Sanjabij Tari v. v. against the Supreme Court of India is a major case that was decided on on September 25, 2025. The case Kishore S. Borcar and Anr. is concerned with major challenges associated with the cheque dishonour cases under the Negotiable Instruments Act, 1881 (NI Act). The judgment issued by a number of Justices, Manmohan and N.V. Anjaria, is expected to help address the huge number of such cases and reimburse the reputation of cheques as a payment method. The judgment of the Court, in addition to quashing a High Court conviction and reinstating the conviction of an accused, issued broad-ranging principles of expeditious disposal of a case under Section 138 of the NI Act.
Facts of the Case
An ex-parte judgment of the Bombay High Court at Goa in which Kishore S. Borcar (Respondent No.1-Accused) was acquitted under Section 138 of the NI Act was appealed to by the Sanjabij Tari (the Appellant-Complainant). This ruling of the High Court overturned both the simultaneous rulings of both the Trial Court and the Sessions Court which had found the accused guilty. The case revolved around the issue of a dishonoured cheque which the accused is said to have given to the complainant to settle a legally binding debt.
The complainant was a man, who earned a salary of Rs. 2,300 monthly, who said he had made a friendly loan of Rs. 6,00, 000 to the accused through arranging funds with his father and a financial institution. The accused, on the other hand, claimed that the low salary of the complainant was an indication he could never afford to lend him such a huge amount of money. The accused also argued that he had given a blank cheque to the complainant to facilitate him in taking a loan in a bank, which the Sessions Court and later the Supreme Court found unimaginable and ridiculous. The accused had also done nothing to respond to the statutory notice given to him by the complainant, and this fact made the Court make an inference that the opinion of the complainant had some truth.
The rationale and the Law of the Court.
The case presented by the Supreme Court was based on a number of legal principles. It has highlighted that after the execution of cheque is received, the presumptions in Sections 118 and 139 of the NI Act will be applied, which is that the cheque is assumed to be drawn in consideration and discharge of a legally binding debt or liability. They are presumptions which are refutable but the first burden of disproving it lies on the accused. The Court noted that the High Court, under its revisionary appellate power, made an error when it re-examined the evidence and disturbed the factual determination of the lower courts in concomitant factual determination without a finding of perversity.
One of the issues that were dealt with was that the accused tried to put in question the financial ability of the complainant. As the Court made clear, although an accused may present a probable defense, the accused did not show any supporting documentation and independent evidence to substantiate his or her assertion that the complainant did not have the means necessary to loan out the money. The Court also cited a previous case that the first burden was on the accused to establish the defense of financial inability of the complainant in responding to the demand notice. In addition, the Court again stated that the omission to respond to a statutory notice gives rise to an implication that the cheque has been issued to settle a debt.
The Court was also dealing with a major legal controversy of whether Section 269SS of the Income Tax Act, 1961, has any implication on cheque bouncing cases. It opposed the perspective which certain courts had adopted that a cash transaction of more than Rs. 20,000 is not a legally binding debt in the event that it contravenes this provision. The Supreme Court believed that a violation of Section 269SS can only be punishable under the Income Tax Act and it does not make the transaction invalid or invalidate the presumptions in the NI Act. The Court described such approach as the opposite to the legislative mandate and resulting in lengthy trials.
Cheque Dishonour Cases Directions and Guidelines.
The Court realized the staggering high pendency of cheque bouncing cases, and as such, they gave a successive set of directions to simplify the trial procedure. These principles are to be used to ensure financial discipline and efficient and prompt resolution of the disputes.
Among the major guidelines are:
- Service of Summons: Summons may be served in other modes besides the customary ones but may as well be served dasti (by the complainant) and by electronic means such as email, mobile number, or Whatsapp, though the complainant must submit an affidavit authenticating the information.
- Online Payment Facility: District Courts will develop online payment facilities based on secure QR codes or UPI links to allow the accused to make the cheque amount payment at the first stage itself in getting early settlements.
- Standardized Complaint Format: Any complaints pursuant to the NI Act, Section 138, should be prepared to contain a standardized outline containing the details of the parties, cheque, dishonor, statutory notice and cause of action.
- Rebooking Compounding Guidelines: The Court revisited the Compounding Guidelines that it set down in the damage case of Damodar S. Prabhu in 2010 on compounding offenses under the NI Act. It adjusted the rated system of cost imposition, decreasing the percentages. According to the new guidelines, when the accused makes payments in form of the cheque before his or her evidence is recorded, there will be no cost or penalty. This is to promote early settlement.
- Cases monitoring: Chief Justices of Delhi, Bombay and Calcutta were invited to constitute administrative committees to keep an eye on the cases pending and being performed under Section 138. The District and Sessions Judges in such jurisdictions are also instructed to have dedicated dashboards and make monthly reviews.
This historic decision enabled the Court to permit the appeal, quash the decision of the High Court and revive the joint conviction of the inferior courts. It ordered the accused to pay Rs. 7,50,000 in instalment. The ruling is a decisive move towards reinstating the integrity of cheques in business dealings and clearing the mammoth of cases that have piled up on the Indian judicial system.
