issuance, dishonour, notice), the law presumes the cheque was issued for a legally enforceable debt, shifting the onus to the accused.
- The accused’s defence—alleged loss of cheque book—rested entirely on oral statements, which were found contradictory between the accused and his witness, and not supported by any police or bank acknowledgment.
- The Court held that statutory presumptions under Sections 118 and 139 are not rebutted by mere defence assertions, but require substantive material or evidence.
- Claims of parallel acquittal in a separate case (on another similar cheque) were rejected, as each cheque gives rise to a distinct cause of action.
- On the maintainability question, the Court clarified that liability under Section 138 attaches to the signatory of the cheque; thus, a trustee or president can be proceeded against even without impleading the trust.
- No irregularity, illegality, or error was found in the concurrent findings below; no case for revisional interference was made out.
Arguments by the Parties
Petitioner (Revisionist)
- Both courts below failed to appreciate contradictions in the complainant’s and witness statements.
- The contested cheques were never issued in discharge of any legally enforceable liability.
- Claimed the cheque book was lost prior to presentation and this was intimated to both police and the bank; misuse of lost cheques resulted in multiple complaints.
- No documentary or independent evidence was produced by the complainant to establish the alleged loan.
- Argued that statutory presumptions were effectively rebutted by the defence evidence.
- Cited acquittal in a separate but similar complaint as inconsistent with current conviction.
- Contended that he was charged both in personal and representative capacity but appeal only pursued in personal capacity; hence proceedings suffered jurisdictional defect.
Respondent (Complainant)
- Supported concurrent findings of both lower courts, citing proper appreciation of evidence.
- Produced original cheques, bank memos, legal notice, and postal records establishing ingredients of offence.
- Asserted that both lower courts found cheques were issued for a subsisting liability and proper notice was served.
- Contended that plea of lost cheques was an afterthought, unsupported by any contemporaneous record.
- Pointed out contradictions in the defence witness testimony and absence of reliable evidence of alleged loss.
- Clarified that conviction against the Samiti had attained finality as only individual appeal was filed.
Factual Background
The complainant alleged that the accused borrowed ₹4,00,000 in cash and, in discharge of this liability, issued two cheques totaling ₹4,00,000 drawn on his bank account. Both cheques were dishonoured with the remark “Payment stopped by drawer.” The statutory legal notice was refused by the accused. The accused claimed loss of the cheque book prior to presentation and denied any debt. In trial, the accused presented only oral evidence to support his defence; no corroborative documents were produced. Both lower courts convicted the accused under Section 138 of the NI Act, finding the defence improbable and unsubstantiated.
Statutory Analysis
- Sections 118 and 139 of the Negotiable Instruments Act, 1881: The Court reaffirmed the presumption in favour of the holder that a cheque was issued for discharge of debt or liability, and clarified the process by which this presumption is rebutted.
- Section 138 of the Negotiable Instruments Act, 1881: Ingredients of the offence—issuance, presentation, dishonour, notice—must be strictly proved by the complainant; once done, the presumption operates.
- The judgment restated that a bare denial or unsupported assertion by the accused does not suffice to rebut the statutory presumption.
Dissenting / Concurring Opinion Summary
No dissenting or concurring opinions were delivered; the decision is unanimous.
Procedural Innovations
No new procedural directions or innovations were introduced in this judgment.
Alert Indicators
- ✔ Precedent Followed – The judgment reiterates and reaffirms the existing legal position on the rebuttal of statutory presumptions under the Negotiable Instruments Act.