TRANSFORMING CHEQUE BOUNCE LITIGATION: Supreme Court’s Landmark Ruling in Sanjabij Tari v. Kishore S. Borcar & Anr. (2025 INSC 1158)

INTRODUCTION

On 25 September 2025, the Supreme Court in Sanjabij Tari v. Kishore S. Borcar & Anr. delivered a transformative judgment that will redefine the litigation landscape under Section 138 of the Negotiable Instruments Act, 1881 (“NI Act”). Beyond restoring the conviction that the High Court had wrongly set aside, the Court issued far-reaching systemic reforms aimed at tackling the huge pendency of cheque bounce cases.

For lawyers, NBFCs, and banks, this ruling is not just another precedent—it is a strategic blueprint for handling Section 138 cases more efficiently and effectively.

CASE BRIEF: PRESUMPTIONS AND LIMITS OF REVISION

1. Facts: The accused’s cheque bounced; Trial Court and Sessions Court convicted; High Court in revision acquitted by re-evaluating facts.

2. Supreme Court’s Holding:

   • Presumptions under Sec. 118 & 139 NI Act: Once signature is admitted, debt/liability is presumed. Mere claims of “security cheque” or “financial incapacity of complainant” are not enough to rebut.

   • Adverse inference for no reply: Silence to statutory demand notice strengthens the complainant’s case.

   • Revision jurisdiction narrowed: High Courts cannot re-appreciate evidence in revision unless findings are perverse or illegal.

   • Relief structured: Accused directed to pay ₹7.5 lakh in 15 monthly instalments of ₹50,000 each.

SYSTEMIC REFORMS: SUPREME COURT’S GUIDELINES

The Court went beyond individual adjudication and issued sweeping directions to all courts to streamline cheque bounce cases:

1. Model Complaint Formats

Mandatory particulars: parties, cheque details, dishonour memo, statutory notice, cause of action, jurisdiction, and reliefs. This avoids delays due to technical defects.

2. Cognizance & Summons Discipline

Magistrates must take cognizance first, then issue summons after verifying documents. This prevents premature or improper issuance of process.

3. Flexible Service of Summons

One of the most pathbreaking parts of the judgment is recognition of multiple modes of service of summons, beyond traditional process servers:

1. Registered post / Speed post / Courier with acknowledgment.

2. Email to accused’s last known email address.

3. WhatsApp or other instant messaging apps with delivery/read receipts.

4. Through banks/employers where official contact details are available.

This removes one of the biggest bottlenecks—delayed or failed service of summons, which historically caused repeated adjournments and pendency.

How it helps:

• NBFCs & Banks can now ensure borrowers are reached through official contact points (registered email, WhatsApp used for loan updates, etc.).

• Lawyers can cut down adjournments due to non-service, expediting trial commencement.

• Courts will save valuable judicial time otherwise wasted on repeated summons attempts.

Practical measures for litigants:

To fully benefit from these new service modes, litigants should:

1. Maintain updated contact details of borrowers/customers (email IDs, WhatsApp numbers, alternate numbers, office details).

2. File affidavits of service attaching proof such as email delivery reports, WhatsApp screenshots showing “delivered/read” ticks, or courier tracking slips.

3. Use multi-pronged service simultaneously (e.g., speed post + email + WhatsApp) to pre-empt later objections of non-service.

4. Preserve consent clauses in loan agreements authorizing service of notices and summons via electronic means.

This proactive approach will ensure quicker trials and defeat dilatory tactics.

4. Compounding Incentives

Graduated deposits—10% at trial stage, 15% at appellate stage, 20% at higher stages—encourage early compounding.

5. Monitoring & Special NI Courts

District Judges to hold monthly reviews; High Courts may create special NI Act courts for speedy disposal.

6. Implementation Timeline

High Courts and District Courts directed to operationalize reforms by 1 November 2025.

IMPLICATIONS FOR STAKEHOLDERS

For lawyers, the judgment creates both opportunities and responsibilities. Complaints must now be drafted strictly in accordance with the Supreme Court’s prescribed format, leaving no scope for technical objections that can derail proceedings at the threshold. They must also actively pursue service of summons through multiple modes such as post, courier, email, and WhatsApp to ensure that accused persons cannot exploit delays in service to prolong litigation. This ruling also arms lawyers with a strong precedent to resist revision-stage acquittals by highlighting the Supreme Court’s clear bar on reappreciation of evidence in revisional jurisdiction. Furthermore, advocates should strategically push for early compounding or structured settlements at the appropriate stage, using the Court’s compounding framework and instalment-based recovery directions to their clients’ advantage.

For NBFCs and banks, the ruling has equally significant implications. Financial institutions should immediately integrate multi-mode service clauses into their loan documentation so that borrowers consent in advance to receive communications through electronic means as well. They must also put systems in place to digitally store and continuously update borrowers’ latest contact details, including email addresses and WhatsApp numbers, to facilitate swift service of notices and summons. Legal teams should be trained to file detailed affidavits of service supported by electronic proofs such as delivery reports, screenshots, and tracking receipts. In addition, lenders should be open to exploring structured settlements and instalment-based compensation orders during the sentencing phase, as such mechanisms improve the practical chances of recovery while maintaining compliance with judicial directions.

CONCLUSION: A NEW ERA FOR CHEQUE BOUNCE LITIGATION

The Sanjabij Tari judgment will inevitably transform the litigation trend under Section 138 of the NI Act in three crucial ways. First, by reinforcing strong statutory presumptions and restricting the scope of revisional interference, it ensures higher sustainability of convictions. Second, by institutionalising the system of multi-mode service of summons, it eliminates one of the biggest hurdles in cheque bounce prosecutions delayed or failed service thus paving the way for faster commencement of trials. Third, by mandating standardised complaint formats and incentivising early compounding, it creates an efficient and predictable case flow that will significantly reduce pendency.

For lawyers, NBFCs, and banks, this judgment serves simultaneously as a shield and a sword a shield against frivolous defences and procedural delays, and a sword to cut through bottlenecks that have historically plagued cheque bounce litigation. If stakeholders adopt the practical measures outlined by the Supreme Court, Section 138 prosecutions will no longer remain a perennial clog on the judicial system but will instead evolve into a streamlined and effective recovery mechanism.