Himachal Pradesh High Court
Reserved On: 15.05.2025 vs R To on 2 July, 2025
2025:HHC:20993
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No.599 of 2022
Reserved on: 15.05.2025
.
Date of Decision: 02.07.2025
Hem Raj Sharma ...Petitioner
Versus
r to
Jeet Ram Chaudhary since deceased through LR.
…Respondent
Coram
Hon’ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 Yes
For the Petitioner : Mr. Surinder Saklani, Advocate.
For the Respondent : Mr. Ajay Sharma, Senior Advocate,
with Mr. Atharv Sharma, Advocate.
Rakesh Kainthla, Judge
The present revision is directed against the judgment
05.08.2022, passed by learned Additional Sessions Judge,
Nalagarh, District Solan, H.P. (learned Appellate Court) vide
which the appeal filed by the petitioner (accused before learned
Trial Court) was dismissed and the judgment of conviction and
1
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
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order of sentence dated 27.01.2020, passed by learned Additional
Chief Judicial Magistrate, Nalagarh, District Solan, H.P. (learned
.
Trial Court), were upheld. (Parties shall 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 against the
offence punishable
r to
accused before the learned Trial Court for the commission of an
under Section 138 of the Negotiable
Instruments Act (in short, ‘NI Act‘). It was asserted that the
accused and the complainant were known to each other. The
accused borrowed a sum of ₹5,00,000/- from the complainant.
The accused issued a cheque of ₹5,00,000/- to discharge his legal
liability. The complainant presented the cheque to his bank, from
where it was sent to the bank of the accused; however, the cheque
was dishonoured with an endorsement ‘insufficient funds’. The
complainant issued a notice to the accused through his counsel
asking him to pay the amount; however, the accused failed to pay
the amount despite the receipt of a valid notice of demand. Hence,
the complaint was filed before the learned Trial Court against the
accused for taking action as per the law.
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3. The learned Trial Court found sufficient reasons to
summon the accused. When the accused appeared, 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 himself (CW1) to prove his
case.
5.
The accused, in his statement recorded under Section
313 of the CrPC, admitted that he had issued a cheque of
₹5,00,000/- drawn on the State Bank of India to the complainant.
He admitted that the cheque was dishonoured with an
endorsement ‘funds insufficient’. He denied the rest of the
complainant’s case. He stated that the complainant was engaged
in the money lending business. He gave the cheque to the accused
as security, but the complainant misused the cheque. He remained
in custody in an abduction case w.e.f. 30.09.2012 till 30th May,
2014. He examined Ajay Sood (DW-1), himself (DW-2), Mohinder
Singh (DW-3) and Nikka Ram (DW-4).
6. Learned Trial Court held that the issuance of a cheque
was not disputed and there is a presumption that the cheque was
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issued for consideration in discharge of the legal liability. The
burden to rebut the presumption is upon the accused. His
.
evidence was not sufficient to rebut the presumption. His plea that
he remained in prison will not help him because the cheque was
issued on 30.09.2015. The complainant is not required to prove the
source of income. Repeated presentation of the cheque does not
affect the liability of the accused. The cheque was dishonoured
with an endorsement ‘funds insufficient’. The complainant sent a
notice to the accused asking him to pay the amount within a period
of 15 days from the date of receipt of the notice. The notice was
duly served upon the accused, but he failed to pay the amount
despite the receipt of a valid 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 a fine of
₹7,00,000/-, which was ordered to be disbursed to the
complainant as compensation.
7. Being aggrieved from the judgment and order passed
by the learned Trial Court, the accused preferred an appeal, which
was decided by the learned Appellate Court. Learned Appellate
Court concurred with the findings recorded by the learned Trial
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Court that issuance of cheque was not disputed, and a
presumption would arise that the cheque was issued for
.
consideration in discharge of the legal liability. The evidence
presented by the accused was not sufficient to rebut the
presumption. The statements of defence witnesses were not
credible. The complainant is not required to prove the source of
funds because of the presumption. The cheque was dishonoured
with an endorsement ‘funds insufficient’. The notice was served
upon the accused, but he failed to pay the amount despite the
receipt of a valid notice of demand. Therefore, the appeal filed by
the accused was dismissed, and the judgment and order passed by
the learned Trial Court were upheld.
8. Being aggrieved by the judgments and order passed by
learned Courts below, the accused filed the present petition,
asserting that learned Courts below passed the judgments based
on surmises and hypotheses. The complainant failed to prove the
existence of a lawful consideration. He could not tell the date on
which the money was advanced. He stated that the money was
advanced in the years 2014 and 2015; however, the accused
remained in jail till 21.02.2014. The statement of Mohinder Singh
(DW-3) showed that he had handed over the cheque, signed by the
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accused, to the complainant as security for ₹1,00,000/- borrowed
by him. This evidence proved that the defence of the accused and
.
the learned Courts below erred in discarding the statement of this
witness. The accused did not require any loan, as is apparent from
his income tax returns. These were not considered by the learned
Courts below. The notice was never served upon the accused, and
the essential requirement of Section 138 of the NI Act was not
satisfied; therefore, it was prayed that the present appeal be
allowed and the judgments and order passed by the learned Courts
below be set aside.
9. I have heard Mr. Surinder Saklani, learned counsel for
the petitioner and Mr. Ajay Sharma, learned Senior Counsel,
assisted by Mr. Atharv Sharma, learned counsel for the
respondent.
10. Mr. Surinder Saklani, learned counsel for the
petitioner, submitted that the complainant stated the cheque was
issued on 30.09.2015; however, it was presented by him on
29.09.2015, which falsifies his version. The accused did not require
any money, as is apparent from his Income Tax returns filed by
him. Learned Courts below failed to appreciate these returns. The
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complainant failed to prove the existence of a legally enforceable
debt or other liability, and the learned Courts below erred in
.
relying upon the presumption under Section 118(a) and 139 of the
Income Tax Act. Therefore, he prayed that the present petition be
allowed and the judgments and order passed by the learned Courts
below be quashed. He relied upon a judgment of the Hon’ble
Supreme Court passed in Sri Dattaraya vs. Sharanappa 2024 INSC
11. to
586 in support of his submission.
Mr. Ajay Sharma, learned Senior Counsel for the
respondent/complainant, submitted that the learned Courts below
had rightly appreciated the evidence and this Court should not
interfere with the concurrent findings of fact recorded by the
learned Courts below. The cheque was post-dated and was
dishonoured on the ground that it was a post-dated cheque.
Hence, the dishonour of the cheque on 29.09.2015 does not make
the complainant’s case suspect. Hence, he 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.
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13. It was laid down by the Hon’ble Supreme Court in
Malkeet Singh Gill v. State of Chhattisgarh, (2022) 8 SCC 204: (2022)
.
3 SCC (Cri) 348: 2022 SCC OnLine SC 786 that the revisional court is
not an appellate court and it can only rectify the patent defect,
errors of jurisdiction or the law. It was observed 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 adetailed 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 revisionis 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. Theobject 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 individualcases. It is also well settled that while considering the same,
the Revisional Court does not dwell at length upon the factsand evidence of the case to reverse those findings.
14. This position was reiterated in State of Gujarat v.
Dilipsinh Kishorsinh Rao, 2023 SCC OnLine SC 1294, wherein it was
observed:
“13. The power and jurisdiction of the Higher Court under
Section 397 Cr. P.C., which vests the court with the power to
call for and examine records of an inferior court, is for the
purposes of satisfying itself as to the legality and regularity
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2025:HHC:20993provision 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 aninferior 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
rlaw. If one looks into the various judgments of thisCourt, 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 noevidence, 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 inbuiltrestrictions 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
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2025:HHC:20993categories aforestated. Even framing of charge is a much-
advanced stage in the proceedings under the CrPC.”
15. It was held in Kishan Rao v. Shankargouda, (2018) 8 SCC
.
165: (2018) 3 SCC (Cri) 544: (2018) 4 SCC (Civ) 37: 2018 SCC OnLine
SC 651 that it is impermissible for the High Court to reappreciate
the evidence and come to its conclusions in the absence of any
perversity. It was observed 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 ofKerala 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 cancall 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. Inother words, the jurisdiction is one of supervisory
jurisdiction exercised by the High Court for correcting amiscarriage 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 appellatejurisdiction. 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
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2025:HHC:20993standpoint, 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
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
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Phalke v. Sanjaysinh Ramrao Chavan, 2013 SCC OnLine Bom
1753] the order of conviction by substituting its own view.
This Court set aside the High Court’s order holding that the
High Court exceeded its jurisdiction in substituting its
.
views, and that too without any legal basis.
16. This position was reiterated in Bir Singh v. Mukesh
Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ)
309: 2019 SCC OnLine SC 13, wherein it was observed at page 205:
“16. It is well settled that in exercise of revisional
jurisdiction under Section 482 of the Criminal Procedure
Code, the High Court does not, in the absence of perversity,
upset concurrent factual findings. It is not for the Revisional
Court to re-analyse and re-interpret the evidence on record.
17. As held by this Court in Southern Sales &
Services v. Sauermilch Design and Handels GmbH [Southern
Sales & Services v. Sauermilch Design and Handels GmbH,
(2008) 14 SCC 457], it is a well-established principle of law
that the Revisional Court will not interfere even if a 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
parameters laid down by the Hon’ble Supreme Court.
18. The accused admitted in his statement recorded under
Section 313 of Cr.P.C. that he had issued the cheque of ₹5,00,000/-
drawn on State Bank of India Branch Main Market Bilaspur, H.P.
His witness Mohinder Singh (DW-3) stated that he handed a blank
cheque of accused to the complainant as a security for a payment
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of ₹1,00,000/-. 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 hasbeen 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 issaid 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 areasonable man would act on the supposition that it
exists. Unless, therefore, the explanation is supportedby 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:
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2025:HHC:20993“26. Applying the proposition of law as noted above, in the
facts of the present case, it is clear that the signature on the
cheque, having been admitted, a presumption shall be
raised under Section 139 that the cheque was issued in.
discharge of debt or liability.”
20. This position was reiterated in Kalamani Tex v. P.
Balasubramanian, (2021) 5 SCC 283: (2021) 3 SCC (Civ) 25: (2021) 2
SCC (Cri) 555: 2021 SCC OnLine SC 75 wherein it was held at page
289:
“14. Once the 2nd appellant had admitted his signatures on
the cheque and the deed, the trial court ought to have
presumed that the cheque was issued as consideration for alegally 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
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.
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2025:HHC:20993However, 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 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
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liability as per Section 139 of the NI Act. It appears that both
the learned trial court as well as the High Court have
committed an error in shifting the burden upon the
complainant to prove the debt or liability, without
.
appreciating the presumption under Section 139 of the NI
Act. As observed above, Section 139 of the Act is an example
of reverse onus clause and therefore, once the issuance of
the cheque has been admitted and even the signature on the
cheque has been admitted, there is always a presumption in
favour of the complainant that there exists legally
enforceable debt or liability and thereafter, it is for the
accused to rebut such presumption by leading evidence.”
22. The presumption under Section 139 of the NI Act was
explained by the Hon’ble Supreme Court in Triyambak S. Hegde v.
Sripad, (2022) 1 SCC 742: (2022) 1 SCC (Civ) 512: 2021 SCC OnLine SC
788 as under at page 747:
“12. From the facts arising in this case and the nature of the
rival contentions, the record would disclose that the
signature on the documents at Exts. P-6 and P-2 are not
disputed. Ext. P-2 is the dishonoured cheque based on
which the complaint was filed. From the evidence tenderedbefore the JMFC, it is clear that the respondent has not
disputed the signature on the cheque. If that be theposition, as noted by the courts below, a presumption
would arise under Section 139 in favour of the appellantwho 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
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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 thecheque was made or drawn for consideration on the
date which the cheque bears. Section 139 of the Actenjoins 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 theaforesaid 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
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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
r 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.
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
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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
r 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, 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
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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 acheque received the cheque of the nature referred to in
Section 138 for the discharge, in whole or in part, of anydebt 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 toestablish that there is no consideration received. It is in the
context 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::: Downloaded on – 03/07/2025 21:17:43 :::CIS
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2025:HHC:20993accused is not expected to discharge an unduly high
standard of proof. It is accordingly that the principle has
developed that all which the accused needs to establish is a
probable defence. As to whether a probable defence has.
been established is a matter to be decided on the facts of
each case on the conspectus of evidence and circumstances
that exist…”
24. Similar is the judgment in P. Rasiya v. Abdul Nazer, 2022
SCC OnLine SC 1131, wherein it was observed:
“As per Section 139 of the N.I. Act, it shall be presumed,
unless the contrary is proved, that the holder of a cheque
received the cheque of the nature referred to in Section 138
for discharge, in whole or in part, of any debt or other
liability. Therefore, once the initial burden is discharged bythe 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 underSection 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 infavour 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:
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
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2025:HHC:20993of 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 theCourt 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 andproving 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 drawerof 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 thedrawer. 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]]
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.
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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 toreach 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 caseis 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-
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. The accused claimed that he had a sufficient amount
with him. He relied upon the income tax returns (Ext.D-5 to
Ext.D-7); however, these are not income tax returns but the
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printout of Form 26AS. These forms show that the payments made
by IL&FS Engineering and Construction Company to the accused
.
and the tax deducted on this amount. The accused admitted in his
cross-examination that he had five vehicles with him, which
shows that he incurs running costs on them. Thus, the payment
made to the accused has to be adjusted for the cost of running the
vehicles, and in the absence of the income tax return showing the
income and the expenditure, the payment made to the accused
cannot be treated to be net income.
27. Nikka Ram (DW-4) brought the statement of account
of Hem Raj (Ext.D-9), which does not show that the accused had a
sound financial condition. He never had ₹5,00,000/- in his
account till 13.06.2014, on which date ₹7,20,000/- were
transferred by IL & FS Engineering and Construction Company.
This amount was paid to various persons, and he had a balance of
₹39,346/- on 07.07.2014 and ₹781/- on 20.12.2014. His statement
of account does not establish his version that he had a sound
financial condition and never required an amount of ₹5,00,000/-
from the complainant.
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28. Mohinder Singh (DW-3) stated that he was serving as a
driver with the accused. He demanded money from the accused,
.
but he (the accused) did not have money; hence, he obtained
₹1,00,000/- from the complainant. This testimony falsifies the
version of the accused that he had sufficient money and did not
require the loan of ₹5,00,000/-. If the accused was unable to pay
₹1,00,000/- to Mohinder Singh, his plea that he did not require
29. to
₹5,00,000/- is not acceptable.
Mohinder Singh (DW-3) stated that he had handed over
a blank cheque, signed by the accused, to the complainant because
he did not have his cheque. He returned ₹1,30,000/- to the
complainant in cash, but the complainant did not return the
cheque to him. The complainant told him that the cheque was
torn and could not be reused. His testimony is not acceptable. He
claimed that the accused did not have money with him, and he had
to take the money from the complainant. In such a situation, the
accused would not have handed over the blank cheque to him
because he knew that he had no money in his account and the
cheque would be dishonoured. The accused is a businessperson
and would be aware of the consequences of issuing a cheque
without funds in the account.
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30. Mohinder Singh (DW3) stated in his cross-examination
that Jeet Ram, the complainant, is residing at Barotiwala. He could
.
not say from whom he had learnt that the complainant was giving
money on interest. He obtained money at Bilaspur at the Nihali
Bus Stand. He handed over the cheque to Jeet Ram at the bus
stand. No other person had taken money from Jet Ram on interest.
He did not know from whom he came to know that Jeet Ram was
available at the Nihali Bus Stand. He denied that he made a false
story at the instance of the accused. Learned Appellate Court had
rightly pointed out that the testimony of this witness is highly
unreliable. He could not give the name of any person from whom
he came to know that Jeet Ram was giving money on loan, and he
would be available at Bilaspur in Nihali bus stand. It is difficult to
believe that this witness would have taken a loan from a person
regarding whom it was not known that he gives loans to persons
with interest. It cannot be believed that he would have gone to
Nihali Bus stand with a blank cheque, the complainant would be
present at the bus stand with ₹1,00,000/- with him and the
complainant would hand over the money to him without any
acquaintance based on a blank signed cheque regarding which it
was not known by whom it was issued and whether the account
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had money in it. Mohinder Singh (DW-3) did not state that he
had talked to the complainant and that the complainant had
.
demanded a security cheque from him. He simply stated that he
obtained the blank cheque from the accused, went to Nihali Bus
Stand, handed over the blank cheque to the complainant and
returned with ₹1,00,000/-. He stated that he had returned
₹1,30,000/- to the complainant but has not produced any receipt.
He believed the assertion of the complainant that the cheque was
torn and would not be misused. It is not even shown that he had
told the accused that his cheque was not returned by the
complainant to prevent its misuse. All these circumstances make
the testimony of this witness highly doubtful, and learned Courts
below were justified in discarding such testimony.
31. The cheque (Ext. C-1) bears Sl. No. 206988. It was
submitted that the cheque bearing Sl. No. 206987 and 206992
were encashed in April 2012 and, March 2014, and it is highly
unlikely that the cheque bearing Sl. No. 206988 would be issued
on 30.09.2015. This submission is not acceptable. First, there is no
principle of law that cheques are to be issued in seriatim.
Secondly, the complainant stated that the cheque was dated
30.09.2015, and never stated that the cheque was issued on
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30.09.2015. Hence, the submission that the cheque was issued on
30.09.2015 is without any basis. The loan was advanced in the year
.
2014, and even if it was a security cheque issued at the time of
taking out the loan, the same will not help the accused in the
absence of any evidence that the money was paid by the accused to
the complainant. It was laid down by this Court in Hamid
Mohammad Versus Jaimal Dass 2016 (1) HLJ 456, that even if the
It was observed:
r to
cheque was issued towards the security, the accused will be liable.
“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 anyforce 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 beattracted. The court has perused the original cheque, Ext. C-
1 dated 30.10.2008, placed on record. There is no recital inthe cheque Ext. C-1, that cheque was issued as a security
cheque. It is well-settled law that a cheque issued assecurity 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.”
32. It was laid down by the Hon’ble Supreme Court in
Sampelly Satyanarayana Rao vs. Indian Renewable Energy
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Development Agency Limited 2016(10) SCC 458 that issuing a
cheque toward security will also attract the liability for the
.
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 53with 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 isfor “discharge of debt or liability” depends on the nature of
the transaction. If on the date of the cheque, liability or debtexists 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 isadvanced and the instalment falls due. It is undisputed that
the loan was duly disbursed on 28th February 2002, whichwas prior to the date of the cheques. Once the loan was
disbursed and instalments have fallen due on the date of thecheque 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
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2025:HHC:20993debt 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.
agreement, 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 hadnot 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 thecheque 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)
33. 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
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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
paper under every circumstance. ‘Security’ in its true sense
is the state of being safe, and the security given for a loan issomething 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 borroweragrees 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 agreementbetween 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 Section138 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 beingstipulated for repayment, all that it ensures is that such
cheque which is issued as ‘security cannot be presentedprior 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 loanamount 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
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2025:HHC:20993in 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
litigation 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 ofinitiating 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.”
34.
Thus, no advantage can be derived from the testimony
of Nikka Ram (DW-4).
35. The accused tendered his affidavit (Ext. DW-2/A) in
evidence. At the outset, it is necessary to notice that the accused
cannot tender his evidence by way of affidavit as laid down by the
Hon’ble Supreme Court in M/S Mandvi Co-Op Bank Ltd vs. Nimesh
B Thakore 2010 (3) SCC 83, wherein it was observed: –
“44. Coming now to the last question with regard to the
right of the accused to give his evidence, like the
complainant, on affidavit, the High Court has held that,
subject to the provisions of sections 315 and 316 of the Code
of Criminal Procedure, the accused can also give his
evidence on affidavit. The High Court was fully conscious
that section 145(1) does not provide for the accused to give
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2025:HHC:20993High Court argued that there was no express bar in law
against the accused giving his evidence on affidavit, and
more importantly, providing a similar right to the accused
would be in furtherance of the legislative intent to make the.
trial process swifter.
45. In paragraph 29 of the judgment, the High Court
observed as follows:
“It is true that section 145(1) confers a right on the
complainant to give evidence on affidavit. It does not
speak of a similar right being conferred on the
accused. The Legislature in their wisdom may not
have thought it proper to incorporate the word`accused’ with the word `complainant’ in sub-section
(1) of section 145 in view of the immunity conferred
on the accused from being compelled to be a witness
against himself under Article 20(3) of theConstitution of India….”
Then, in paragraph 31 of the judgment, it observed:
“…. Merely because section 145(1) does not expressly
permit the accused to do so, does not mean that theMagistrate cannot allow the accused to give his
evidence on affidavit by applying the same analogy
unless there is just and reasonable ground to refusesuch permission. There is no express bar on the
accused to give evidence on affidavit either in the Actor in the Code….. I find no justified reason to refuse
permission to the accused to give his evidence on
affidavit, subject to the provisions contained insections 315 and 316 of the Code.”
46. On this issue, we are afraid that the High Court
overreached itself and took a course that amounts to taking
over the legislative functions. On a bare reading of section
143, it is clear that the legislature provided for the
complainant to give his evidence on the affidavit and did not
provide for the accused to similarly do so. But the High
Court thought that not mentioning the accused along with
the complainant in sub-section (1) of section 145 was
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merely an omission by the legislature that it could fill up
without difficulty. Even though the legislature in their
wisdom did not deem it proper to incorporate the word
`accused’ with the word `complainant’ in section 145(1), it
.
did not mean that the Magistrate could not allow the
accused to give his evidence on affidavit by applying the
same analogy unless there was a just and reasonable ground
to refuse such permission.
47. There are two errors apparent in the reasoning of the
High Court. First, if the legislature in their wisdom did not
think “it proper to incorporate a word `accused’ with the
word `complainant’ in section 145(1)……”, it was not open to
the High Court to fill up the self-perceived blank. Secondly,
the High Court was in error in drawing an analogy between
the evidence of the complainant and the accused in a case of
a dishonoured cheque. The case of the complainant in a
complaint under section 138 of the Act would be based
largely on documentary evidence.
48. The accused, on the other hand, in a large number of
cases, may not lead any evidence at all and let the
prosecution stand or fall on its evidence. In case the defence
does lead any evidence, the nature of its evidence may not
be necessarily documentary; in all likelihood, the defence
would lead other kinds of evidence to rebut the presumption
that the issuance of the cheque was not in the discharge of
any debt or liability. This is the basic difference between the
nature of the complainant’s evidence and the evidence of
the accused in a case of a dishonoured cheque. It is,
therefore, wrong to equate the defence evidence with the
complainant’s evidence and to extend the same option to
the accused as well.
49. Coming back to the first error in the High Court’s
reasoning, in the guise of interpretation, it is not
permissible for the court to make additions to the law and to
read into it something that is just not there. In Union of India
and Anr. vs. Deoki Nandan Aggarwal, 1992 Supp. (1) SCC 323,
this court sounded a note of caution against the court
usurping the role of the legislator in the guise of
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interpretation. The court observed:
“14. …it is not the duty of the court either to enlarge
the scope of the legislation or the intention of the
legislature when the language of the provision is plain.
and unambiguous. The court cannot rewrite, recast or
reframe the legislation for the very good reason that it
has no power to legislate. The power to legislate has
not been conferred on the courts. The court cannotadd words to a statute or read words into it which are
not there. Assuming there is a defect or an omission in
the words used by the legislature, the court could not
go to its aid to correct or make up the deficiency.
Courts shall decide what the law is and not what it
should be. The court, of course, adopts a construction
which will carry out the obvious intention of the
legislature, but it could not legislate itself. But to
r invoke judicial activism to set at nought thelegislative judgment is subversive of the
constitutional harmony and comity of
instrumentalities….”
50. In Raghunath Rai Bareja and Anr. vs. Punjab National
Bank and Ors., (2007) 2 SCC 230 while observing that it is the
task of the elected representatives of the people to legislate
and not that of the Judge even if it results in hardship or
inconvenience, Supreme Court quoted in affirmation, the
observation of Justice Frankfurter of the US Supreme Court
which is as follows:
“41. As stated by Justice Frankfurter of the US
Supreme Court (see “Of Law and Men: Papers andAddresses of Felix Frankfurter”)
“Even within their area of choice, the courts are
not at large. They are confined by the nature
and scope of the judicial function in its
particular exercise in the field of interpretation.
They are under the constraints imposed by the
judicial function in our democratic society. As a
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2025:HHC:20993will gainsay that the function in construing a
statute is to ascertain the meaning of words
used by the legislator. To go beyond it is to
usurp a power which our democracy has lodged.
in its elected legislature. The great judges have
constantly admonished their brethren of the
need for discipline in observing the limitations.
A judge must not rewrite a statute, neither toenlarge nor to contract it. Whatever
temptations the statesmanship of policy-
making might wisely suggest, construction
must eschew interpolation and evisceration. Hemust not read in by way of creation. He must
not read out except to avoid patent nonsense or
internal contradiction.”
51. In Duport Steels Ltd. vs. Sirs, [1980] 1 All ER 529, 534, Lord
Scarman expounded the legal position in the following
words:
“But in the field of statute law, the judge must be
obedient to the will of Parliament as expressed in its
enactments. In this field, Parliament makes andunmakes the law. The judge’s duty is to interpret and
to apply the law, not to change it to meet the judge’s
idea of what justice requires. Interpretation does, ofcourse, imply in the interpreter a power of choice
where differing constructions are possible. But ourlaw requires the judge to choose the construction,
which in his judgment best meets the legislative
purpose of the enactment. If the result be unjust butinevitable, the judge may say so and invite Parliament
to reconsider its provision. But he must not deny the
statute.”
52. In light of the above we have no hesitation in holding
that the High Court was in error in taking the view, that on a
request made by the accused the magistrate may allow him
to tender his evidence on affidavit and consequently, we set
aside the direction as contained in subparagraph (r) of
paragraph 45 of the High Court judgment.”
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36. He stated in the affidavit that he had signed a blank
cheque and handed it over to his driver, who required an amount
.
of ₹1,00,000/- for the construction of his house. He had taken a
loan on interest from the complainant and a blank signed cheque
was handed over to the complainant as security demanded by him.
37. His testimony is contrary to the statement of Mohinder
Singh (DW-3). As per his affidavit, the loan was already taken by
the driver and the cheque was handed over as a security, whereas
Mohinder Singh (DW-3) stated that the cheque was handed over to
the complainant when he advanced the loan. Further he has not
provided any explanation why he had not provided the loan to his
driver and instead handed over a blank signed cheque to him, after
all, his claim is that he had sufficient funds and never required
₹5,00,000/- from the complainant. He further stated that the
driver demanded the cheque from the complainant and
complainant said that the cheque was torn and he believed the
words of the complainant. This part of his statement is not
acceptable. He never stated that he knew the complainant
therefore; he had no reason to trust the complainant. Learned
Courts below had rightly pointed out that he was a businessman
and knew the significance of the cheque. He admitted in his cross-
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examination that cases of dishonor of chqeue were pending
against him, clearly showing that he knew the consequences of the
.
dishonor of the cheque. Therefore, he had no reason to trust the
complainant and not to take the blank cheque back from him
merely on his assurance that the cheque was torn.
38. The accused further stated in his affidavit that he was
arrested on 30.09.2012 and was released on bail on 21.02.2014. The
complainant stated in his cross-examination that money was paid
in the year 2014-15. Hence, the testimony of the accused that he
was arrested and released in February 2014 does not make the
complainant’s case suspect.
39. The complainant admitted in his cross-examination
that the accused had issued a cheque dated 30.09.2015. This was a
positive suggestion made on behalf of the accused to the
complainant, and it shows that the handing over of the cheque to
the complainant by the accused was not disputed. It was laid down
by the Hon’ble Supreme Court in Balu Sudam Khalde v. State of
Maharashtra, (2023) 13 SCC 365: 2023 SCC OnLine SC 355 that the
suggestion put to the witness can be taken into consideration
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while determining the innocence or guilt of the accused. It was
observed at page 382:-
.
“34. According to the learned counsel, such suggestions
could be a part of the defence strategy to impeach the
credibility of the witness. The proof of guilt required of the
prosecution does not depend on the satisfaction made to awitness.
35. In Tarun Bora v. State of Assam [Tarun Bora v. State of
Assam, (2002) 7 SCC 39: 2002 SCC (Cri) 1568], a three-judge
Bench of this Court was dealing with an appeal against theorder passed by the Designated Court, Guwahati, in TADA
Sessions case wherein the appellant was convicted under
Section 365IPC read with Sections 3(1) and 3(5) of the
Terrorist and Disruptive Activities (Prevention) Act, 1987.
36. In Tarun Bora case [Tarun Bora v. State of Assam, (2002) 7
SCC 39: 2002 SCC (Cri) 1568], this Court, while considering
the evidence on record, took note of a suggestion which was
put to one of the witnesses and considering the reply given
by the witness to the suggestion put by the accused,concluded that the presence of the accused was admitted.
We quote with profit the following observations made by
this Court in paras 15, 16 and 17, respectively, as under :
(Tarun Bora case [Tarun Bora v. State of Assam, (2002) 7 SCC
39: 2002 SCC (Cri) 1568], SCC pp. 43-44)“15. The witness further stated that during the assault,
the assailant accused him of giving information to the
army about the United Liberation Front of Assam(ULFA). He further stated that on the third night, he was
carried away blindfolded on a bicycle to a different place,
and when his eyes were unfolded, he could see his
younger brother Kumud Kakati (PW 2) and his wife Smt
Prema Kakati (PW 3). The place was Duliapather, which
is about 6-7 km away from his Village, Sakrahi. The
witness identified the appellant, Tarun Bora, and stated
that it is he who took him in an Ambassador car from the
residence of Nandeswar Bora on the date of the incident.
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16. In cross-examination, the witness stated as under:
‘Accused Tarun Bora did not blind my eyes, nor did he
assault me.’.
17. This part of the cross-examination is suggestive of
the presence of the accused Tarun Bora in the whole
episode. This will suggest the presence of the accused,
Tarun Bora, as admitted. The only denial is that the
accused did not participate in blind-folding the eyes of
the witness, nor assaulted him.”
37. In Rakesh Kumar v. State of Haryana [Rakesh
Kumar v. State of Haryana, (1987) 2 SCC 34: 1987 SCC (Cri)
256], this Court was dealing with an appeal against the
judgment of the High Court affirming the order of the
Sessions Judge whereby the appellant and three other
persons were convicted under Section 302 read with Section
34IPC. While reappreciating the evidence on record, this
Court noticed that in the cross-examination of PW 4 Sube
Singh, a suggestion was made with regard to the colour of
the shirt worn by one of the accused persons at the time of
the incident. This Court, taking into consideration the
nature of the suggestion put by the defence and the reply,
arrived at the conclusion that the presence of the accused,
namely, Dharam Vir, was established on the spot at the time
of the occurrence. We quote the following observations
made by this Court in paras 8 and 9, respectively, as under
(SCC p. 36)
“8. PW 3, Bhagat Singh, stated in his examination-in-
chief that he had identified the accused at the time of the
occurrence. But curiously enough, he was not cross-
examined as to how and in what manner he could
identify the accused, as pointed out by the learned
Sessions Judge. No suggestion was also given to him that
the place was dark and that it was not possible to identify
the assailants of the deceased.
9. In his cross-examination, PW 4 Sube Singh stated that
the accused, Dharam Vir, was wearing a shirt of white
shirt. It was suggested to him on behalf of the accused
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that Dharam Vir was wearing a cream-coloured shirt of
cream colour. In answer to that suggestion, PW 4 said it
is not correct that Dharam Vir, the accused, was wearing
a shirt of a cream colour and not a white colour at that
.
time.’ The learned Sessions Judge has rightly observed
that the above suggestion at least proves the presence of
accused Dharam Vir on the spot at the time of
occurrence.”
38. Thus, from the above, it is evident that the suggestion
made by the defence counsel to a witness in the cross-
examination, if found to be incriminating in nature in any
manner, would definitely bind the accused, and the accused
cannot get away on the plea that his counsel had no implied
authority to make suggestions in the nature of admissions
against his client.
39. Any concession or admission of a fact by a defence
counsel would definitely be binding on his client, except the
concession on a point of law. As a legal proposition, we
cannot agree with the submission canvassed on behalf of
the appellants that an answer by a witness to a suggestion
made by the defence counsel in the cross-examination does
not deserve any value or utility if it incriminates the
accused in any manner.”
40. It was submitted that the cheque was presented on
29.09.2015, which is not possible because the cheque was handed
over on 30.09.2015. This is a misreading of the evidence. The
complainant admitted that the accused handed over the cheque
dated 30.09.2015, and not that the cheque was handed over on
30.09.2015. Therefore, its presentation on 29.09.2015 will not
make the complainant’s case suspect.
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41. It was submitted that the complainant had not
produced any proof of delivery of money; hence, his case is
.
suspect. This submission is not acceptable. It was laid down by
Hon’ble Supreme Court of India in Ashok Singh v. State of U.P., 2025
SCC OnLine SC 706, that the complainant is not required to give any
detail of the bank account, withdrawal of the money and its
delivery to the accused because of the presumption of
consideration attached to the cheque. 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 alsothe 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 complainantat 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 anobjection is raised that the complainant was not in a
financial position to pay the amount so claimed by him to
have been given as a loan to the accused, only then the
complainant would have to bring before the Court cogent
material to indicate that he had the financial capacity and
had actually advanced the amount in question by way of
loan. In the case at hand, the appellant had categorically
stated in his deposition and reiterated in the cross-
examination that he had withdrawn the amount from the
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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 weregiven 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-standto raise a probable defence would not shift the onus on the
complainant in such a case, for the plea of defence has to bebuttressed 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 ofthe money given to the petitioners by way of loan by
producing statement of accounts and/or Income Tax
Returns, the same ipso facto, would not negate such claim
for the reason that the cheques having being issued and
signed by the petitioners has not been denied, and no
evidence has been led to show that the respondent lacked
capacity to provide the amount(s) in question. In this
regard, we may make profitable reference to the decision
in Tedhi Singh v. Narayan Dass Mahant, (2022) 6 SCC 735:
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2025:HHC:20993’10. 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 beexpected 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 demonstratethat 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
rproducing documents. It is also open to him to establish
the very same aspect by pointing to the materialsproduced 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 thecourts 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 thecomplainant 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)
42. Therefore, the case of the complainant cannot be
doubted because of the absence of details regarding the delivery of
money.
43. In Sri Dattaraya (supra) Hon’ble Supreme Court refused
to interfere with the judgment of acquittal passed by the learned
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Trial Court based on the findings that the issuance of the cheque
was doubtful because of contradictions, complainant had failed to
.
prove the existence of a legally enforceable debt and his financial
capacity to advance the loan. In the present case, no such findings
have been recorded; therefore, the cited judgment will not assist
the accused.
44. Therefore, both the learned Courts below have rightly
held that the accused had admitted the issuance of the cheque, and
a presumption arose, the accused had failed to rebut the
presumption. Hence, the plea of the complainant that the cheque
was issued in the discharge of legal liability has to be accepted as
correct.
45. The complainant stated that the cheque was
dishonoured with an endorsement ‘insufficient funds’, which is
corroborated by the Memo of dishonour (Ext.C-2). Nikka Ram
(DW-4) also admitted in his cross-examination that the cheque
was dishonoured due to insufficient funds. He is a witness put
forth as a witness of truth by the accused. Therefore, it was duly
proved on record that the cheque of the accused was dishonoured
due to insufficient funds.
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46. Ajay Sood (DW-1) proved the memo of dishonour
(Ext.D-1), stating that the cheque was returned because the
.
instrument was post-dated. This memo is regarding the
presentation of the cheque on 29.09.2015, and will not make the
complainant’s case suspect.
47. The complainant stated that he issued a notice to the
accused asking him to pay the amount within 15 days. Notice
summoned. to
(Ext.C-3) was issued at the same address at which the accused was
The accused mentioned the same address in his
statement recorded under Section 313 of Cr.P.C., notice of
accusation and the personal bonds furnished by him. It was sent
by means of a registered AD cover and is deemed to have been
served. No material was brought on record by the accused to rebut
this presumption, and the learned Courts below had rightly held
that the notice of demand was duly served upon the accused.
48. 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
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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 thenotice 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 ofsummons (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 complaintunder 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 woulddefeat 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 thepremium to avoid receiving the notice by adopting different
strategies and escape from legal consequences of Section138 of the Act.” (Emphasis supplied)
49. 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 deemed receipt of the notice of
demand.
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50. 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 a valid
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
51. to
under Section 138 of the NI Act.
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 ofnegotiable instruments, including cheques, in financial
transactions. The penal provision of Section 138 of the
Negotiable Instruments Act is intended to be a deterrent to
callous issuance of negotiable instruments such as cheques
without serious intention to honour the promise implicit in
the issuance of the same.”
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52. 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.
53. Learned Trial Court had imposed a fine ₹7,00,000/-
which was ordered to be paid to the complainant. The cheque was
issued on 30.09.2015, and the learned Trial Court imposed the
sentence on 27.01.2020, after the lapse of 4 years. The complainant
lost interest that he would have gained by depositing the amount
in the bank, and he had to pay the litigation expenses for filing the
complaint. 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 but also
compensatory and restitutive. The provisions of NIA envision a
single window for criminal liability for the dishonour of a cheque
as well as civil liability for the realisation of the cheque amount. It
is also well settled that there needs to be a consistent approach
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2025:HHC:20993the 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]”
54. Hence, the amount of ₹2,00,000/- paid as
.
compensation on the amount of ₹5,00,000/-cannot be said to be
excessive.
55. No other point was urged.
56. In view of the above, the present revision fails, and the
same is dismissed.
57.
r to
Records of the learned Courts below be sent back
forthwith, along with a copy of this judgment.
(Rakesh Kainthla)
Judge
2nd July, 2025
(ravinder)
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