In Brief
Bir Singh issued a cheque for Rs 15 lakhs to Mukesh Kumar in repayment of a friendly loan. The cheque was dishonored twice for insufficient funds. Despite conviction by the trial and appellate courts under Section 138 of the Negotiable Instruments Act, the High Court acquitted Mukesh Kumar, reasoning that the parties had a fiduciary relationship and the burden lay on Bir Singh to prove the loan. The Supreme Court allowed the appeal, holding that the statutory presumption under Section 139 applies to all cheques, including those between persons in fiduciary relationships, and the burden to rebut it rests solely on the drawer. The conviction was confirmed with enhanced compensation of Rs 16 lakhs.
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