Landmark Judgments: Complete Notes (Part N)

Part N gathers the twelve Supreme Court decisions that every student of cheque dishonour law must know, in three groups: the offence and burden of proof, procedure and reach, and the system of Section 138 litigation. This consolidated note covers Topics 58 to 60.

58. The Offence and the Burden of Proof

Kusum Ingots (2000): set out the ingredients of Section 138; sick company protection does not bar prosecution.
Rangappa (2010, three judges): the Section 139 presumption includes a legally enforceable debt (overruling Krishna Janardhan Bhat); rebuttal on a preponderance of probabilities.
Basalingappa (2019): rebuttal may rest on the complainant's own materials and circumstances, including doubts about financial capacity.
Bir Singh (2019): a signed blank cheque may be completed by the payee and the presumption applies; no re-appreciation in revision.

59. Procedure and Reach

C.C. Alavi Haji (2007, three judges): service of a properly posted notice is presumed; a drawer who does not pay within 15 days of summons cannot plead non-receipt.
Aneeta Hada (2012, three judges): the company must be arraigned before its directors are prosecuted (overruling Anil Hada).
MSR Leathers (2012, three judges): successive presentations and prosecution on a later dishonour are allowed (overruling Sadanandan Bhadran).
Dashrath Rupsingh Rathod (2014, three judges): jurisdiction only at the drawer's bank; reversed by the 2015 amendment (Sections 142(2) and 142A).

60. The System of Section 138 Litigation

Damodar S. Prabhu (2010): graded costs for compounding (nil, 10, 15, 20 per cent), revised in Sanjabij Tari (2025) to nil, 5, 7.5 and 10 per cent.
Meters and Instruments (2017): the offence is primarily compensatory; proceedings may be closed on full payment.
In re Expeditious Trial (2021, five judges): reasons for converting summary trials; inquiry for out-of-jurisdiction accused on affidavits; one trial for cheques within 12 months recommended; no recall of summons.
P. Mohanraj (2021, three judges): the IBC moratorium bars Section 138 proceedings against the company, not its directors; under review for personal insolvency (Dineshchand Surana, 2026).

⚠ Key point

Part N in one line: the Supreme Court has defined the ingredients and the reverse burden of Section 138, closed technical escape routes on notice, required companies to be arraigned, allowed repeated presentation, shaped (with Parliament) the jurisdiction rule, and built a system of graded costs, summary trial and settlement, while fitting the offence into insolvency law.

61. The Topics of This Part

Topic 58: Kusum Ingots, Rangappa, Basalingappa and Bir Singh; Topic 59: C.C. Alavi Haji, Aneeta Hada, MSR Leathers and Dashrath Rupsingh Rathod; Topic 60: Damodar S. Prabhu, Meters and Instruments, the 2021 suo motu case and P. Mohanraj.