Rajesh Jain vs Ajay Singh
Background
Rajesh Jain, an orthopaedic surgeon, claimed he had lent money over time to Ajay Singh, who eventually issued a post-dated cheque for about Rs. 6.95 lakh as part-repayment; the cheque bounced for insufficient funds. Both the trial court and the Punjab and Haryana High Court acquitted Ajay Singh of the criminal cheque-bounce charge, holding that he had cast enough doubt on whether a valid debt actually existed and that the complainant had failed to independently prove the debt with supporting records like a loan ledger. Rajesh Jain, appearing in person, appealed to the Supreme Court against this double acquittal.
Decision Breakdown
The Supreme Court undertook a detailed explanation of how the legal presumption under Section 139 of the Negotiable Instruments Act works: once a cheque's signature is admitted, courts must presume it was issued to discharge a real debt, and the burden shifts to the accused to disprove this by a "preponderance of probabilities", not simply by casting vague doubt on the complainant's case. The Court found that both lower courts had made a fundamental legal error by continuing to expect the complainant to prove his case with documentary evidence even after the presumption had kicked in, instead of scrutinising whether the accused had actually discharged his own burden. On review, the accused's defence (that a blank cheque was misused by the complainant's employee, his sister-in-law) was found to be riddled with contradictions and was denied by both witnesses, with no real evidence to support it. The Supreme Court therefore reversed the acquittal, convicted Ajay Singh, and sentenced him to pay a fine of twice the cheque amount (about Rs. 13.9 lakh), with one year of simple imprisonment as the default punishment if unpaid.
Lesson Learnt
When someone admits signing a cheque that later bounces, the law presumes it was issued for a genuine debt: the accused, not the person who received the cheque, bears the burden of disproving this presumption with a credible, consistent defence, and courts getting this burden backwards is a legal error the Supreme Court will correct even after two lower courts have ruled the same way.