Section 138 NI Act — Defences of the Accused
An accused in a Section 138 complaint must establish that the cheque was not issued for the discharge of a legally enforceable debt or liability. The defence often rests on showing the cheque was given as security, the particulars were filled in without consent, or the statutory notice was never received. The core legal question is whether the accused has successfully rebutted the mandatory presumption under Section 139 of the Negotiable Instruments Act.
Courts assess the defence on a standard of preponderance of probabilities, not proof beyond reasonable doubt. The accused may rely on the complainant's own case, inconsistencies in evidence, or surrounding circumstances to raise a probable defence. While the listed cases do not directly address the security cheque defence, the principles from judgments such as M/S Indian Oil Corporation v. M/S Nepc India Ltd. and Amit Kapoor v. Ramesh Chander & Anr. guide how courts weigh the material at the stage of framing charge or quashing proceedings.
The leading cases
12 judgments · 12 Supreme Court · most-cited first
What LexPilot's research engine returns for this question, ranked by court and how often each judgment has been cited since. Read the full judgment before you rely on a holding.
- 1
B.S. Joshi and Ors. v. State of Haryana and Anr.
2003 INSC 179Supreme Court · 2003cited 11,973 times
The High Court, in exercise of its inherent powers under Section 482 Cr.P.C., can quash criminal proceedings, FIR, or complaint in matrimonial disputes even for non-compoundable offences under Section 498A and 406 IPC.…
- 2
Bhagwan Dass v. State(nct) of Delhi
2011 INSC 368Supreme Court · 2011cited 11,233 times
The conviction is upheld. The prosecution proved its case beyond reasonable doubt through a complete chain of circumstantial evidence, including motive, unnatural conduct of the appellant in not informing the police…
- 3
Dataram Singh v. State of Uttar Pradesh & Anr.
2018 INSC 107Supreme Court · 2018cited 8,612 times
The Supreme Court allowed the appeal and granted bail to the appellant. The Court held that grant of bail is the general rule and incarceration is the exception. The discretion to grant bail must be exercised…
- 4
M/S Celestium Financial v. A. Gnanasekaran Etc
2025 INSC 804Supreme Court · 2025cited 8,155 times
A complainant under s. 138 NI Act is a "victim" within s. 2(wa) CrPC because the dishonour of a cheque causes direct economic loss and injury. Such a complainant-victim has a right to appeal against an order of…
- 5
Damodar S. Prabhu v. Sayed Babalal H.
2010 INSC 260Supreme Court · 2010cited 3,685 times
Compounding allowed and appellant's conviction in each impugned judgment set aside. s.147 NI Act, by virtue of its non-obstante clause, exclusively governs compounding of offences under the Act and overrides s.320…
- 6
Vinod Kumar v. State of Punjab
2015 INSC 956Supreme Court · 2015cited 2,063 times
Appeal dismissed; conviction and sentence under ss. 7 and 13(2) of the Prevention of Corruption Act, 1988 upheld. On the facts, demand, acceptance and recovery were proved by the combined testimony of PW-6 (unshaken…
- 7
Chandrappa and Ors. v. State of Karnataka
2007 INSC 142Supreme Court · 2007cited 1,785 times
The Supreme Court allowed the appeal, set aside the High Court's order of conviction, and restored the trial court's order of acquittal. The Court held that the appellate court's power in an appeal against acquittal is…
- 8
Amit Kapoor v. Ramesh Chander & Anr.
2012 INSC 398Supreme Court · 2012cited 1,193 times
Appeal allowed. (1) At the stage of framing a charge under s. 228 CrPC the court must form only a tentative view based on a strong suspicion; it is not required to reach a firm or prima facie finding of guilt. The…
- 9
M/S Indian Oil Corporation v. M/S Nepc India Ltd. and Ors.
2006 INSC 452Supreme Court · 2006cited 995 times
The allegations in the complaint are sufficient to constitute offences under Sections 415 and 425 IPC. High Court was not justified in quashing the complaints in entirety. The order of High Court insofar as it quashes…
- 10
Alister Anthony Pareira v. State of Maharashtra
2012 INSC 18Supreme Court · 2012cited 985 times
The appeals were dismissed. (i) Charges under ss. 304(Part II) and 338 IPC for a single rash or negligent act done with knowledge of likely dangerous consequences are not mutually destructive and can legally co-exist.…
- 11
Mallikarjun Kodagali (dead) Represented through Legal Representatives v. the State of Karnataka & Ors.
2018 INSC 969Supreme Court · 2018cited 972 times
Per Lokur J (majority, for himself and Nazeer J): The significant date is the date of the order of acquittal, not the date of the alleged offence; the victim's cause of action arises only on acquittal; an acquittal…
- 12
Gurcharan Singh & Ors. v. State (delhi Administration)
1977 INSC 231Supreme Court · 1978cited 968 times
The Supreme Court upheld the High Court's order cancelling the bail granted to the appellants. The Court held that the Sessions Judge failed to give proper weight to the serious apprehension of witness tampering, a…
Frequently asked questions
Can a cheque given as security be the basis of a Section 138 NI Act complaint?
The accused must show on a preponderance of probabilities that the cheque was issued only as security and not towards a debt that was due on the date of presentation. Courts examine the underlying transaction and the understanding between the parties to decide whether the presumption under Section 139 stands rebutted.
What is the standard of proof for an accused to rebut the presumption under Section 139?
The accused need not prove the defence beyond reasonable doubt. It is sufficient to raise a probable defence through cross-examination, leading defence evidence, or pointing to material in the complainant's case that makes the existence of a legally enforceable debt doubtful.
What happens if the statutory demand notice was not served on the accused?
Non-service of the notice is a factual defence. If the accused demonstrates that the notice was not received, the cause of action for the complaint may not have arisen. The court will examine the mode of dispatch and whether the complainant complied with the legal requirement of sending the notice to the correct address.
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