Introduction
Cases related to cheque bounce under Section 138 of the Negotiable Instruments Act, 1881 are very common in Indian courts. These cases mainly deal with situations where a person issues a cheque to repay money, but the cheque is returned unpaid by the bank. To protect trust in business and personal transactions, the law creates certain legal presumptions in favour of the person who receives the cheque.
The Supreme Court judgment in Bir Singh vs Mukesh Kumar (2019) is an important case that explains how strong these presumptions are and what an accused person must do to escape liability. This judgment is especially useful for law students and young lawyers because it clearly explains that once a cheque is signed and given, the law assumes it was issued for a valid debt unless the accused proves otherwise.¹
This article explains the case in simple and clear language, without technical complexity, while maintaining legal accuracy.
Facts of the Case
In this case, Bir Singh was the complainant and Mukesh Kumar was the accused. Bir Singh claimed that Mukesh Kumar had taken a friendly loan of ₹15 lakhs from him. To repay this loan, Mukesh Kumar issued a cheque of the same amount in favour of Bir Singh.
When Bir Singh deposited the cheque in the bank, it was returned unpaid because there was not enough money in Mukesh Kumar’s bank account. Bir Singh deposited the cheque once again, but it was dishonoured for the same reason.
After this, Bir Singh sent a legal notice to Mukesh Kumar as required under Section 138 of the Negotiable Instruments Act, asking him to pay the cheque amount within the given time. Mukesh Kumar did not make the payment. Therefore, Bir Singh filed a criminal case for cheque dishonour.
Journey of the Case Through Courts
Trial Court
The Trial Court examined the evidence and found Mukesh Kumar guilty under Section 138 of the Negotiable Instruments Act. The court held that the cheque was issued towards repayment of a loan and that all legal requirements were fulfilled. Mukesh Kumar was sentenced to one year of simple imprisonment and was also directed to pay ₹15 lakhs as compensation to Bir Singh.
Appellate Court
Mukesh Kumar challenged the decision before the Appellate Court. The Appellate Court agreed with the Trial Court that Mukesh Kumar was guilty. However, it slightly reduced the punishment while keeping the conviction intact.
High Court
Mukesh Kumar then approached the High Court by filing a revision petition. The High Court reversed the decisions of both lower courts and acquitted Mukesh Kumar. The High Court observed that Bir Singh had not properly proved how he arranged such a large amount of money. It also accepted the defence argument that the cheque was given as a blank signed cheque and was misused.
Supreme Court
Bir Singh was dissatisfied with the High Court’s decision and filed an appeal before the Supreme Court. The Supreme Court examined whether the High Court was correct in acquitting the accused and whether the legal presumptions under the Negotiable Instruments Act were correctly applied.
Issues Before the Supreme Court
The Supreme Court considered the following important questions:
- Whether a signed cheque creates a legal presumption of debt even if it is filled by someone else.
- Whether the High Court was justified in overturning the findings of the Trial Court and Appellate Court.
- What kind of evidence is required from the accused to rebut the presumption under Section 139 of the Negotiable Instruments Act.
Relevant Legal Provisions Explained
Section 138 – Cheque Bounce Offence
This section makes cheque dishonour a criminal offence if: – the cheque was issued to repay a legally enforceable debt, – the cheque is returned unpaid by the bank, – the payee sends a legal notice within time, and – the drawer fails to pay within the prescribed period.²
Section 139 – Presumption in Favour of the Holder
Section 139 states that the court must presume that the cheque was issued to discharge a debt or liability, unless the accused proves otherwise.³
Section 118 – Presumption of Consideration
This section presumes that every negotiable instrument was made for consideration, meaning that money or value was involved.⁴
Supreme Court Judgment and Reasoning
The Supreme Court allowed the appeal and set aside the High Court’s judgment. It restored the conviction of Mukesh Kumar. The Court made several important observations which are explained below.
1. Presumption Applies Once Cheque is Signed
The Supreme Court clearly held that once a person admits his signature on the cheque, the law automatically presumes that the cheque was issued for a valid debt. It does not matter whether the cheque was filled by the drawer himself or by someone else.
The Court explained that even if a person gives a signed blank cheque voluntarily, the presumption under Section 139 still applies.
2. Defence of Blank Cheque is Not Enough
The accused argued that he had given a blank signed cheque which was later misused. The Supreme Court rejected this argument. It held that merely saying that a cheque was misused is not enough. The accused must provide strong and believable evidence to support such a claim.
3. Burden of Proof Lies on the Accused
The Court explained that once the complainant proves that the cheque was signed and dishonoured, the burden shifts to the accused. The accused must raise a probable defence using evidence. Simple denial or suggestions during cross-examination are not sufficient.
4. High Court Exceeded Its Powers
The Supreme Court strongly criticised the High Court for interfering with the findings of the Trial Court and Appellate Court. It stated that revisional powers are limited and should be used only when there is a serious legal error or injustice. In this case, there was no such error.
5. Proof of Source of Money Not Always Necessary
The Supreme Court disagreed with the High Court’s view that the complainant must always prove the source of funds. The Court held that once the legal presumption applies, the complainant is not required to prove the loan unless the accused first rebuts the presumption.
Key Legal Principles Established
From this judgment, the following principles emerge:
- A signed cheque carries a strong legal presumption of debt.
- Filling of cheque details by another person does not invalidate the cheque.
- The accused must bring reliable evidence to rebut the presumption.
- High Courts should not lightly interfere with concurrent findings of lower courts.
Importance of This Judgment
Strengthening Trust in Cheques
This judgment helps maintain trust in cheque transactions. If courts easily accept defences like “blank cheque misuse” without proof, cheques would lose their reliability.
Clear Guidance for Courts
The judgment provides clear instructions to lower courts on how to deal with cheque bounce cases and how to apply legal presumptions.
Awareness for Common People
People often sign blank cheques casually. This case serves as a warning that signing and handing over a cheque carries serious legal consequences.
Critical View
Some critics feel that the strong presumption under Section 139 may sometimes harm innocent accused persons. However, the Supreme Court has clearly stated that the presumption is rebuttable. Therefore, genuine defences supported by evidence will still be considered.
Overall, the judgment maintains a fair balance between protecting honest lenders and preventing false prosecutions.
Conclusion
The Supreme Court decision in Bir Singh vs Mukesh Kumar (2019) is a very important judgment in cheque dishonour law. It clearly explains that once a cheque is signed and issued, the law presumes that it was given for a valid debt. The accused cannot escape liability by simply claiming misuse or lack of documentation.
This case strengthens the objective of the Negotiable Instruments Act and promotes certainty and discipline in financial transactions. For law students, advocates, and judges, this judgment remains a key authority on Sections 138 and 139 of the Negotiable Instruments Act.
Bir Singh v. Mukesh Kumar (2019)
▪︎ Reference https://indiankanoon.org/doc/157736723/
Citation:
¹ Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197.
² Section 138, Negotiable Instruments Act, 1881.
³ Section 139, Negotiable Instruments Act, 1881 (Presumption in favour of holder of cheque).
⁴ Section 118(a), Negotiable Instruments Act, 1881 (Presumption as to consideration).
Author Name: Anil Pandit, Law student pursuing the three-year LL.B. course, Guwahati, Assam
