Uttam Ram Vs Devinder Singh Hudan & Anr (Supreme Court of India)
In Uttam Ram vs Devinder Singh Hudan & Anr, the Supreme Court addressed a cheque bounce dispute under Section 138 of the Negotiable Instruments Act. The appellant, Uttam Ram, an apple orchard owner and supplier of packing materials in Himachal Pradesh, had filed a complaint against Devinder Singh (respondent no. 1) for issuing a dishonoured cheque amounting to ₹5,38,856. The cheque was allegedly issued towards settlement of dues arising from apple trade and packing material supplied on credit. However, the cheque was returned unpaid due to “insufficient funds.” The trial court had dismissed the complaint, stating that the cheque did not represent a legally enforceable debt, a decision that was upheld by the Himachal Pradesh High Court in 2018.
The Supreme Court, however, found merit in the appeal. The appellant had produced supporting witnesses, including Prem Chand—an authorised agent of the respondent—who confirmed that the cheque was issued in his presence as part of a settlement. The respondent failed to appear as a witness in his own defense, instead alleging misuse of a blank cheque by the agent. The Court noted that mere denial of issuance, without substantial proof or rebuttal evidence, was insufficient to defeat the statutory presumption under Section 139 of the NI Act, which presumes the cheque was issued towards a debt or liability unless proven otherwise. The Court also emphasized that once execution of the cheque is established, the burden shifts to the accused to rebut the presumption, which was not done effectively in this case.
