Tedhi Singh vs Narayan Dass Mahant
Background
The respondent complained that he had lent the appellant Rs. 7 lakh out of friendship in 2011, and that the cheque the appellant gave in return was dishonoured. The Chief Judicial Magistrate convicted the appellant under Section 138 of the NI Act, sentencing him to one year's imprisonment plus Rs. 7 lakh compensation; the Sessions Judge and the High Court both upheld this. The appellant tried to raise a "probable defence" (examining four bank officials to suggest the complainant lacked the financial capacity to lend such a sum, and claiming his cheque had been lost and misused) and appealed to the Supreme Court.
Decision Breakdown
The Court reaffirmed that under Section 139 of the NI Act there is a rebuttable presumption that a cheque was issued for a debt, and the accused only needs to establish a "probable defence" on a preponderance of probabilities, not proof beyond doubt. However, examining the record, the Court found the appellant's own reply notice had admitted a cordial relationship with the complainant and never raised the "lost cheque" story or the complainant's alleged lack of funds: that story surfaced only later at trial, undermining its credibility. Since three courts below had already ruled against the appellant and the evidence did not show a probable defence, the Supreme Court upheld the conviction but modified the sentence: the one-year jail term was replaced with a Rs. 5,000 fine (with a month's imprisonment in default) plus an additional Rs. 15,000 compensation to the complainant.
Lesson Learnt
A person accused of cheque bounce must raise their real defence at the earliest opportunity (such as in the reply to the legal notice): an explanation invented only later at trial is far less likely to be believed, even though the accused's burden is only to show a "probable" defence, not conclusive proof.