High Court of Gujarat Allows Appeal Against Acquittal in Cheque Dishonour Case — Rebuttal of Presumption Under Section 139 NI Act Requires Probable Defence, Not Mere Denial. The accused failed to rebut the presumption that the cheque was issued for a legally enforceable debt, leading to conviction under Section 138 of the Negotiable Instruments Act, 1881.

High Court: Gujarat High Court In Favour of Prosecution

Admin

2026-05-19 22:17:37

Font size:

Case Note & Summary

The appellant, Rajesh Darshanlal Gupta, filed a complaint under Section 138 of the Negotiable Instruments Act, 1881, against the respondents, Amivision (a partnership firm) and its partner Sanjay Narsinhdas Shroff, alleging dishonour of a cheque for Rs. 1,50,000 issued towards repayment of a loan. The trial court acquitted the accused on 11.01.2008, holding that the complainant failed to prove the debt beyond reasonable doubt. The appellant appealed under Section 378 CrPC. The High Court examined the evidence, noting that the cheque and its dishonour were admitted, and the presumption under Section 139 NI Act applied. The accused merely denied the debt without leading any evidence to rebut the presumption. The court held that the trial court erred in shifting the burden of proof onto the complainant and in requiring proof beyond reasonable doubt from the complainant. The presumption under Section 139 is a mandatory presumption that shifts the evidential burden onto the accused to raise a probable defence. Since the accused failed to do so, the acquittal was perverse. The High Court allowed the appeal, convicted the accused under Section 138 NI Act, and sentenced them to pay a fine of Rs. 2,00,000, with default simple imprisonment.

Headnote

A) Negotiable Instruments Act - Cheque Dishonour - Presumption under Section 139 - Rebuttal - The accused must raise a probable defence to rebut the presumption that the cheque was issued for a legally enforceable debt; mere denial is insufficient. The trial court's acquittal was set aside as the accused failed to rebut the presumption. (Paras 1-8)

B) Criminal Procedure Code - Appeal against Acquittal - Section 378 CrPC - Scope - The High Court can interfere with an acquittal if the trial court's findings are perverse or based on no evidence. Here, the trial court's conclusion was contrary to the evidence and law. (Paras 1-8)

Issue of Consideration

Whether the trial court erred in acquitting the accused despite the presumption under Section 139 of the Negotiable Instruments Act, 1881, and whether the accused successfully rebutted the presumption of legally enforceable debt.

Final Decision

The appeal is allowed. The judgment of acquittal dated 11.01.2008 is set aside. The respondents are convicted for the offence under Section 138 of the Negotiable Instruments Act, 1881. They are sentenced to pay a fine of Rs. 2,00,000 (Rupees Two Lakhs only), in default, to undergo simple imprisonment for a period of six months. Out of the fine amount, Rs. 1,90,000 shall be paid to the appellant as compensation.

Law Points

Presumption under Section 139 of Negotiable Instruments Act
1881
Rebuttal of presumption
Standard of proof for accused
Section 138 NI Act
Section 378 CrPC

Case Details

2026 LawText (GUJ) (01) 143

R/CRIMINAL APPEAL NO. 1962 of 2008

2026-01-19

Sanjeev J. Thaker

MR RI SHARMA, MR SS ACHARYA for the Appellant; MS SUDHA C SHUKLA for the Respondent No. 2

Rajesh Darshanlal Gupta

Amivision A Partnership Firm & Anr.

Nature of Litigation

Criminal appeal against acquittal in a cheque dishonour case under Section 138 of the Negotiable Instruments Act, 1881.

Remedy Sought

The appellant (original complainant) sought conviction of the respondents for the offence under Section 138 NI Act.

Filing Reason

The cheque issued by the respondent firm towards repayment of a loan was dishonoured, and the trial court acquitted the accused.

Previous Decisions

The trial court (13th Additional Senior Civil Judge and Judicial Magistrate, Vadodara) acquitted the accused on 11.01.2008 in Criminal Case No. 3383 of 2001.

Issues

Whether the trial court erred in acquitting the accused despite the presumption under Section 139 of the Negotiable Instruments Act, 1881? Whether the accused successfully rebutted the presumption of legally enforceable debt?

Submissions/Arguments

Appellant argued that the cheque and its dishonour were admitted, and the presumption under Section 139 NI Act applied; the accused failed to rebut it. Respondent argued that the complainant failed to prove the debt beyond reasonable doubt.

Ratio Decidendi

Under Section 139 of the Negotiable Instruments Act, 1881, there is a mandatory presumption that the cheque was issued for a legally enforceable debt. The accused must rebut this presumption by raising a probable defence; mere denial is insufficient. The trial court's acquittal was perverse as it placed the burden of proof on the complainant beyond reasonable doubt, contrary to the statutory presumption.

Judgment Excerpts

Feeling aggrieved by and dissatisfied with the judgment and order of acquittal dated 11.01.2008... The brief facts leading to filing of this appeal are such that respondent No.2 – Sanjay Narsinhdas Shroff, who was the partner of respondent No.1 - Firm i.e. Amivision, was a friend of the appellant - complainant and as he was in need of funds, he sought financial help in February, 2007 from the complainant - present appellant...

Procedural History

The appellant filed a complaint under Section 138 NI Act in Criminal Case No. 3383 of 2001 before the 13th Additional Senior Civil Judge and Judicial Magistrate, Vadodara. The trial court acquitted the accused on 11.01.2008. The appellant then filed the present appeal under Section 378 CrPC before the High Court of Gujarat.