Hon’ble Supreme Court in its recent judgment in a case titled as Ashok Singh v. State Of U.P. (Crl Appeal 4171 of 2024) delivered on April 2, 2025 made observations regarding the burden of proof in cheque bounce cases under Section 138 of the Negotiable Instruments Act, 1881.  

Key takeaways from the judgment:  

No initial onus on the complainant to prove financial capacity: The Supreme Court clearly stated that at the initial stage of a cheque bounce case, the complainant is not obligated to prove their financial capacity or wherewithal to advance the money for which the cheque was issued. 

Presumption in favor of the holder: The court reiterated the statutory presumption under Sections 118 and 139 of the NI Act, which assumes that a cheque was issued for a debt or liability and that the holder is in due course. 

Onus shifts to the accused: The responsibility to rebut this presumption lies with the accused. If the accused raises a credible objection that the complainant lacked the financial capacity to lend the claimed amount, then the complainant might be required to present evidence to demonstrate their financial capacity.  

High Court’s error: The Supreme Court overturned the Allahabad High Court’s order, which had acquitted the accused based on the presumption that the complainant had failed to provide details of their bank account and the date of withdrawal of the loan amount. The Supreme Court found this approach by the High Court to be erroneous.

Accused’s defence lacked credibility: In this specific case, the accused’s claim that the cheque was lost was not found credible, especially considering the timeline of events. 

In essence, the Ashok Singh v. State Of U.P. judgment clarifies that the complainant in a cheque bounce case doesn’t have to initially prove their financial capacity. The presumption favors the complainant, and the onus is on the accused to raise a probable defence to rebut this presumption. Only if such a defence is raised regarding the complainant’s financial capacity would the complainant then need to provide relevant evidence.