In Brief
Two complainants sought to recover investment dues from a company director through cheque dishonour proceedings under Section 138 of the Negotiable Instruments Act, 1881. The respondent had issued two cheques (Rs. 37 lakh and Rs. 14 lakh) and a Promissory Note for repayment but later stopped payment. Trial and Sessions Courts convicted him. The High Court reversed the conviction, accepting that cheques were issued as security. The Supreme Court restored the conviction, holding that the statutory presumption that a signed cheque discharges a legally enforceable debt is rebuttable only by credible evidence. The respondent's defences—that cheques were blank security for an old 1995 loan and that the Promissory Note was unauthorised—were rejected as lacking credibility and inconsistent with the facts established by lower courts."
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