Legal Notice Cheque Bounce Case

In a significant judgment delivered on June 9, 2025, the Delhi High Court addressed crucial aspects of cases under Section 138 of the Negotiable Instruments Act, 1881 (NI Act). The case, Barun Bhanot v. M/s Annie Impexpo Marketing Pvt Ltd & Anr, provides the interpretation of legal notices and presumptions under the Act.


Facts of the Case

The case involved dishonored cheques worth ₹1,00,000 (two cheques of ₹50,000 each) issued by the respondent company. The petitioner, a consultancy service provider, claimed these cheques were issued towards partial payment of outstanding dues totaling ₹2,64,689.

Legal Issues 

- Validity of Legal Notice under Section 138(b)

- Application of presumption under Section 139

- Standard for interference in acquittal cases


The Court made several important observations:

1. Requirements of Legal Notice

The service of demand notice under Section 138(b) of the NI Act is a condition precedent to filing a complaint. Since the provision is penal in nature, it must be strictly construed.

2. Presumption Under Section 139

The Court emphasized that while Section 139 raises certain presumptions in favor of the holder of the cheque, these presumptions are not absolute. The accused can contest them by raising a probable defense on a preponderance of probabilities.

3. Burden of Proof

Once the accused successfully raises a probable defense, the burden shifts back to the complainant to prove the existence of debt as a matter of fact.

This judgment offers several practical lessons for businesses:

- Legal notices must specifically demand payment of the cheque amount

- Proper maintenance of accounts and consistency in claimed amounts is crucial

- The presumption under Section 139 can be effectively rebutted through circumstantial evidence


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