Reshma v. Vijay & Another
Bench: Division Bench — 2 Judges (R.F. Nariman & S. Ravindra Bhat JJ)
Parties
Facts of the Case
In a Section 138 NI Act cheque dishonour case, the accused contended that the cheque was not issued for a 'legally enforceable debt or liability' but was a blank signed cheque given as security. The core question was the burden of proof — whether the prosecution must positively prove the existence of a legally enforceable debt, or whether there is a presumption in favour of the debt's existence that the accused must rebut.
Legal Issues Before the Court
- 1What is the burden of proof in Section 138 NI Act cases — who must prove the existence or absence of a legally enforceable debt?
- 2What is the presumption under Section 139 NI Act and how can it be rebutted?
The Judgment
The Court restated the settled position: Section 139 NI Act creates a statutory presumption that once a cheque and its dishonour are proved, the court shall presume that the holder of the cheque received it for the discharge of a legally enforceable debt or liability. This is a rebuttable presumption — the accused can rebut it by raising a probable defence. The standard for rebuttal is 'preponderance of probabilities' — the accused need not prove their defence beyond reasonable doubt. Once the accused raises a probable defence (e.g., the cheque was a blank security cheque), the presumption is rebutted and the prosecution must prove the debt.
Key Principles Laid Down
SECTION 139 NI ACT — STATUTORY PRESUMPTION OF DEBT: Once the complainant proves: (1) the signature on the cheque is the accused's; (2) the cheque was duly presented; and (3) the cheque was dishonoured — the court must presume that the cheque was issued for a legally enforceable debt or liability.
REBUTTABLE PRESUMPTION — STANDARD IS PREPONDERANCE: The Section 139 presumption is rebuttable. The accused can rebut it by showing, on a balance of probabilities, that the cheque was not issued for an enforceable debt — e.g., it was a blank security cheque, the amount was forged, or the underlying debt was void. The accused need not prove this beyond reasonable doubt.
ONCE REBUTTED — BURDEN SHIFTS TO COMPLAINANT: If the accused successfully rebuts the Section 139 presumption on the balance of probabilities, the burden shifts back to the complainant to prove the existence of the legally enforceable debt on which the cheque was issued.
LEGALLY ENFORCEABLE DEBT — KEY REQUIREMENT: Section 138 NI Act only applies if the cheque was issued for a 'legally enforceable debt or liability.' A cheque given as a gift, bribe, or for an illegal debt is not covered.
Impact on Indian Law
Reshma (2020) is a recent clear restatement of the burden of proof framework in Section 138 NI Act cases — an area of law that generates enormous litigation volume. The presumption/rebuttal framework under Section 139 is central to every Section 138 trial. The judgment is routinely cited in NI Act cases where the defence claims the cheque was a blank security cheque.
Frequently Asked Questions
Who bears the burden of proof in a Section 138 NI Act cheque dishonour case?
Once the complainant proves the cheque, dishonour, and the statutory notice, Section 139 NI Act creates a presumption that the cheque was issued for a legally enforceable debt. The burden then shifts to the accused to rebut this presumption on a balance of probabilities. The accused need not prove their defence beyond reasonable doubt — raising a probable defence (e.g., blank security cheque) is sufficient to rebut the presumption.