{"id":29699,"date":"2026-08-09T05:44:56","date_gmt":"2026-08-09T05:44:56","guid":{"rendered":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/?p=29699"},"modified":"2026-08-09T05:54:22","modified_gmt":"2026-08-09T05:54:22","slug":"burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881","status":"publish","type":"post","link":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/","title":{"rendered":"Burden Of Proving The Complainant&#8217;s Financial Capacity Under Section 138 Of The Negotiable Instruments Act, 1881"},"content":{"rendered":"\n<h1 id=\"h-kuntegowda-v-thurubaiah-2026-burden-of-proof-financial-capacity-and-section-138-ni-act\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Kuntegowda_v_Thurubaiah_2026_Burden_of_Proof_Financial_Capacity_and_Section_138_NI_Act\"><\/span>Kuntegowda v. Thurubaiah (2026): Burden of Proof, Financial Capacity and Section 138 NI Act<span class=\"ez-toc-section-end\"><\/span><\/h1>\n\n\n\n<p class=\"wp-block-paragraph\">A Fortified Analysis of Kuntegowda v. Thurubaiah (2026) and the Governing Precedent Chain<\/p><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_86 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #0c0c0c;color:#0c0c0c\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #0c0c0c;color:#0c0c0c\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#Kuntegowda_v_Thurubaiah_2026_Burden_of_Proof_Financial_Capacity_and_Section_138_NI_Act\" >Kuntegowda v. Thurubaiah (2026): Burden of Proof, Financial Capacity and Section 138 NI Act<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#Factual_Matrix_and_Procedural_History\" >Factual Matrix and Procedural History<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#Core_Legal_Issue\" >Core Legal Issue<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#Supreme_Courts_Reasoning_and_Key_Holdings\" >Supreme Court&#8217;s Reasoning and Key Holdings<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#Statutory_Presumptions_Under_Sections_118_and_139_NI_Act\" >Statutory Presumptions Under Sections 118 and 139, NI Act<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#No_Initial_Onus_on_Complainant_to_Prove_Financial_Capacity\" >No Initial Onus on Complainant to Prove Financial Capacity<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#Accuseds_Duty_to_Raise_the_Capacity_Defence_Timely\" >Accused&#8217;s Duty to Raise the Capacity Defence Timely<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#Corroborative_Evidence_and_Rejection_of_the_%E2%80%9CSecurity_Cheque%E2%80%9D_Defence\" >Corroborative Evidence and Rejection of the \u201cSecurity Cheque\u201d Defence<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#Limits_of_Revisional_Jurisdiction\" >Limits of Revisional Jurisdiction<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#Fortifying_the_Precedent_Chain\" >Fortifying the Precedent Chain<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#1_Kumar_Exports_v_Sharma_Carpets_2009_2_SCC_513\" >1. Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#2_Rangappa_v_Sri_Mohan_2010_11_SCC_441\" >2. Rangappa v. Sri Mohan, (2010) 11 SCC 441<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#3_Basalingappa_v_Mudibasappa_2019_5_SCC_418_%E2%80%94_the_necessary_counterpoint\" >3. Basalingappa v. Mudibasappa, (2019) 5 SCC 418 \u2014 the necessary counterpoint<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#4_Ashok_Singh_v_State_of_UP_Anr_2025_INSC_427_corrected_citation\" >4. Ashok Singh v. State of U.P. &amp; Anr., 2025 INSC 427 (corrected citation)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#5_Tedhi_Singh_v_Narayan_Dass_Mahant_2022_6_SCC_735\" >5. Tedhi Singh v. Narayan Dass Mahant, (2022) 6 SCC 735<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#Practical_Implications_%E2%80%94_Practitioner_Checklist\" >Practical Implications \u2014 Practitioner Checklist<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#For_Complainants\" >For Complainants<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#For_Accused\" >For Accused<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#For_Revisional_Courts\" >For Revisional Courts<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#Conclusion\" >Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/burden-of-proving-the-complainants-financial-capacity-under-section-138-of-the-negotiable-instruments-act-1881\/#Important_Links\" >Important Links<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n\n\n\n\n<p class=\"wp-block-paragraph\">In a significant reaffirmation of settled jurisprudence under the Negotiable Instruments Act, 1881, the Supreme Court in Kuntegowda v. Thurubaiah 2026 INSC 790 (date of decision on 04.08.2026) has authoritatively held that the initial burden to raise a defence challenging the complainant&#8217;s financial capacity to advance a loan lies squarely on the accused, and such a plea must ordinarily be specifically taken in the reply to the statutory demand notice under Section 138.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This judgement, delivered by a bench comprising Justice B.V. Nagarathna and Justice Ujjal Bhuyan on 4 August 2026, sets aside the Karnataka High Court&#8217;s revisional order acquitting the accused and restores the conviction, while crystallising important principles governing the burden of proof, statutory presumptions, and the limits of revisional jurisdiction in cheque dishonour cases.<\/p>\n\n\n\n<h2 id=\"h-factual-matrix-and-procedural-history\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Factual_Matrix_and_Procedural_History\"><\/span>Factual Matrix and Procedural History<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The case arose from a complaint alleging that the accused had borrowed \u20b94.5 lakh as a hand loan in December 2010 towards the purchase of a house site, repayable within a year at 16% interest, and had subsequently issued a cheque in discharge of the said liability. The cheque was dishonoured on presentation due to \u201cinsufficient funds\u201d, prompting the complainant to initiate proceedings under Section 138 of the NI Act.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Stage<\/th><th>Finding<\/th><\/tr><\/thead><tbody><tr><td>Trial Court<\/td><td>Convicted the accused under Section 138 and imposed a sentence.<\/td><\/tr><tr><td>First Appellate Court<\/td><td>Affirmed conviction, albeit with a modification of sentence.<\/td><\/tr><tr><td>Karnataka High Court (Revision)<\/td><td>Acquitted the accused, holding that the complainant had failed to establish his financial capacity to lend \u20b94.5 lakh.<\/td><\/tr><tr><td>Supreme Court (Appeal)<\/td><td>Reversed the High Court, restored conviction, and laid down definitive propositions on the burden of proof.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 id=\"h-core-legal-issue\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Core_Legal_Issue\"><\/span>Core Legal Issue<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Whether, in a prosecution under Section 138 of the NI Act, the complainant is required to prove his financial capacity to advance the loan at the threshold, or whether such an issue arises only when specifically raised by the accused, preferably in the reply to the statutory notice.<\/p>\n\n\n\n<h2 id=\"h-supreme-court-s-reasoning-and-key-holdings\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Supreme_Courts_Reasoning_and_Key_Holdings\"><\/span>Supreme Court&#8217;s Reasoning and Key Holdings<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 id=\"h-statutory-presumptions-under-sections-118-and-139-ni-act\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Statutory_Presumptions_Under_Sections_118_and_139_NI_Act\"><\/span>Statutory Presumptions Under Sections 118 and 139, NI Act<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The Court reiterated that once the execution of the cheque (including the accused&#8217;s signature) is admitted or proved, the mandatory presumptions under Sections 118 and 139 of the NI Act spring into operation. Section 118 presumes that every negotiable instrument was made or drawn for consideration; Section 139 presumes that the cheque was issued for the discharge, in whole or in part, of a debt or other liability. These presumptions are rebuttable, but the burden to rebut them rests on the accused, and the standard is preponderance of probabilities, not proof beyond reasonable doubt.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Once the accused admitted his signature on the cheque, the statutory presumptions under Sections 118 and 139 came into operation. These presumptions shift the burden to the accused to rebut the existence of a legally enforceable debt. \u2014 Kuntegowda v. Thurubaiah, 2026 LiveLaw (SC) 765<\/p>\n\n\n\n<h3 id=\"h-no-initial-onus-on-complainant-to-prove-financial-capacity\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"No_Initial_Onus_on_Complainant_to_Prove_Financial_Capacity\"><\/span>No Initial Onus on Complainant to Prove Financial Capacity<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The Supreme Court held that proof of financial capacity is not a sine qua non for invoking Section 138. The essential ingredients to set the criminal machinery in motion are:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Cheque drawn by the accused on an account maintained by him;<\/li>\n\n\n\n<li>Presentation within six months, or within its validity period;<\/li>\n\n\n\n<li>Dishonour for insufficiency of funds or breach of arrangement;<\/li>\n\n\n\n<li>Statutory demand notice within 30 days of dishonour;<\/li>\n\n\n\n<li>Non-payment within 15 days of receipt of notice.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Once these foundational facts are established through documents such as the cheque return memo and legal demand notice, the court is bound to proceed under Section 138.<\/p>\n\n\n\n<h3 id=\"h-accused-s-duty-to-raise-the-capacity-defence-timely\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Accuseds_Duty_to_Raise_the_Capacity_Defence_Timely\"><\/span>Accused&#8217;s Duty to Raise the Capacity Defence Timely<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A pivotal aspect of the judgement is its emphasis on procedural fairness and timely pleading. The Court held that if the accused intends to challenge the complainant&#8217;s capacity to lend, such a defence must be specifically pleaded in the reply to the statutory notice under Section 138. The rationale is twofold: first, failure to respond to the statutory notice gives rise to an inference that the complainant&#8217;s version carries merit; and second, in the absence of such a plea, the complainant cannot be expected to lead evidence on his financial capacity while presenting his case.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Court clarified that the accused may discharge this burden by producing independent witnesses or documentary evidence or by relying on the complainant&#8217;s own evidence through effective cross-examination. In the present case, no contra material was placed on record to show that the complainant lacked the means to extend the hand loan.<\/p>\n\n\n\n<h3 id=\"h-corroborative-evidence-and-rejection-of-the-security-cheque-defence\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Corroborative_Evidence_and_Rejection_of_the_%E2%80%9CSecurity_Cheque%E2%80%9D_Defence\"><\/span>Corroborative Evidence and Rejection of the \u201cSecurity Cheque\u201d Defence<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The complainant had consistently maintained that he had arranged the loan amount with financial assistance from relatives and acquaintances, a version corroborated by prosecution witnesses whose testimony remained unshaken in cross-examination. The accused&#8217;s alternative defence \u2014 that the cheque was issued as a blank security cheque in connection with a separate loan of \u20b940,000 \u2014 was rejected as an afterthought, since no documentary evidence supported it and the notice demanding return of the cheque was issued only after the prosecution had commenced.<\/p>\n\n\n\n<h3 id=\"h-limits-of-revisional-jurisdiction\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Limits_of_Revisional_Jurisdiction\"><\/span>Limits of Revisional Jurisdiction<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The Supreme Court faulted the Karnataka High Court for exceeding the limits of its revisional jurisdiction under Section 397\/401 CrPC (now Sections 438\/442, BNSS, and Section 452 BNSS on the specific power invoked). A revisional court cannot re-appreciate evidence as if it were a first appellate court, cannot substitute its own conclusions merely because another view is possible, and may interfere only where there is perversity, manifest illegality, or miscarriage of justice. Since both the trial court and the first appellate court had returned concurrent findings of guilt, and no perversity was demonstrated, the High Court was not justified in acquitting the accused.<\/p>\n\n\n\n<h2 id=\"h-fortifying-the-precedent-chain\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Fortifying_the_Precedent_Chain\"><\/span>Fortifying the Precedent Chain<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 id=\"h-1-kumar-exports-v-sharma-carpets-2009-2-scc-513\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Kumar_Exports_v_Sharma_Carpets_2009_2_SCC_513\"><\/span>1. Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Expressly relied upon within Kuntegowda itself, this decision is the foundational modern authority on the interplay between Sections 118 and 139: once the cheque and signature are proved, the presumption of a legally enforceable debt arises, but the accused need only raise a probable defence, not prove his case beyond reasonable doubt, to rebut it.<\/p>\n\n\n\n<h3 id=\"h-2-rangappa-v-sri-mohan-2010-11-scc-441\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Rangappa_v_Sri_Mohan_2010_11_SCC_441\"><\/span>2. Rangappa v. Sri Mohan, (2010) 11 SCC 441<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A three-judge bench settled that Section 139 is a reverse-onus clause that includes, within its sweep, the existence of a legally enforceable debt or liability. This is the bedrock authority for treating the presumption as covering the transaction as a whole, not merely the fact of issuance.<\/p>\n\n\n\n<h3 id=\"h-3-basalingappa-v-mudibasappa-2019-5-scc-418-the-necessary-counterpoint\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Basalingappa_v_Mudibasappa_2019_5_SCC_418_%E2%80%94_the_necessary_counterpoint\"><\/span>3. Basalingappa v. Mudibasappa, (2019) 5 SCC 418 \u2014 the necessary counterpoint<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">This addition is important for balance. In Basalingappa, the Supreme Court upheld an acquittal where the accused successfully raised a probable defence and the complainant&#8217;s own admissions exposed doubtful capacity to advance a large loan within a short span. The decision confirms that Kuntegowda does not immunise complainants from scrutiny altogether \u2014 it simply fixes the sequence in which that scrutiny must be triggered: through a timely, specific defence, after which the complainant&#8217;s evidence remains fully open to challenge. Practitioners citing Kuntegowda for the accused&#8217;s burden should read it alongside Basalingappa to avoid overstating the complainant&#8217;s immunity.<\/p>\n\n\n\n<h3 id=\"h-4-ashok-singh-v-state-of-u-p-amp-anr-2025-insc-427-corrected-citation\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_Ashok_Singh_v_State_of_UP_Anr_2025_INSC_427_corrected_citation\"><\/span>4. Ashok Singh v. State of U.P. &amp; Anr., 2025 INSC 427 (corrected citation)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Decided on 2 April 2025 by Justices Sudhanshu Dhulia and Ahsanuddin Amanullah, this decision anticipated Kuntegowda almost verbatim: the onus is not on the complainant, at the threshold, to prove financial capacity, unless the accused expressly raises that defence \u2014 at least in the reply to the statutory demand notice. The original draft&#8217;s citation of \u201c2025 LiveLaw (SC) 383\u201d could not be verified and has been replaced with the confirmed neutral citation.<\/p>\n\n\n\n<h3 id=\"h-5-tedhi-singh-v-narayan-dass-mahant-2022-6-scc-735\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_Tedhi_Singh_v_Narayan_Dass_Mahant_2022_6_SCC_735\"><\/span>5. Tedhi Singh v. Narayan Dass Mahant, (2022) 6 SCC 735<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Relied upon in Ashok Singh, this decision independently confirms that the complainant need not show, in the first instance, that he possessed the financial capacity to advance the loan \u2014 the burden shifts only once the accused sets up a specific case to that effect.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Also Read: <a target=\"_blank\" href=\"https:\/\/www.legalservicesindia.com\/sources-of-hindu-law-origins-evolution-and-modern-relevance-in-indian-jurisprudence\/\" rel=\"noreferrer noopener\">Sources of Hindu Law: Origins, Evolution, and Modern Relevance in Indian Jurisprudence<\/a><\/p>\n\n\n\n<h2 id=\"h-practical-implications-practitioner-checklist\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Practical_Implications_%E2%80%94_Practitioner_Checklist\"><\/span>Practical Implications \u2014 Practitioner Checklist<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 id=\"h-for-complainants\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"For_Complainants\"><\/span>For Complainants<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>\u2610 Ensure strict compliance with statutory timelines \u2014 presentation, notice, and filing.<\/li>\n\n\n\n<li>\u2610 Preserve bank records, transaction history, and witness details in case capacity is challenged.<\/li>\n\n\n\n<li>\u2610 Rely on the Sections 118 and 139 presumptions unless effectively rebutted; do not volunteer capacity evidence unprompted.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"h-for-accused\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"For_Accused\"><\/span>For Accused<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>\u2610 Reply to the statutory notice within 15 days and specifically plead lack of the complainant&#8217;s financial capacity, if intended \u2014 Kuntegowda and Ashok Singh both penalise belated pleas.<\/li>\n\n\n\n<li>\u2610 Gather documentary evidence \u2014 income tax returns, bank statements, employment records \u2014 to support the defence, per Basalingappa.<\/li>\n\n\n\n<li>\u2610 Use cross-examination strategically to elicit inconsistencies regarding the source of funds.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"h-for-revisional-courts\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"For_Revisional_Courts\"><\/span>For Revisional Courts<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>\u2610 Exercise jurisdiction sparingly and only where there is a clear error of law or perversity.<\/li>\n\n\n\n<li>\u2610 Avoid re-appreciating evidence where concurrent findings exist, absent a manifest miscarriage of justice.<\/li>\n<\/ul>\n\n\n\n<h2 id=\"h-conclusion\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Kuntegowda v. Thurubaiah stands as a landmark reaffirmation of the balanced framework under the NI Act: the complainant&#8217;s burden is limited to proving foundational facts; the accused bears the onus to raise and substantiate defences, including challenges to financial capacity; statutory presumptions operate robustly to protect the sanctity of negotiable instruments; and revisional courts must respect the boundaries of their jurisdiction. Read together with Basalingappa, the precedent chain is best understood not as foreclosing scrutiny of the complainant&#8217;s means, but as insisting that such scrutiny be earned through a timely and specific defence \u2014 failing which, the presumption does the complainant&#8217;s work for him.<\/p>\n\n\n\n<ul class=\"wp-block-yoast-seo-related-links yoast-seo-related-links\">\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/appeal-vs-review-vs-revision-under-cpc-complete-guide-with-supreme-court-judgments-2026\/\">Appeal vs Review vs Revision Under CPC: Complete Guide with Supreme Court Judgements (2026)<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/cheque-bounce-and-debt-recovery-in-the-uae-legal-remedies-and-enforcement-procedures\/\">Cheque Bounce and Debt Recovery in the UAE: Legal Remedies and Enforcement Procedures<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/parameshwari-vs-state-of-tamil-nadu-2026-supreme-court-sentencing-judgment\/\">Parameshwari v. State of Tamil Nadu (2026): Supreme Court on Sentencing, Proportionality &amp; Deterrence<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/supreme-court-conversion-revision-appeal-writ-section-115-cpc\/\">Supreme Court on Conversion of Revision into Appeal or Writ: Landmark Ruling in Nawab Shaqafath Ali Khan v. Nawab Imdad Jah Bahadur<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/supreme-court-section-138-ni-act-conviction-quashed-after-settlement\/\">Supreme Court: Section 138 NI Act Conviction Can Be Quashed After Settlement Between Parties<\/a><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Important_Links\"><\/span>Important Links<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.legalserviceindia.com\/lawyers\/lawyers_home.htm\" target=\"_blank\" rel=\"noreferrer noopener\">Lawyers in India<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/copyright\/register.htm\" target=\"_blank\" rel=\"noreferrer noopener\">Copyright Registration in India<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/articles\/index.html\" target=\"_blank\" rel=\"noreferrer noopener\">Caveat Filing in Supreme Court of India<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/helpline\/mutual_consent_divorce.htm\" target=\"_blank\" rel=\"noreferrer noopener\">Mutual Consent Divorce in Delhi <\/a>NCR: WhatsApp 9650499965<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Kuntegowda v. Thurubaiah (2026): Burden of Proof, Financial Capacity and Section 138 NI Act A Fortified Analysis of Kuntegowda v. Thurubaiah (2026) and the Governing Precedent Chain In a significant reaffirmation of settled jurisprudence under the Negotiable Instruments Act, 1881, the Supreme Court in Kuntegowda v. Thurubaiah 2026 INSC 790 (date of decision on 04.08.2026)<\/p>\n","protected":false},"author":73,"featured_media":29707,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"two_page_speed":[],"_jetpack_memberships_contains_paid_content":false,"_joinchat":[],"footnotes":""},"categories":[7],"tags":[4765,28],"class_list":["post-29699","post","type-post","status-publish","format-standard","has-post-thumbnail","category-banking-finance-laws","tag-banking-finance-laws","tag-top-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.2 (Yoast SEO v28.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Burden Of Proving The Complainant&#039;s Financial Capacity Under Section 138 Of The Negotiable Instruments Act, 1881 - Legal Service India - Articles<\/title>\n<meta name=\"description\" content=\"Supreme Court in Kuntegowda v. 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