N. Vijay Kumar v. Vishwanath Rao N.
Background
N. Vijay Kumar (accused) and Vishwanath Rao N. (complainant) had a decade-long friendship. The complainant claimed he lent Rs. 20 lakh to the accused to help produce a Kannada film, in return for which the accused issued a cheque that was later dishonoured for insufficient funds. The accused denied this, claiming the cheque was one of two blank cheques handed over years earlier as security for a much smaller loan of Rs. 3.5 lakh, which had already been fully settled through a signed Memorandum of Understanding, and that the cheques had allegedly been "lost" by the complainant, a loss he had reported to the police. The trial court acquitted the accused, but the Karnataka High Court reversed this and convicted him under Section 138.
Decision Breakdown
The Supreme Court restored the trial court's acquittal. It held that once the accused raised a probable defence rebutting the presumption of a legally enforceable debt (under Section 139 of the Act), the burden shifted back to the complainant to actually prove the loan. The complainant failed to do so. He produced no supporting documents such as income-tax records or account books, and did not examine any of the "well-wishers" he claimed were present when the cheque was handed over, despite naming them. On this evidentiary gap, the Court held the High Court's conviction was unjustified and the trial court's acquittal correct.
Lesson Learnt
In a cheque-bounce case, the law initially presumes the cheque was issued for a genuine debt, but once the accused raises a credible, probable defence, the complainant must back up the claimed transaction with real evidence: bald assertions, without documents or corroborating witnesses, are not enough to sustain a conviction.