The High Court of Tripura reaffirms that once issuance and signature of a cheque are admitted, the statutory presumption under Section 139 of the Negotiable Instruments Act (NI Act) arises in favour of the complainant regarding its issuance in discharge of a debt or liability—placing the burden to rebut on the accused. The judgment sets aside an acquittal by the trial court, clarifies evidentiary standards, and stands as binding precedent for all subordinate courts within the state.
Summary
| Category | Data |
|---|---|
| Case Name | Crl.A./22/2024 of Sri Subrajyoti Paul Vs Sri Bijoy Sarkar and Anr. |
| CNR | TRHC010015862024 |
| Date of Registration | 27-09-2024 |
| Decision Date | 31-10-2025 |
| Disposal Nature | Allowed |
| Judgment Author | HON’BLE MR. JUSTICE BISWAJIT PALIT |
| Court | High Court of Tripura |
| Bench | Single Bench: HON’BLE MR. JUSTICE BISWAJIT PALIT |
| Precedent Value | Binding precedent within Tripura; persuasive elsewhere |
| Overrules / Affirms | Sets aside acquittal by trial court; upholds presumption under Section 139 NI Act |
| Type of Law | Criminal Law; Negotiable Instruments Act (Section 138 and 139) |
| Questions of Law |
|
| Ratio Decidendi |
The statutory presumption under Section 139 NI Act operates once issuance and signature are admitted, unless the accused produces credible evidence—by witness, cross-examination, or complainant’s material—to rebut the presumption. Alleging the cheque was issued as “security” is, by itself, insufficient, especially when not substantiated by credible documents or evidence. The supplier’s claim of outstanding money without reliable evidence or legal action does not defeat the complainant’s case. Presumptions under Sections 118(a) and 139 NI Act have to be rebutted by showing the nonexistence of legally enforceable debt/liability, not just by suggesting alternate explanations. The court is to lean towards the statutory object of securing banking efficacy unless cogent defence is raised. |
| Judgments Relied Upon |
|
| Logic / Jurisprudence / Authorities Relied Upon by the Court |
The court emphasizes the legal effect of presumptions under Section 139 and Section 118(a) NI Act as interpreted by the Supreme Court in Rangappa, Womb Laboratories, Tedhi Singh, and explains the difference in standard of proof between prosecution and defence. Refers to the object and purpose of Chapter XVII of NI Act—to enhance credibility in banking and business transactions. Discusses the necessity of rebutting statutory presumption by credible evidence and not by mere assertions. |
| Facts as Summarised by the Court |
The appellant, proprietor of M/S Aromatica, paid the respondent-accused Rs.70,000 in advance for supply of “Gandhaki Jaributi” (aromatic herbs). After failing to supply or refund, the accused issued a post-dated cheque for Rs.70,000, which was dishonoured twice for insufficient funds. Demand notice was duly served but unpaid—leading to trial under Section 138 NI Act. The accused admitted cheque issuance and signature, but claimed it was a “security cheque” and that materials worth a higher sum were supplied. Trial court acquitted, holding for the defence; the High Court, on appeal, found the presumption unrebutted, disbelieved the “security” claim, and sentenced the accused. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts in Tripura |
| Persuasive For | Other High Courts and the Supreme Court, particularly in interpreting Section 139 NI Act |
| Follows |
|
| Distinguishes |
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What’s New / What Lawyers Should Note
- The court gives clear guidance that a “security cheque” defence must be supported by credible, contemporaneous evidence such as agreements or documentary records; mere assertion will not rebut the Section 139 presumption.
- Where the accused admits signature and issuance of cheque, burden squarely shifts on the accused to rebut the presumption—not enough to raise vague or uncorroborated claims of “security purpose”.
- Absence of procedural lapses by complainant and failure of accused to respond to statutory demand notice weighs in favour of conviction.
- The judgment emphasizes that presumption under Section 139 NI Act not only covers issuance but, absent rebuttal, also the purpose as discharge of legal debt/liability.
- Subordinate courts in Tripura are bound to apply this standard; lawyers may cite this case as authority on the limits of “security cheque” defences in NI Act prosecutions.
Summary of Legal Reasoning
- The High Court first identifies the statutory presumptions under Sections 139 and 118(a) NI Act, referring to leading Supreme Court judgments including Rangappa v. Sri Mohan, Tedhi Singh v. Narayan Dass Mahant, and Womb Laboratories v. Vijay Ahuja, emphasizing that once execution is admitted, the presumption operates fully.
- The court reviews the evidence and holds that the defence of “security cheque” is a matter for the accused to prove, not a ground for defeating the presumption without credible supporting evidence.
- The accused’s claim of having supplied goods worth more than the disputed amount was unsupported by reliable documentary proof or legal recourse—delivery slips lacked proper signatures; witnesses were interested/chance witnesses.
- Trial court’s reliance on defence evidence was held misplaced as it failed to appreciate the statutory design and Supreme Court authority on shifting burden and evidentiary standards in Section 138 prosecutions.
- The defence failed to raise a probable case to rebut the presumption; mere assertion of a “security cheque” arrangement, without cogent corroboration, was found insufficient.
- The court sets aside the acquittal, convicts under Section 138, and sentences the accused, directing payment to the complainant.
Arguments by the Parties
Petitioner (Appellant):
- The cheque was issued by the respondent in discharge of a legally enforceable debt arising from a failed supply contract.
- Cheque was dishonoured twice due to insufficient funds.
- All statutory requirements under Section 138 NI Act were complied with.
- Cited Supreme Court decisions (including Womb Laboratories and Rangappa) to assert that “security” as a defence does not, without evidence, discharge the burden.
- Trial court misconstrued the law and evidence, resulting in acquittal.
Respondent:
- Claimed the cheque was issued as a security deposit, not towards any debt or liability.
- Asserted that goods worth Rs.2,94,172 were supplied to the appellant; the complainant failed to pay or return the cheque.
- Cited earlier High Court and Supreme Court cases (Jhulan Chandra Das v. Kamal Bhowmik; Vijay v. Laxman; M.S. Narayana Menon v. State of Kerala) to argue that presumption can be rebutted and the complainant failed to prove payment or subsisting debt.
- Argued that presence of interested witness and lack of proper financial documentation weaken the prosecution case.
Factual Background
The parties had a business arrangement for supply of “Gandhaki Jaributi”. The appellant paid the respondent Rs.70,000 in advance. The respondent did not supply the product nor refund the money, but issued a post-dated cheque, which was dishonoured twice for insufficient funds. Despite a statutory demand notice being duly received, the amount was not paid. The appellant initiated criminal proceedings under Section 138 of the NI Act. The trial court acquitted the accused principally on the basis of the “security cheque” defence and the conclusion that the complainant failed to prove outstanding debt. On appeal, the High Court re-examined the evidence and legal standards.
Statutory Analysis
- Section 138 NI Act: The offence requires a legally enforceable debt, dishonour of cheque, and failure to pay after notice. Compliance with proviso (cheque presentation within validity, notice within prescribed time, failure to pay within 15 days) is essential.
- Section 139 NI Act: Presumes, unless the contrary is proved, that a cheque was issued in discharge of debt or liability; reverse onus is engaged.
- Section 118(a) NI Act: Presumption as to consideration in negotiable instruments—until the contrary is proved.
- The court interprets these presumptions as setting a high evidentiary threshold for the accused to rebut, in line with Supreme Court authority.
- The court finds that “shall presume” means the court must presume unless disproved and is not mere formality.
- Statutory interpretation is in line with the object of Chapter XVII, to promote confidence in banking and prevent fraudulent evasion of debts.
Alert Indicators
- Precedent Followed – The decision reaffirms and applies binding Supreme Court precedent on Section 138/139 NI Act, especially Rangappa v. Sri Mohan and related authorities.