Presumption Under Section 139 NI Act Can’t Be Brushed Aside Without Defence Evidence or Proper Cross-Examination: Jharkhand High Court

“Inventing a Defence Not Raised by Accused is Perversity in Law”: Jharkhand High Court at Ranchi reinstating the conviction of the accused under Section 138 of the Negotiable Instruments Act, which had earlier been overturned by the Sessions Judge. The High Court observed that the reversal of conviction was based on impermissible assumptions, disregard of legal standards, and a complete misapplication of law regarding presumption under Section 139 of the NI Act.

“Inventing a defence which the accused never raised during trial amounts to legal perversity and results in miscarriage of justice,” held Justice Anil Kumar Choudhary while allowing the acquittal appeal filed under Section 378(4) CrPC.

The case stemmed from a cheque bounce of ₹30,00,000 issued in discharge of a friendly loan. The cheque was dishonoured with the remarks "payment stopped" and "exceeds arrangement". The Judicial Magistrate First Class had convicted the accused, sentencing them to one year’s simple imprisonment and ordering compensation of ₹35,00,000. However, this was set aside by the Sessions Court on the ground that the complainant had failed to prove the existence of legally enforceable debt or liability.

The High Court has now restored the conviction, declaring the Sessions Judge's reasoning legally untenable and contrary to well-established principles of criminal jurisprudence.

“In the Absence of Cross-Examination on Key Point, the Witness's Version Remains Unimpeached and Must Be Believed”

Justice Choudhary strongly criticized the Sessions Court for ignoring the fact that the accused had neither led any evidence nor cross-examined the complainant on the question of the debt being unenforceable. The Court observed:

“There is absolutely no suggestion given by the accused persons in the cross-examination of CW1 that the cheque was issued not for any legally enforceable debt… Under such circumstances, this Court has no hesitation in holding that the learned Sessions Judge… has committed a perversity for inventing a defence which was not even a defence of the accused.”

The complainant had examined himself as CW1 and filed his chief in affidavit form. Though cross-examined, he was not confronted at all on the issue of the legality of the underlying debt. The High Court held that in such a situation, the testimony on legally enforceable debt remains unchallenged and must be accepted as truth.

“Had the accused intended to challenge the existence of debt, they were bound to raise that suggestion in cross-examination. Failure to do so renders the testimony unimpeached,” held the Court, citing Laxmibai (Dead) v. Bhagwantbuva, AIR 2013 SC 1204 and State of U.P. v. Nahar Singh, AIR 1998 SC 1328.

“Sessions Court Committed Grave Error by Using Personal Knowledge and Other Cases Not in Record”

The Sessions Court had relied on the fact that in another similar complaint between the same parties, the complainant had not produced ledger statements, and inferred that even in the present case, the debt was not genuine. Terming this approach impermissible and prejudicial, the High Court observed:

“This act of the learned Sessions Judge has been done in utter violation of the cardinal principle of appreciation of evidence in a criminal trial, which ultimately had resulted in miscarriage of justice.”

The High Court was categorical that such personal knowledge or reference to unrelated records, particularly without giving the complainant an opportunity to rebut, vitiates the very foundation of judicial determination. The Court stated:

“The learned Sessions Judge… has committed a grave illegality by using his personal knowledge if any, which was not borne out of the case record… in gross violation of the cardinal principle of appreciation of evidence in a criminal trial.”

“Presumption Under Section 139 of NI Act Is Statutory and Remains Intact Unless Rebutted by Probable Defence”

The Court heavily relied on the presumption created under Section 139 of the NI Act which operates once execution of cheque is admitted. In the present case, the accused had admitted issuance of the cheque and did not produce any evidence to rebut the presumption.

Relying on T.P. Murugan v. Bojan, (2018) 8 SCC 469 and Uttam Ram v. Devinder Singh Hudan, 2019 SCC OnLine SC 1361, the Court reaffirmed:

“Cross-examination on the prosecution witness is not sufficient to rebut the presumption of consideration. The respondent failed to rebut the presumption by adducing any cogent or credible evidence.”

The defence had argued that the complainant had admitted to running a money lending business without a licence. However, the Court found that no questions were ever put to the complainant in cross-examination to suggest that the cheque in question was related to such unlicensed lending.

“The learned Sessions Judge committed a grave mistake by giving unnecessary emphasis upon such cross-examination… No question was asked as to whether the present cheque was issued as part of a money-lending transaction.”

The High Court thus concluded that the acquittal was not only based on irrelevant considerations but also involved a complete disregard of settled principles of evidence law.

“Acquittal Set Aside, Conviction Restored Against Sole Surviving Accused Entity”

As two of the original accused persons had passed away during the proceedings and one other person was impleaded posthumously despite not being part of the trial, the Court clarified that the restored conviction would operate only against M/s Auto Tyre Centre (Respondent No.2), the surviving legal entity involved in the issuance of cheque.

The Court concluded: “Accordingly, the judgment dated 03.06.2019 passed by the learned Sessions Judge, East Singhbhum at Jamshedpur in Criminal Appeal No. 263 of 2018 is quashed and set aside, and the judgment of conviction and order of sentence dated 18.09.2018 passed by the learned Judicial Magistrate First Class, Jamshedpur in C/1 Case No. 572 of 2015 is restored only against the respondent no.2 of this appeal.”

By reversing the Sessions Court’s acquittal and reinstating the trial court’s conviction, the Jharkhand High Court has reinforced the legal sanctity of presumptions under the Negotiable Instruments Act. It has categorically held that a mere alternative view or assumption by the appellate court, in absence of any defence evidence or material cross-examination, cannot override a legally justified conviction.

Date of Decision: 18 August 2025