Citation: Kambhamapati Madhusudhana Rao v. Jarugula Lokanarayana & Anr., Criminal Revision Case No. 1423 of 2009, decided on 01.10.2026 | Citation: 2026:APHC:41489
The Andhra Pradesh High Court has acquitted a company director convicted in a cheque bounce case under Section 138 of the Negotiable Instruments Act. The complainant had invested Rs 3 lakh in the company in 1993 for a 30% stake and later wanted to exit. The director agreed to buy his shares and signed several agreements over the years. The complainant claimed that in June 2000, in front of mediators, he was given a post-dated cheque for Rs 9 lakh as full and final settlement, and the cheque bounced. The trial court and the sessions court both convicted the company and its director. Justice Subhendu Samanta, in revision, accepted that the accused can rebut the legal presumption of a debt on a “preponderance of probabilities”, which is a much lighter standard than proof beyond reasonable doubt, and that even a slight tilt in favour of the defence is enough. He found the defence probable on three points. The director had informed the bank years earlier that this cheque had been misplaced. The complaint came only after the bank began recovery proceedings against the company. And although every earlier share-purchase deal was put in writing, there was no document for the supposed full and final settlement of Rs 9 lakh. The court held that the lower courts had overlooked the defence evidence, set aside the conviction and sentence, and acquitted the director.
Held, Once a cheque is admitted, the law presumes it was issued for a legally enforceable debt, but the accused can rebut this presumption by showing a probable defence on a preponderance of probabilities. He may do this through his own evidence or through the complainant’s own material, and he need not prove his defence beyond reasonable doubt. Although a High Court’s revisional power against concurrent convictions is limited, it can interfere when the lower courts have ignored relevant material and evidence.
