23/08/2026
βοΈ SUPREME COURT REAFFIRMS THE SANCTITY OF CHEQUE-BOUNCE PRESUMPTIONS
Case: Kuntegowda v. Thurubaiah, 2026 INSC 790
Bench: Justices B.V. Nagarathna & Ujjal Bhuyan
A hand loan. A dishonoured cheque. And a legal tug-of-war that travelled from a Magistrate's court all the way to the Supreme Court.
π The backstory:
A complainant lent βΉ4.5 lakh to a friend for a house-site purchase. The cheque issued in repayment bounced for insufficient funds. The Trial Court convicted the accused under Section 138 of the Negotiable Instruments Act. The Sessions Court, on appeal, agreed β only trimming the fine. But the Karnataka High Court, exercising revisional powers, acquitted the accused, reasoning that the complainant hadn't convincingly shown he had the means to lend that much money.
The Supreme Court didn't buy it β and here's why this ruling matters:
1οΈβ£ Presumption is powerful, not optional
Once a cheque's signature is admitted, Sections 118 & 139 of the NI Act presume it was issued for a real debt. The burden shifts to the accused to disprove this with credible evidence β not vague theories or notices sent as an afterthought.
2οΈβ£ Timing exposes intent
The accused claimed the cheque was a misused "blank security cheque." But his legal notice raising this defence was sent over a year after the complaint was filed β well after the complainant's evidence was already recorded. The Court called this exactly what it looked like: an ex-post-facto, engineered defence.
3οΈβ£ Revisional jurisdiction has limits
Perhaps the sharpest takeaway: a High Court sitting in revision is not a second appellate court. It cannot re-weigh evidence and substitute its own view for concurrent findings of two lower courts unless there's real perversity or illegality on record. Merely finding "another view possible" isn't enough.
π Bottom line: The Supreme Court restored the conviction and the fine, sending a clear signal β cheque-bounce presumptions exist to protect the credibility of commercial transactions, and courts exercising limited supervisory powers must respect that boundary.
A useful read for anyone in banking, commercial litigation, or contract enforcement.