Signed Blank Cheque Defence Rejected under Section 138 NI Act – Supreme Court Ruling

  • Blog|News|FEMA & Banking|
  • 3 Min Read
  • By Taxmann
  • |
  • Last Updated on 5 January, 2026

Latest from Taxmann

signed blank cheque defence under section 138 NI Act

Case Details: Sanjabij Tari vs. Kishore S. Borcar - [2025] 180 taxmann.com 701 (SC)

Judiciary and Counsel Details

  • Manmohan & N.V. Anjaria, JJ.
  • Amarjit Singh Bedi, Ms. Surekha Raman, Shreyash Kumar, Harshit Singh & Sidharth Nair, Advs. for the Appellant.
  • Ankit Yadav, Ms. Gunjan Rathore, Ms. Shivangi Gulati, Chaitanya Sonkeria, Ms. Aastha Harshwal, Advs., T. Mahipal & Merusagar Samantaray, AORs for the Respondent.

Facts of the Case

The instant case concerns a loan transaction between the appellant-complainant and the accused, wherein the appellant had advanced a loan to the accused. Towards repayment of the said loan, the accused issued cheques in favour of the appellant. However, upon presentation, the cheques were dishonoured. Consequently, the appellant initiated proceedings against the accused under section 138 of the Negotiable Instruments Act, 1881.

The Trial Court, after appreciating the evidence on record, held that the accused had failed to rebut the statutory presumptions under sections 118 and 139 of the Act and that the appellant had successfully proved the existence of a legally enforceable debt. The contention of the accused that the appellant lacked the financial capacity to advance the loan was also rejected. The Sessions Court, in appeal, concurred with the findings of the Trial Court and dismissed the appeal filed by the accused.

However, the High Court, in revision, accepted the defence of the accused that the cheque in question was a signed blank cheque issued only to enable the appellant (a friend of the accused) to obtain a loan from a bank. On this basis alone, the High Court held that the presumptions under sections 118 and 139 stood rebutted and consequently acquitted the accused of the offence under section 138. Notably, the accused had neither produced any documentary evidence nor examined any independent witness, nor led any cogent evidence to establish either the alleged defence or the financial incapacity of the appellant to advance the loan.

Supreme Court Held

On appeal, the Supreme Court held that the High Court had erred in exercising its revisional jurisdiction by acquitting the accused on the basis of a mere bald explanation, unsupported by any evidence. It was observed that a vague plea of issuance of a signed blank cheque, without any corroborative material, is insufficient to rebut the statutory presumptions. Accordingly, the impugned order of the High Court was set aside, and the judgments and orders passed by the Trial Court and the Sessions Court were restored. The accused was directed to pay the outstanding cheque amount to the appellant in 15 equated monthly instalments.

List of Cases Referred to

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Taxmann editorial team

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied

Leave a Reply

Your email address will not be published. Required fields are marked *

«
»

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied