Presumption Under Section 139 Can't Be Rebutted Pre-Trial: Supreme Court Restores Cheque Bounce Complaint Quashed By Patna High Court

"High Court could not have undertaken a roving enquiry into the existence of debt at a pre-trial stage when statutory presumption exists under Section 139" – On December 19, 2025, the Supreme Court of India set aside the Patna High Court’s order which had quashed a complaint under Section 138 of the Negotiable Instruments Act, 1881. The Apex Court observed that the High Court had exceeded its jurisdiction under Section 482 CrPC by delving into disputed questions of fact relating to the issuance of the cheque — an enquiry which, the Court emphasized, ought to be left to the trial stage.

The judgment is significant as it reasserts the strength of the presumption of liability under Section 139 of the N.I. Act and restricts the scope of High Court intervention at the threshold stage of criminal proceedings in cheque bounce cases.

"Quashing Based on Non-Existence of Debt Without Trial Is Impermissible Where Complaint Discloses Prima Facie Offence"

The Bench comprising Justice Manoj Misra and Justice Ujjal Bhuyan ruled that “the High Court committed an error by conducting a roving enquiry, at the pre-trial stage, as regards the cheque being issued for the discharge of debt or liability”, and such exercise could not be sustained in law.

The core legal issue was whether the High Court, while exercising powers under Section 482 CrPC, could evaluate whether the cheque in question was issued for a legally enforceable debt — despite the statutory presumption in favour of the complainant under Section 139 of the N.I. Act. The Court categorically answered this in the negative, holding that such factual determinations must be made at trial, not during preliminary adjudication.

The appellant, M/s Sri Om Sales, had filed a criminal complaint in 2013 against the respondent Abhay Kumar for an alleged offence under Section 138 of the N.I. Act, contending that the respondent had issued a cheque dated March 4, 2013, for ₹20 lakhs towards payment for goods delivered. The cheque was dishonoured twice due to insufficient funds. Despite legal notice, the payment was not made, prompting the filing of the complaint.

The Magistrate took cognizance and summoned the accused. However, the respondent approached the High Court, which quashed the complaint holding that the cheque was not issued for any legally enforceable debt — effectively accepting the respondent's version of facts at the pre-trial stage.

The Supreme Court reaffirmed the settled position of law that at the stage of summoning or even during consideration under Section 482 CrPC, the High Court is not to adjudicate factual disputes, particularly when the complaint makes out a prima facie case.

“The complaint clearly spells out the necessary ingredients for commission of an offence punishable under Section 138... In such circumstances... issuance of process to the accused was warranted,” the Court observed.

Crucially, the Court emphasized the presumption under Section 139 of the N.I. Act, stating:

“Under Section 139 of the N.I. Act, there is a presumption that the holder of a cheque received the cheque... for the discharge, in whole or in part, of any debt or other liability. This presumption can be rebutted by evidence led in trial.”

By bypassing this legal presumption and delving into the existence of debt based on defence contentions, the High Court, in the Supreme Court’s view, short-circuited the criminal process.

Precedents Cited and Reaffirmed

The Court bolstered its reasoning by citing multiple precedents that restrict High Court’s jurisdiction under Section 482 CrPC in N.I. Act cases:

• Maruti Udyog Ltd. v. Narender, (1999) 1 SCC 113
• Rangappa v. Sri Mohan, (2010) 11 SCC 441: "Presumption includes existence of legally enforceable debt or liability."
• Rajeshbhai Muljibhai Patel v. State of Gujarat, (2020) 3 SCC 794
• Rathish Babu Unnikrishnan v. State (NCT of Delhi), (2022) 20 SCC 661: “The court should be slow to grant the relief of quashing a complaint at a pre-trial stage, when the factual controversy is in the realm of possibility, particularly because of the legal presumption.”

The Court quoted the Rathish Babu ruling with approval, noting the danger of scuttling criminal proceedings prematurely, especially when “the factual controversy is yet to be canvassed and considered by the trial court.”

Supreme Court’s Final Directions

Setting aside the High Court’s order, the Supreme Court allowed the appeal and restored the criminal complaint:

“The criminal complaint in question is restored on the file of the concerned Magistrate and shall be dealt with in accordance with law.”

It also made it clear that the trial court shall decide the issue of whether the cheque was issued for any liability, without being influenced by any observations made by the High Court.

“We make it clear that we have not expressed any opinion as to whether the cheque in question was issued for the discharge, in whole or in part, of any debt or liability.”

This judgment reinforces the principle that the statutory presumption under Section 139 of the N.I. Act must be respected and rebutted only at trial, not prematurely by the High Courts under Section 482 CrPC. It serves as a strong reaffirmation of the complainant’s rights in cheque dishonour cases, emphasizing that the existence of debt or liability is a matter for evidence and trial, not for threshold dismissal based on untested claims of the accused.

Date of Decision: 19 December 2025