Negotiable Instruments Act, 1881 — Sections 118(a), 139 — Presumption — Financial capacity of complainant — Onus and rebuttal Presumption under Sections 118(a) and 139 arises when signature on cheque is admitted, but it is rebuttable and disappears once contrary evidence is led. Accused is entitled to challenge complainant’s financial capacity to advance the alleged loan and to raise a probable defence by cross-examination and/or own evidence. Complainant admitted monthly salary of ₹25,000/- in 2012–2013 (annual ₹3,00,000/-), claimed to have saved and kept ₹5,00,000/- in cash at home, and to have advanced it without security or documentation. DW2 proved income tax return of complainant showing income of ₹4,75,685/- in 2018–2019 and no previous returns. Court found it highly doubtful that complainant could have saved and kept at home an amount equal to about 20 months’ salary and hand it over merely on asking, without any contemporaneous record. Held that Trial Court was justified in insisting on proof of advancing the loan and in doubting complainant’s case; presumption stood rebutted.

A. Criminal Procedure Code, 1973 — Appeal against acquittal — Scope of interference — Principles reiterated

In appeal against acquittal under Section 378 CrPC, interference is permissible only if the judgment of acquittal suffers from patent perversity, is based on misreading/omission to consider material evidence, and where no two reasonable views are possible and only the view consistent with guilt is possible. Double presumption in favour of the accused (presumption of innocence + reinforcement by acquittal) reaffirmed. Followed Surendra Singh v. State of Uttarakhand, 2025 SCC OnLine SC 176: (2025) 5 SCC 433; Babu Sahebagouda Rudragoudar; Rajesh Prasad v. State of Bihar; Chandrappa v. State of Karnataka; H.D. Sundara v. State of Karnataka.

(Paras 12–13)

B. Negotiable Instruments Act, 1881 — Sections 138, 118(a), 139 — Cheque towards time-barred debt — No “legally enforceable debt” — Complaint not maintainable

Complainant’s own case: ₹5,00,000/- advanced in July 2012, cheque issued only in August 2019 (dated 22.01.2020). Limitation for suit to recover such loan is three years from the date of advancing the loan (Art. 21, Limitation Act, 1963). Any suit after July 2015 would be barred. Thus, cheque of August 2019 was issued towards a time-barred debt. Following Social Leasing (India) Ltd. v. Rajan Kumar Kanthwal, 2025 SCC OnLine HP 3131, held that cheque issued towards time-barred debt is not for a “legally enforceable debt” and cannot attract Section 138 NI Act; mere giving of a cheque, without more, does not revive a time-barred debt.

(Paras 14–17)

C. Negotiable Instruments Act, 1881 — Sections 118(a), 139 — Presumption — Financial capacity of complainant — Onus and rebuttal

Presumption under Sections 118(a) and 139 arises when signature on cheque is admitted, but it is rebuttable and disappears once contrary evidence is led. Accused is entitled to challenge complainant’s financial capacity to advance the alleged loan and to raise a probable defence by cross-examination and/or own evidence.

Complainant admitted monthly salary of ₹25,000/- in 2012–2013 (annual ₹3,00,000/-), claimed to have saved and kept ₹5,00,000/- in cash at home, and to have advanced it without security or documentation. DW2 proved income tax return of complainant showing income of ₹4,75,685/- in 2018–2019 and no previous returns. Court found it highly doubtful that complainant could have saved and kept at home an amount equal to about 20 months’ salary and hand it over merely on asking, without any contemporaneous record. Held that Trial Court was justified in insisting on proof of advancing the loan and in doubting complainant’s case; presumption stood rebutted.

Followed Rajaram v. Maruthachalam, 2023 SCC OnLine SC 48; Tedhi Singh v. Narayan Dass Mahant, (2022) 6 SCC 735; Basalingappa v. Mudibasappa, (2019) 5 SCC 418; Dattatraya v. Sharanappa, (2024) 8 SCC 573: (2024) 3 SCC (Cri) 776; John K. Abraham v. Simon C. Abraham, (2014) 2 SCC 236; Rajesh Jain v. Ajay Singh, (2023) 10 SCC 148.

(Paras 18–26)

D. Negotiable Instruments Act, 1881 — Section 138 — “Payment stopped by drawer” — Stop-payment instructions on account of loss of cheque much prior to alleged issuance — Lost/stolen cheque — No offence under Section 138

Accused’s defence: chequebook was lost; he lodged complaint with bank and gave stop-payment instructions on 23.05.2018 (Ex. DW1/A). Cheque in question was allegedly issued only in August 2019, bearing date 22.01.2020, and was dishonoured with endorsement “payment stopped by the drawer”. Bank official (DW1) supported stop-payment instruction well before alleged issuance.

Relying on Gaurav Agarwal v. State of Uttarakhand, MANU/UC/0407/2025; Bobby Anand v. State of U.P., 2023 SCC OnLine All 4645; and K. Sadanandan v. V.S. Satheesh Kumar, 2015 SCC OnLine Ker 16879, held that when stop-payment has been lodged due to loss/theft of cheque much prior to the alleged issuance, the cheque is rendered incapable of encashment and there is, in law, no effective “issuance” for discharge of liability; dishonour in such circumstances does not attract penal consequences under Section 138 NI Act.

(Paras 5–6, 27–29

E. Negotiable Instruments Act, 1881 — Section 138 — Presumption and rebuttal — Evidence led by accused — Reasonable view of acquittal — No interference in appeal

In light of (i) cheque being for time-barred debt, (ii) serious doubt about complainant’s financial capacity, and (iii) prior stop-payment due to loss of cheque, the accused successfully raised a probable defence on the standard of preponderance of probabilities. The view taken by the Trial Court acquitting the accused was a possible and reasonable view on the evidence. Applying the principles governing appeals against acquittal, High Court declined to substitute another view and upheld the acquittal.

Appeal dismissed; judgment of acquittal dated 04.12.2023 affirmed; Trial Court record ordered to be returned.

(Paras 6–7, 12–13, 17–21, 24, 26–30, 31–32)