1. Hand loan — Cheque dishonour — Account closed — Complaint under Section 138 NI Act. (Para 1 , 2 , 3 , 4 , 5 )
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2026 Supreme(Gau) 1395
THE GAUHATI HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
SUSMITA PHUKAN KHAUND, J.
Rajib Tanti S/o Shri Panchanan Tanti - Appellant
Versus
Debajit Chandra Baruah S/o Late Bipin Chandra Baruah - Respondent
Crl.Rev.P. No.370 of 2018
Decided On : 28-07-2026
Important Points
The presumption under Section 139 NI Act that a cheque is issued for discharge of debt is rebuttable. Failure to provide credible evidence of stolen cheques and unexplained delay in reporting loss leads to upholding conviction. Sentence may be modified.
Subject
Criminal Law - Negotiable Instruments Act – Dishonour of Cheque
Act Referred
Headnote
(A) Negotiable Instruments Act, 1881 - Sections 138 and 139 - Dishonour of cheque due to 'account closed' treated as insufficient funds under Section 138 - Presumption under Section 139 that cheque issued for discharge of debt - Burden on accused to rebut - Delay in reporting loss of chequebook - Failure to produce evidence of GD entry - Conviction upheld.
(B) Criminal Procedure Code, 1973 - Section 397/401 - Scope of revision - Concurrent findings not interfered unless perverse.
Facts of the case:
The complainant lent Rs.5,00,000 to the accused in November 2011. The accused repaid Rs.45,000 and issued a cheque for the balance of Rs.4,55,000 on 01.03.2012. The cheque was presented for collection on 28.05.2012 but returned unpaid due to the account being closed. Statutory notice was served; the accused replied denying liability claiming that the chequebook had been stolen. The trial court convicted the accused under Section 138 of the NI Act, sentencing him to simple imprisonment for three months and a fine of Rs.6,00,000. The appellate court upheld the conviction. The accused filed a revision before the High Court.
Findings of Court:
The High Court held that the accused's plea of stolen cheques was not credible because there was an unexplained delay of over a year in reporting the loss to the police, and the GD entry was not produced in evidence. The accused admitted his signature on the cheque. The accused's bank account had been closed since 2009, yet the cheque was allegedly issued in 2012. The presumption under Section 139 of the NI Act that the cheque was issued for discharge of a debt was not rebutted. The conviction was upheld. However, the sentence of imprisonment was set aside and modified to a fine of Rs.5,50,000 with default imprisonment of six months.
Issues: 1. Whether the cheque was issued in discharge of a debt or liability? 2. Whether the accused successfully rebutted the presumption under Section 139 of the NI Act? 3. Whether the sentence should be modified?
Ratio Decidendi: The presumption under Section 139 of the NI Act that a cheque is issued for discharge of a debt operates in favour of the holder. The accused must rebut this presumption by raising a probable defence. In the present case, the defence of stolen cheques was not supported by credible evidence; the delay in reporting the loss and failure to produce the GD entry rendered the defence unbelievable. The accused's conduct (maintaining a closed account, admitting signature) further weakened his case. Therefore, the conviction under Section 138 was justified. The sentence was modified considering the prolonged nature of the litigation.
Result: Revision petition dismissed. Conviction under Section 138 of the Negotiable Instruments Act, 1881 upheld. Sentence modified: fine of Rs.5,50,000, in default simple imprisonment for six months. (Paras 33-37)
(B) Criminal Procedure Code, 1973 - Section 397/401 - Scope of revision - Concurrent findings not interfered unless perverse.
Facts of the case:
The complainant lent Rs.5,00,000 to the accused in November 2011. The accused repaid Rs.45,000 and issued a cheque for the balance of Rs.4,55,000 on 01.03.2012. The cheque was presented for collection on 28.05.2012 but returned unpaid due to the account being closed. Statutory notice was served; the accused replied denying liability claiming that the chequebook had been stolen. The trial court convicted the accused under Section 138 of the NI Act, sentencing him to simple imprisonment for three months and a fine of Rs.6,00,000. The appellate court upheld the conviction. The accused filed a revision before the High Court.
Findings of Court:
The High Court held that the accused's plea of stolen cheques was not credible because there was an unexplained delay of over a year in reporting the loss to the police, and the GD entry was not produced in evidence. The accused admitted his signature on the cheque. The accused's bank account had been closed since 2009, yet the cheque was allegedly issued in 2012. The presumption under Section 139 of the NI Act that the cheque was issued for discharge of a debt was not rebutted. The conviction was upheld. However, the sentence of imprisonment was set aside and modified to a fine of Rs.5,50,000 with default imprisonment of six months.
Issues: 1. Whether the cheque was issued in discharge of a debt or liability? 2. Whether the accused successfully rebutted the presumption under Section 139 of the NI Act? 3. Whether the sentence should be modified?
Ratio Decidendi: The presumption under Section 139 of the NI Act that a cheque is issued for discharge of a debt operates in favour of the holder. The accused must rebut this presumption by raising a probable defence. In the present case, the defence of stolen cheques was not supported by credible evidence; the delay in reporting the loss and failure to produce the GD entry rendered the defence unbelievable. The accused's conduct (maintaining a closed account, admitting signature) further weakened his case. Therefore, the conviction under Section 138 was justified. The sentence was modified considering the prolonged nature of the litigation.
Result: Revision petition dismissed. Conviction under Section 138 of the Negotiable Instruments Act, 1881 upheld. Sentence modified: fine of Rs.5,50,000, in default simple imprisonment for six months. (Paras 33-37)
Legal Category Hierarchy
- crime and sentencing
- practice and procedure
Advocates:
Advocate Appeared:
For the Appellant : Mr. K. Sarma
For the Respondent: Mr. B. Chakraborty
Advocate Appeared:
For the Appellant : Mr. K. Sarma
For the Respondent: Mr. B. Chakraborty
Table of Contents
2. Dispute over issuance of cheque — Defence of stolen cheque versus presumption of legally enforceable debt. (Para 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 )
3. Revision dismissed — Conviction upheld — Sentence reduced to fine with default imprisonment. (Para 33 , 34 , 35 , 37 , 38 )
4. Does dishonour of a cheque due to 'account closed' fall within the ambit of Section 138 of the NI Act?
Yes, following NEPC Micon Ltd., when a cheque is returned with endorsement 'account closed', it amounts to insufficient funds under Section 138. (Para 13 )
5. What is the presumption under Section 139 of the NI Act regarding issuance of a cheque?
The holder of the cheque is presumed to have received it for discharge of a debt or liability, unless the accused rebuts that presumption. (Para 11 , 24 , 31 )
6. Can a defence of stolen cheque rebut the presumption under Section 139 of the NI Act?
The defence must be credible and supported by evidence; unexplained delay in reporting loss and failure to produce records leaves the presumption intact. (Para 9 , 10 , 15 , 16 , 17 , 18 , 28 , 29 , 30 , 31 )
7. Does overwriting on the cheque amount invalidate the cheque for the purpose of Section 138?
No, if the amount is clearly written in words and the overwriting in figures is explained, the cheque remains valid. (Para 10 , 18 )
JUDGEMENT AND ORDER :
SUSMITA PHUKAN KHAUND, J.
1. This revision petition under Section 397/401 read with Section 482 of the Code of Criminal Procedure, 1973 (CrPC for short) has been preferred against the judgment and order dated 30.08.2018 passed by the learned Additional Sessions Judge (F.T.C.) Sonitpur, Tezpur in connection with Criminal Appeal No. 3(S-1)/2017 upholding the judgment and order dated 09.01.2017 passed by the learned Additional Chief Judicial Magistrate of Sonitpur, Tezpur convicting the petitioner under Section 138 of the Negotiable Instruments Act, 1881 (NI Act for short) and sentencing him to undergo simple imprisonment for three months and to pay a fine of Rs. 6 lacs with default stipulation in connection with NI Case No. 21/2012.
Factual matrix:-
2. The genesis of the case was that Shri Debajit Chandra Baruah lent Rs. 5 lacs in the month of November, 2011 to the accused/petitioner Shri Rajiv Tantito meet his urgent need as he was in need of money and the amount was to bereturned within three months but the petitioner failed to return the entire amount. Rajiv Tanti (hereinafter also referred to as the petitioner and/or accused) returned an amount of Rs. 45,000/- out of the total money borrowed within a period of three months and the amount of Rs. 4,55,000/- remained unpaid.
3. The respondent/complainant Shri Debajit Chandra Baruah approached the petitioner and requested him to pay the remaining amount. On repeated requests, the petitioner issued a cheque bearing No. 152182 of the HDFC bank, Tezpur of Rs.4,55,000/- on 01.03.2012 in favour of Shri Debajit Chandra Baruah (hereinafter referred to as the respondent or complainant).
4. On 28.05.2012, the respondent presented the cheque for collection in his bank at SBI, Tezpur in his account No. 10501648200 maintained with the SBI, Tezpur Branch, but the cheque was returned unpaid on the ground that the account of the petitioner was closed. On receipt of information from the Bank regarding the dishonour of cheque, the complainant/respondent issued a notice to the petitioner through his lawyer on 12.06.2012 and demanded payment of the cheque amount within 15 days from the date of receipt of notice. The notice was duly received by the petitioner on 18.06.2012 and after receipt of notice, the petitioner sent a reply to the respondent on 03.07.2012 through his Advocate denying the complainant's averments, but with false allegations of theft of cheque No. 152181 to 152200 in the last week of January, 2011. This impelled the respondent to file a complaint petition on 01.08.2012 along with his statement on affidavit under Section 200 of the CrPC. The Court took cognizance and summoned the petitioner who contested the proceeding.To substantiate his stance,the respondent examined three witnesses as follows:-
a) PW1, Debajit Chandra Baruah(complainant);
b) PW2, Dhriti Pallab Das (Manager Personnel, Banking division);
c) PW3, Abhijit Sharma (Branch manager, HDFC Bank, Tezpur Branch).
5. On closure of prosecution evidence, the statement of the petitioner was recorded under Section 313 of the Cr.PC on the incriminating circumstances arising against him. The petitioner denied of having committed any offence under section 138 of the NI Act. The petitioner adduced his evidence as defense witness.
Decision of the Trial Court:-
6. The Trial Court formulated several points for determination to decide this case but the issue in this case narrows down to:-
a) whether the petitioner had issued the cheque bearing number 152182 of Rs. 4,55,000/- on 01.03.2012 for payment of the amount to the complainant from his account to discharge any debt or other liability; and
b) whether the petitioner could prove that his cheques so issued were stolen by the respondent/complainant.
7. The Trial Court has elaborately discussed the evidence.The complaint petition and the statement under Section 200 of the CrPC has been reiterated by the respondent/complainant as PW1. He exhibited the dishonoured cheque as Exhibi
