Punjab & Haryana High Court Clarifies Presumption Under Section 138 NI Act
Accused Entitled to Rebut Presumption with Probabilities
Judicial Emphasis on Fair Trial in Cheque Bounce Cases
By Our Legal Correspondent
New Delhi: June 16, 2026:
Cheque bounce litigation under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) has become one of the most common forms of criminal prosecution in India. The Punjab & Haryana High Court’s ruling in Narender Kumar v. State of Haryana (2026) provides fresh clarity on the presumption of liability under Section 139 NI Act and the evidentiary burden on the accused. The judgment underscores that while the law presumes liability once a cheque is issued, the accused can rebut this presumption by raising probabilities, not necessarily by proving innocence beyond reasonable doubt.
Case Background
Facts: The accused was prosecuted under Section 138 NI Act for dishonour of cheque.
Trial Court: Convicted the accused, relying on statutory presumption under Section 139.
Appeal: Accused argued that presumption was rebuttable and he had raised sufficient doubts.
High Court’s Decision: Clarified that presumption under Section 139 is rebuttable and accused can discharge burden by showing probabilities against existence of debt or liability.
Key Legal Issues
Nature of Presumption under Section 139 NI Act
Once cheque is issued, presumption arises that it was for discharge of debt/liability.
Presumption is rebuttable.
Burden of Proof on Accused
Accused need not prove innocence beyond reasonable doubt.
Can rebut presumption by showing probabilities or inconsistencies.
Standard of Proof
Prosecution must prove case beyond reasonable doubt.
Accused only needs to raise reasonable doubt or probability.
Court’s Observations
Presumption is Rebuttable: Section 139 creates a presumption but does not make it conclusive.
Accused’s Burden is Lighter: Accused can rely on circumstances, inconsistencies, or probabilities.
Fair Trial Principle: Courts must balance statutory presumption with rights of accused.
Evidence Evaluation: Mere issuance of cheque is not sufficient if accused raises credible defence.
Relevant Laws and Rules
Negotiable Instruments Act, 1881
Section 138: Offence of cheque dishonour.
Section 139: Presumption in favour of holder.
Indian Evidence Act, 1872
Section 4: Definitions of “may presume” and “shall presume.”
Judicial Precedents
Rangappa v. Sri Mohan (2010): Presumption under Section 139 includes existence of debt/liability.
Basalingappa v. Mudibasappa (2019): Accused can rebut presumption by raising probabilities.
Wider Implications
For Accused: Provides clarity that burden is lighter; can rebut presumption with probabilities.
For Complainants: Must prepare stronger evidence beyond cheque issuance.
For Courts: Reinforces balanced approach in cheque bounce cases.
For Policy: Encourages fair trial and reduces misuse of NI Act provisions.
Comparative Perspective
India: Presumption under NI Act is rebuttable; accused can rely on probabilities.
UK: Cheque dishonour treated as civil liability; criminalisation rare.
US: Dishonour of cheque generally civil; fraud may attract criminal liability.
Inference: India’s criminalisation of cheque dishonour is unique; courts balance presumption with fairness.
Conclusion
The Punjab & Haryana High Court’s ruling in Narender Kumar v. State of Haryana strengthens jurisprudence on cheque bounce cases. By clarifying that presumption under Section 139 NI Act is rebuttable and accused can discharge burden by raising probabilities, the Court reinforced the principle of fair trial. This judgment ensures that statutory presumptions do not become instruments of injustice.
FAQs (Searchable Index Format)
1. What is Section 138 NI Act?
It criminalises dishonour of cheques for insufficiency of funds or exceeding arrangement.
2. What does Section 139 NI Act provide?
It presumes that cheque was issued for discharge of debt/liability.
3. Is the presumption under Section 139 conclusive?
No. It is rebuttable.
4. How can accused rebut presumption?
By raising probabilities, inconsistencies, or credible defence.
5. Does accused need to prove innocence beyond reasonable doubt?
No. Only needs to raise reasonable doubt or probability.
6. What did the High Court decide in Narender Kumar’s case?
That presumption under Section 139 is rebuttable and accused can discharge burden by showing probabilities.
7. Which Supreme Court cases are relevant?
Rangappa v. Sri Mohan (2010) and Basalingappa v. Mudibasappa (2019).
8. What is the burden of proof on prosecution?
To prove guilt beyond reasonable doubt.
9. How does this ruling help accused persons?
It clarifies that their burden is lighter and they can rely on probabilities.
10. What is the broader impact?
Strengthens fair trial principles and prevents misuse of cheque bounce provisions.