Himachal Pradesh High Court
Reserved On: 04.07.2025 vs Karan Bahadur on 28 July, 2025
2025:HHC:24427
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No. 154 of 2025
Reserved on: 04.07.2025
Date of Decision: 28.07.2025
.
Yadvinder Singh ...Petitioner
Versus
Karan Bahadur ...Respondent
Coram
Hon’ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 No.
For the Petitioner : Mr. H.S. Rangra. Advocate.
For the Respondent : Mr. Reeta Hingmang, Advocate.
Rakesh Kainthla, Judge
The petitioner has filed the present petition against the
judgment dated 27.02.2025 passed by learned Additional Sessions
Judge, Kullu, District Kullu, H.P. (learned Appellate Court), vide
which the judgment of conviction and order of sentence dated
29.07.2024 passed by learned Chief Judicial Magistrate, Kullu,
District Kullu, H.P. (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
petition 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 accused is a forest contractor-cum-
labour supply mate of Forest Corporation, Kullu, District Kullu,
H.P. He had taken work for cutting and transportation of the
timber. He hired the services of the complainant for felling the
timbers, converting them into sleepers, fuel wood and pulp wood,
etc. An agreement to this effect was executed between the parties.
The complainant completed the work, and the accused issued a
cheque of ₹3,19,525/- to discharge his liability. The complainant
presented the cheque to the State Bank of Patiala, Kullu, Branch
through his banker; however, the cheque was dishonoured with an
endorsement ‘Insufficient funds’. The complainant served a notice
upon the accused asking him to repay the money within fifteen
days from the receipt of the notice, but he failed to repay the
money. Hence, a complaint was filed to take action against the
accused as per the law.
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3. The learned Trial Court found sufficient reasons to
summon the accused. When the accused appeared, a 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 Davinder Singh Rana
(CW-1), Harsh Thakur (CW-2), himself (CW-3) and Pritpal Singh
(PW-4) to prove his case.
5. to
The accused, in his statement recorded under Section
313 of Cr.P.C., admitted that he was awarded work of conversion
and transportation of the timber. He admitted that he had entered
into an agreement with the complainant for felling and converting
the timber. He denied that he had issued a cheque of ₹3,19,525/-
to discharge his legal liability. He admitted that the cheque was
dishonoured with an endorsement ‘insufficient funds’, and he had
received a notice. He claimed that he was not liable to pay any
money; therefore, he did not pay anything to the complainant. He
stated that a false case was made against him, and the witnesses
deposed against him falsely. He and Jog Dhian were working for
M/s Y.J. Timber. He had allotted the work to the complainant. He
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had not issued any cheque, and the cheque might have been issued
by Jog Dhian. He had filed a complaint with the police regarding
.
the loss of the cheque. He examined Constable Amar Singh (DW-1),
Budh Ram (DW-2) and Sahil Rana (DW-3) to prove his defence.
6. Learned Trial Court held that the issuance of the
cheque was not disputed. The defence of the accused that the
cheque was issued by Jog Dhian was not probable. Statement of
Budh Ram (DW-2) to this effect was not satisfactory. The
complainant proved the agreement (Ext.CW-1/A), which was
admitted by the accused. The agreement shows that the accused
had entered into the contract with the complainant in his
individual capacity. Budh Ram (DW-2) admitted in his cross-
examination that the accused had given the work of converting the
timber to the complainant. The cheque was dishonoured with an
endorsement ‘Insufficient funds’, and the accused admitted the
receipt of the notice. He did not pay any money to the complainant.
All the ingredients of commission of offence punishable under
Section under Section 138 of N.I.Act were satisfied. Hence, the
accused was convicted for the commission of an offence
punishable under Section 138 of the NI Act and was sentenced to
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undergo simple imprisonment of two years and pay a
compensation of ₹6,39,050/- to the complainant.
.
7. Being aggrieved from the judgment and roder passed by
the learned Trial Court, the accused preferred an appeal. The
learned Appellate Court concurred with the findings recorded by
the learned Trial Court that the issuance of the cheque was not
disputed. The plea taken by the accused that the cheque was
handed over by Jog Dhian was not probable. Ghanshyam, who is
stated to have filled the cheque, was not examined in defence.
Budh Ram (DW-2) admitted in his cross-examination that the
accused had executed an agreement with the complainant for the
transportation of the timber. The cheque was dishonoured with an
endorsement ‘insufficient funds’. The accused admitted the
receipt of the notice. Hence, all the ingredients of the commission
of an offence punishable under Section 138 of the NI Act were duly
satisfied. There was no infirmity in the sentence imposed by the
learned Trial Court. Hence, the appeal was dismissed.
8. Being aggrieved and dissatisfied with the judgments
and order passed by the learned Courts below, the
petitioner/accused has filed the present petition, asserting that the
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learned Courts below did not appreciate the facts and law in their
proper perspective. Material omissions, contradictions, and
.
improvements in the statement of the complainant were brushed
aside. The complainant admitted that the accused was a partner of
M/s Y.J. Timber with Jog Dhian. He also admitted that the firm has
an office in the Sobhla Hotel. The complainant was not engaged by
the accused, and he had no liability to discharge. The cheque was
issued by Ghanshyam, and the statement of Budh Ram (DW-2) to
this effect was ignored. The evidence on record showed that there
was no legal liability to discharge, and the learned Courts below
failed to hold otherwise. Therefore, it was prayed that the present
revision be allowed and the judgments and order passed by learned
Courts below be set aside.
9. I have heard Mr. H.S. Rangra, learned counsel for the
petitioner and Ms. Reeta Hingmang, learned counsel for the
respondent.
10. Mr. H.S. Rangra, learned counsel for the
petitioner/accused, submitted that the learned Courts below erred
in appreciating the material placed before them. The defence
version was duly proved by the testimony of Budh Ram (DW-2).
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The complainant admitted in his cross-examination that the
accused is a partner of M/s Y.J. Timber. This probablized the
.
version of the accused that the cheque was issued on behalf of the
firm and the accused had no personal liability. The learned Trial
Court had erred in imposing the sentence of two years, which is the
maximum sentence and awarding huge compensation. Therefore,
he prayed that the present petition be allowed and the judgments
11. Ms.
r Reeta to
and orders passed by the learned Courts below be set aside.
Hingmang, learned counsel for the
respondent, supported the judgments and order passed by the
learned Courts below and submitted that no interference is
required with them. Hence, she prayed that the present petition be
dismissed.
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 a 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: –
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2025:HHC:24427“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,
the 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) 17 SCC 688: 2023 SCC OnLine SC
1294, wherein it was observed at page 695:
14. The power and jurisdiction of the Higher Court under
Section 397CrPC, which vests the court with the power tocall for and examine records of an inferior court, is for the
purposes of satisfying itself as to the legality and
regularities of any proceeding or order made in a case. Theobject of this provision is to set right a patent defect or an
error of jurisdiction or law or the perversity which has crept
in such proceedings.
15. It would be apposite to refer to the judgment of this
Court in Amit Kapoor v. Ramesh Chander [Amit
Kapoor v. Ramesh Chander, (2012) 9 SCC 460: (2012) 4 SCC
(Civ) 687: (2013) 1 SCC (Cri) 986], where scope of Section 397
has been considered and succinctly explained as under: (SCC
p. 475, paras 12-13)::: Downloaded on – 28/07/2025 21:24:29 :::CIS
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2025:HHC:24427“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 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. Each
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 CrPC.”
16. This Court in the aforesaid judgment in Amit Kapoor
case [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460 :
(2012) 4 SCC (Civ) 687 : (2013) 1 SCC (Cri) 986] has also laid
down principles to be considered for exercise of jurisdiction
under Section 397 particularly in the context of prayer for
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2025:HHC:24427for as under : (Amit Kapoor case [Amit Kapoor v. Ramesh
Chander, (2012) 9 SCC 460 : (2012) 4 SCC (Civ) 687 : (2013) 1
SCC (Cri) 986], SCC pp. 482-83, para 27)
“27. Having discussed the scope of jurisdiction under.
these two provisions, i.e. Section 397 and Section 482 of
the Code, and the fine line of jurisdictional distinction, it
will now be appropriate for us to enlist the principles
with reference to which the courts should exercise such
jurisdiction. However, it is not only difficult but
inherently impossible to state such principles with
precision. At best and upon objective analysis of various
judgments of this Court, we are able to cull out some of
the principles to be considered for proper exercise of
jurisdiction, particularly, with regard to quashing of
charge either in exercise of jurisdiction under Section 397
or Section 482 of the Code or together, as the case may
be:
27.1. Though there are no limits to the powers of the
Court under Section 482 of the Code but the more the
power, the more due care and caution is to be exercised in
invoking these powers. The power of quashing criminalproceedings, particularly, the charge framed in terms of
Section 228 of the Code, should be exercised very
sparingly and with circumspection and that too in therarest of rare cases.
27.2. The Court should apply the test as to whether the
uncontroverted allegations as made from the record of
the case and the documents submitted therewith prima
facie establish the offence or not. If the allegations are sopatently absurd and inherently improbable that no
prudent person can ever reach such a conclusion, and
where the basic ingredients of a criminal offence are not
satisfied, then the Court may interfere.
27.3. The High Court should not unduly interfere. No
meticulous examination of the evidence is needed for
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2025:HHC:24427not at the stage of framing of charge or quashing of
charge.
***
.
27.9. Another very significant caution that the courts
have to observe is that it cannot examine the facts,
evidence and materials on record to determine whether
there is sufficient material on the basis of which the case
would end in a conviction; the court is concerned
primarily with the allegations taken as a whole whether
they will constitute an offence and, if so, is it an abuse of
the process of court leading to injustice.
***
27.13. Quashing of a charge is an exception to the rule of
continuous prosecution. Where the offence is even
broadly satisfied, the Court should be more inclined to
permit continuation of prosecution rather than its
quashing at that initial stage. The Court is not expected
to marshal the records with a view to decide admissibility
and reliability of the documents or records, but is an
opinion formed prima facie.”
17. The revisional court cannot sit as an appellate court and
start appreciating the evidence by finding out
inconsistencies in the statement of witnesses, and it is not
legally permissible. The High Courts ought to be cognizant
of the fact that the trial court was dealing with an
application for discharge.
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:
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2025:HHC:24427“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 to satisfy
itself as to the correctness, legality or propriety of any
finding, sentence or order. In other words, the
jurisdiction is one of supervisory jurisdiction 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 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 concluding 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
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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
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 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 the exercise of revisional
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2025:HHC:24427Code, 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 wrongorder 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.”
17. The present revision has to be decided as per the
18. to
parameters laid down by the Hon’ble Supreme Court.
The accused did not dispute his signature on 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 towardsdischarge 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
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2025:HHC:24427established 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.
by 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 75wherein it was held at page 289:
“13. Adverting to the case in hand, we find on a plain reading
of its judgment that the trial court completely overlooked
the provisions and failed to appreciate the statutorypresumption drawn under Section 118 and Section 139 of
NIA. The statute mandates that once the signature(s) of an
accused on the cheque/negotiable instrument are
established, then these “reverse onus” clauses become
operative. In such a situation, the obligation shifts upon the
accused to discharge the presumption imposed upon him.
This point of law has been crystallised by this Court in
Rohitbhai Jivanlal Patel v. State of Gujarat [Rohitbhai Jivanlal
Patel v. State of Gujarat, (2019) 18 SCC 106, para 18: (2020) 3::: Downloaded on – 28/07/2025 21:24:29 :::CIS
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2025:HHC:24427SCC (Civ) 800: (2020) 3 SCC (Cri) 575] in the following words :
(SCC pp. 120-21, para 18)
“18. In the case at hand, even after purportedly
drawing the presumption under Section 139 of the NI.
Act, the trial court proceeded to question the want of
evidence on the part of the complainant as regards the
source of funds for advancing loan to the accused and
want of examination of relevant witnesses who
allegedly extended him money for advancing it to the
accused. This approach of the trial court had been at
variance with the principles of presumption in law.
After such presumption, the onus shifted to the
accused and unless the accused had discharged the
onus by bringing on record such facts and
circumstances as to show the preponderance of
probabilities tilting in his favour, any doubt on the
r complainant’s case could not have been raised for
want of evidence regarding the source of funds for
advancing loan to the appellant-accused.”
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: –
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
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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 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
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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. Learned Courts below had rightly held that there is a
presumption under Section 139 of the NI Act that the cheque was
issued in the discharge of the legal liability. This presumption 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 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 who was the holder of the
cheque. Section 139 of the NI Act reads as hereunder:
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2025:HHC:24427“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 presumptionsshall be made:
(a) of consideration: that every negotiable
instrument was made or drawn for
r consideration, and that every such instrument,
when it has been accepted, indorsed, negotiatedor 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
aforesaid presumption. The trial court was not
persuaded to rely on the interested testimony of DW 1
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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. Mudibasapp
a, (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
r admitted, Section 139 of the Act mandates a
presumption that the cheque was for thedischarge of any debt or other liability.
25.2. The presumption under Section 139 is a
rebuttable presumption, and the onus is on theaccused 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 theaccused can also rely on the materials submitted
by the complainant in order to raise a probable
defence. Inference of preponderance ofprobabilities 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
r 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 doubtful,
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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
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2025:HHC:24427provision 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 notexpected 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 matterto 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 138for 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 accusedand the signature and the issuance of the cheque are not
disputed by the accused, in that case, the onus will shiftupon 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 andthereafter, 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.”
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:
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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. [Bharat Barrel & Drum Mfg.
Co. v. Amin Chand Payrelal [Bharat Barrel & Drum Mfg.
Co. v. Amin Chand Payrelal, (1999) 3 SCC 35] ]
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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 doesoffer 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
accused. The accused is not expected to prove the non-
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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. Therefore, the Court has to start with the presumption
that the cheque was issued in discharge of legal liability, and the
burden is upon the accused to prove the contrary.
27. The accused, in his statement recorded under Section
313 of Cr.P.C. r sthated that he had entered into an agreement
(Ext.CW-1/A) with the complainant. A perusal of the agreement
(Ex.CW-1/A) shows that this agreement was executed between the
accused and the complainant regarding the work of the conversion
of the timber. This agreement falsifies the plea taken by the
accused that work was allotted to M/s Y.J. Timber, and he had no
concern with it.
28. Budh Ram (DW-2) stated that he looked after the
business of M/s Y.J. Timber. Yadvinder Singh had allotted the work
to the complainant through Jog Dhian as his power of attorney.
Ghanshyam was looking after the work of the firm. Ghanshyam
distributed the cheque in the presence of Jog Dhian from his office
on 31.01.2012. One cheque was handed over to the complainant.
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The amount and figures were written by Ghanshyam. Cheque
(Mark-A) was handed to Saju Ram, and one cheque was issued in
.
the name of Ghanshyam.
29. Sahil Rana (DW-3) stated that cheques (Ext.DW-3/C1 to
Ext.DW-3/C5) were issued to various persons by M/s Y.J. Timber.
30. The cheques mentioned by the defence witnesses bear
different dates. The cheque (Mark-A) mentioned by Budh Ram
(DW-1) and subsequently exhibited as Ext.DW-3/C3 was issued in
favour of Saju Ram on 18.06.2009. It is signed by the petitioner
and Jog Dhian and bears the stamp of M/s Y.J. Timbers and
Ropeways Company. All the cheques exhibited by Sahil Rana
contain the signatures of two persons and the stamp of M/s Y.J.
Timbers and Ropeways Company. None of the cheque was issued
on 31.01.2012 as claimed by Budh Ram (DW-1). The cheques were
issued in the years 2006-2009. These cheques falsify the
statement of Budh Ram (DW-1). Firstly, these cheques were not
issued in the year 2012 and were issued much earlier. Secondly, the
cheques were issued with the stamp of M/s Y.J. Timbers and
Ropeways Company. If so many cheques were issued with the
stamp of M/s Y.J. Timber and Ropeways Company, there was no
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reason why the cheque (Ext. CW-3/B) should have been issued with
the signature of one person and without bearing the stamp of a
.
firm. Therefore, the learned Courts below had rightly rejected the
testimony of Budh Ram (DW-1) that all the cheques, including the
cheque (Ex. CW-3/B), were issued on one day.
31. It was submitted that the cheque (DW-3/C5) was issued
in the name of the complainant, which probablizes the version of
the accused that the firm had allotted the work to the complainant;
otherwise, the firm had no reason to issue the cheque in the name
of the complainant. This submission cannot be accepted. The
cheque (Ext.DW-3/C5) was issued on 19.09.2008. The agreement in
the present case was executed on 07.10.2011, therefore, the cheque
(Ex. DW-3/C5) was issued before the execution of the agreement
between the complainant and the accused. The complainant
admitted that he is a labourer. Therefore, his supplying labour to
the firm is not unusual, and his case cannot be doubted simply
because he had received a cheque from the firm in the year 2008.
32. A heavy reliance was placed upon the entry in the daily
diary (Ext.DW-1/A) to submit that the chequebook was misplaced.
Learned Appellate Court had rightly pointed out that this entry was
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recorded on 29.05.2012. The cheque was dishonoured on
30.04.2012. The accused admitted the receipt of the notice
.
dispatched on 14.05.2012 vide receipt (Ext.CW-3/G); therefore, he
could make a complaint regarding the loss of the cheque on
29.05.2012 after receiving the notice.
33. It was mentioned in the daily diary that the cheque book
containing blank signed cheques bearing Nos. 025501 to 025562
were lying in the custody of Ghanshayam Lal. The cheques were
missing and could be misused by someone.
34. There is no evidence that the payment of cheque Nos.
025501 to 025562 was stopped by the accused by issuing
instructions to the bank. Sahil Rana (DW-2) was called with the
record, but the record of these cheques was not requisitioned from
him. Hence, the version of the accused that he had lost the cheque
book bearing his signatures was not supported by the
contemporaneous record and was rightly rejected by the learned
Courts below; henceand it was rightly held that the accused had
failed to rebut the presumption attached to the cheque.
35. The accused admitted in his statement recorded under
Section 313 of Cr.P.C. that the cheque was dishonoured with the
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endorsement ‘insufficient funds’. The memo of dishonour
(Ext.CW-3/C) also shows that the cheque was dishonoured with an
.
endorsement, insufficient funds; therefore, the learned Courts
below had rightly held that the cheque was dishonoured because of
‘insufficient funds’.
36. The complainant stated that he had issued a notice
(Ext.CW-3/F) to the accused. The accused admitted in his
statement recorded under Section 313 of Cr.P.C. that notice was
served upon him; therefore, the issuance and the receipt of notice
are not in dispute.
37. Thus, it was duly proved on record that the accused had
issued the cheque in discharge of his legal liability, which was
dishonoured with an endorsement ‘insufficient funds’. The notice
was duly served upon the accused, and the accused failed to pay the
amount despite receipt of the valid notice of demand. Hence, all the
ingredients of the commission of an offence punishable under
Section 138 of the NI Act were duly satisfied. Learned Trial Court
had rightly convicted the accused for the commission of an offence
punishable under Section 138 of N.I.Act.
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38. The learned Trial Court sentenced the accused to
undergo simple imprisonment for 2 years. This was the maximum
.
sentence that could be awarded under Section 138 of the NI Act. A
sentence has to be proportionate. Learned Trial Court noticed that
the offence punishable under Section 138 of the NI Act was socio-
economic, but that was hardly any consideration for imposing the
maximum sentence. The legislature had already taken care of this
consideration while providing for a punishment up to two years.
The learned Trial Court was required to modulate the sentence,
keeping in view the gravity of the offence by balancing the
mitigating and aggravating circumstances. The learned Trial Court
failed to carry out this exercise and imposed a sentence of two
years without justification. Hence, the sentence of two years
imposed by the learned Trial Court cannot be sustained.
39. No aggravating circumstances were brought to record.
The accused has been facing the agony of trial since 2015. Keeping
in view this consideration, the sentence of nine months would be
adequate. Hence, the sentence imposed by the learned Trial Court
is ordered to be reduced to a period of nine months.
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40. Learned Trial Court sentenced the accused to pay a
compensation of ₹6,39,050/-, which was double the cheque
.
amount. The cheque was issued on 31.01.2012, and sentence was
imposed by the learned Trial Court on 29.07.2024 after the lapse of
more than 12 years. The complainant lost interest that it would
have gained by advancing the loan to various persons. The
complainant had to engage an Advocate and incur the expenses for
the litigation. He 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 butalso 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
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SCC (Cri) 520]”
41. The interest on ₹3,19,525/- for twelve years at the rate
.
of 9 % per annum is ₹3,45,087/-, therefore, the double the amount
of the cheque was justified in the present case.
42. No other point was urged.
43. In view of the above, the present revision petition is
partly allowed, and the sentence imposed by the learned Trial
Court is ordered to be reduced to nine months from a period of two
years imposed by the learned Trial Court. The amount of
compensation awarded by the learned Trial Court does not require
any modification, and no interference is required with it.
44. Records of the learned Courts below be sent back
forthwith, along with a copy of this judgment.
(Rakesh Kainthla)
Judge
28th July, 2025
(ravinder)
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