#presumption of liability

The Himachal Pradesh High Court has ruled that a cheque issued as security for a loan is not immune from prosecution under Section 138 of the Negotiable Instruments Act, provided the underlying debt remains unpaid and statutory notice is properly served. This removes legal ambiguity for banks and lenders relying on security cheques, reinforcing that intent to defraud is not required - only the dishonour of a legally enforceable liability.

HP High Court reaffirms that the statutory presumption under Section 139 of the NI Act shifts the burden of proof to the accused, who must present cogent evidence to rebut liability. Mere allegations of cheque tampering without corroboration are insufficient to overturn conviction for cheque dishonour.

Gauhati High Court rules that once a cheque is issued under Section 138 of the Negotiable Instruments Act, the presumption of liability arises, shifting the burden of proof to the accused. The court held that absence of debt must be proven at trial, not during pre-trial quashment proceedings, reinforcing the strict interpretation of cheque dishonour cases.

The Himachal Pradesh High Court ruled that an accused’s admission during Section 313 CrPC examination, combined with cheque issuance and dishonour, conclusively triggers the statutory presumption under Section 139 NI Act. This shifts the burden of proof entirely to the accused, reinforcing complainant rights in cheque bounce cases.

Kerala High Court holds that a partnership firm's name change does not affect standing to prosecute under Section 138 NI Act; presumption of liability stands unless rebutted by credible evidence.

Punjab and Haryana High Court holds that security cheques issued for commercial liability can trigger Section 138 NI Act prosecution; presumption of debt applies if signature is admitted.