SANJABIJ TARIversusKISHORE S. BORCAR & ANR.

                [2025] 9 S.C.R. 1515 : 2025 INSC 1158

                              Sanjabij Tari
                                    v.
                         Kishore S. Borcar & Anr.
                     (Criminal Appeal No. 1755 of 2010)
                              25 September 2025
                  [Manmohan* and N.V. Anjaria, JJ.]


                            Issue for Consideration
       The present appeal has been filed challenging the ex-parte
       judgment and order dated 16.04.2009 passed by the High Court
       acquitting the respondent no.1-accused u/s.138 of the Negotiable
       Instruments Act, 1881 and reversing the concurrent judgments of
       the Trial Court and the Sessions Court.

                                   Headnotes†
       Negotiable Instruments Act, 1881 – Chapter XVII (Sections
       138 to 148):
       Held: The provisions contained in Chapter XVII provide that where
       any cheque drawn by a person for the discharge of any liability
       is returned by the bank unpaid for the reason of the insufficiency
       of the amount of money standing to the credit of the account on
       which the cheque was drawn or for the reason that it exceeds the
       arrangements made by the drawer of the cheque with the banker
       for that account, the drawer of such cheque shall be deemed to
       have committed an offence – In that case, the drawer, without
       prejudice to the other provisions of the said Act, shall be punishable
       with imprisonment for a term which may extend to two years, or
       with fine which may extend to twice the amount of the cheque, or
       with both. [Para 13]

       Negotiable Instruments Act, 1881 – Chapter XVII (Sections
       138 to 148) – Intent of:
       Held: The intent behind introducing Chapter XVII is to restore
       the credibility of cheques as a trustworthy substitute for cash
       payment and to promote a culture of using cheques – Further, by
       criminalizing the act of issuing cheques without sufficient funds or


* Author
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    for other specified reasons, the law promotes financial discipline,
    discourages irresponsible practices and allows for a more efficient
    and timely resolution of disputes compared to the previous pure
    civil remedy which was found to involve the payee in a long-drawn
    out process of litigation. [Para 14]

    Negotiable Instruments Act, 1881 – ss.118 and 139 – District
    Courts and High Courts are not giving effect to presumptions:
    Held: This Court takes judicial notice of the fact that some
    District Courts and some High Courts are not giving effect to the
    presumptions incorporated in Sections 118 and 139 of NI Act and
    are treating the proceedings under the NI Act as another civil
    recovery proceedings and are directing the complainant to prove
    the antecedent debt or liability – This Court is of the view that such
    an approach is not only prolonging the trial but is also contrary to
    the mandate of Parliament, namely, that the drawer and the bank
    must honour the cheque, otherwise, trust in cheques would be
    irreparably damaged. [Para 21]

    Negotiable Instruments Act, 1881 – s.138 – Keeping in view
    the massive backlog of cheque bouncing cases, the following
    directions are issued:
    Held: i) In all cases filed u/s.138 of the NI Act, service of summons
    shall not be confined through prescribed usual modes but shall
    also be issued dasti i.e. summons shall be served upon the
    accused by the complainant in addition – The Trial Courts shall
    further resort to service of summons by electronic means in terms
    of the applicable Notifications/Rules, if any, framed under sub-
    Sections 1 and 2 of s.64 and under Clause (i) of Section 530 and
    other provisions of the BNSS, 2023 like Delhi BNSS (Service of
    Summons and Warrants) Rules, 2025; (ii) The complainant shall
    file an affidavit of service before the Court – In the event such
    affidavit is found to be false, the Court shall be at liberty to take
    appropriate action against the complainant in accordance with law;
    (iii) In order to facilitate expeditious settlement of cases u/s.138 of
    the NI Act, the Principal District and Sessions Judge of each District
    Court shall create and operationalise dedicated online payment
    facilities through secure QR codes or UPI links – The complainant
    shall also be informed of such payment and upon confirmation of
    receipt, appropriate orders regarding release of such money and
    compounding/closure of proceedings u/s.147 of the NI Act and/
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                    Sanjabij Tari v. Kishore S. Borcar & Anr.


     or s.255 of Cr.PC/278 BNSS, 2023 may be passed by the Court
     in accordance with law; (iv) Each and every complaint u/s.138 of
     the NI Act shall contain a synopsis in the format which shall be
     filed immediately after the index (at the top of the file) i.e. prior to
     the formal complaint; (v) This Court directs that there shall be no
     requirement to issue summons to the accused in terms of s.223
     of BNSS i.e., at the pre-cognizance stage; (vi) Since the object
     of s.143 of the NI Act is quick disposal of the complaints u/s.138
     by following the procedure prescribed for summary trial under
     the Code – The Trial Courts shall record cogent and sufficient
     reasons before converting a summary trial to summons trial –
     The Trial Court shall be at liberty (at the initial post cognizance
     stage) to ask questions, it deems appropriate, u/s.251 Cr.PC/s.274
     BNSS, 2023; (vii) The Court shall record the responses to the
     questions in the ordersheet in the presence of the accused and
     his/her counsel and thereafter determine whether the case is fit
     to be tried summarily under Chapter XXI of the Cr.PC/Chapter
     XXII of the BNSS, 2023; (viii) Wherever, the Trial Court deems
     it appropriate, it shall use its power to order payment of interim
     deposit as early as possible u/s.143A of the NI Act; (ix) Since
     physical courtrooms create a conducive environment for direct
     and informal interactions encouraging early resolution, the High
     Courts shall ensure that after service of summons, the matters
     are placed before the physical Courts – Exemptions from personal
     appearances should be granted only when facts so warrant – It
     is clarified that prior to the service of summons the matters may
     be listed before the digital Courts; (x) Wherever cases u/s.138 of
     the NI Act are permitted to be heard and disposed of by evening
     courts, the High Courts should ensure that pecuniary limit of
     the cheque amount is realistic; (xi) Each District and Sessions
     Judge in Delhi, Mumbai and Calcutta shall maintain a dedicated
     dashboard reflecting the pendency and progress of cases u/s.138
     of the NI Act – The dashboard shall include, inter alia, details
     regarding total pendency, monthly disposal rates, percentage of
     cases settled/compounded, average number of adjournments
     per case and the stage-wise breakup of pending matters – The
     District and Sessions Judges in aforesaid jurisdictions shall conduct
     monthly reviews of the functioning of Magistrates handling NI Act
     matters; (xii) The Chief Justices of Delhi, Bombay and Calcutta
     are requested to form Committee on the Administrative side to
     monitor pendency and to ensure expeditious disposal of s.138 of
     the NI Act cases. [Para 36]
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    Negotiable Instruments Act, 1881 – Guidelines for compounding
    offences under the NI Act nearly fifteen years back in Damodar
    S. Prabhu are modified:
    Held: (a) If the accused pays the cheque amount before recording
    of his evidence (namely defence evidence), then the Trial Court
    may allow compounding of the offence without imposing any cost
    or penalty on the accused; (b) If the accused makes the payment of
    the cheque amount post the recording of his evidence but prior to
    the pronouncement of judgment by the Trial Court, the Magistrate
    may allow compounding of the offence on payment of additional
    5% of the cheque amount with the Legal Services Authority or
    such other Authority as the Court deems fit; (c) Similarly, if the
    payment of cheque amount is made before the Sessions Court or
    a High Court in Revision or Appeal, such Court may compound
    the offence on the condition that the accused pays 7.5% of the
    cheque amount by way of costs; (d) Finally, if the cheque amount
    is tendered before this Court, the figure would increase to 10% of
    the cheque amount. [Para 38]

    Negotiable Instruments Act, 1881 – s.138 – Respondent no.1-
    accused was u/s.138 of N.I. Act – The High Court acquitted the
    respondent no.1-accused u/s.138 of the NI Act and reversing
    the concurrent judgments of the Trial Court and the Sessions
    Court – Correctness:
    Held: In the present case, the cheque in question has admittedly
    been signed by the respondent no.1-accused – This Court is of
    the view that once the execution of the cheque is admitted, the
    presumption u/s.118 of the NI Act that the cheque in question
    was drawn for consideration and the presumption u/s.139 of the
    NI Act that the holder of the cheque received the said cheque in
    discharge of a legally enforceable debt or liability arises against
    the accused – It is pertinent to mention that in the present case,
    the respondent no.1-accused has filed no documents and/or
    examined any independent witness or led any evidence with
    regard to the financial incapacity of the appellant-complainant to
    advance the loans in question – Furthermore, the fact that the
    accused has failed to reply to the statutory notice u/s.138 of the
    NI Act leads to an inference that there is merit in the appellant-
    complainant’s version – The High Court’s finding that the respondent
    no.1-accused’s defence that a signed blank cheque was issued
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                    Sanjabij Tari v. Kishore S. Borcar & Anr.


     by him so as to enable his friend/appellant-complainant to obtain
     a loan from a bank was sufficient to rebut the presumptions u/
     ss.118 and 139 of the NI Act is unbelievable and absurd – Thus,
     the impugned order passed by the High Court dated 16.04.2009
     is set aside and the judgment as well as the orders of Trial Court
     and Sessions Court are restored with a direction to the respondent
     no.1-accused to pay Rs.7,50,000/-. [Paras 15, 22, 29, 32]

                                Case Law Cited
     Tedhi Singh v. Narayan Dass Mahant [2022] 4 SCR 442 : (2022) 6
     SCC 735; P. Mohanraj and Others v. Shah Brothers Ispat Private
     Limited [2021] 14 SCR 204 : (2021) 6 SCC 258 – relied on.
     Rangappa v. Sri Mohan [2010] 6 SCR 507 : (2010) 11 SCC
     44; APS Forex Services Private Limited v. Shakti International
     Fashion Linkers and Ors. [2020] 2 SCR 811 : (2020) 12 SCC
     724; Bir Singh v. Mukesh Kumar [2019] 2 SCR 24 : (2019) 4 SCC
     197; Rajaram S/o Sriramulu Naidu (Since Deceased) Through
     LRs. v. Maruthachalam (Since Deceased) Through LRs. [2023] 1
     SCR 809 : (2023) 16 SCC 125; Southern Sales & Services and
     Others v. Sauermilch Design and Handels GMBH, [2008] 14 SCR
     130 : (2008) 14 SCC 457; TMMTC Ltd. and Another v. Medchl
     Chemicals & Pharma (P) Ltd. and Another [2001] Supp. 5 SCR
     265: (2002) 1 SCC 234; Indian Bank Association and Others v.
     Union of India and Others [2014] 5 SCR 386 : (2014) 5 SCC 590;
     Damodar S. Prabhu v. Sayed Babalal H. [2010] 5 SCR 678 : (2010)
     5 SCC 663; Re: Expeditious Trial of cases under Section 138 of
     NI Act 1881 [2022] 3 SCR 276 : (2021) 16 SCC 116; Chellammal
     & Another v. State Represented by the Inspector of Police, 2025
     SCC OnLine SC 870 – referred to.
     Ashok v. Fayaz Aahmad, 2025 SCC OnLine Kar 490 – approved.
     P.C. Hari v. Shine Varghese & Anr., 2025 SCC OnLine Ker 5535;
     M.V. Nalinakshan v. M. Rameshan & Anr., 2009 All MR (Cri)
     Journal 273 – referred to.

                                  List of Acts
     Negotiable Instruments Act, 1881; Code of Criminal Procedure;
     Income Tax Act, 1961; Bhartiya Nagarik Suraksha Sanhita, 2023;
     Probation of Offenders Act, 1958; Constitution of India.
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                            List of Keywords
     Chapter XVII (Sections 138 to 148) of Negotiable Instruments
     Act, 1881; Discharge of any liability; Insufficiency of the amount
     of money; Credibility of cheques; Section 138 of Negotiable
     Instruments Act, 1881; Section 118 of Negotiable Instruments Act,
     1881; Massive backlog of cheque bouncing cases.

                           Case Arising From
     CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
     1755 of 2010
     From the Judgment and Order dated 16.04.2009 of the High Court
     of Judicature at Bombay at Goa in CRLRA No. 76 of 2008

                        Appearances for Parties
     Advs. for the Appellant:
     Amarjit Singh Bedi, Ms. Surekha Raman, Srisatya Mohanty,
     Shreyash Kumar, Harshit Singh, M/S. K J John And Co.
     Advs. for the Respondents:
     Ankit Yadav, T. Mahipal, Merusagar Samantaray.

                Judgment / Order of the Supreme Court

                                Judgment

     Manmohan, J.

1.   The present Appeal has been filed challenging the ex-parte judgment
     and order dated 16th April 2009 passed by the High Court of Bombay
     at Goa acquitting the Respondent No.1-Accused under Section 138 of
     the Negotiable Instruments Act, 1881 (for short ‘NI Act’) and reversing
     the concurrent judgments of the Trial Court and the Sessions Court.

     ARGUMENTS ON BEHALF OF APPELLANT-COMPLAINANT
2.   Mr. Amarjit Singh Bedi, learned counsel for the Appellant-Complainant
     submitted that the High Court in exercise of its revisional jurisdiction
     erred in upsetting the conviction of the Respondent No.1-Accused
     under Section 138 of the NI Act based on categorical findings of facts
     rendered by both the Courts below that the dishonoured cheque had
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                    Sanjabij Tari v. Kishore S. Borcar & Anr.


     been issued in favour of the Appellant-Complainant in discharge of
     a legally enforceable debt.
3.   He contended that there was no evidence on record to establish
     that the Appellant-Complainant did not have the financial means
     to advance a friendly loan of Rs.6,00,000/- (Rupees Six Lakhs) to
     the Respondent No.1-Accused . He emphasised that the Appellant-
     Complainant in his statement under oath had stated that in order
     to oblige his friend/Respondent No.1-Accused , the Appellant-
     Complainant had arranged money from his father, who was a cloth
     merchant having two shops and even went to the extent of parting
     with a portion of the loan amount which he himself had borrowed
     from a financial institution.
4.   He pointed out that the Respondent No.1-Accused during the course
     of arguments on sentencing before the Trial Court had prayed for
     leniency on the ground that he was ready to pay the cheque amount
     to the Appellant-Complainant within a reasonable time.
5.   He further stated that though the Appellant-Complainant filed an
     application under Section 482 of the Code of Criminal Procedure
     (‘Cr.P.C.’) for recall of the impugned judgment by substantiating
     sufficient cause for the absence of his advocate on 16th April 2009,
     yet the learned Single Judge had been pleased to dismiss the said
     application holding that the Court had become functus officio and it
     had no jurisdiction under criminal law to recall the impugned order.
     He submitted that the High Court erred in not exercising its inherent
     powers to set aside the impugned judgment which, for all legal
     purposes, was an ex-parte order.
6.   He lastly stated that if this Court were to set aside the impugned
     judgment of the High Court and restore the concurrent judgments
     of the Trial Court and Sessions Court, the Appellant-Complainant
     would accept the payment of outstanding amount in instalments as
     directed by the Trial Court.

     ARGUMENTS ON BEHALF OF RESPONDENT NO.1-ACCUSED
7.   Per contra, Mr. Ankit Yadav, learned counsel for the Respondent
     No.1-Accused stated that the Appellant-Complainant was being
     paid a salary of only Rs.2,300/- (Rupees Two Thousand and Three
     Hundred) per month at the relevant point of time, which was not
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     even adequate to take care of his family, leave alone sufficient to
     advance a loan of Rs.6,00,000/- (Rupees Six Lakhs). He contended
     that the Appellant-Complainant was a highly indebted person who
     did not have any source of income other than his meagre salary and
     therefore, he did not have the wherewithal to advance such a huge
     loan and that too without issuance of any kind of receipt.
8.   He submitted that the accused can always rely on material and/or
     evidence filed by the complainant in order to raise a probable defence
     which creates doubts about the existence of a legally enforceable debt
     or liability. In support of his submission, he relied upon the judgment
     of this Court in Rangappa vs. Sri Mohan, (2010) 11 SCC 441.
9.   He further submitted that whenever the accused questions the
     financial capacity of the complainant in support of his probable
     defence, despite the presumption of a legally enforceable debt under
     Section 139 of the NI Act, the onus shifts back to the complainant
     to prove his financial capacity, more particularly, when it is a case of
     giving loan by cash and thereafter issuance of a cheque. In support
     of his submission, he relied upon the judgment of this Court in APS
     Forex Services Private Limited vs. Shakti International Fashion
     Linkers and Ors., (2020) 12 SCC 724.
10. He emphasised that the defence of the Respondent No.1-Accused
    that a blank cheque had been given to the Appellant-Complainant to
    enable him to obtain a loan from the bank was more than a probable
    defence to rebut the presumption under the NI Act, particularly, in
    view of the fact that the parties were known to each other.

                               REASONING

     SCOPE AND INTENT OF CHAPTER XVII OF NI ACT
11. Having heard learned counsel for the parties, this Court is of the
    view that it is essential to first outline the scope and intent of Chapter
    XVII (Sections 138 to 148) of NI Act which has been inserted by Act
    66 of 1988 w.e.f. 1st April 1989.
12. The Statement of Objects and Reasons of Act 66 of 1988 states,
    “….to enhance the acceptability of cheques in settlement of liabilities
    by making the drawer liable for penalties in case of bouncing of
    cheques due to insufficiency of funds in the accounts or for the
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                    Sanjabij Tari v. Kishore S. Borcar & Anr.


     reason that it exceeds the arrangements made by the drawer, with
     adequate safeguards to prevent harassment of honest drawers.”
13. The provisions contained in Chapter XVII provide that where any
    cheque drawn by a person for the discharge of any liability is returned
    by the bank unpaid for the reason of the insufficiency of the amount
    of money standing to the credit of the account on which the cheque
    was drawn or for the reason that it exceeds the arrangements made
    by the drawer of the cheque with the banker for that account, the
    drawer of such cheque shall be deemed to have committed an offence.
    In that case, the drawer, without prejudice to the other provisions of
    the said Act, shall be punishable with imprisonment for a term which
    may extend to two years, or with fine which may extend to twice the
    amount of the cheque, or with both.
14. Consequently, this Court is of the view that the intent behind
    introducing Chapter XVII is to restore the credibility of cheques as a
    trustworthy substitute for cash payment and to promote a culture of
    using cheques. Further, by criminalizing the act of issuing cheques
    without sufficient funds or for other specified reasons, the law
    promotes financial discipline, discourages irresponsible practices and
    allows for a more efficient and timely resolution of disputes compared
    to the previous pure civil remedy which was found to involve the
    payee in a long-drawn out process of litigation.

     ONCE EXECUTION OF CHEQUE IS ADMITTED, PRESUMPTIONS
     UNDER SECTIONS 118 AND 139 OF THE NI ACT ARISE
15. In the present case, the cheque in question has admittedly been
    signed by the Respondent No.1-Accused . This Court is of the view
    that once the execution of the cheque is admitted, the presumption
    under Section 118 of the NI Act that the cheque in question was
    drawn for consideration and the presumption under Section 139 of
    the NI Act that the holder of the cheque received the said cheque in
    discharge of a legally enforceable debt or liability arises against the
    accused. It is pertinent to mention that observations to the contrary
    by a two Judges Bench in Krishna Janardhan Bhat vs. Dattatraya
    G. Hegde, (2008) 4 SCC 54 have been set aside by a three Judges
    Bench in Rangappa (supra).
16. This Court is further of the view that by creating this presumption,
    the law reinforces the reliability of cheques as a mode of payment
    in commercial transactions.
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17. Needless to mention that the presumption contemplated under
    Section 139 of the NI Act, is a rebuttable presumption. However,
    the initial onus of proving that the cheque is not in discharge of any
    debt or other liability is on the accused/drawer of the cheque [See:
    Bir Singh vs. Mukesh Kumar, (2019) 4 SCC 197].
18. The judgment of this Court in APS Forex Services Private Limited
    (supra) relied upon by learned counsel for the Respondent No.1-
    Accused only says that presumption under Section 139 of the NI
    Act is rebuttable and when the same is rebutted, the onus would
    shift back to the complainant to prove his financial capacity, more
    particularly, when it is a case of giving loan by cash. This judgment
    nowhere states, as was sought to be contended by learned counsel
    for the Respondent No.1-Accused, that in cases of dishonour of
    cheques, in lieu of cash loans, the presumption under Section 139
    of the NI Act does not arise.

     APPROACH OF SOME COURTS BELOW TO NOT GIVE EFFECT
     TO THE PRESUMTIONS UNDER SECTIONS 118 AND 139 OF NI
     ACT IS CONTRARY TO MANDATE OF PARLIAMENT
19. Recently, the Kerala High Court in P.C. Hari vs. Shine Varghese
    & Anr., 2025 SCC OnLine Ker 5535 has taken the view that a
    debt created by a cash transaction above Rs. 20,000/- (Rupees
    Twenty Thousand) in violation of the provisions of Section 269SS
    of the Income Tax Act, 1961 (for short ‘IT Act, 1961’) is not a ‘legally
    enforceable debt’ unless there is a valid explanation for the same,
    meaning thereby that the presumption under Section 139 of the Act
    will not be attracted in cash transactions above Rs. 20,000/- (Rupees
    Twenty Thousand).
20. However, this Court is of the view that any breach of Section 269SS
    of the IT Act, 1961 is subject to a penalty only under Section 271D of
    the IT Act, 1961. Further neither Section 269SS nor 271D of the IT
    Act, 1961 state that any transaction in breach thereof will be illegal,
    invalid or statutorily void. Therefore, any violation of Section 269SS
    would not render the transaction unenforceable under Section 138 of
    the NI Act or rebut the presumptions under Sections 118 and 139
    of the NI Act because such a person, assuming him/her to be the
    payee/holder in due course, is liable to be visited by a penalty only
    as prescribed. Consequently, the view that any transaction above
    Rs.20,000/- (Rupees Twenty Thousand) is illegal and void and
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                    Sanjabij Tari v. Kishore S. Borcar & Anr.


     therefore does not fall within the definition of ‘legally enforceable
     debt’ cannot be countenanced. Accordingly, the conclusion of law
     in P.C. Hari (supra) is set aside.
21. This Court also takes judicial notice of the fact that some District
    Courts and some High Courts are not giving effect to the presumptions
    incorporated in Sections 118 and 139 of NI Act and are treating the
    proceedings under the NI Act as another civil recovery proceedings
    and are directing the complainant to prove the antecedent debt or
    liability. This Court is of the view that such an approach is not only
    prolonging the trial but is also contrary to the mandate of Parliament,
    namely, that the drawer and the bank must honour the cheque,
    otherwise, trust in cheques would be irreparably damaged.

     NO DOCUMENTS AND/OR EVIDENCE LED WITH REGARD TO
     THE FINANCIAL INCAPACITY OF THE APPELLANT
22. It is pertinent to mention that in the present case, the Respondent No.1-
    Accused has filed no documents and/or examined any independent
    witness or led any evidence with regard to the financial incapacity
    of the Appellant-Complainant to advance the loans in question.
    For instance, this Court in Rajaram S/o Sriramulu Naidu (Since
    Deceased) Through LRs. vs. Maruthachalam (Since Deceased)
    Through LRs., (2023) 16 SCC 125 has held that presumptions
    under Sections 118 and 139 of the NI Act can be rebutted by the
    accused examining the Income Tax Officer and bank officials of the
    complainant/drawee.

     WHEN THE EVIDENCE OF PW-1 IS READ IN ITS ENTIRETY, IT
     CANNOT BE SAID THAT THE APPELLANT-COMPLAINANT HAD
     NO WHEREWITHAL TO ADVANCE LOAN
23. Most certainly, the accused can rely upon the evidence adduced by
    the complainant to rebut the presumption with regard to the existence
    of a legally enforceable debt or liability, yet in the present case, when
    the evidence of Appellant-Complainant (PW-1) is read in its entirety,
    like it should be, it cannot be said that the Appellant-Complainant
    had no wherewithal to advance any loan to the Respondent No.1-
    Accused .
24. In fact, the Appellant-Complainant, in his statement, has stated that
    as the Respondent No.1-Accused was his friend, he had advanced
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     part of the loan received by him and had also taken loan from his
     father to advance money to the Respondent No.1-Accused .
25. The Trial Court in its order and judgment dated 30th April 2007 has
    held that the Respondent No.1-Accused has failed to rebut the
    presumption under Sections 118 and 139 of the NI Act and that the
    Appellant-Complainant has proved the legally enforceable debt. The
    relevant portion of the Trial Court’s order and judgment dated 30th
    April 2007 is reproduced hereinbelow:-
          “11…Accused had not disputed his signature on the
          cheque. Complainant stated that he had advanced to
          accused amount of cheque in two different installments on
          two different occasions cannot be believed has no merit.
          Accused himself admitted his signature on the cheque and
          accused had failed to rebut the presumption in favour of
          the complainant as available under Negotiable Instruments
          Act, 1881.
          12.As regard the contention of the Ld. Advocate for
          the accused that the complainant failed to show legally
          enforceable liability due to him by the accused has also
          no merit as there is cogent evidence of the complainant
          supported with documentary evidence as regard the
          cheque and its dishonour and its non payment by the
          accused inspite of the receipt of the notice to pay the
          same….”
26. The Sessions Court too specifically rejected the contention of the
    Respondent No.1-Accused that the Appellant-Complainant had no
    means to advance the loan of Rs.6,00,000/- (Rupees Six Lakhs)
    to the Respondent No.1-Accused. The relevant portion of the
    Sessions Court’s judgment dated 17th September 2008 is reproduced
    hereinbelow:-
          “15…The contention of the accused, now in appeal, that
          the complainant had no means to sustain himself and was
          in debt to various institutions is not borne out from the
          records. No doubt, no documentary evidence is produced
          by the complainant nor any witness is there to prove that he
          gave Rs.6,00,000/- to the accused. But the circumstances,
          discussed above are such that the testimony of PW1 is
          sufficient to prove the said friendly loan transaction…”
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     IN REVISIONAL JURISDICTION, HIGH COURT DOES NOT, IN THE
     ABSENCE OF PERVERSITY, UPSET CONCURRENT FACTUAL
     FINDINGS
27. It is well settled that in exercise of revisional jurisdiction, the High
    Court does not, in the absence of perversity, upset concurrent
    factual findings [See: Bir Singh (supra)]. This Court is of the view
    that it is not for the Revisional Court to re-analyse and re-interpret
    the evidence on record. As held by this Court in Southern Sales &
    Services and Others vs. Sauermilch Design and Handels GMBH,
    (2008) 14 SCC 457, it is a well-established principle of law that the
    Revisional Court will not interfere, even if a wrong order is passed
    by a Court having jurisdiction, in the absence of a jurisdictional error.
28. Consequently, this Court is of the view that in the absence of perversity,
    it was not open to the High Court in the present case, in revisional
    jurisdiction, to upset the concurrent findings of the Trial Court and
    the Sessions Court.

     FAILURE OF ACCUSED TO REPLY TO NOTICE LEADS TO AN
     INFERENCE
29. Furthermore, the fact that the accused has failed to reply to the
    statutory notice under Section 138 of the NI Act leads to an inference
    that there is merit in the Appellant-Complainant’s version. This Court
    in Tedhi Singh vs. Narayan Dass Mahant, (2022) 6 SCC 735 has
    held that the accused has the initial burden to set up the defence
    in his reply to the demand notice that the complainant did not have
    the financial capacity to advance the loan. The relevant portion of
    the said judgment is reproduced hereinbelow:-
           “10. … The proceedings under Section 138 of the NI
           Act is not a civil suit. At the time, when the complainant
           gives his evidence, unless a case is set up in the reply
           notice to the statutory notice sent, that the complainant
           did not have the wherewithal, it cannot be expected of
           the complainant to initially lead evidence to show that he
           had the financial capacity. To that extent, the courts in our
           view were right in holding on those lines. However, the
           accused has the right to demonstrate that the complainant
           in a particular case did not have the capacity and
           therefore, the case of the accused is acceptable which
1528                                                      [2025] 9 S.C.R.

                        Supreme Court Reports


          he can do by producing independent materials, namely,
          by examining his witnesses and producing documents.
          It is also open to him to establish the very same aspect
          by pointing to the materials produced by the complainant
          himself. He can further, more importantly, achieve this
          result through the cross-examination of the witnesses of
          the complainant. Ultimately, it becomes the duty of the
          courts to consider carefully and appreciate the totality of
          the evidence and then come to a conclusion whether in
          the given case, the accused has shown that the case of
          the complainant is in peril for the reason that the accused
          has established a probable defence.”
                                                (emphasis supplied)

30. This Court in MMTC Ltd. and Another vs. Medchl Chemicals &
    Pharma (P) Ltd. and Another, (2002) 1 SCC 234 has specifically
    held that when a statutory notice is not replied, it has to be presumed
    that the cheque was issued towards the discharge of liability.
31. Also, after receipt of the legal notice, wherein the Appellant-
    Complainant alleged that the Respondent No.1-Accused’s cheque
    had bounced, no complaint or legal proceeding was initiated by
    the Respondent No.1-Accused alleging that the cheque was not to
    be encashed. Consequently, the defence of financial incapacity of
    Appellant-Complainant advanced by the Respondent No.1-Accused
    is an afterthought.

     RESPONDENT NO.1-ACCUSED’S DEFENCE THAT A SIGNED
     BLANK CHEQUE WAS ISSUED TO ENABLE COMPLAINANT TO
     OBTAIN A LOAN IS UNBELIEVABLE
32. The High Court’s finding that the Respondent No.1-Accused ’s
    defence that a signed blank cheque was issued by him so as to
    enable his friend/Appellant-Complainant to obtain a loan from a bank
    was sufficient to rebut the presumptions under Sections 118 and 139
    of the NI Act is unbelievable and absurd. This Court agrees with the
    Sessions Court’s finding in the present case that, “It is funny to say
    that for obtaining loan from the bank, one can show a cheque which
    is issued on an account in which there are not sufficient funds. The
    case of the accused is unbelievable”.
[2025] 9 S.C.R.                                                             1529

                    Sanjabij Tari v. Kishore S. Borcar & Anr.


     KEEPING IN VIEW THE MASSIVE BACKLOG OF CHEQUE
     BOUNCING CASES, THE FOLLOWING GUIDELINES ARE ISSUED
33. Before parting with this matter, this Court takes judicial notice of
    the fact that despite repeated directions by this Court in various
    judgments including Indian Bank Association and Others vs.
    Union of India and Others, (2014) 5 SCC 590, Damodar S. Prabhu
    vs. Sayed Babalal H., (2010) 5 SCC 663 and In Re: Expeditious
    Trial of cases under Section 138 of NI Act 1881, (2021) 16
    SCC 116, pendency of cheque bouncing cases under the NI Act in
    District Courts in major metropolitan cities of India continues to be
    staggeringly high. For instance, the pendency of Section 138 cases
    as on 01st September 2025 in Delhi District Courts is 6,50,283 (Six
    Lakhs Fifty Thousand Two Hundred Eighty Three), Mumbai District
    Courts is 1,17,190 (One Lakh Seventeen Thousand One Hundred
    Ninety) and Calcutta District Courts is 2,65,985 (Two Lakhs Sixty
    Five Thousand Nine Hundred Eighty Five) [Source: National Judicial
    Data Grid]. This pendency is putting an unprecedented strain on the
    judicial system as in some States, cases under Section 138 of the
    NI Act constitute nearly fifty per cent (50%) of the pendency in Trial
    Court (in Delhi Section 138 NI Act cases constitute 49.45% of total
    Trial Court pendency).
34. In P. Mohanraj and Others v. Shah Brothers Ispat Private Limited,
    (2021) 6 SCC 258, this Court while re-iterating the position of law
    with regard to the nature of offence under Section 138 of the NI Act,
    has held as under:
           “53. A perusal of the judgment in Ishwarlal
           Bhagwandas [S.A.L. Narayan Row v. Ishwarlal Bhagwandas,
           (1966) 1 SCR 190 : AIR 1965 SC 1818] would show that
           a civil proceeding is not necessarily a proceeding which
           begins with the filing of a suit and culminates in execution
           of a decree. It would include a revenue proceeding as well
           as a writ petition filed under Article 226 of the Constitution,
           if the reliefs therein are to enforce rights of a civil nature.
           Interestingly, criminal proceedings are stated to be
           proceedings in which the larger interest of the State is
           concerned. Given these tests, it is clear that a Section
           138 proceeding can be said to be a “civil sheep” in a
           “criminal wolf’s” clothing, as it is the interest of the
1530                                                       [2025] 9 S.C.R.

                        Supreme Court Reports


          victim that is sought to be protected, the larger interest
          of the State being subsumed in the victim alone moving
          a court in cheque bouncing cases, as has been seen
          by us in the analysis made hereinabove of Chapter XVII
          of the Negotiable Instruments Act.”
                                                (emphasis supplied)

35. Admittedly, the offence under Section 138 of the NI Act is quasi-
    criminal in character and is compoundable [See: Damodar S. Prabhu
    (supra)]. Recently, in Gian Chand Garg v. Harpal Singh & Anr.
    (Criminal Appeal No. 3789 of 2025 dated 11th August 2025), a co-
    ordinate Bench of this Court has set aside concurrent convictions
    rendered by the Courts below on the ground that the proceeding
    under Section 138 of the NI Act is essentially a civil proceeding
    and it is open to the parties to enter into a voluntary compromise.
    Consequently, this Court is of the view that not only a voluntary
    compromise can bring the proceedings under Section 138 NI Act to
    an end, but the accused under the said offence are entitled to benefit
    under the Probation of Offenders Act, 1958 [See: Chellammal &
    Another vs. State Represented by the Inspector of Police, 2025
    SCC OnLine SC 870]. Observations to the contrary by Kerala HC
    in M.V. Nalinakshan vs. M. Rameshan & Anr. 2009 All MR (Cri)
    Journal 273 are set aside.
36. Keeping in view the massive backlog of cheque bouncing cases and
    the fact that service of summons on the accused in a complaint filed
    under Section 138 of the NI Act continues to be one of the main
    reasons for the delay in disposal of the complaints as well as the
    fact that punishment under the NI Act is not a means of seeking
    retribution but is more a means to ensure payment of money and to
    promote credibility of cheques as a trustworthy substitute for cash
    payment, this Court issues the following directions:-
     A.   In all cases filed under Section 138 of the NI Act, service
          of summons shall not be confined through prescribed usual
          modes but shall also be issued dasti i.e. summons shall be
          served upon the accused by the complainant in addition. This
          direction is necessary as a large number of Section 138 cases
          under the NI Act are filed in the metropolitan cities by financial
[2025] 9 S.C.R.                                                         1531

                    Sanjabij Tari v. Kishore S. Borcar & Anr.


           institutions, by virtue of Section 142(2) of the NI Act, against
           accused who may not be necessarily residing within the territorial
           jurisdiction of the Court where the complaint has been filed.
           The Trial Courts shall further resort to service of summons by
           electronic means in terms of the applicable Notifications/Rules,
           if any, framed under sub-Sections 1 and 2 of Section 64 and
           under Clause (i) of Section 530 and other provisions of the
           Bhartiya Nagarik Suraksha Sanhita, 2023 (for short ‘BNSS,
           2023’) like Delhi BNSS (Service of Summons and Warrants)
           Rules, 2025. For this purpose, the complainant shall, at the time
           of filing the complaint, provide the requisite particulars including
           e-mail address, mobile number and/or WhatsApp number/
           messaging application details of the accused, duly supported
           by an affidavit verifying that the said particulars pertain to the
           accused/respondent.
     B.    The complainant shall file an affidavit of service before the Court.
           In the event such affidavit is found to be false, the Court shall
           be at liberty to take appropriate action against the complainant
           in accordance with law.
     C.    In order to facilitate expeditious settlement of cases under
           Section 138 of the NI Act, the Principal District and Sessions
           Judge of each District Court shall create and operationalise
           dedicated online payment facilities through secure QR codes
           or UPI links. The summons shall expressly mention that the
           Respondent/Accused has the option to make payment of the
           cheque amount at the initial stage itself, directly through the
           said online link. The complainant shall also be informed of such
           payment and upon confirmation of receipt, appropriate orders
           regarding release of such money and compounding/closure of
           proceedings under Section 147 of the NI Act and/or Section
           255 of Cr.P.C./278 BNSS, 2023 may be passed by the Court
           in accordance with law. This measure shall promote settlement
           at the threshold stage and/or ensure speedy disposal of cases.
     D.    Each and every complaint under Section 138 of the NI Act shall
           contain a synopsis in the following format which shall be filed
           immediately after the index (at the top of the file) i.e. prior to
           the formal complaint:-
1532                                                    [2025] 9 S.C.R.

                       Supreme Court Reports


        Complaint under Section 138 of the Negotiable
        Instruments Act, 1881
        I.     Particulars of the Parties
        (i)    Complainant: ____________
        (ii)   Accused: ____________
               (In case where the accused is a company or a firm
               then Registered Address, Name of the Managing
               Director/Partner, Name of the signatory, Name of the
               persons vicariously liable)
        II.    Cheque Details
        (i)    Cheque No. ____________
        (ii)   Date: ____________
        (iii) Amount: ____________
        (iv) Drawn on Bank/Branch: ____________
        (v)    Account No.: ____________
        III.   Dishonour
        (i)    Date of Presentation: ____________
        (ii)   Date of Return/Dishonour Memo: ____________
        (iii) Branch where cheque was dishonoured:_________
        (iv) Reason for Dishonour: ____________
        IV.    Statutory Notice
        (i)    Date of Notice: ____________
        (ii)   Mode of Service: ____________
        (iii) Date of Dispatch & Tracking No.: ____________
        (iv) Proof of Delivery & date of delivery: ____________
        (v)    Whether served:____________________
        (vi) If Not, reasons thereof:________________
        (vii) Reply to the Legal Demand Notice, if any____________
[2025] 9 S.C.R.                                                         1533

                    Sanjabij Tari v. Kishore S. Borcar & Anr.


           V.     Cause of Action
           (i)    Date of accrual: ____________
           (ii)   Jurisdiction invoked under Section 142(2):
                  ____________
           (iii) Whether any other complaint under section 138 NI
                 Act is pending between the same parties, If Yes, in
                 which court and the date and year of the institution.
           VI.    Relief Sought
           (i)    Summoning of accused and trial under Section 138
                  NI Act__________
           (ii)   Whether Award of Interim compensation under
                  Section 143A of NI Act sought _____
           VII. Filed through:
                  Complainant/Authorized Representative”
     E.    Recently, the High Court of Karnataka in Ashok Vs. Fayaz
           Aahmad, 2025 SCC OnLine Kar 490 has taken the view that
           since NI Act is a special enactment, there is no need for the
           Magistrate to issue summons to the accused before taking
           cognizance (under Section 223 of BNSS) of complaints filed
           under Section 138 of NI Act. This Court is in agreement with
           the view taken by the High Court of Karnataka. Consequently,
           this Court directs that there shall be no requirement to issue
           summons to the accused in terms of Section 223 of BNSS i.e.,
           at the pre-cognizance stage.
     F.    Since the object of Section 143 of the NI Act is quick disposal
           of the complaints under Section 138 by following the procedure
           prescribed for summary trial under the Code, this Court
           reiterates the direction of this Court in In Re: Expeditious
           Trial of cases under Section 138 of NI Act (supra) that the
           Trial Courts shall record cogent and sufficient reasons before
           converting a summary trial to summons trial. To facilitate this
           process, this Court clarifies that in view of the judgment of the
           Delhi High Court in Rajesh Agarwal vs. State and Anr., 2010
           SCC OnLine Del 2511, the Trial Court shall be at liberty (at
           the initial post cognizance stage) to ask questions, it deems
1534                                                        [2025] 9 S.C.R.

                         Supreme Court Reports


         appropriate, under Section 251 Cr.P.C. / Section 274 BNSS,
         2023 including the following questions:-
         (i)    Do you admit that the cheque belongs to your account?
                Yes/No
         (ii)   Do you admit that the signature on the cheque is yours?
                Yes/No
         (iii) Did you issue/deliver this cheque to the complainant?
               Yes/No
         (iv) Do you admit that you owed liability to the complainant at
              the time of issuance? Yes/No
         (v)    If you deny liability, state clearly the defence:
                (a)   Security cheque only;
                (b)   Loan repaid already;
                (c)   Cheque altered/misused;
                (d)   Other (specify).
         (vi) Do you wish to compound the case at this stage? Yes/No
    G.   The Court shall record the responses to the questions in the
         order-sheet in the presence of the accused and his/her counsel
         and thereafter determine whether the case is fit to be tried
         summarily under Chapter XXI of the Cr.P.C. / Chapter XXII of
         the BNSS, 2023.
    H.   Wherever, the Trial Court deems it appropriate, it shall use its
         power to order payment of interim deposit as early as possible
         under Section 143A of the NI Act.
    I.   Since physical courtrooms create a conducive environment for
         direct and informal interactions encouraging early resolution,
         the High Courts shall ensure that after service of summons,
         the matters are placed before the physical Courts. Exemptions
         from personal appearances should be granted only when facts
         so warrant. It is clarified that prior to the service of summons
         the matters may be listed before the digital Courts.
    J.   Wherever cases under Section 138 of the NI Act are permitted
         to be heard and disposed of by evening courts, the High Courts
[2025] 9 S.C.R.                                                         1535

                    Sanjabij Tari v. Kishore S. Borcar & Anr.


           should ensure that pecuniary limit of the cheque amount is
           realistic. For instance, in Delhi, the jurisdiction of the evening
           courts to hear and decide cases of cheque amount is not
           exceeding Rs.25,000/-. In the opinion of this Court, the said
           limit is too low. The High Courts should forthwith issue practice
           directions and set up realistic pecuniary benchmarks for evening
           Courts.
     K.    Each District and Sessions Judge in Delhi, Mumbai and
           Calcutta shall maintain a dedicated dashboard reflecting the
           pendency and progress of cases under Section 138 of the NI
           Act. The dashboard shall include, inter alia, details regarding
           total pendency, monthly disposal rates, percentage of cases
           settled/compounded, average number of adjournments per case
           and the stage-wise breakup of pending matters. The District
           and Sessions Judges in aforesaid jurisdictions shall conduct
           monthly reviews of the functioning of Magistrates handling NI
           Act matters. A consolidated quarterly report shall be forwarded
           to the High Court.
     L.    The Chief Justices of Delhi, Bombay and Calcutta are requested
           to form Committee on the Administrative side to monitor
           pendency and to ensure expeditious disposal of Section 138
           of the NI Act cases. These Committees should meet at least
           once a month and explore the option of appointing experienced
           Magistrates to deal with Section 138 of the NI Act cases as
           well as promoting mediation, holding of Lok Adalats and other
           alternative dispute resolution mechanisms in Section 138 NI
           Act cases.
37. It is pertinent to mention that this Court framed guidelines for
    compounding offences under the NI Act nearly fifteen years back
    in Damodar S. Prabhu (supra). The relevant portion of the said
    Judgment is reproduced hereinbelow:-

                                 “THE GUIDELINES
           (i) In the circumstances, it is proposed as follows:
           (a) That directions can be given that the writ of summons
           be suitably modified making it clear to the accused that he
           could make an application for compounding of the offences
1536                                                    [2025] 9 S.C.R.

                      Supreme Court Reports


        at the first or second hearing of the case and that if such
        an application is made, compounding may be allowed
        by the court without imposing any costs on the accused.
        (b) If the accused does not make an application for
        compounding as aforesaid, then if an application for
        compounding is made before the Magistrate at a
        subsequent stage, compounding can be allowed subject
        to the condition that the accused will be required to pay
        10% of the cheque amount to be deposited as a condition
        for compounding with the Legal Services Authority, or such
        authority as the court deems fit.
        (c) Similarly, if the application for compounding is made
        before the Sessions Court or a High Court in revision or
        appeal, such compounding may be allowed on the condition
        that the accused pays 15% of the cheque amount by way
        of costs.
        (d) Finally, if the application for compounding is made
        before the Supreme Court, the figure would increase to
        20% of the cheque amount.

                xxx                xxx                 xxx
        24. We are also conscious of the view that the judicial
        endorsement of the abovequoted Guidelines could be seen
        as an act of judicial law-making and therefore an intrusion
        into the legislative domain. It must be kept in mind that
        Section 147 of the Act does not carry any guidance on
        how to proceed with the compounding of offences under
        the Act. We have already explained that the scheme
        contemplated under Section 320 CrPC cannot be followed
        in the strict sense. In view of the legislative vacuum, we
        see no hurdle to the endorsement of some suggestions
        which have been designed to discourage litigants from
        unduly delaying the composition of the offence in cases
        involving Section 138 of the Act.
        25. The graded scheme for imposing costs is a means to
        encourage compounding at an early stage of litigation. In
        the status quo, valuable time of the court is spent on the
        trial of these cases and the parties are not liable to pay
[2025] 9 S.C.R.                                                          1537

                    Sanjabij Tari v. Kishore S. Borcar & Anr.


           any court fee since the proceedings are governed by the
           Code of Criminal Procedure, even though the impact of
           the offence is largely confined to the private parties. Even
           though the imposition of costs by the competent court is a
           matter of discretion, the scale of costs has been suggested
           in the interest of uniformity. The competent court can of
           course reduce the costs with regard to the specific facts
           and circumstances of a case, while recording reasons
           in writing for such variance. Bona fide litigants should of
           course contest the proceedings to their logical end.
           26. Even in the past, this Court has used its power to do
           complete justice under Article 142 of the Constitution to
           frame guidelines in relation to the subject-matter where
           there was a legislative vacuum.”
38. Since a very large number of cheque bouncing cases are still pending
    and interest rates have fallen in the last few years, this Court is of the
    view that it is time to ‘revisit and tweak the guidelines’. Accordingly,
    the aforesaid guidelines of compounding are modified as under:-
     (a)   If the accused pays the cheque amount before recording of his
           evidence (namely defence evidence), then the Trial Court may
           allow compounding of the offence without imposing any cost
           or penalty on the accused.
     (b)   If the accused makes the payment of the cheque amount post
           the recording of his evidence but prior to the pronouncement
           of judgment by the Trial Court, the Magistrate may allow
           compounding of the offence on payment of additional 5% of
           the cheque amount with the Legal Services Authority or such
           other Authority as the Court deems fit.
     (c)   Similarly, if the payment of cheque amount is made before the
           Sessions Court or a High Court in Revision or Appeal, such
           Court may compound the offence on the condition that the
           accused pays 7.5% of the cheque amount by way of costs.
     (d)   Finally, if the cheque amount is tendered before this Court, the
           figure would increase to 10% of the cheque amount.
39. This Court is of the view that if the Accused is willing to pay in
    accordance with the aforesaid guidelines, the Court may suggest
1538                                                       [2025] 9 S.C.R.

                            Supreme Court Reports


     to the parties to go for compounding. If for any reason, the financial
     institutions/complainant asks for payment other than the cheque
     amount or settlement of entire loan or other outstanding dues, then the
     Magistrate may suggest to the Accused to plead guilty and exercise
     the power under Section 255(2) and/or 255(3) of the Cr.P.C. or 278
     of the BNSS, 2023 and/or give the benefit under the Probation of
     Offenders Act, 1958 to the Accused.

                                 CONCLUSION
40. Keeping in view the aforesaid findings, the appeal is allowed. The
    impugned order passed by the High Court dated 16th April, 2009 is
    set aside and the judgment as well as the orders of Trial Court and
    Sessions Court are restored with a direction to the Respondent No.1-
    Accused to pay Rs.7,50,000/- (Rupees Seven Lakhs Fifty Thousand)
    in 15 (fifteen) equated monthly instalment of Rs.50,000/- (Rupees
    Fifty Thousand) each. The High Courts and District Courts shall
    implement the aforesaid guidelines not later than 01st November, 2025.

     Result of the case: Appeal allowed.




     †
         Headnotes prepared by: Ankit Gyan