Himachal Pradesh High Court
Reserved On: 15.05.2025 vs Jyoti Badehta on 18 June, 2025
2025:HHC:18543
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No.97 of 2025
Reserved on: 15.05.2025
Date of Decision: 18.06.2025
Ramesh Hetta …Petitioner
Versus
Jyoti Badehta
…Respondent
Coram
Hon’ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 No
For the Petitioner : Mr. Arvind Negi, Advocate.
For the Respondent : Nemo
Rakesh Kainthla, Judge
The present revision is directed against the judgment
17.08.2024 passed by the learned Additional Sessions Judge, Rohru
Camp at Theog, District Shimla, H.P. (learned Appellate Court)
vide which the judgment of conviction dated 01.11.2023 and order
of sentence dated 09.11.2023, passed by learned Additional Chief
Judicial Magistrate, Theog, District Shimla, H.P. (learned Trial
Court), were upheld. (Parties shall hereinafter be referred to in the
1
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
Page |2
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 against the
accused 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 is an orchardist. The accused used to purchase the
apples from the growers. The complainant sold the apple boxes to
the accused for ₹ 1,72,000/- and the accused issued a post-dated
cheque towards the sale consideration of the apple boxes
purchased by him. The complainant presented the cheque, but it
was dishonoured with an endorsement ‘insufficient funds’. The
complainant issued a notice to the accused asking him to pay the
amount within 15 days of the receipt of the notice. The notice was
duly served upon the accused on 04.03.2016, however, the accused
failed to pay the amount. Hence, the complaint was filed against
the accused for taking action as per the law.
3. The learned Trial Court found sufficient reasons to
summon the accused. When the accused appeared, a notice of
Page |3
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 herself (CW1) to prove her
case.
5. The accused, in his statement recorded under Section
313 of the CrPC, admitted that he was involved in the business of
the purchase of apples from the growers. He denied the rest of the
complainant’s case. He stated that he had purchased an apple crop
from the complainant; however, she did not allow him to pluck
apples from the orchard and misused the cheque handed over to
her as security. He examined himself as DW-1.
6. Learned Trial Court held that issuance of cheque was
not disputed, and there is a presumption that the cheque was
issued to discharge a legal liability. The accused had taken a
contradictory stand before the Court. His plea that he had issued
the cheque as a security would not help him because a cheque
issued towards the security also attracts the provisions of Section
138 of the NI Act. The cheque was dishonoured with an
endorsement ‘insufficient funds’. The notice was delivered to the
Page |4
accused. He failed to pay the amount despite the receipt of the
notice of demand. Hence, the learned Trial Court convicted the
accused for the commission of an offence punishable under
Section 138 of the NI Act and sentenced him to undergo simple
imprisonment for one year and pay compensation of ₹. 3,44,000/-
to the complainant.
7. Being aggrieved from the judgment and order passed
by the learned Trial Court, the accused filed an appeal, which was
decided by the learned Appellate Court. Learned Appellate Court
concurred with the findings recorded by the learned Trial Court
that the cheque was presumed to be issued in discharge of legal
liability. The accused failed to rebut the presumption attached to
the cheque. The cheque was dishonoured with an endorsement of
insufficient funds. The notice was duly served upon the accused,
and he failed to pay the amount despite the receipt of a valid notice
of demand. Therefore, the accused was rightly convicted and
sentenced by the learned Trial Court.
8. Being aggrieved from the judgments and order passed
by the learned Courts below, the accused has filed the present
revision asserting that the learned Courts below erred in
Page |5
convicting and sentencing the accused. The judgments are based
on conjectures and surmises. The accused had issued the cheque to
the complainant as security, but he was not allowed to pluck the
apple from the orchard. Therefore, the purpose of the security
cheque was not fulfilled. The complainant failed to return the
cheque to the accused and instead presented it before the bank.
The contents and signatures were filled in with different pens, and
there are material alterations in the cheque. The statutory notice
was served upon the accused, and the necessary ingredients of
Section 138 of the NI Act were not satisfied. Therefore, it was
prayed that the present revision petition be allowed and the
judgments and order passed by the learned Courts below be set
aside.
9. I have heard Mr. Arvind Negi, learned counsel for the
petitioner, who submitted that the learned Courts below erred in
convicting and sentencing the accused. The complainant failed to
prove the goods receipts, which are necessary to establish that she
had sold the apple crop to the accused. The plea taken by the
accused that he had issued a cheque as a security towards the
payment of the apple crop, but he was not allowed to pluck the
apple, is highly probable. Learned Courts below erred in rejecting
Page |6
this plea. Therefore, he prayed that the present revision be allowed
and the judgments and order passed by the learned Courts below
be set aside.
10. I have given considerable thought to the submissions
made by him at the bar and have gone through the records
carefully.
11. 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 on 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,
Page |7the Revisional Court does not dwell at length upon the facts
and evidence of the case to reverse those findings.
12. 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.
Page |8
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 the CrPC.”
13. 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 on 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
Page |9jurisdiction 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
P a g e | 10
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.
14. 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.”
P a g e | 11
15. The present revision has to be decided as per the
parameters laid down by the Hon’ble Supreme Court.
16. The accused did not dispute the issuance of the cheque
in his statement recorded under Section 313 of Cr.P.C. and in the
statement on oath. He specifically stated while appearing as DW-1
that the cheque (Ext.C-1) was signed by him. 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
by proof, the presumption created by the provision
cannot be said to be rebutted……”
P a g e | 12
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.
17. 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.”
18. 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.”
19. Similar is the judgment in APS Forex Services (P) Ltd. v.
Shakti International Fashion Linkers (2020) 12 SCC 724, wherein it
was observed: –
P a g e | 13
“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
P a g e | 14
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.”
20. 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
P a g e | 15who 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
P a g e | 16aforesaid 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. 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 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.
P a g e | 17
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
P a g e | 18
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.”
21. 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
P a g e | 19context 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…”
22. 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.”
P a g e | 20
23. 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.
P a g e | 21
[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
P a g e | 22
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]]
24. The accused claimed in his statement recorded under
Section 313 of Cr.P.C. that he had issued the cheque as security to
the complainant, and he was not allowed to pluck the apple crop
from the orchard. This plea was not established by the statement
of the accused while appearing as DW-1. He stated in his cross-
examination that he had not purchased any apples from the
complainant, nor was the cheque issued regarding the
consideration of the apple crop. He claimed that he had taken
money from the complainant and had issued the cheque as
security. Learned Trial Court had rightly pointed out that the
defence taken by the accused was highly contradictory. He claimed
in his statement recorded under Section 313 of Cr.P.C. that the
cheque was issued as security for the purchase of an apple crop but
he claimed in his statement on oath that the cheque was issued as
security for repayment of the loan taken by him. Both these pleas
P a g e | 23
cannot be taken together, and the contradictory statement of the
accused was not sufficient to rebut the presumption.
25. It was submitted that the complainant had failed to
produce goods receipts, which falsifies her version. This
submission cannot be accepted. A similar situation arose in Uttam
Ram v. Devinder Singh Hudan, (2019) 10 SCC 287: (2020) 1 SCC (Cri)
154: (2020) 1 SCC (Civ) 126: 2019 SCC OnLine SC 1361,, wherein the
complainant’s claim was doubted because of the contradiction in
the number of apple boxes and failure to produce the receipt. It
was held by the Hon’ble Supreme Court that the complainant is
not to prove the debt in view of the statutory presumption
contained in Section 139 of the NI Act. The burden is upon the
accused to rebut the presumption. It was observed at page 293:
“19. A negotiable instrument including a cheque carries a
presumption of consideration in terms of Section 118(a) and
under Section 139 of the Act. Sections 118(a) and 139 read as
under:
“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;
P a g e | 24
***
139. Presumption in favour of 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.”
20. The trial court and the High Court proceeded as if, the
appellant is to prove a debt before civil court wherein, the
plaintiff is required to prove his claim on the basis of
evidence to be laid in support of his claim for the recovery of
the amount due. A dishonour of a cheque carries a statutory
presumption of consideration. The holder of the cheque in
due course is required to prove that the cheque was issued
by the accused and that when the same presented, it was not
honoured. Since there is a statutory presumption of
consideration, the burden is on the accused to rebut the
presumption that the cheque was issued not for any debt or
other liability.
21. There is the mandate of presumption of consideration in
terms of the provisions of the Act. The onus shifts to the
accused on proof of issuance of cheque to rebut the
presumption that the cheque was issued not for discharge of
any debt or liability in terms of Section 138 of the Act which
reads as under:
“138. Dishonour of cheque for insufficiency, etc. of funds in
the account.–Where any cheque drawn by a person on an
account maintained by him with a banker for payment of
any amount of money to another person from out of that
account for the discharge, in whole or in part, of any debt
or other liability, is returned by the bank unpaid, either
because of the amount of money standing to the credit of
that account is insufficient to honour the cheque or that
it exceeds the amount arranged to be paid from that
account by an agreement made with that bank, such
person shall be deemed to have committed an offence
and shall, …”
P a g e | 25
22. In Kumar Exports [Kumar Exports v. Sharma Carpets,
(2009) 2 SCC 513: (2009) 1 SCC (Civ) 629: (2009) 1 SCC (Cri)
823], it was held that mere denial of the existence of debt
will not serve any purpose but the accused may adduce
evidence to rebut the presumption. This Court held as
under: (SCC pp. 520-21, para 20)
“20. The accused in a trial under Section 138 of the Act
has two options. He can either show that consideration
and debt did not exist or that under the particular
circumstances of the case, the non-existence of
consideration and debt is so probable that a prudent man
ought to suppose that no consideration and debt existed.
To rebut the statutory presumptions an accused is not
expected to prove his defence beyond reasonable doubt
as is expected of the complainant in a criminal trial. The
accused may adduce direct evidence to prove that the
note in question was not supported by consideration and
that there was no debt or liability to be discharged by
him. However, the court need not insist in every case that
the accused should disprove the non-existence of
consideration and debt by leading direct evidence
because the existence of negative evidence is neither
possible nor contemplated. At the same time, it is clear that
bare denial of the passing of the consideration and existence
of debt, apparently would not serve the purpose of the
accused. Something which is probable has to be brought on
record for getting the burden of proof shifted to the
complainant. To disprove the presumptions, the accused
should bring on record such facts and circumstances, upon
consideration of which, the court may either believe that the
consideration and debt did not exist or their non-existence
was so probable that a prudent man would under the
circumstances of the case, act upon the plea that they did not
exist. Apart from adducing direct evidence to prove that
the note in question was not supported by consideration
or that he had not incurred any debt or liability, the
accused may also rely upon circumstantial evidence and
if the circumstances so relied upon are compelling, the
P a g e | 26
burden may likewise shift again on to the complainant.
The accused may also rely upon presumptions of fact, for
instance, those mentioned in Section 114 of the Evidence
Act to rebut the presumptions arising under Sections 118
and 139 of the Act.”
(emphasis supplied)
23. In the judgment Kishan Rao v. Shankargouda [Kishan
Rao v. Shankargouda, (2018) 8 SCC 165 : (2018) 4 SCC (Civ) 37 :
(2018) 3 SCC (Cri) 544], this Court referring to Kumar
Exports [Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 :
(2009) 1 SCC (Civ) 629 : (2009) 1 SCC (Cri) 823]
and Rangappa [Rangappa v. Sri Mohan, (2010) 11 SCC 441 :
(2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri) 184] returned the
following findings : (Kishan Rao case [Kishan
Rao v. Shankargouda, (2018) 8 SCC 165 : (2018) 4 SCC (Civ) 37 :
(2018) 3 SCC (Cri) 544], SCC pp. 173-74, para 22)
“22. Another judgment which needs to be looked into
is Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010)
11 SCC 441: (2010) 4 SCC (Civ) 477: (2011) 1 SCC (Cri) 184]. A
three-judge Bench of this Court had occasion to examine
the presumption under Section 139 of the 1881 Act. This
Court in the aforesaid case has held that in the event the
accused is able to raise a probable defence which creates
doubt with regard to the existence of a debt or liability,
the presumption may fail. The following was laid down
in paras 26 and 27: (SCC pp. 453-54)
’26. In light of these extracts, we are in agreement
with the respondent claimant that the presumption
mandated by Section 139 of the Act does indeed
include the existence of a legally enforceable debt or
liability. To that extent, the impugned observations
in Krishna Janardhan Bhat [Krishna Janardhan
Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54: (2008) 2
SCC (Cri) 166] may not be correct. However, this does
not in any way cast doubt on the correctness of the
decision in that case since it was based on the specific
facts and circumstances therein. As noted in the
P a g e | 27citations, this is of course in the nature of a rebuttable
presumption and it is open to the accused to raise a
defence wherein the existence of a legally enforceable
debt or liability can be contested. However, there can
be no doubt that there is an initial presumption which
favours the complainant.
27. Section 139 of the Act is an example of a reverse
onus clause that has been included in furtherance of
the legislative objective of improving the credibility of
negotiable instruments. While Section 138 of the Act
specifies a strong criminal remedy in relation to the
dishonour of cheques, the rebuttable presumption
under Section 139 is a device to prevent undue delay in
the course of litigation. However, it must be
remembered that the offence made punishable by
Section 138 can be better described as a regulatory
offence since the bouncing of a cheque is largely in
the nature of a civil wrong whose impact is usually
confined to the private parties involved in commercial
transactions. In such a scenario, the test of
proportionality should guide the construction and
interpretation of reverse onus clauses and the
defendant-accused cannot be expected to discharge
an unduly high standard of proof.'”
24. In the judgment Bir Singh v. Mukesh Kumar [Bir
Singh v. Mukesh Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Civ)
309: (2019) 2 SCC (Cri) 40], this Court held that presumption
under Section 139 of the Act is a presumption of law. The
Court held as under: (SCC pp. 206 & 208-09, paras 20, 33 &
36)
“20. Section 139 introduces an exception to the general
rule as to the burden of proof and shifts the onus on the
accused. The presumption under Section 139 of the
Negotiable Instruments Act is a presumption of law, as
distinguished from a presumption of facts. Presumptions
are rules of evidence and do not conflict with the
presumption of innocence, which requires the
prosecution to prove the case against the accused beyond
P a g e | 28reasonable doubt. The obligation on the prosecution may
be discharged with the help of presumptions of law and
presumptions of fact unless the accused adduces
evidence showing the reasonable possibility of the non-
existence of the presumed fact as held in Hiten P.
Dalal [Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6
SCC 16: 2001 SCC (Cri) 960].
***
33. A meaningful reading of the provisions of the
Negotiable Instruments Act including, in particular,
Sections 20, 87 and 139, makes it amply clear that a
person who signs a cheque and makes it over to the
payee remains liable unless he adduces evidence to rebut
the presumption that the cheque had been issued for
payment of a debt or in discharge of a liability. It is
immaterial that the cheque may have been filled in by
any person other than the drawer if the cheque is duly
signed by the drawer. If the cheque is otherwise valid, the
penal provisions of Section 138 would be attracted.
***
36. Even a blank cheque leaf, voluntarily signed and
handed over by the accused, which is towards some
payment, would attract presumption under Section 139
of the Negotiable Instruments Act, in the absence of any
cogent evidence to show that the cheque was not issued
in discharge of a debt.”
25. In other judgment Rohitbhai Jivanlal Patel v. State of
Gujarat [Rohitbhai Jivanlal Patel v. State of Gujarat, (2019) 18
SCC 106: 2019 SCC OnLine SC 389: AIR 2019 SC 1876] this
Court held as under: (SCC paras 15, 17 and 22)
“15. So far the question of the existence of basic
ingredients for drawing of presumption under
Sections 118 and 139 of the NI Act is concerned,
apparent it is that the appellant-accused could not
deny his signature on the cheques in question that
had been drawn in favour of the complainant on a
bank account maintained by the accused for a sum of
P a g e | 29
Rs 3 lakhs each. The said cheques were presented to
the bank concerned within the period of their validity
and were returned unpaid for the reason of either the
balance being insufficient or the account being
closed. All the basic ingredients of Section 138 as also
of Sections 118 and 139 are apparent on the face of the
record. The trial court had also consciously taken note
of these facts and had drawn the requisite
presumption. Therefore, it is required to be presumed
that the cheques in question were drawn for
consideration and the holder of the cheques i.e. the
complainant received the same in discharge of an
existing debt. The onus, therefore, shifts on the
appellant-accused to establish a probable defence so
as to rebut such a presumption.
***
17. On the aspects relating to a preponderance of
probabilities, the accused has to bring on record such
facts and such circumstances which may lead the Court
to conclude either that the consideration did not exist or
that its non-existence was so probable that a prudent
man would, under the circumstances of the case, act
upon the plea that the consideration did not exist. This
Court has, time and again, emphasised that though there
may not be sufficient negative evidence which could be
brought on record by the accused to discharge his
burden, yet mere denial would not fulfil the
requirements of rebuttal as envisaged under Sections 118
and 139 of the NI Act….
***
22. The result of the discussion in the foregoing
paragraphs is that the major considerations on which the
trial court chose to proceed clearly show its fundamental
error of approach where, even after drawing the
presumption, it had proceeded as if the complainant was
to prove his case beyond a reasonable doubt. Such being
the fundamental flaw on the part of the trial court, the
P a g e | 30
High Court [Shashi Mohan Goyanka v. State of Gujarat,
2018 SCC OnLine Guj 3674] cannot be said to have acted
illegally or having exceeded its jurisdiction in reversing
the judgment of acquittal. As noticed hereinabove, in the
present matter, the High Court has conscientiously and
carefully taken into consideration the views of the trial
court and after examining the evidence on the record as a
whole, found that the findings of the trial court are
vitiated by perversity. Hence, interference by the High
Court was inevitable; rather had to be made for a just and
proper decision of the matter.”
“20. The Trial Court and the High Court proceeded as if the
appellant were to prove a debt before a civil court, wherein
the plaintiff is required to prove his claim on the basis of
evidence to be laid in support of his claim for the recovery
of the amount due. Dishonour of a cheque carries a
statutory presumption of consideration. The holder of the
cheque in due course is required to prove that the cheque
was issued by the accused and that when the same was
presented, it was not honoured. Since there is a statutory
presumption of consideration, the burden is on the accused
to rebut the presumption that the cheque was issued not for
any debt or other liability.”
26. A similar view was taken in Rohitbhai Jivanlal Patel v.
State of Gujarat (2019) 18 SCC 106, and it was held that once a
presumption has been drawn, the onus shifts to the accused. It
was observed: –
12. According to the learned counsel for the appellant-
accused, the impugned judgment is contrary to the
principles laid down by this Court in Arulvelu [Arulvelum v.
State, (2009) 10 SCC 206 : (2010) 1 SCC (Cri) 288] because the
High Court has set aside the judgment of the trial court
without pointing out any perversity therein. The said case
of Arulvelu [Arulvelum v. State, (2009) 10 SCC 206 : (2010) 1
P a g e | 31
SCC (Cri) 288] related to the offences under Sections 304-B
and 498-A IPC. Therein, on the scope of the powers of the
appellate court in an appeal against acquittal, this Court
observed as follows : (SCC p. 221, para 36)
“36. Careful scrutiny of all these judgments leads to
the definite conclusion that the appellate court should be
very slow in setting aside a judgment of acquittal,
particularly in a case where two views are possible. The
trial court judgment cannot be set aside because the
appellate court’s view is more probable. The appellate
court would not be justified in setting aside the trial
court judgment unless it arrives at a clear finding on
marshalling the entire evidence on record that the
judgment of the trial court is either perverse or wholly
unsustainable in law.”
The principles aforesaid are not of much debate. In other
words, ordinarily, the appellate court will not be upsetting
the judgment of acquittal, if the view taken by the trial court
is one of the possible views of the matter and unless the
appellate court arrives at a clear finding that the judgment
of the trial court is perverse i.e. not supported by evidence
on record or contrary to what is regarded as normal or
reasonable; or is wholly unsustainable in law. Such general
restrictions are essential to remind the appellate court that
an accused is presumed to be innocent unless proved guilty
beyond a reasonable doubt, and a judgment of acquittal
further strengthens such presumption in favour of the
accused. However, such restrictions need to be visualised in
the context of the particular matter before the appellate
court and the nature of the inquiry therein. The same rule
with the same rigour cannot be applied in a matter relating
to the offence under Section 138 of the NI Act, particularly
where a presumption is drawn that the holder has received
the cheque for the discharge, wholly or in part, of any debt
or liability. Of course, the accused is entitled to bring on
record the relevant material to rebut such presumption and
to show that preponderance of probabilities are in favour of
his defence but while examining if the accused has brought
P a g e | 32
about a probable defence so as to rebut the presumption,
the appellate court is certainly entitled to examine the
evidence on record in order to find if preponderance indeed
leans in favour of the accused.
13. For determination of the point as to whether the High
Court was justified in reversing the judgment and orders of
the trial court and convicting the appellant for the offence
under Section 138 of the NI Act, the basic questions to be
addressed are twofold: as to whether the complainant
Respondent 2 had established the ingredients of Sections
118 and 139 of the NI Act, so as to justify drawing of the
presumption envisaged therein; and if so, as to whether the
appellant-accused had been able to displace such
presumption and to establish a probable defence whereby,
the onus would again shift to the complainant?
27. This position was reiterated in Ashok Singh v. State of
U.P., 2025 SCC OnLine SC 706, wherein 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
alleged 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
P a g e | 33had 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
presumed 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
P a g e | 34evidence 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)’
(underlining in original; emphasis supplied by us in bold)
28. Therefore, the version of the complainant cannot be
doubted because of the failure to produce the receipts.
P a g e | 35
29. It was submitted that the signatures and body of the
cheque were filled with a different pen, and there is a material
alteration in the cheque. This submission is not acceptable. No
expert was examined to prove that the body and signatures were
written with different pens. In any case, 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 a person is liable for the commission of an offence
punishable under Section 138 of the NI Act even if the cheque is
filled by some other person. It was observed:
“33. A meaningful reading of the provisions of the
Negotiable Instruments Act including, in particular,
Sections 20, 87 and 139, makes it amply clear that a person
who signs a cheque and makes it over to the payee remains
liable unless he adduces evidence to rebut the presumption
that the cheque had been issued for payment of a debt or in
discharge of a liability. It is immaterial that the cheque may
have been filled in by any person other than the drawer if
the cheque is duly signed by the drawer. If the cheque is
otherwise valid, the penal provisions of Section 138 would
be attracted.
34. If a signed blank cheque is voluntarily presented to a
payee, towards some payment, the payee may fill up the
amount and other particulars. This in itself would not
invalidate the cheque. The onus would still be on the
accused to prove that the cheque was not in discharge of a
debt or liability by adducing evidence.
35. It is not the case that the respondent accused him of
either signing the cheque or parted with it under any threat
P a g e | 36or coercion. Nor is it the case that the respondent accused
that the unfilled signed cheque had been stolen. The
existence of a fiduciary relationship between the payee of a
cheque and its drawer would not disentitle the payee to the
benefit of the presumption under Section 139 of the
Negotiable Instruments Act, in the absence of evidence of
exercise of undue influence or coercion. The second
question is also answered in the negative.
36. Even a blank cheque leaf, voluntarily signed and handed
over by the accused, which is towards some payment, would
attract presumption under Section 139 of the Negotiable
Instruments Act, in the absence of any cogent evidence to
show that the cheque was not issued in discharge of a debt.”
30. This position was reiterated in Oriental Bank of
Commerce v. Prabodh Kumar Tewari, 2022 SCC OnLine SC 1089,
wherein it was observed:
“12. The submission, which has been urged on behalf of the
appellant, is that even assuming, as the first respondent
submits, that the details in the cheque were not filled in by
the drawer, this would not make any difference to the
liability of the drawer.
xxxxxx
32. A drawer who signs a cheque and hands it over to
the payee is presumed to be liable unless the drawer
adduces evidence to rebut the presumption that the cheque
has been issued towards payment of a debt or in the
discharge of a liability. The presumption arises under
Section 139.
31. Therefore, the cheque is not bad even if it is not filled
by the drawer.
P a g e | 37
32. The accused claimed that the cheque was issued as a
security. However, he has taken contradictory pleas regarding the
purpose for which the cheque was issued; hence, this plea is not
proved on record. In any case, it was laid down by this Court in
Hamid Mohammad Versus Jaimal Dass 2016 (1) HLJ 456, that even if
the cheque was issued towards the security, the accused will be
liable. It was observed:
“9. Submission of learned Advocate appearing on behalf of
the revisionist that the cheque in question was issued to the
complainant as security and on this ground, criminal
revision petition be accepted is rejected being devoid of any
force for the reasons hereinafter mentioned. As per Section
138 of the Negotiable Instruments Act 1881, if any cheque is
issued on account of other liability, then the provisions of
Section 138 of the Negotiable Instruments Act 1881 would be
attracted. The court has perused the original cheque, Ext. C-
1 dated 30.10.2008 placed on record. There is no recital in
the cheque Ext. C-1, that cheque was issued as a security
cheque. It is well-settled law that a cheque issued as
security would also come under the provision of Section 138
of the Negotiable Instruments Act 1881. See 2016 (3) SCC
page 1 titled Don Ayengia v. State of Assam & another. It is
well-settled law that where there is a conflict between
former law and subsequent law, then subsequent law
always prevails.”
33. It was laid down by the Hon’ble Supreme Court in
Sampelly Satyanarayana Rao vs. Indian Renewable Energy
Development Agency Limited 2016(10) SCC 458 that issuing a
cheque toward security will also attract the liability for the
P a g e | 38
commission of an offence punishable under Section 138 of N.I. Act.
It was observed: –
“10. We have given due consideration to the submission
advanced on behalf of the appellant as well as the
observations of this Court in Indus Airways Private Limited
versus Magnum Aviation Private Limited (2014) 12 SCC 53
with reference to the explanation to Section 138 of the Act
and the expression “for the discharge of any debt or other
liability” occurring in Section 138 of the Act. We are of the
view that the question of whether a post-dated cheque is
for “discharge of debt or liability” depends on the nature of
the transaction. If on the date of the cheque, liability or debt
exists or the amount has become legally recoverable, the
Section is attracted and not otherwise.
11. Reference to the facts of the present case clearly shows
that though the word “security” is used in clause 3.1(iii) of
the agreement, the said expression refers to the cheques
being towards repayment of instalments. The repayment
becomes due under the agreement, the moment the loan is
advanced and the instalment falls due. It is undisputed that
the loan was duly disbursed on 28th February 2002, which
was prior to the date of the cheques. Once the loan was
disbursed and instalments have fallen due on the date of the
cheque as per the agreement, the dishonour of such
cheques would fall under Section 138 of the Act. The
cheques undoubtedly represent the outstanding liability.
12. Judgment in Indus Airways (supra) is clearly
distinguishable. As already noted, it was held therein that
liability arising out of a claim for breach of contract under
Section 138, which arises on account of dishonour of a
cheque issued, was not by itself at par with a criminal
liability towards discharge of acknowledged and admitted
debt under a loan transaction. Dishonour of a cheque issued
for discharge of a later liability is clearly covered by the
statute in question. Admittedly, on the date of the cheque,
there was a debt/liability in praesenti in terms of the loan
P a g e | 39agreement, as against the case of Indus Airways (supra),
where the purchase order had been cancelled and a cheque
issued towards advance payment for the purchase order was
dishonoured. In that case, it was found that the cheque had
not been issued for discharge of liability but as an advance
for the purchase order, which was cancelled. Keeping in
mind this fine, but the real distinction, the said judgment
cannot be applied to a case of the present nature where the
cheque was for repayment of a loan instalment which had
fallen due, though such deposit of cheques towards
repayment of instalments was also described as “security”
in the loan agreement. In applying the judgment in Indus
Airways (supra), one cannot lose sight of the difference
between a transaction of the purchase order which is
cancelled and that of a loan transaction where the loan has
actually been advanced and its repayment is due on the date
of the cheque.
13. The crucial question to determine the applicability of
Section 138 of the Act is whether the cheque represents the
discharge of existing enforceable debt or liability, or
whether it represents an advance payment without there
being a subsisting debt or liability. While approving the
views of different High Courts noted earlier, this is the
underlying principle as can be discerned from the
discussion of the said cases in the judgment of this Court.”
(Emphasis supplied)
34. This position was reiterated in Sripati Singh v. State of
Jharkhand, 2021 SCC OnLine SC 1002: AIR 2021 SC 5732, and it was
held that a cheque issued as security is not waste paper and a
complaint under section 138 of the N.I. Act can be filed on its
dishonour. It was observed:
“17. A cheque issued as security pursuant to a financial
transaction cannot be considered as a worthless piece of
P a g e | 40paper under every circumstance. ‘Security’ in its true sense
is the state of being safe, and the security given for a loan is
something given as a pledge of payment. It is given,
deposited or pledged to make certain the fulfilment of an
obligation to which the parties to the transaction are bound.
If in a transaction, a loan is advanced and the borrower
agrees to repay the amount in a specified timeframe and
issues a cheque as security to secure such repayment; if the
loan amount is not repaid in any other form before the due
date or if there is no other understanding or agreement
between the parties to defer the payment of the amount, the
cheque which is issued as security would mature for
presentation and the drawee of the cheque would be entitled
to present the same. On such presentation, if the same is
dishonoured, the consequences contemplated under Section
138 and the other provisions of N.I. Act would flow.
18. When a cheque is issued and is treated as ‘security’
towards repayment of an amount with a time period being
stipulated for repayment, all that it ensures is that such
cheque which is issued as ‘security cannot be presented
prior to the loan or the instalment maturing for repayment
towards which such cheque is issued as security. Further,
the borrower would have the option of repaying the loan
amount or such financial liability in any other form, and in
that manner, if the amount of the loan due and payable has
been discharged within the agreed period, the cheque issued
as security cannot thereafter be presented. Therefore, the
prior discharge of the loan or there being an altered
situation due to which there would be an understanding
between the parties is a sine qua non to not present the
cheque which was issued as security. These are only the
defences that would be available to the drawer of the cheque
in proceedings initiated under Section 138 of the N.I. Act.
Therefore, there cannot be a hard and fast rule that a
cheque, which is issued as security, can never be presented
by the drawee of the cheque. If such is the understanding, a
cheque would also be reduced to an ‘on-demand promissory
note’ and in all circumstances, it would only be civil
P a g e | 41litigation to recover the amount, which is not the intention
of the statute. When a cheque is issued even though as
‘security’ the consequence flowing therefrom is also known
to the drawer of the cheque and in the circumstance stated
above if the cheque is presented and dishonoured, the
holder of the cheque/drawee would have the option of
initiating the civil proceedings for recovery or the criminal
proceedings for punishment in the fact situation, but in any
event, it is not for the drawer of the cheque to dictate terms
with regard to the nature of litigation.”
35. Therefore, even if the cheque was a security cheque, it
would not absolve the accused of his criminal liability. In the
present case, there is no evidence that the complainant did not
allow the accused to pluck the apple crop or that the accused had
paid the loan taken by him; therefore, the issuance of the security
cheque will make the accused liable.
36. Therefore, learned Courts below had rightly held the
accused had issued the cheque in discharge of his legal liability
and he had failed to rebut the presumption under Sections 118 (a)
and 139 of the NI Act.
37. The complainant stated that the cheque was
dishonoured due to insufficient funds. Memo (Ext.C-2) mentions
that the cheque was dishonoured due to insufficient funds. 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)
P a g e | 42
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.
38. 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’
39. The complainant stated that she had issued a notice to
the accused. This notice was sent through RAD cover. The
acknowledgement (Ext. C-5) bears the signatures of the accused,
which are similar to the signatures on the statement on oath,
notice of accusation and the statement recorded under Section 313
of Cr. P.C. The accused stated in his cross-examination that he
might have received the notice, and he had not sent a reply to the
notice. Thus, he has not specifically denied the receipt of the
P a g e | 43
notice, and the learned Courts below had rightly held that the
notice was duly served upon the accused.
40. It was laid down in C.C. Allavi Haji vs. Pala Pelly Mohd.
2007(6) SCC 555 that the person who claims that he had not
received the notice has to pay the amount within 15 days from the
date of the receipt of the summons from the Court and in case of
failure to do so, he cannot take the advantage of the fact that
notice was not received by him. It was observed:
“It is also to be borne in mind that the requirement of giving
of notice is a clear departure from the rule of Criminal Law,
where there is no stipulation of giving of notice before filing
a complaint. Any drawer who claims that he did not receive the
notice sent by post, can, within 15 days of receipt of summons
from the court in respect of the complaint under Section 138 of
the Act, make payment of the cheque amount and submit to the
Court that he had made payment within 15 days of receipt of
summons (by receiving a copy of the complaint with the
summons) and, therefore, the complaint is liable to be rejected.
A person who does not pay within 15 days of receipt of the
summons from the Court along with the copy of the complaint
under Section 138 of the Act, cannot obviously contend that
there was no proper service of notice as required under Section
138, by ignoring statutory presumption to the contrary under
Section 27 of the G.C. Act and Section 114 of the Evidence Act. In
our view, any other interpretation of the proviso would
defeat the very object of the legislation. As observed in
Bhaskaran‘s case (supra), if the giving of notice in the
context of Clause (b) of the proviso was the same as the
receipt of notice a trickster cheque drawer would get the
premium to avoid receiving the notice by adopting different
strategies and escape from legal consequences of Section
P a g e | 44138 of the Act.” (Emphasis supplied)
41. The accused has not paid any money to the
complainant; hence, it was duly proved that the accused had failed
to pay the money despite the receipt of the notice.
42. Therefore, it was duly proved before the learned Trial
Court that the cheque was issued in discharge of legal liability. It
was dishonoured with an endorsement ‘funds insufficient’ and the
accused had failed to pay the amount despite the receipt of the
notice of demand. Hence, the complainant had proved his case
beyond a reasonable doubt, and the learned Trial Court had rightly
convicted the accused of the commission of an offence punishable
under Section 138 of the NI Act.
43. The learned Trial Court sentenced the accused to
undergo simple imprisonment for 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
P a g e | 45transactions. 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.”
44. 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.
45. Learned Trial Court had ordered the accused to pay a
compensation of ₹3,44,000/- to the complainant, which is double
of the cheque amount. The cheque was issued on 12.11.2015, and
the learned Trial Court imposed the sentence on 09.11.202 after the
lapse of 8 years. The complainant lost interest on the amount, and
she had to pay the litigation expenses for filing the complaint. She
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
P a g e | 46NIA 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]”
46. The amount of ₹ 1,23,840/- would accrue as interest
for a period of 8 years @9% per annum on the principal of ₹
1,72,000/- . The complainant had also paid money to her lawyer
and had incurred the litigation expenses; therefore, the amount of
₹1,72,000/- awarded as compensation cannot be said to be
excessive.
47. No other point was urged.
48. In view of the above, the present revision fails, and the
same is dismissed.
49. Records of the learned Courts below be sent back
forthwith, along with a copy of this judgment.
(Rakesh Kainthla)
Judge
18th June, 2025
(ravinder)