Manipur High Court Upholds Acquittal in High-Profile Cheque Bounce Case

Court Stresses on the Need for Complainant to Prove Existence of Debt Before Presumption under Negotiable Instruments Act

In a recent judgment delivered on October 17, 2025, the Manipur High Court upheld the acquittal of Mahendra Kumar Jain in a cheque bounce case that had garnered significant attention. The court, presided over by Justice A. Guneshwar Sharma, dismissed the appeal filed by Manoj Kumar Jain, who alleged that Mahendra Kumar Jain had issued a cheque for Rs. 24 lakhs, which was dishonored due to insufficient funds.

The case revolved around a financial transaction where the appellant, Manoj Kumar Jain, claimed to have given Rs. 24 lakhs in cash to Mahendra Kumar Jain in addition to a cheque payment of Rs. 1.8 crore as part of a land deal. While the cheque amount was returned, the cash component was allegedly returned via a cheque that bounced, leading to the legal dispute under Section 138 of the Negotiable Instruments Act, 1881.

The High Court emphasized that the presumption under Section 139 of the Negotiable Instruments Act is not absolute and can only be invoked once the existence of a legally enforceable debt is established under Section 138. The court noted that the complainant failed to provide any documentary evidence or credible witness testimony to prove that the cash payment was made, thus failing to establish a legally recoverable debt.

Justice Sharma pointed out that mere admission of the accused's signature on the cheque does not automatically lead to the presumption of a debt. The accused successfully rebutted the presumption by denying the receipt of the cash and the issuance of the cheque for discharging any debt or liability.

The judgment cited several precedents, including the Supreme Court's decision in Basalingappa v. Mudibasappa, which clarified that the presumption under Section 139 is rebuttable and can be challenged on the preponderance of probabilities. The accused is not required to testify but can rely on the complainant's evidence or circumstances to rebut the presumption.

The court concluded that since the appellant failed to establish the initial burden of proving the existence of a debt, the presumption under Section 139 could not be invoked. Consequently, the trial court's decision to acquit Mahendra Kumar Jain was upheld, with the appeal being dismissed.

Bottom Line:

Negotiable Instruments Act - Presumption under section 139 of the Negotiable Instruments Act is not absolute - Complainant must first establish the existence of legally recoverable debt or liability under Section 138 of the Act, and the presumption under Section 139 comes into play only after such establishment.

Statutory provision(s): Negotiable Instruments Act, 1881 - Sections 138, 139; Criminal Procedure Code - Section 378

Shri Manoj Kumar Jain v. Shri Mahendra Kumar Jain, (Manipur) : Law Finder Doc Id # 2796485