Accused cannot escape liability in cheque bounce cases under Section 138 NI Act merely by chanting the mantra of “blank security cheque"

Accused cannot escape liability in cheque bounce cases under Section 138 NI Act merely by chanting the mantra of “blank security cheque” — this is the clear message from the recent judgment of the Punjab & Haryana High Court in Narender Kumar v. State of Haryana & Anr., CRR‑1095‑2025, decided on 25 May 2026 by Hon’ble Mr. Justice Sumeet Goel.

Background: Friendly Loan, Dishonoured Cheque, and Conviction

In this case, the complainant and accused were known to each other, and the accused approached him in December 2015 seeking a friendly loan of ₹1,50,000 for his wife’s delivery expenses. In January 2016, he again requested ₹2,20,000 citing medical treatment for his new‑born child, which the complainant advanced, making the total advance ₹3,70,000.

To discharge this liability, the accused issued cheque no. 231216 dated 06.06.2016 for ₹3,70,000 drawn on Andhra Bank, Sirsa, which was dishonoured on presentation on 07.06.2016 with the remark “Funds insufficient”. The complainant served a legal notice dated 24.06.2016, but the accused failed to pay within the statutory period, leading to a complaint under Section 138 NI Act before the JMIC, Sirsa.

The trial court convicted the accused and sentenced him under Section 138 NI Act; the appellate court (Additional Sessions Judge, Sirsa) affirmed the conviction and sentence. Aggrieved, the accused filed a criminal revision (CRR‑1095‑2025) before the High Court.

Defence of “Blank Security Cheque” and Alleged Compromise

Before the trial court, in his statement under Section 313 CrPC, the accused denied any friendly relations, denied filling cheque particulars, denied receiving legal notice, and claimed he used to work in the complainant’s shop. His core defence was that he had given a blank signed cheque as security towards some advance taken while working at the complainant’s shop, which was later misused.

He also took a plea that the matter had been compromised for ₹1,00,000 and that he had already paid ₹65,000 to the complainant in the presence of Advocate Yogesh Garg (CW‑2). However:

·       No such compromise was mentioned in his Section 313 statement.

·       No suggestion about any compromise was put to the complainant (CW‑3) in cross‑examination.

·  CW‑2 was examined only to prove issuance of statutory notice and said nothing about any compromise in examination‑in‑chief; stray answers in cross‑examination were held unreliable for proving a settlement.

Crucially, the complainant produced a written agreement (Ex.C‑3) acknowledging liability of ₹3,70,000, signed by the accused. The accused admitted his signatures on the agreement but tried to argue that he had signed blank papers which were later converted into an agreement. He examined no witness nor put any suggestion to the complainant about forgery of Ex.C‑3, which led the courts to reject this plea.

Legal Reasoning: Presumption, Burden of Proof, and “Blank Cheques”

1. Presumption under Sections 118 & 139 NI Act

The High Court reaffirmed that once execution/signature on the cheque is admitted, statutory presumptions under Sections 118 and 139 NI Act arise in favour of the complainant. There is a legal presumption that:

·       The cheque was issued for consideration, and

·       It was issued in discharge of a legally enforceable debt or liability, unless the contrary is proved by the accused.

The Court described the accused’s argument – that the complainant must first prove pre‑existing liability – as “naive” because Section 139 itself creates a presumption of liability once the cheque is proved and signature is admitted. The burden therefore squarely lay on the accused to establish that the cheque was not issued towards any legally enforceable debt.

2. “Blank Security Cheque” is Not a Magic Defence

The accused admitted his signatures on the cheque but claimed that it was a blank security cheque misused by the complainant. The High Court approved the trial court’s reliance on Bir Singh v. Mukesh Kumar (2019), where the Supreme Court held that if a cheque is voluntarily signed and handed over, even if blank, the payee can fill in particulars, and the cheque does not become invalid on that ground alone; the burden remains on the accused to prove absence of debt or liability.

Mere bald assertion that the cheque was a security instrument was held insufficient to rebut the presumption under Sections 118 and 139. The accused also failed to explain convincingly how the cheque came into the complainant’s possession or produce any documentary or cogent oral evidence in support of the security‑cheque theory. Consequently, the Court held that the presumption remained intact.

3. Effect of Agreement Ex.C‑3

The written agreement Ex.C‑3, acknowledging liability of ₹3,70,000, further strengthened the complainant’s case. The accused admitted his signature on Ex.C‑3 but merely claimed that he had signed blank papers; yet he neither examined witnesses nor confronted the complainant in cross‑examination about any alleged fabrication. The Court held that such an unsubstantiated plea cannot dislodge a duly proved written acknowledgment of liability.

4. Revisional Jurisdiction is Limited

The High Court emphasised the limited scope of interference under revisional jurisdiction, especially when there are concurrent findings of fact by the trial and appellate courts. Relying upon Sanjabij Tari v. Kishore S. Borcar, 2025 (4) RCR (Criminal) 420, and Southern Sales & Services v. Sauermilch Design and Handels GMBH (2008) 14 SCC 457, it reiterated that in the absence of perversity or jurisdictional error, the High Court cannot re‑appreciate evidence and upset concurrent factual findings.

Finding no perversity, no jurisdictional error, and no miscarriage of justice, the Court dismissed the revision petition and affirmed the conviction and sentence.

Key Takeaways for Accused and Complainants in Cheque Bounce Cases

This decision carries significant practical lessons for both sides in Negotiable Instruments Act prosecutions.

For accused persons

·    Once you admit signature on a cheque, the law presumes it was issued towards a legally enforceable liability; the burden is on you to rebut this presumption with probable and cogent evidence, not mere denial.

·      Taking the plea of “blank security cheque” without documentary support, without consistent defence at all stages, and without examining supporting witnesses is extremely risky; courts will treat such pleas as bald assertions.

·        If you rely on compromise or part payment, it must be brought on record through proper evidence, suggestions in cross‑examination, and, ideally, written terms; stray answers by a witness examined for another purpose may not rescue you.

·    Claims like “I signed blank papers” are weak unless backed by immediate protest, contemporaneous complaint, or other corroboration; silence at crucial stages (313 CrPC statement, cross‑examination) is often fatal.

For complainants

·       Ensure legal notice is properly issued and proved through postal receipts and testimony; failure of the accused to dispute service or cross‑examine on this aspect strengthens your case.

·   Written acknowledgments of liability (like Ex.C‑3) can be powerful corroborative documents alongside the cheque and bank memo.

·    Consistent pleadings and evidence regarding the nature of the transaction (loan amount, dates, purpose) help the court accept your version despite the friendly or informal nature of the loan.

·       Even where the accused alleges “security cheque”, you need not prove the entire transaction like a civil suit, because statutory presumptions under Sections 118 and 139 operate in your favour once execution is admitted.

Why This Judgment Matters for NI Act Litigation

The Narender Kumar judgment reinforces a growing judicial trend: defence based solely on “blank security cheque” without solid evidence will not suffice to escape conviction under Section 138 NI Act. It harmonises with Supreme Court authority in Bir Singh v. Mukesh Kumar by accepting that voluntarily signed blank cheques, if handed over, can be validly completed by the payee and will carry the statutory presumptions.

Equally important, the judgment is a reminder about procedural rigour: omissions in Section 313 statements, lack of specific suggestions in cross‑examination, failure to examine relevant witnesses, and absence of contemporaneous protest can decisively tilt the scales against the accused. For practitioners, this case underscores the importance of building a structured defence from day one instead of relying on generic stock pleas.

As an advocate regularly handling cheque bounce matters in Punjab and adjoining regions, I see this ruling as a clear signal: accused persons must be advised that once they admit signature on the cheque, the onus is heavy and real, and casual “security cheque” narratives are unlikely to withstand judicial scrutiny. At the same time, complainants who meticulously follow the statutory scheme — execution, dishonour, notice, and evidence — can confidently rely on these presumptions to secure conviction where a genuine liability exists.

                                                 Narender Kumar v. State of Haryana & Anr., CRR‑1095‑2025