Blank Cheque Defence Fails in Section 138 Revision

The Karnataka High Court at Bengaluru, per Justice V. Srishananda, dismissed a criminal revision petition challenging conviction under Section 138 of the Negotiable Instruments Act.

The complaint was based on a loan of Rs.3,00,000 allegedly advanced in cash on 24.10.2014. The complainant’s case was that the accused issued a post-dated cheque for the same amount, which was dishonoured for insufficiency of funds. After notice and non-payment, prosecution followed.

The trial court convicted the accused and imposed a fine of Rs.4,00,000, with Rs.3,95,000 directed as compensation to the complainant. The first appellate court affirmed that decision. The revision petition then questioned both findings.

The High Court examined whether the accused had rebutted the presumption under Section 139 of the Negotiable Instruments Act. The court held that the rebuttal evidence was not sufficient. It relied in particular on the accused’s own admissions in cross-examination.

Those admissions included that he had borrowed Rs.50,000 from the complainant and repaid it later, that he had issued two blank cheques to the complainant’s society as security, and that he had no counterfoil to show the cheque in question was issued blank as security. The court also noted that the accused did not demand return of the cheques in the relevant documents and had not taken criminal action for the alleged misuse of the cheque.

On that material, the court held that the oral and documentary evidence led by the accused did not displace the statutory presumption in favour of the complainant. It therefore found no reason to interfere with the concurrent findings of conviction.

The revision petition was dismissed.

Practical takeaway: In a Section 138 case, a blank cheque defence will not succeed unless the accused brings credible evidence to rebut the statutory presumption.