Himachal Pradesh High Court
Reserved On: 02.06.2025 vs Bhupinder on 25 June, 2025
2025:HHC:19713
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No.141 of 2024
Reserved on: 02.06.2025
Date of Decision: 25.06.2025
Om Prakash …Petitioner
Versus
Bhupinder …Respondent
Coram
Hon’ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1
For the Petitioner : Mr. B.R. Sharma, Advocate.
For the Respondent : Mr. Ajay Kumar Lahota, Advocate.
Rakesh Kainthla, Judge
The present revision is directed against the judgment
dated 05.01.2024 passed by learned Additional Sessions Judge,
Rohru, H.P. (learned Appellate Court) vide which, the judgment of
conviction and order of sentence dated 06.07.2023 passed by
learned Additional Chief Judicial Magistrate, Court No. 1, Rohru
District, Shimla (learned Trial Court) were upheld. (Parties shall
1
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
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hereinafter be referred to in the same manner as they were arrayed
before the learned Trial Court for convenience.)
2. Briefly stated, the facts giving rise to the present
revision are that the complainant filed a complaint before the
learned Trial Court for the commission of an offence punishable
under Section 138 of the Negotiable Instruments Act (in short, NI
Act). It was asserted that the complainant and the accused were
known to each other. The accused purchased 4 cows from the
complainant in the first week of March, 2018, @ ₹1,00,000/- each.
The accused promised to pay the amount within a week; however,
the amount was not paid. The complainant asked the accused to
pay the amount. The accused issued a cheque for ₹4,00,000/-
drawn on PNB Branch, Shoghi in favour of the complainant. The
complainant presented the cheque to his Bank, but it was returned
with the remarks ‘funds insufficient’. The complainant issued a
notice to the accused asking him to pay the amount within 15 days
from the date of receipt of the notice. This notice was duly served
upon the accused; however, the accused failed to pay the amount
despite the receipt of the valid notice of demand. Hence, the
complaint was filed before the Court to take action as per the law.
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3. The learned Trial Court found sufficient reasons to
summon the accused. When the accused appeared, notice of
accusation was put to him for the commission of an offence
punishable under Section 138 of the NI Act, to which he pleaded
not guilty and claimed to be tried.
4. The complainant examined himself as CW1 to prove his
case.
5. The accused, in his statement recorded under Section
313 of Cr.P.C., admitted that he knew the accused. He denied the
rest of the complainant’s case. He examined himself as (DW1) and
Narinder Kumar (DW2).
6 Learned Trial Court held that the accused stated in his
examination-in-chief that he had issued two cheques as security.
He also admitted in his cross-examination that the second cheque
was issued towards the cost of the apple crop. This contradicted
his version. The cheque carried with it a presumption that it was
issued in discharge of the legal liability for valid consideration.
The cheque was dishonoured with an endorsement ‘insufficient
funds’. The notice was duly served upon the accused and the
accused failed to pay the amount despite the receipt of the notice;
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hence, the accused was convicted of the commission of an offence
punishable under Section 138 of NI Act and he was sentenced to
undergo simple imprisonment for a period of one year, pay a fine
of ₹5,20,000/- and in default of payment of fine to further
undergo imprisonment for three months.
7. Being aggrieved from the judgment passed by the
learned Trial Court, the accused filed an appeal, which was decided
by the learned Additional Sessions Judge, Rohru (learned
Appellate Court). Learned Appellate Court concurred with the
findings recorded by the learned Trial Court that the accused had
failed to rebut the presumption of consideration attached to the
cheque. The evidence led by the accused failed to rebut this
presumption. The cheque was dishonoured with an endorsement
‘funds insufficient’. The notice was duly served upon the accused
but he failed to pay the amount despite the receipt of a valid notice
of demand; therefore, he was rightly convicted of the commission
of an offence punishable under Section 138 of the NI Act. The
learned Trial Court had imposed an adequate sentence, and no
interference was required with the sentence imposed by the
learned Trial Court; hence, the appeal filed by the accused was
dismissed.
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8. Being aggrieved from the judgments and order passed
by learned Courts below, the accused has filed the present revision
asserting that learned Courts below erred in appreciating the
evidence. The cheque was never issued to discharge the legal
liability. The complainant failed to lead any evidence in support of
his plea; therefore, it was prayed that the present revision be
allowed and the judgments and order passed by the learned Courts
below be set aside.
9. I have heard Mr. B.R. Sharma, learned counsel for the
petitioner/accused and Mr. Ajay Kumar Lahota, learned counsel
for the respondent/
10. Mr. B.R. Sharma, learned counsel for the
petitioner/accused, submitted that the learned Courts below erred
in appreciating the evidence. The defence evidence proved that the
cheque was issued as a security in discharge of legal liability, and
it was misused by the complainant. The notice was not served
upon the accused, and the requirement of Section 138 of the NI Act
was not satisfied; therefore, he prayed that the present revision be
allowed and the judgments and order passed by the learned Courts
below be set aside.
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11. Mr. Ajay Kumar Lahota, learned counsel for the
respondent/complainant, supported the judgments and order
passed by the learned Courts below and submitted that no
interference is required with them.
12. I have given considerable thought to the submissions
made at the bar and have gone through the records carefully.
13 It was laid down by the Hon’ble Supreme Court in
Malkeet Singh Gill v. State of Chhattisgarh, (2022) 8 SCC 204: (2022)
3 SCC (Cri) 348: 2022 SCC OnLine SC 786 that the revisional court is
not an appellate court and it can only rectify the patent defect,
errors of jurisdiction or the law. It was observed at page 207: –
“10. Before adverting to the merits of the contentions, at
the outset, it is apt to mention that there are concurrent
findings of conviction arrived at by two courts after a
detailed appreciation of the material and evidence brought
on record. The High Court in criminal revision against
conviction is not supposed to exercise the jurisdiction like
the appellate court, and the scope of interference in revision
is extremely narrow. Section 397 of the Criminal Procedure
Code (in short “CrPC“) vests jurisdiction to satisfy itself or
himself as to the correctness, legality or propriety of any
finding, sentence or order, recorded or passed, and as to the
regularity of any proceedings of such inferior court. The
object of the provision is to set right a patent defect or an
error of jurisdiction or law. There has to be a well-founded
error which is to be determined on the merits of individual
cases. It is also well settled that while considering the same,
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2025:HHC:19713the Revisional Court does not dwell at length upon the facts
and evidence of the case to reverse those findings.
14. This position was reiterated in State of Gujarat v.
Dilipsinh Kishorsinh Rao, 2023 SCC OnLine SC 1294, wherein it was
observed:
“13. The power and jurisdiction of the Higher Court under
Section 397 Cr. P.C., which vests the court with the power to
call for and examine records of an inferior court, is for the
purposes of satisfying itself as to the legality and regularity
of any proceeding or order made in a case. The object of this
provision is to set right a patent defect or an error of
jurisdiction or law or the perversity which has crept into
such proceedings. It would be apposite to refer to the
judgment of this court in Amit Kapoor v. Ramesh
Chandra, (2012) 9 SCC 460, where the scope of Section 397
has been considered and succinctly explained as under:
“12. Section 397 of the Code vests the court with the
power to call for and examine the records of an
inferior court for the purposes of satisfying itself as to
the legality and regularity of any proceedings or order
made in a case. The object of this provision is to set
right a patent defect or an error of jurisdiction or law.
There has to be a well-founded error, and it may not
be appropriate for the court to scrutinise the orders,
which, upon the face of it, bear a token of careful
consideration and appear to be in accordance with the
law. If one looks into the various judgments of this
Court, it emerges that the revisional jurisdiction can
be invoked where the decisions under challenge are
grossly erroneous, there is no compliance with the
provisions of law, the finding recorded is based on no
evidence, material evidence is ignored or judicial
discretion is exercised arbitrarily or perversely. These
are not exhaustive classes but are merely indicative.
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2025:HHC:19713Each case would have to be determined on its own
merits.
13. Another well-accepted norm is that the revisional
jurisdiction of the higher court is a very limited one and
cannot be exercised in a routine manner. One of the inbuilt
restrictions is that it should not be against an interim or
interlocutory order. The Court has to keep in mind that the
exercise of revisional jurisdiction itself should not lead to
injustice ex facie. Where the Court is dealing with the
question as to whether the charge has been framed properly
and in accordance with law in a given case, it may be
reluctant to interfere in the exercise of its revisional
jurisdiction unless the case substantially falls within the
categories aforestated. Even framing of charge is a much-
advanced stage in the proceedings under the CrPC.”
15. It was held in Kishan Rao v. Shankargouda, (2018) 8 SCC
165: (2018) 3 SCC (Cri) 544: (2018) 4 SCC (Civ) 37: 2018 SCC OnLine
SC 651 that it is impermissible for the High Court to reappreciate
the evidence and come to its conclusions in the absence of any
perversity. It was observed at page 169:
“12. This Court has time and again examined the scope of
Sections 397/401 CrPC and the ground for exercising the
revisional jurisdiction by the High Court. In State of
Kerala v. Puttumana Illath Jathavedan Namboodiri [State of
Kerala v. Puttumana Illath Jathavedan Namboodiri, (1999) 2
SCC 452: 1999 SCC (Cri) 275], while considering the scope of
the revisional jurisdiction of the High Court, this Court has
laid down the following: (SCC pp. 454-55, para 5)
“5. … In its revisional jurisdiction, the High Court can
call for and examine the record of any proceedings for
the purpose of satisfying itself as to the correctness,
legality or propriety of any finding, sentence or order. In
other words, the jurisdiction is one of supervisory
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2025:HHC:19713jurisdiction exercised by the High Court for correcting a
miscarriage of justice. But the said revisional power
cannot be equated with the power of an appellate court,
nor can it be treated even as a second appellate
jurisdiction. Ordinarily, therefore, it would not be
appropriate for the High Court to reappreciate the
evidence and come to its own conclusion on the same
when the evidence has already been appreciated by the
Magistrate as well as the Sessions Judge in appeal unless
any glaring feature is brought to the notice of the High
Court which would otherwise tantamount to a gross
miscarriage of justice. On scrutinising the impugned
judgment of the High Court from the aforesaid
standpoint, we have no hesitation in coming to the
conclusion that the High Court exceeded its jurisdiction
in interfering with the conviction of the respondent by
reappreciating the oral evidence. …”
13. Another judgment which has also been referred to and
relied on by the High Court is the judgment of this Court
in Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao
Phalke [Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao
Phalke, (2015) 3 SCC 123: (2015) 2 SCC (Cri) 19]. This Court
held that the High Court, in the exercise of revisional
jurisdiction, shall not interfere with the order of the
Magistrate unless it is perverse or wholly unreasonable or
there is non-consideration of any relevant material, the
order cannot be set aside merely on the ground that another
view is possible. The following has been laid down in para
14: (SCC p. 135)
“14. … Unless the order passed by the Magistrate is
perverse or the view taken by the court is wholly
unreasonable or there is non-consideration of any
relevant material or there is palpable misreading of
records, the Revisional Court is not justified in setting
aside the order, merely because another view is possible.
The Revisional Court is not meant to act as an appellate
court. The whole purpose of the revisional jurisdiction is
to preserve the power in the court to do justice in
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accordance with the principles of criminal jurisprudence.
The revisional power of the court under Sections 397 to
401 CrPC is not to be equated with that of an appeal.
Unless the finding of the court, whose decision is sought
to be revised, is shown to be perverse or untenable in law
or is grossly erroneous or glaringly unreasonable or
where the decision is based on no material or where the
material facts are wholly ignored or where the judicial
discretion is exercised arbitrarily or capriciously, the
courts may not interfere with the decision in exercise of
their revisional jurisdiction.”
14. In the above case, also conviction of the accused was
recorded, and the High Court set aside [Dattatray Gulabrao
Phalke v. Sanjaysinh Ramrao Chavan, 2013 SCC OnLine Bom
1753] the order of conviction by substituting its own view.
This Court set aside the High Court’s order holding that the
High Court exceeded its jurisdiction in substituting its
views, and that too without any legal basis.
16. This position was reiterated in Bir Singh v. Mukesh
Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ)
309: 2019 SCC OnLine SC 13, wherein it was observed at page 205:
“16. It is well settled that in exercise of revisional
jurisdiction under Section 482 of the Criminal Procedure
Code, the High Court does not, in the absence of perversity,
upset concurrent factual findings. It is not for the Revisional
Court to re-analyse and re-interpret the evidence on record.
17. As held by this Court in Southern Sales &
Services v. Sauermilch Design and Handels GmbH [Southern
Sales & Services v. Sauermilch Design and Handels GmbH,
(2008) 14 SCC 457], it is a well-established principle of law
that the Revisional Court will not interfere even if a wrong
order is passed by a court having jurisdiction, in the absence
of a jurisdictional error. The answer to the first question is
therefore, in the negative.”
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17. The present revision has to be decided as per the
parameters laid down by the Hon’ble Supreme Court.
18. The accused admitted the issuance of the cheque while
appearing as DW1. He stated that he had issued the cheque to the
complainant as a guarantee because Narender Kumar had taken
money from the complainant. This statement shows that the
complainant admitted the issuance of the cheque. It was laid down
by this Court in Naresh Verma vs. Narinder Chauhan 2020(1) Shim.
L.C. 398 that where the accused had not disputed his signatures on
the cheque, the Court has to presume that it was issued in
discharge of legal liability and the burden would shift upon the
accused to rebut the presumption. It was observed: –
“8. Once signatures on the cheque are not disputed, the plea
with regard to the cheque having not been issued towards
discharge of lawful liability, rightly came to be rejected by
learned Courts below. Reliance is placed upon Hiten P. Dalal
v. Bartender Nath Bannerji, 2001 (6) SCC 16, wherein it has
been held as under:
“The words ‘unless the contrary is proved’ which
occur in this provision make it clear that the
presumption has to be rebutted by ‘proof’ and not by
a bare explanation which is merely plausible. A fact is
said to be proved when its existence is directly
established or when, upon the material before it, the
Court finds its existence to be so probable that a
reasonable man would act on the supposition that it
exists. Unless, therefore, the explanation is supported
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2025:HHC:19713by proof, the presumption created by the provision
cannot be said to be rebutted……”
9. S.139 of the Act provides that it shall be presumed,
unless the contrary is proved, that the holder of a
cheque received the cheque of nature referred to in
section 138 for the discharge, in whole or in part, of
any debt or other liability.
19. Similar is the judgment in Basalingappa vs.
Mudibasappa 2019 (5) SCC 418 wherein it was held:
“26. Applying the proposition of law as noted above, in the
facts of the present case, it is clear that the signature on the
cheque, having been admitted, a presumption shall be
raised under Section 139 that the cheque was issued in
discharge of debt or liability.”
20. This position was reiterated in Kalamani Tex v. P.
Balasubramanian, (2021) 5 SCC 283: (2021) 3 SCC (Civ) 25: (2021) 2
SCC (Cri) 555: 2021 SCC OnLine SC 75 wherein it was held at page
289:
“14. Once the 2nd appellant had admitted his signatures on
the cheque and the deed, the trial court ought to have
presumed that the cheque was issued as consideration for a
legally enforceable debt. The trial court fell in error when it
called upon the respondent complainant to explain the
circumstances under which the appellants were liable to
pay. Such an approach of the trial court was directly in the
teeth of the established legal position as discussed above,
and amounts to a patent error of law.”
21. Similar is the judgment in APS Forex Services (P) Ltd. v.
Shakti International Fashion Linkers (2020) 12 SCC 724, wherein it
was observed: –
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2025:HHC:19713“7.2. What is emerging from the material on record is that
the issuance of a cheque by the accused and the signature of
the accused on the said cheque are not disputed by the
accused. The accused has also not disputed that there were
transactions between the parties. Even as per the statement
of the accused, which was recorded at the time of the
framing of the charge, he has admitted that some amount
was due and payable. However, it was the case on behalf of
the accused that the cheque was given by way of security,
and the same has been misused by the complainant.
However, nothing is on record that in the reply to the
statutory notice, it was the case on behalf of the accused
that the cheque was given by way of security. Be that as it
may, however, it is required to be noted that earlier the
accused issued cheques which came to be dishonoured on
the ground of “insufficient funds” and thereafter a fresh
consolidated cheque of ₹9,55,574 was given which has been
returned unpaid on the ground of ” STOP PAYMENT”.
Therefore, the cheque in question was issued for the second
time. Therefore, once the accused has admitted the issuance
of a cheque which bears his signature, there is a
presumption that there exists a legally enforceable debt or
liability under Section 139 of the NI Act. However, such a
presumption is rebuttable in nature, and the accused is
required to lead evidence to rebut such presumption. The
accused was required to lead evidence that the entire
amount due and payable to the complainant was paid.
9. Coming back to the facts in the present case and
considering the fact that the accused has admitted the
issuance of the cheques and his signature on the cheque and
that the cheque in question was issued for the second time
after the earlier cheques were dishonoured and that even
according to the accused some amount was due and
payable, there is a presumption under Section 139 of the NI
Act that there exists a legally enforceable debt or liability. Of
course, such presumption is rebuttable in nature. However,
to rebut the presumption, the accused was required to lead
evidence that the full amount due and payable to the
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complainant had been paid. In the present case, no such
evidence has been led by the accused. The story put forward
by the accused that the cheques were given by way of
security is not believable in the absence of further evidence
to rebut the presumption, and more particularly, the cheque
in question was issued for the second time after the earlier
cheques were dishonoured. Therefore, both the courts
below have materially erred in not properly appreciating
and considering the presumption in favour of the
complainant that there exists a legally enforceable debt or
liability as per Section 139 of the NI Act. It appears that both
the learned trial court as well as the High Court have
committed an error in shifting the burden upon the
complainant to prove the debt or liability, without
appreciating the presumption under Section 139 of the NI
Act. As observed above, Section 139 of the Act is an example
of reverse onus clause and therefore, once the issuance of
the cheque has been admitted and even the signature on the
cheque has been admitted, there is always a presumption in
favour of the complainant that there exists legally
enforceable debt or liability and thereafter, it is for the
accused to rebut such presumption by leading evidence.”
22. The presumption under Section 139 of the NI Act was
explained by the Hon’ble Supreme Court in Triyambak S. Hegde v.
Sripad, (2022) 1 SCC 742: (2022) 1 SCC (Civ) 512: 2021 SCC OnLine SC
788 as under at page 747:
“12. From the facts arising in this case and the nature of the
rival contentions, the record would disclose that the
signature on the documents at Exts. P-6 and P-2 are not
disputed. Ext. P-2 is the dishonoured cheque based on
which the complaint was filed. From the evidence tendered
before the JMFC, it is clear that the respondent has not
disputed the signature on the cheque. If that be the
position, as noted by the courts below, a presumption
would arise under Section 139 in favour of the appellant
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2025:HHC:19713who was the holder of the cheque. Section 139 of the NI Act
reads as hereunder:
“139. Presumption in favour of the holder. –It shall be
presumed, unless the contrary is proved, that the
holder of a cheque received the cheque of the nature
referred to in Section 138 for the discharge, in whole
or in part, of any debt or other liability.”
13. Insofar as the payment of the amount by the appellant in
the context of the cheque having been signed by the
respondent, the presumption for passing of the
consideration would arise as provided under Section 118(a)
of the NI Act, which reads as hereunder:
“118. Presumptions as to negotiable instruments. —
Until the contrary is proved, the following
presumptions shall be made:
(a) of consideration: that every negotiable instrument
was made or drawn for consideration, and that every
such instrument, when it has been accepted,
indorsed, negotiated or transferred, was accepted,
indorsed, negotiated or transferred for
consideration.”
14. The above-noted provisions are explicit to the effect
that such presumption would remain until the contrary is
proved. The learned counsel for the appellant in that regard
has relied on the decision of this Court in K.
Bhaskaran v. Sankaran Vaidhyan Balan [K.
Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510:
1999 SCC (Cri) 1284] wherein it is held as hereunder: (SCC
pp. 516-17, para 9)
“9. As the signature in the cheque is admitted to be
that of the accused, the presumption envisaged in
Section 118 of the Act can legally be inferred that the
cheque was made or drawn for consideration on the
date which the cheque bears. Section 139 of the Act
enjoins the Court to presume that the holder of the
cheque received it for the discharge of any debt or
liability. The burden was on the accused to rebut the
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2025:HHC:19713aforesaid presumption. The trial court was not
persuaded to rely on the interested testimony of DW 1
to rebut the presumption. The said finding was
upheld [Sankaran Vaidhyan Balan v. K. Bhaskaran,
Criminal Appeal No. 234 of 1995, order dated 23-10-
1998 (Ker)] by the High Court. It is not now open to
the accused to contend differently on that aspect.”
15. The learned counsel for the respondent has, however,
referred to the decision of this Court
in Basalingappa v. Mudibasappa [Basalingappa v. Mudibasap
pa, (2019) 5 SCC 418: (2019) 2 SCC (Cri) 571] wherein it is held
as hereunder: (SCC pp. 432-33, paras 25-26)
“25. We having noticed the ratio laid down by this
Court in the above cases on Sections 118(a) and 139,
we now summarise the principles enumerated by this
Court in the following manner:
25.1. Once the execution of the cheque is admitted,
Section 139 of the Act mandates a presumption that
the cheque was for the discharge of any debt or other
liability.
25.2. The presumption under Section 139 is a
rebuttable presumption, and the onus is on the
accused to raise the probable defence. The standard of
proof for rebutting the presumption is that of
preponderance of probabilities.
25.3. To rebut the presumption, it is open for the
accused to rely on evidence led by him or the accused
can also rely on the materials submitted by the
complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be
drawn not only from the materials brought on record
by the parties but also by reference to the
circumstances upon which they rely.
25.4. That it is not necessary for the accused to come
into the witness box in support of his defence, Section
139 imposed an evidentiary burden and not a
persuasive burden.
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25.5. It is not necessary for the accused to come into
the witness box to support his defence.
26. Applying the preposition of law as noted above, in
the facts of the present case, it is clear that the
signature on the cheque, having been admitted, a
presumption shall be raised under Section 139 that
the cheque was issued in discharge of debt or liability.
The question to be looked into is as to whether any
probable defence was raised by the accused. In the
cross-examination of PW 1, when the specific
question was put that a cheque was issued in relation
to a loan of Rs 25,000 taken by the accused, PW 1 said
that he does not remember. PW 1 in his evidence
admitted that he retired in 1997, on which date he
received a monetary benefit of Rs 8 lakhs, which was
encashed by the complainant. It was also brought in
evidence that in the year 2010, the complainant
entered into a sale agreement for which he paid an
amount of Rs 4,50,000 to Balana Gouda towards sale
consideration. Payment of Rs 4,50,000 being
admitted in the year 2010 and further payment of
loan of Rs 50,000 with regard to which Complaint No.
119 of 2012 was filed by the complainant, a copy of
which complaint was also filed as Ext. D-2, there was
a burden on the complainant to prove his financial
capacity. In the years 2010-2011, as per own case of
the complainant, he made a payment of Rs 18 lakhs.
During his cross-examination, when the financial
capacity to pay Rs 6 lakhs to the accused was
questioned, there was no satisfactory reply given by
the complainant. The evidence on record, thus, is a
probable defence on behalf of the accused, which
shifted the burden on the complainant to prove his
financial capacity and other facts.”
16. In that light, it is contended that the very materials
produced by the appellant and the answers relating to lack
of knowledge of property details by PW 1 in his cross-
examination would indicate that the transaction is
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doubtful, and no evidence is tendered to indicate that the
amount was paid. In such an event, it was not necessary for
the respondent to tender rebuttal evidence, but the case put
forth would be sufficient to indicate that the respondent has
successfully rebutted the presumption.
17. On the position of law, the provisions referred to in
Sections 118 and 139 of the NI Act, as also the enunciation of
law as made by this Court, need no reiteration as there is no
ambiguity whatsoever. In Basalingappav. Mudibasappa
[Basalingappa v. Mudibasappa, (2019) 5 SCC 418 : (2019) 2
SCC (Cri) 571] relied on by the learned counsel for the
respondent, though on facts the ultimate conclusion
therein was against raising presumption, the facts and
circumstances are entirely different as the transaction
between the parties as claimed in the said case is peculiar to
the facts of that case where the consideration claimed to
have been paid did not find favour with the Court keeping in
view the various transactions and extent of amount
involved. However, the legal position relating to the
presumption arising under Sections 118 and 139 of the NI
Act on signature being admitted has been reiterated. Hence,
whether there is a rebuttal or not would depend on the facts
and circumstances of each case.”
23. This position was reiterated in Tedhi Singh v. Narayan
Dass Mahant, (2022) 6 SCC 735: (2022) 2 SCC (Cri) 726: (2022) 3 SCC
(Civ) 442: 2022 SCC OnLine SC 302 wherein it was held at page 739:
“8. It is true that this is a case under Section 138 of the
Negotiable Instruments Act. Section 139 of the NI Act
provides that the court shall presume that the holder of a
cheque received the cheque of the nature referred to in
Section 138 for the discharge, in whole or in part, of any
debt or other liability. This presumption, however, is
expressly made subject to the position being proved to the
contrary. In other words, it is open to the accused to
establish that there is no consideration received. It is in the
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2025:HHC:19713context of this provision that the theory of “probable
defence” has grown. In an earlier judgment, in fact, which
has also been adverted to in Basalingappa [Basalingappa v.
Mudibasappa, (2019) 5 SCC 418: (2019) 2 SCC (Cri) 571], this
Court notes that Section 139 of the NI Act is an example of
reverse onus (see Rangappa v. Sri Mohan [Rangappa v. Sri
Mohan, (2010) 11 SCC 441: (2010) 4 SCC (Civ) 477: (2011) 1 SCC
(Cri) 184]). It is also true that this Court has found that the
accused is not expected to discharge an unduly high
standard of proof. It is accordingly that the principle has
developed that all which the accused needs to establish is a
probable defence. As to whether a probable defence has
been established is a matter to be decided on the facts of
each case on the conspectus of evidence and circumstances
that exist…”
24. Similar is the judgment in P. Rasiya v. Abdul Nazer, 2022
SCC OnLine SC 1131, wherein it was observed:
“As per Section 139 of the N.I. Act, it shall be presumed,
unless the contrary is proved, that the holder of a cheque
received the cheque of the nature referred to in Section 138
for discharge, in whole or in part, of any debt or other
liability. Therefore, once the initial burden is discharged by
the Complainant that the cheque was issued by the accused
and the signature and the issuance of the cheque are not
disputed by the accused, in that case, the onus will shift
upon the accused to prove the contrary that the cheque was
not for any debt or other liability. The presumption under
Section 139 of the N.I. Act is a statutory presumption and
thereafter, once it is presumed that the cheque is issued in
whole or in part of any debt or other liability which is in
favour of the Complainant/holder of the cheque, in that
case, it is for the accused to prove the contrary.”
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25. This position was reiterated in Rajesh Jain v. Ajay Singh,
(2023) 10 SCC 148: 2023 SCC OnLine SC 1275, wherein it was
observed at page 161:
33. The NI Act provides for two presumptions: Section 118
and Section 139. Section 118 of the Act inter alia directs that
it shall be presumed until the contrary is proved that every
negotiable instrument was made or drawn for
consideration. Section 139 of the Act stipulates that “unless
the contrary is proved, it shall be presumed that the holder
of the cheque received the cheque for the discharge of,
whole or part of any debt or liability”. It will be seen that
the “presumed fact” directly relates to one of the crucial
ingredients necessary to sustain a conviction under Section
138. [The rules discussed hereinbelow are common to both
the presumptions under Section 139 and Section 118 and are
hence not repeated–reference to one can be taken as
reference to another]
34. Section 139 of the NI Act, which takes the form of a
“shall presume” clause, is illustrative of a presumption of
law. Because Section 139 requires that the Court “shall
presume” the fact stated therein, it is obligatory for the
Court to raise this presumption in every case where the
factual basis for the raising of the presumption had been
established. But this does not preclude the person against
whom the presumption is drawn from rebutting it and
proving the contrary, as is clear from the use of the phrase
“unless the contrary is proved”.
35. The Court will necessarily presume that the cheque had
been issued towards the discharge of a legally enforceable
debt/liability in two circumstances. Firstly, when the drawer
of the cheque admits issuance/execution of the cheque
and secondly, in the event where the complainant proves
that the cheque was issued/executed in his favour by the
drawer. The circumstances set out above form the fact(s)
which bring about the activation of the presumptive clause.
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[Bharat Barrel & Drum Mfg. Co. v. Amin Chand
Payrelal [Bharat Barrel & Drum Mfg. Co. v. Amin Chand
Payrelal, (1999) 3 SCC 35]]
36. Recently, this Court has gone to the extent of holding
that presumption takes effect even in a situation where the
accused contends that a blank cheque leaf was voluntarily
signed and handed over by him to the complainant. [Bir
Singh v. Mukesh Kumar [Bir Singh v. Mukesh Kumar, (2019) 4
SCC 197: (2019) 2 SCC (Civ) 309: (2019) 2 SCC (Cri) 40] ].
Therefore, the mere admission of the drawer’s signature,
without admitting the execution of the entire contents in
the cheque, is now sufficient to trigger the presumption.
37. As soon as the complainant discharges the burden to
prove that the instrument, say a cheque, was issued by the
accused for discharge of debt, the presumptive device under
Section 139 of the Act helps shifting the burden on the
accused. The effect of the presumption, in that sense, is to
transfer the evidential burden on the accused of proving
that the cheque was not received by the Bank towards the
discharge of any liability. Until this evidential burden is
discharged by the accused, the presumed fact will have to be
taken to be true, without expecting the complainant to do
anything further.
38. John Henry Wigmore [John Henry Wigmore and the Rules of
Evidence: The Hidden Origins of Modern Law] on Evidence states as
follows:
“The peculiar effect of the presumption of law is
merely to invoke a rule of law compelling the Jury to
reach the conclusion in the absence of evidence to the
contrary from the opponent but if the opponent does
offer evidence to the contrary (sufficient to satisfy the
Judge’s requirement of some evidence), the
presumption ‘disappears as a rule of law and the case
is in the Jury’s hands free from any rule’.”
39. The standard of proof to discharge this evidential
burden is not as heavy as that usually seen in situations
where the prosecution is required to prove the guilt of an
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accused. The accused is not expected to prove the non-
existence of the presumed fact beyond a reasonable doubt.
The accused must meet the standard of “preponderance of
probabilities”, similar to a defendant in a civil proceeding.
[Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010) 11
SCC 441: (2010) 4 SCC (Civ) 477: (2011) 1 SCC (Cri) 184: AIR
2010 SC 1898]]
26. Narender Kumar (DW2) stated that he had transactions
with the complainant. Om Prakash, the accused, was a surety. He
stated in his cross-examination that Om Prakash is his friend. He
did not bring any statement of account with him. He did not
produce any record regarding the taking of the loan.
27. It was never suggested to the complainant in his cross-
examination that the accused had issued a cheque as a guarantor
for the repayment of the loan by Narender. It was stated in the
application under Section 145(2) of the NI Act seeking permission
to cross-examine the complainant and the witnesses that the
accused has paid the entire money. Thus, it is apparent that the
accused has taken a contradictory defence. He initially stated that
he had paid the entire amount to the complainant. Thereafter, he
came up with a plea that the cheque was issued as a security for
the repayment of the loan by Narender which was never suggested
to the complainant in his cross-examination and was also not
asserted in the statement recorded under Section 313 of Cr.P.C.
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Thus, the learned Courts below had rightly held that this plea was
an afterthought which could not have been relied upon.
28. The complainant stated that he had sold four cows to
the accused, and the cheque was issued towards their cost. There
is nothing in his cross-examination to show that he was making a
false statement. Therefore, learned Courts below had rightly
accepted the complainant’s testimony.
29. It was submitted that no person was examined to prove
the delivery of the cows to the accused. This submission will not
help the accused. It was laid down by the Hon’ble Supreme Court
in Ashok Kumar Versus State of U.P, 2025 SCC Online SC 706 that the
complainant is not to prove the advancement of the loan because it
is a matter of presumption. It was observed:
22. The High Court while allowing the criminal revision has
primarily proceeded on the presumption that it was
obligatory on the part of the complainant to establish his
case on the basis of evidence by giving the details of the
bank account as well as the date and time of the withdrawal
of the said amount which was given to the accused and also
the date and time of the payment made to the accused,
including the date and time of receiving of the cheque,
which has not been done in the present case. Pausing here,
such presumption on the complainant, by the High Court,
appears to be erroneous. The onus is not on the complainant
at the threshold to prove his capacity/financial wherewithal
to make the payment in discharge of which the cheque is
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2025:HHC:19713alleged to have been issued in his favour. Only if an
objection is raised that the complainant was not in a
financial position to pay the amount so claimed by him to
have been given as a loan to the accused, only then the
complainant would have to bring before the Court cogent
material to indicate that he had the financial capacity and
had actually advanced the amount in question by way of
loan. In the case at hand, the appellant had categorically
stated in his deposition and reiterated in the cross-
examination that he had withdrawn the amount from the
bank in Faizabad (Typed Copy of his deposition in the
paperbook wrongly mentions this as ‘Firozabad’). The Court
ought not to have summarily rejected such a stand, more so
when respondent no. 2 did not make any serious attempt to
dispel/negate such a stand/statement of the appellant.
Thus, on the one hand, the statement made before the
Court, both in examination-in-chief and cross-
examination, by the appellant with regard to withdrawing
the money from the bank for giving it to the accused has
been disbelieved whereas the argument on behalf of the
accused that he had not received any payment of any loan
amount has been accepted. In our decision in S. S.
Production v. Tr. Pavithran Prasanth, 2024 INSC 1059, we
opined:
‘8. From the order impugned, it is clear that though the
contention of the petitioners was that the said amounts were
given for producing a film and were not by way of return of
any loan taken, which may have been a probable defence for
the petitioners in the case, but rightly, the High Court has
taken the view that evidence had to be adduced on this point
which has not been done by the petitioners. Pausing here,
the Court would only comment that the reasoning of the
High Court, as well as the First Appellate Court and Trial
Court, on this issue is sound. Just by taking a counter-stand
to raise a probable defence would not shift the onus on the
complainant in such a case, for the plea of defence has to be
buttressed by evidence, either oral or documentary, which in
the present case has not been done. Moreover, even if it is
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2025:HHC:19713presumed that the complainant had not proved the source of
the money given to the petitioners by way of loan by
producing statement of accounts and/or Income Tax
Returns, the same ipso facto, would not negate such claim
for the reason that the cheques having being issued and
signed by the petitioners has not been denied, and no
evidence has been led to show that the respondent lacked
capacity to provide the amount(s) in question. In this
regard, we may make profitable reference to the decision
in Tedhi Singh v. Narayan Dass Mahant, (2022) 6 SCC 735:
’10. The trial court and the first appellate court have
noted that in the case under Section 138 of the NI Act, the
complainant need not show in the first instance that he
had the capacity. The proceedings under Section 138 of
the NI Act is not a civil suit. At the time, when the
complainant gives his evidence, unless a case is set up in
the reply notice to the statutory notice sent, that the
complainant did not have the wherewithal, it cannot be
expected of the complainant to initially lead evidence to
show that he had the financial capacity. To that extent,
the courts in our view were right in holding on those
lines. However, the accused has the right to demonstrate
that the complainant in a particular case did not have
the capacity and therefore, the case of the accused is
acceptable, which he can do by producing independent
materials, namely, by examining his witnesses and
producing documents. It is also open to him to establish
the very same aspect by pointing to the materials
produced by the complainant himself. He can further,
more importantly, achieve this result through the cross-
examination of the witnesses of the
complainant. Ultimately, it becomes the duty of the
courts to consider carefully and appreciate the totality of
the evidence and then come to a conclusion whether, in
the given case, the accused has shown that the case of the
complainant is in peril for the reason that the accused
has established a probable defence.’
(emphasis supplied)’
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30. Therefore, the case of the complainant cannot be
faulted because no witness deposed about the delivery of the cow
to the accused.
31. The complainant stated that the cheque was
dishonoured with the endorsement ‘funds insufficient’. The
memo (Ext. C3/CW1) shows the reason for dishonour as ‘funds
insufficient’. It was laid down by the Hon’ble Supreme Court in
Mandvi Cooperative Bank Ltd. v. Nimesh B. Thakore, (2010) 3 SCC 83:
(2010) 1 SCC (Civ) 625: (2010) 2 SCC (Cri) 1: 2010 SCC OnLine SC 155
that the memo issued by the Bank is presumed to be correct and
the burden is upon the accused to rebut the presumption. It was
observed at page 95:
24. Section 146, making a major departure from the
principles of the Evidence Act, provides that the bank’s slip
or memo with the official mark showing that the cheque
was dishonoured would, by itself, give rise to the
presumption of dishonour of the cheque, unless and until
that fact was disproved. Section 147 makes the offences
punishable under the Act compoundable.
32. In the present case, no evidence was produced to rebut
the presumption, and the learned Courts below had rightly held
that the cheque was dishonoured with an endorsement
‘insufficient funds’
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33. The complainant stated that he had issued a notice to
the accused asking him to pay the amount. The accused admitted
in his cross-examination that he had received a notice regarding
the cheque, and he had not sent any reply to the notice; therefore,
the receipt of the notice is not disputed.
34. The accused did not claim that he had paid the money
to the complainant, and it was duly proved that the accused had
failed to pay the money despite the receipt of a valid notice of
demand.
35. Therefore, it was proved on record that the
complainant had issued a cheque in discharge of the legal liability,
which was dishonoured with an endorsement ‘funds insufficient’.
The complainant issued a valid notice of demand, which was duly
served upon the accused, and the accused failed to pay the amount
despite the receipt of the notice of demand. Therefore, all the
ingredients of the commission of the offence punishable under
Section 138 of the NI Act were duly satisfied, and the learned Trial
Court had rightly convicted the accused of the commission of an
offence punishable under Section 138 of the NI Act.
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36. Learned Trial Court sentenced the accused to undergo
simple imprisonment for a period of one year. It was laid down by
the Hon’ble Supreme Court in Bir Singh v. Mukesh Kumar, (2019) 4
SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ) 309: 2019 SCC
OnLine SC 138 that the penal provisions of Section 138 is deterrent
in nature. It was observed at page 203:
“6. The object of Section 138 of the Negotiable Instruments
Act is to infuse credibility into negotiable instruments,
including cheques, and to encourage and promote the use of
negotiable instruments, including cheques, in financial
transactions. The penal provision of Section 138 of the
Negotiable Instruments Act is intended to be a deterrent to
callous issuance of negotiable instruments such as cheques
without serious intention to honour the promise implicit in
the issuance of the same.”
37. Keeping in view the deterrent nature of the sentence to
be awarded, the sentence of one year’s imprisonment cannot be
said to be excessive, and no interference is required with it.
38. Learned Trial Court ordered the payment of a fine of
₹5,20,000/-. The sentence was imposed on 06.07.2023, and the
cheque was issued on 04.05.2018. Thus, the sentence was imposed
after the lapse of more than 5 years. The complainant lost interest
that he would have obtained by depositing the money in the Bank.
He had to pay the litigation expenses for filing the complaint. He
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was entitled to be compensated for the same. It was laid down by
the Hon’ble Supreme Court in Kalamani Tex v. P. Balasubramanian,
(2021) 5 SCC 283: (2021) 3 SCC (Civ) 25: (2021) 2 SCC (Cri) 555: 2021
SCC OnLine SC 75 that the Courts should uniformly levy a fine up to
twice the cheque amount along with simple interest at the rate of
9% per annum. It was observed at page 291: –
19. As regards the claim of compensation raised on behalf of
the respondent, we are conscious of the settled principles
that the object of Chapter XVII of NIA is not only punitive
but also compensatory and restitutive. The provisions of
NIA envision a single window for criminal liability for the
dishonour of a cheque as well as civil liability for the
realisation of the cheque amount. It is also well settled that
there needs to be a consistent approach towards awarding
compensation, and unless there exist special circumstances,
the courts should uniformly levy fines up to twice the
cheque amount along with simple interest @ 9% p.a. [R.
Vijayan v. Baby, (2012) 1 SCC 260, para 20: (2012) 1 SCC (Civ)
79: (2012) 1 SCC (Cri) 520]”
39. Therefore, the amount of ₹1,20,000/- on the principal
of ₹4,00,000/- cannot be said to be excessive and no interference
is required with it.
40. No other point was urged.
41. In view of the above, the present revision fails, and the
same is dismissed.
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42. Records of the learned Courts below be sent back
forthwith, along with a copy of this judgment.
(Rakesh Kainthla)
Judge
25th June, 2025
(saurav pathania)