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by Admin
22 December 2025 4:25 PM
"Presumption under Section 139 of the NI Act arises once the signature is admitted — trial court failed to apply settled law," In a significant ruling on the evidentiary burden in cheque dishonour cases, the Madras High Court criticised the acquittal of an accused who admitted his signature on a dishonoured cheque, but failed to establish any valid defence. Despite finding clear error in the trial court’s reasoning, the High Court ultimately dismissed the criminal appeal as infructuous, after being informed that the accused had died during the pendency of the proceedings.
The Court was adjudicating Criminal Appeal filed by R. Mohanasundaram, challenging the acquittal of V. Udhayakumar in a case under Section 138 of the Negotiable Instruments Act, 1881, involving a cheque of ₹2,00,000, allegedly issued in discharge of a friendly loan.
Justice M. Nirmal Kumar, sitting in the Criminal Appellate Jurisdiction, observed that once the execution of the cheque was admitted, the presumption under Section 139 NI Act must be invoked in favour of the complainant, and the burden shifts upon the accused to rebut it — which was not done in this case.
“Trial Court’s finding was legally unsustainable” – High Court holds acquittal erroneous but appeal rendered infructuous
The complainant, a grocery shop owner in Dharapuram, had alleged that the accused, a Ticket Checking Inspector in the Tamil Nadu State Transport Corporation, borrowed ₹2 lakhs citing medical exigency and issued a cheque dated 25 July 2010. The cheque was dishonoured for “insufficient funds”, and after due statutory notice, the complainant initiated prosecution.
The accused admitted to the issuance and signature on the cheque, but claimed in cross-examination that the cheque had been given earlier to a third party — one Subramaniam — and was misused by the complainant. However, Subramaniam was never examined.
The High Court found this defence untenable:"The respondent not denied the cheque/Ex.P1 or his signature. The trial Court’s finding that the cheque is not supported by any pro-note or bond paper is not proper."
The Court further noted:
"The respondent in his reply notice did not deny or explain how the complainant came to possess the cheque. The defence that it was handed over to Subramaniam was introduced for the first time in cross-examination, and Subramaniam was not examined to support the claim."
The trial court’s approach — dismissing the complaint solely for lack of written documentation like a promissory note — was declared contrary to the settled legal position under Section 139 NI Act, which presumes a legally enforceable liability once execution is admitted.
Death of accused brings proceedings to a close
Even as the High Court found the appeal meritorious, the legal process reached a dead end when the accused could not be located, despite directions issued on 17 October 2025 and 4 December 2025 to the police. A final report from the Village Administrative Officer, Modakurichi Taluk, Erode District, confirmed that V. Udhayakumar had passed away on 28 October 2023, and the Death Certificate was formally placed on record.
Acknowledging this development, the Court held: "In view of the same, nothing survives for further adjudication in the criminal appeal and the same is dismissed."
Under criminal jurisprudence, the death of the accused abates proceedings, and no conviction or sentence can be imposed posthumously, regardless of the merit of the appeal.
A legally flawed acquittal that could not be corrected due to death of accused
While the appeal ultimately stood dismissed, the judgment of the Madras High Court serves as a pointed reminder that:
Admission of signature on a cheque carries statutory presumptions in favour of the holder.
A vague or unsubstantiated claim of cheque misuse, unsupported by evidence, cannot rebut this presumption.
Courts cannot insist on additional documents like pro-notes or bonds, when the cheque itself is admitted, unless the accused successfully discharges the burden of rebuttal.
However, due to the supervening death of the accused, the High Court could not overturn the acquittal, and the proceedings stood closed as infructuous.
Date of Decision: 09 December 2025
