Renuka v. State of Maharashtra

At the stage of issuing process under S. 138 NI Act, existence of legally enforceable debt is presumed; rebuttal can only occur at trial, not pre-trial.

Facts

The appellant filed a complaint under S. 138 of the Negotiable Instruments Act, 1881 based on dishonour of a cheque of ₹50 crores issued by the second respondent. The cheque arose from a settlement between the appellant and her husband, with the respondent acting as mediator/guarantor.

The cheque was dishonoured with the remark “payment stopped by drawer.” Statutory notice was issued and replied to, but payment was not made. The Magistrate issued process.

The Sessions Court set aside the order, holding that no legally enforceable debt existed. The High Court affirmed this. The appellant challenged these orders before the Supreme Court.

Issues Framed

(a) Whether at the stage of issuance of process under S. 138 NI Act, the court can examine existence of legally enforceable debt?
(b) Whether proceedings can be quashed at pre-trial stage by rebutting presumption under S. 139 NI Act?

Court’s Reasoning

(a) Scope at stage of issuance of process
The Court held that only prima facie elements are to be examined: issuance of cheque, dishonour, statutory notice, and failure to pay (Para 8).

(b) Statutory presumption under S. 139 NI Act
The Court emphasized that once issuance/signature is admitted, “the statutory presumption…comes into play,” including presumption of legally enforceable debt (Para 8–9).

(c) Rebuttal only at trial
The Court held that rebuttal of presumption is a matter of evidence and “has to be undertaken during the trial,” not at the pre-trial stage (Para 8). Premature evaluation “would amount to ignoring the statutory presumption” (Para 10).

(d) Error by Sessions Court and High Court
The Sessions Court wrongly assessed merits (absence of signed agreement, matrimonial dispute) and effectively rebutted presumption without trial. This was impermissible (Para 10).

Held

Appeal allowed. Orders of Sessions Court and High Court set aside. Complaint restored for trial on merits.

Ratio

At the stage of issuance of process under S. 138 NI Act, once foundational facts are established, presumption under S. 139 NI Act operates and cannot be rebutted without trial (Paras 8–10).

Case Details

Citation: 2026 INSC 327
Decided on: 7 April 2026
Case Title: Renuka v. State of Maharashtra
Court: Supreme Court of India
Bench: J.K. Maheshwari, J.; Atul S. Chandurkar, J.

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