Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Mad) 765

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
K.MURALI SHANKAR, J.
M. Star Janet Joy – Appellant
Versus
T. Justin Dhas – Respondent
Crl.A.(MD)No.115 of 2023
Decided On : 09-01-2026

Advocates Appeared:
For the Appellant : Mr. T. Antony Arulraj
For the Respondent: Mr. K.P. Narayana Kumar

A presumption of debt exists under Sections 138 and 139 of the Negotiable Instruments Act, which the accused failed to rebut, affirming liability for dishonored cheques.

Headnote:(A) Negotiable Instruments Act, 1881 - Sections 138 and 139 - Criminal Procedure Code, 1973 - Section 378(4) - Acquittal by the trial court for dishonored cheque - Presumptions under Sections 118 and 139 regarding existence of debt - Accused failed to rebut the presumption of liability regarding the cheque issued, thereby establishing the offence under Section 138. (Paras 7, 39)

(B) Burden of proof - Presumption of consideration - The accused's denial does not absolve him of the burden to rebut the presumption regarding the cheque's validity, which was established by the complainant. (Paras 16, 39)

(C) Punishment - The court imposed a fine of Rs.28,00,000/- as a regulatory punitive measure, emphasizing compensation alongside punishment. (Paras 40, 41)

Facts of the case:
The complainant's husband lent Rs.14 lakhs to the accused, who issued a cheque that was later dishonored due to a closed account. The accused denied issuing the cheque to the complainant, claiming previous unrelated loans.

Findings of Court:
The trial court had erred in acquitting the accused; the presumption of debt under Section 139 was not properly applied, leading to a flawed acquittal.

Issues: Whether the trial court's acquittal of the accused was justified, given the presumption of liability related to the dishonored cheque.

Ratio Decidendi: The court confirmed the importance of the statutory presumptions in favor of the payee in cases under Section 138 of the N.I. Act, emphasizing that the accused failed to adequately counter the presumption of debt and liability.

Result: Criminal Appeal allowed; accused convicted under Section 138 of the N.I. Act, sentenced to pay fine.

Table of Content
1. criminal appeal procedures and complainant's case. (Para 1 , 2 , 4 , 5 , 6 , 7)
2. legal presumptions regarding negotiable instruments. (Para 8 , 9 , 14 , 15 , 16 , 17 , 22 , 30)
3. defense arguments regarding repayment and acquaintance. (Para 10 , 12 , 19 , 25 , 26)
4. burden of proof in cheque dishonor cases. (Para 18 , 20 , 28 , 32 , 39)
5. sentencing and conclusion of appeal. (Para 40 , 41 , 42)

JUDGMENT :

K.MURALI SHANKAR, J.

The Criminal Appeal is directed against the judgment made in S.T.C.No.87 of 2016 dated 29.06.2018 on the file of the Court of Judicial Magistrate No.I, Padmanabhapuram, in acquitting the respondent / accused for the offence under Section 138 of the Negotiable Instruments (hereinafter referred as 'NI') Act.

2. The appellant, who is the complainant, filed a complaint under Section 200 Cr.P.C. against the respondent / accused for the alleged offence under Section 138 r/w 142 of the NI Act.

3. For the sake of convenience and brevity, the parties hereinafter will be referred to as per their status / ranking in the trial Court.

4. The case of the complainant is that the complainant's husband and the accused are friends and on account of that friendship, the accused borrowed a sum of Rs.14 lakhs on 27.11.2015 for the improvement of his jewelry business promising to repay the amount within one month. The complainant approached the accused on 29.12.2015 and demanded the amount. The accused issued a cheque dated 29.12.2015 for Rs.14 lakhs drawn on Andhra Bank, Marthandam Branch in favour of the complainant. The complainant presented the cheque for collection on 29.12.2015 through his banker Pandiyan Grama Bank, Mekkamandapam Branch but the same was returned dishonored as account closed. The complainant sent a legal notice dated 08.01.2016 to the accused demanding him to pay the amount covered by the cheque and the accused having received the notice on 09.01.2016 neither sent any reply nor complied with the notice demand. Since the accused has not repaid the cheque amount within the stipulated time, the complainant was constrained to file the above complaint for the offence under Section 138 r/w 142 of the NI Act.

5. The learned Judicial Magistrate, upon receiving the complaint, recorded the sworn statement of the complainant and on perusing the records, upon satisfied that there existed a prima facie case took the case on file in S.T.C.No.87 of 2016 and ordered for issuance of summons to the accused. After appearance of the accused, copies of records were furnished to him under Section 207 Cr.P.C. on free of costs. When the accused was questioned about the offence alleged against him, he denied the commission of offence and pleaded not guilty.

6. During trial, the complainant examined herself as P.W.1, her husband as P.W.4 and Bank Managers of the complainant as well as the accused Bank as P.W.2 and P.W.3 respectively and exhibited 13 documents as Ex.P.1 to Ex.P.13. The accused examined himself as D.W.1 and 2 other witnesses Thiru.Suresh Paul and Thiru.Andrin Prabhu as D.W.2 and D.W.3 respectively and exhibited 2 documents as Ex.D.1 and Ex.D.2.

7. The learned Judicial Magistrate, upon considering the evidence both oral and documentary and on hearing the arguments of both the sides, passed the impugned judgment dated 29.06.2018 holding that the complainant failed to prove the offence under Section 138 of the NI Act against the accused beyond reasonable doubt, acquitted him under Section 255(1) Cr.P.C. Aggrieved by the impugned judgment of acquittal, the complainant preferred the present appeal.

8.Whether the impugned judgment of acquittal passed in S.T.C.No. 87 of 2016 dated 29.06.2018 on the file of the Judicial Magistrate No.I, Padmanabhapuram, is liable to be set aside? is the point for consideration.

9. Before entering into further discussion, it is necessary to refer Sections 118 (a) and 139 of the Negotiable Instruments Act, which deal with statutory presumptions,

“Section 118 : Presumptions as to nego