Creditor Not Required to Prove Financial Capacity to Extend Loan: Supreme Court Slaps ₹32 Lakh Fine on Defaulter in S.138 NI Act Case [Read Order]

The Court clarified that the complainant does not bear the initial burden to prove their financial ability unless a specific objection is raised in defense

By Avinash Kurungot - On April 3, 2025 7:28 pm - 3 mins read

Creditor Not Required - Prove Financial Capacity - Financial Capacity - Financial Capacity to Extend Loan - Extend Loan - Supreme Court - taxscan

In a notable ruling, the Supreme Court of India has held that a creditor is not required to prove their financial capacity at the outset to establish a legally enforceable debt under Section 138 of the Negotiable Instruments Act, 1881 (NI Act). The Appellant Ashok Singh, filed a Criminal Appeal before the Supreme Court against…

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