‘Cheque is Cash Substitute’ Cheque Dishonour -SC Rejects Kerala HC View on Cash Loans Over ₹20,000– 269SS Breach Does Not Kill Enforceability- Cheque Bounce Backlog – SC Issues Nationwide Procedural Reforms w.e.f. 01.11.2025.
Also read: Cash Loans Above ₹20,000 Violate Income Tax Law, Not Enforceable Under NI Act: Kerala HC
The Supreme Court allowed the Appeal filed by the Complainant, set aside the order of the Bombay High Court (Goa) dated 16.04.2009 which had acquitted the Accused & restored the concurrent conviction by the Trial Court (30.04.2007) & Sessions Court (17.09.2008) under Section 138 of the NI Act. The Court directed the Accused to pay ₹7,50,000/- in 15 equated monthly instalments of ₹50,000/- each.
The case arose from a friendly loan of ₹6,00,000/- advanced by the Complainant to his friend, evidenced by a dishonoured cheque. Both Trial Court & Sessions Court convicted the Accused, but the High Court reversed in revision. The Supreme Court held that the High Court had no jurisdiction to re-appreciate concurrent findings absent perversity.
Presumption under Sections 118 & 139 NI Act Reinforced
The Court reiterated that once execution of cheque is admitted, presumptions under Sections 118 & 139 arise that it was issued for consideration & towards a legally enforceable debt. These presumptions are rebuttable, but the initial burden lies on the Accused. Observations to the contrary in Krishna Janardhan Bhat stand overruled by the three-Judge Bench in Rangappa v. Sri Mohan.
