If a bank returns a cheque for insufficient funds, the law presumes the cheque was given to pay a real debt once the signature is admitted, and it is up to the issuer to prove otherwise with real evidence, not guesses. In this landmark ruling, the Supreme Court restored a conviction that a High Court had wrongly overturned and introduced new, practical steps to expedite cheque-bounce cases nationwide, with effect from 01.11.2025.
Let's examine the case of the appellant-complainant, Sanjabij Tari, who advanced a friendly loan of ₹6,00,000 to the respondent, Kishore S. Borcar, supported by credible testimony that to oblige his friend/Respondent, the appellant-complainant had arranged money from his father, who was a cloth merchant having two shops and even went to the extent of parting with a portion of the loan amount which he himself had borrowed from a financial institution. The respondent issued a cheque which was dishonoured by the bank. The trial and sessions courts convicted the respondent under Section 138 of the Negotiable Instruments Act (NI Act). However, the High Court acquitted the respondent in revision proceedings, a decision that was subsequently set aside by the Supreme Court.
The respondent contended that the complainant did not have the financial means to lend the amount due to low salary and argued that a blank
cheque was given to obtain a bank loan. The Supreme Court rejected these
defences, reaffirming the presumptions favouring the complainant.
KEEPING IN VIEW THE MASSIVE BACKLOG OF CHEQUE BOUNCING CASES, THE FOLLOWING GUIDELINES ARE ISSUED BY THE SUPREME COURT OF INDIA:
The Supreme Court's directions
introduce extensive procedural reforms to reduce pendency and promote early
resolution:
- Service of Summons: Courts shall allow
summons service via e-mail, WhatsApp, and dasti (direct service by
complainant) methods to avoid delays
- Online Payment Facilities: District Courts will operationalise secured QR/UPI payment portals linked to summons for early cheque payment and compounding (closing of the case) options. The summons shall expressly mention that the Respondent/Accused has the option to make payment of the cheque amount at the initial stage itself, directly through the said online link
- Simplified Complaint Synopsis: Each and every complaint under Section 138 of the NI Act shall contain a synopsis in the following format, which shall be filed immediately after the index (at the top of the file), i.e. before the formal complaint [See Annexure below for the format of Synopsis]
- Summary Trials: Trials shall remain summary unless justified. The Trial Courts shall record cogent and sufficient reasons before converting a summary trial to a summons trial. Courts may ask focused questions at the outset about cheque ownership, signature, issuance, liability, defences, and settlement willingness.
- Compounding Costs: Early compounding (before the defence evidence) will incur little or no additional cost; costs increase incrementally with trial stages, ranging from 5% to 10% of the cheque amount.
- Cash Loan Legality: Cash loans over ₹20,000
may face tax penalties but are not illegal or void under Section 138, and
statutory presumptions continue to protect payees.
- Judicial Monitoring: High Courts and
District Courts will maintain dashboards tracking pendency, disposal, and
settlements, and promote mediation, Lok Adalats, and evening courts with
realistic pecuniary limits.
These reforms aim to expedite cheque bounce cases, restore confidence in cheques as reliable payment instruments, and ease the unprecedented judicial backlog. The High Courts and District Courts shall implement the aforesaid guidelines not later than 1st November, 2025.
This article is based on the full judgment and directions issued by the Supreme Court of India on 25 September 2025 in Criminal Appeal No. 1755/2010 (Sanjabij Tari vs Kishore S. Borcar & Anr).
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