Himachal Pradesh High Court
Reserved On: 16.6.2025 vs Vidya Sagar Sharma on 26 June, 2025
2025:HHC:19862
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No. 591 of 2024
.
Reserved on: 16.6.2025
Date of Decision: 26.6.2025.
Vijay Kumar Verma ...Petitioner
Versus
Vidya Sagar Sharma
Coram
r to ...Respondent
Hon’ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 No.
For the Petitioner : Mr. Kuldeep Singh Chandel,
Advocate.
For the Respondent : None.
Rakesh Kainthla, Judge
The present revision is directed against the judgment
dated 6.6.2024, passed by learned Additional Sessions Judge,
Nalagarh, District Solan, H.P. (learned Appellate Court), vide
which the judgment of conviction dated 8.8.2022 and order of
sentence dated 17.8.2022, passed by learned Additional Chief
Judicial Magistrate Nalagarh, District Solan, H.P. (learned Trial
1
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
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Court) were upheld and the appeal filed by the petitioner
(accused before the learned Trial Court) was dismissed. (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
revision are that the complainant filed a complaint before the
learned Trial Court against the accused for the commission of an
offence punishable under Section 138 of the Negotiable
Instruments Act (NI Act). It was asserted that the complainant is
running a shop adjacent to the shop of the accused. The parties
have cordial relations with each other. The accused requested
the complainant to advance a loan in the last week of June 2014
for upgrading his jewellery shop. The complainant paid ₹10.00
lacs to the accused. The accused agreed to pay the amount
within a year with interest @Rs.1.00 lac subject to the issuance
of a post-dated cheque. It was agreed that the complainant
would pay ₹3.00 lacs, and an amount of ₹6.00 lacs would be paid
within three months. The accused issued a post-dated cheque in
the month of June, 2015. The accused did not have a sound
financial condition in June 2015, and he requested the
complainant to provide some time to repay the loan. The
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complainant agreed, and the accused issued a post-dated
cheque of ₹10.00 lacs dated 13.4.2016, drawn on Central Bank of
.
India, Nalagarh, to discharge his liability. The complainant
presented the cheque to his bank, but it was dishonoured with
an endorsement ‘funds insufficient’. The complainant served a
notice upon the accused asking him to pay the amount
mentioned in the cheque. The notice was duly served upon the
accused; however, the accused failed to pay the amount despite
the receipt of the notice of demand. Hence, the complaint was
filed before the learned Trial Court to take action against the
accused as per law.
3. The learned Trial Court found sufficient reasons to
summon the accused. When the accused appeared, notice of
accusation was put to him for the commission of an offence
punishable under Section 138 of the NI Act, to which he pleaded
not guilty and claimed to be tried.
4. The complainant examined himself (CW1) in support
of his complaint.
5. The accused, in his statement recorded under Section
313 of Cr.P.C., stated that the cheque was retained by the
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complainant as security. The complainant was running a
committee. He had received a blank signed cheque from the
.
accused and misused it. The complainant owed more than ₹9.00
lacs towards jewellery items taken by him from the shop of the
accused. He stated that he wanted to lead defence evidence;
however, no evidence was produced despite the opportunities,
and the evidence was closed by the order of the Court on
13.6.2022. r
6. Learned Trial Court held that issuance of the cheque
was not disputed. The plea taken by the accused that the
complainant was running a committee business was not
established by any satisfactory evidence. His plea that the
complainant owed more than ₹9.00 lacs to the accused was also
not proved. The complainant stated that he had paid ₹9.00 lac to
the accused, who was to return the same with ₹1.00 lac interest.
The cheque was issued for ₹10.00 lacs. It was dishonoured with
an endorsement ‘insufficient funds’. The complainant served a
notice upon the accused, but the accused failed to pay the
amount despite the receipt of a valid notice of demand.
Therefore, the accused was convicted for the commission of an
offence punishable under Section 138 of the NI Act and was
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sentenced to undergo simple imprisonment for six months and
pay compensation of ₹11,50,000/- to the complainant.
.
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 Additional Sessions Judge,
Nalagarh. Learned Additional Sessions Judge, Nalagarh,
concurred with the findings recorded by the learned Trial Court
that the cheque carried with it a presumption of consideration.
Even if the cheque was issued as a security, the accused would
not be absolved of his liability to pay the amount. The cheque
was dishonoured with the endorsement ‘insufficient funds’. The
accused failed to pay money despite the receipt of a valid notice
of demand. Hence, the appeal filed by the accused was
dismissed.
8. Being aggrieved from the judgments and order
passed by the learned Courts below, the accused has filed the
present petition, asserting that the learned Courts below failed
to appreciate the evidence on record. The complainant
specifically asserted that initially he had paid ₹3.00 lacs and
₹6.00 lacs after three months. However, he stated in his cross-
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examination that the amount was paid five times through
cheques and two times through the servant of the
.
petitioner/accused. The complainant also admitted that he had
not made transactions of more than ₹10,000/- to ₹15,000/-
within 15 years. The accused had borrowed ₹9.00 lacs, whereas
the complaint was filed for ₹10.00 lacs. Therefore, it was prayed
that the present revision be allowed and the judgments and
order passed by learned Courts below be set aside.
9. I have heard Mr. Kuldeep Singh Chandel, learned
counsel for the petitioner/accused, who submitted that the
learned Trial Court erred in convicting and sentencing the
accused. There was a discrepancy regarding the loan paid to the
accused. The complainant stated that he had advanced ₹9.00
lacs to the accused; however, the cheque of ₹10.00 lacs was
issued, which could not have been issued in discharge of legal
liability. Learned Courts below failed to appreciate this aspect.
There was a discrepancy regarding the money that was advanced
to the accused, which made the case of the complainant highly
suspect. Thus, he prayed that the present revision be allowed
and the judgment and order passed by learned Courts below be
set aside.
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10. I have given considerable thought to the submissions
made 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 a revisional
court is not an appellate court and it can only rectify the patent
defect, errors of jurisdiction or the law. It was observed at page
207: –
“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 evidencebrought on record. The High Court in criminal revision
against conviction is not supposed to exercise the
jurisdiction like the appellate court, and the scope ofinterference in revision is extremely narrow. Section 397
of the Criminal Procedure Code (in short “CrPC“) vestsjurisdiction 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 ofany proceedings of such inferior court. The object of the
provision is to set right a patent defect or an error of
jurisdiction or law. There has to be a well-founded error
which is to be determined on the merits of individual
cases. It is also well settled that while considering the
same, the Revisional Court does not dwell at length upon
the facts and evidence of the case to reverse those
findings.
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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 asto 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 jurisdictionor law. There has to be a well-founded error, and it
may not be appropriate for the court to scrutinisethe orders, which, upon the face of it, bear a token
of careful consideration and appear to be inaccordance 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. Each
case would have to be determined on its own merits.
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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 isdealing 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 substantiallyfalls 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 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 can
call for and examine the record of any proceedings for
the purpose of satisfying itself as to the correctness,
legality or propriety of any finding, sentence or order.
In other words, the jurisdiction is one of supervisory
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2025:HHC:19862a 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 theMagistrate 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 theimpugned 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 therespondent 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
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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 the exercise of revisional
jurisdiction under Section 482 of the Criminal Procedure
Code, the High Court does not, in the absence ofperversity, upset concurrent factual findings. It is not for
the Revisional Court to re-analyse and re-interpret the
evidence on record.
17. As held by this Court in Southern Sales &
Services v. Sauermilch Design and Handels GmbH [Southern
Sales & Services v. Sauermilch Design and Handels GmbH,
(2008) 14 SCC 457], it is a well-established principle of law
that the Revisional Court will not interfere even if a wrong
order is passed by a court having jurisdiction, in the
absence of a jurisdictional error. The answer to the first
question is, therefore, in the negative.”
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15. The present revision has to be decided as per the
parameters laid down by the Hon’ble Supreme Court.
.
16. The complainant asserted in his complaint that he
had agreed to pay a loan of ₹10.00 lacs to the accused, and the
accused agreed to return the same within one year with interest
of ₹1.00 lac. He advanced ₹3.00 lacs on one occasion and ₹6.00
lacs on the other occasion. ₹9.00 lacs were advanced to the
accused. The accused issued a post-dated cheque of ₹10.00 lacs
to discharge his liability. It is apparent from the complaint that
the parties had agreed to the interest of ₹1.00 lac on an amount
of ₹10.00 lacs if paid within one year; however, the accused
failed to pay the amount within one year. Therefore, time was
extended and a cheque dated 13.4.2016 for ₹10.00 lacs was issued
after the expiry of almost two years. Hence, the plea of the
complainant that the accused had agreed to pay the interest of
₹1.00 lakh has to be accepted as correct. The extension of time
would have deprived the complainant of the interest which he
would have gained by keeping the money in his bank account.
Hence, the complainant’s case is not suspicious because the
accused had paid the interest of ₹1.00 on the amount of ₹9.00
lacs for almost two years.
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17. The complainant stated in his cross-examination
that he had known the accused for 15 years. Both of them used to
.
loan money to each other. He never transacted with the accused
for more than ₹5-10 thousand. It was submitted that the cross-
examination of the complainant shows that the transaction
between the parties was restricted to a small amount of ₹5-10
thousand. Hence, the advancing ₹9.00 lacs was highly
improbable. This submission cannot be accepted. The fact that
the parties had money transactions for 15 years and the amount
was being repaid shows that the parties had confidence in each
other, and in these circumstances, the advancement of the loan
of ₹9.00 lac cannot be said to be suspicious.
18. The complainant denied in his cross-examination
that he was running the committee, and Ganesh Diwedi, Pulan
Sahota, Mohammad Sadiq, etc., were the members of the
committee. A denied suggestion does not amount to any proof,
and this suggestion does not prove the defence of the accused
that the complainant was running a committee and he had taken
money regarding the committee. The accused did not produce
any evidence to prove this defence and relied upon the statement
made by him under Section 313 of Cr.P.C. It was held in Sumeti Vij
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v. Paramount Tech Fab Industries, (2022) 15 SCC 689: 2021 SCC
OnLine SC 201 that the accused has to lead defence evidence to
.
rebut the presumption and mere denial in his statement under
Section 313 of Cr.P.C. is not sufficient to rebut the presumption.
It was observed at page 700:
“20. That apart, when the complainant exhibited all these
documents in support of his complaints and recorded thestatement of three witnesses in support thereof, the
appellant has recorded her statement under Section 313 of
the Code but failed to record evidence to disprove or rebutthe presumption in support of her defence available
under Section 139 of the Act. The statement of the accusedrecorded under Section 313 of the Code is not substantive
evidence of defence, but only an opportunity for the accused
to explain the incriminating circumstances appearing in theprosecution’s case against the accused. Therefore, there is no
evidence to rebut the presumption that the cheques were
issued for consideration.” (Emphasis supplied)”
19. Therefore, learned Courts below had rightly held that
the plea taken by the accused that the complainant was running
a committee was not proved.
20. The complainant stated in his cross-examination
that his daughter Anita Sharma was married on 15th December,
2017. He had provided ornaments and jewellery to his daughter.
He denied that he had purchased the ornaments from the
accused on 28.2.2016, 3.2.2016, 7.12.2016 and 6.10.2017. The
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accused did not prove the bills put to the complainant. Hence,
the plea taken by the accused that the complainant had taken
.
jewellery and was liable to pay the amount to him was not
established.
21. The complainant stated in his cross-examination
that he had not made the payment in a lump sum, and the
payment was made five times. The payment was made twice to
the servant; however, he had not prepared any document
regarding the payment made to the servant. It was submitted
that the cross-examination of the complainant makes the case
of the complainant suspect because he had stated in the
complaint that the payment was made on two occasions,
whereas it was stated in his cross-examination that payment
was made on five occasions, which makes the case of the
complainant highly suspect. This submission is not acceptable.
Firstly, the issuance of the cheque is not disputed; therefore, the
presumption arises that the cheque was issued in discharge of
the legal liability. 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
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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 berejected 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 isdirectly 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 presumptioncreated 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.
22. 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.”
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23. 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 fora 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 wasdirectly in the teeth of the established legal position as
discussed above, and amounts to a patent error of law.”
24. 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 thesignature of the accused on the said cheque are not
disputed by the accused. The accused has also notdisputed 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
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2025:HHC:19862funds” 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 Section139 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 andpayable 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 chequeand 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 orliability. Of course, such presumption is rebuttable in
nature. However, to rebut the presumption, the accused
was required to lead evidence that the full amount dueand payable to the complainant had been paid. In the
present case, no such evidence has been led by theaccused. The story put forward by the accused that the
cheques were given by way of security is not believable inthe 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
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2025:HHC:19862appreciating 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 andthereafter, it is for the accused to rebut such presumption
by leading evidence.”
25. 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 notdisputed. 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 respondenthas not disputed the signature on the cheque. If that be
the position, as noted by the courts below, a presumptionwould arise under Section 139 in favour of the appellant
who was the holder of the cheque. Section 139 of the NIAct 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:
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“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, wasaccepted, 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 inSection 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 theAct enjoins the Court to presume that the holder of
the cheque received it for the discharge of any debtor liability. The burden was on the accused to rebut
the aforesaid presumption. The trial court was not
persuaded to rely on the interested testimony ofDW 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. Mudibasa
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ppa, (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 ofpreponderance 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 probabledefence. Inference of preponderance of
probabilities can be drawn not only from the
materials brought on record by the parties but alsoby 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::: Downloaded on – 26/06/2025 21:24:54 :::CIS
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2025:HHC:19862whether 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
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.
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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.”
26. 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 context of this provision that the theory of “probable
defence” has grown. In an earlier judgment, in fact,
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2025:HHC:19862[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 isaccordingly 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 eachcase on the conspectus of evidence and circumstances
that exist…”
27. 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 Section138 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 theaccused 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. Thepresumption 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.”
28. This position was reiterated in Rajesh Jain v. Ajay
Singh, (2023) 10 SCC 148: 2023 SCC OnLine SC 1275, wherein it was
observed at page 161:
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2025:HHC:19862
33. The NI Act provides for two presumptions: Section 118
and Section 139. Section 118 of the Act inter alia directs
that it shall be presumed until the contrary is proved that
every negotiable instrument was made or drawn for.
consideration. Section 139 of the Act stipulates that
“unless the contrary is proved, it shall be presumed that
the holder of the cheque received the cheque for the
discharge of, whole or part of any debt or liability”. It will
be seen that the “presumed fact” directly relates to one of
the crucial ingredients necessary to sustain a conviction
under Section 138. [The rules discussed hereinbelow are
common to both the presumptions under Section 139 and
Section 118 and are hence not repeated–reference to one
can be taken as reference to another]
34. Section 139 of the NI Act, which takes the form of a
“shall presume” clause, is illustrative of a presumption of
law. Because Section 139 requires that the Court “shall
presume” the fact stated therein, it is obligatory for the
Court to raise this presumption in every case where the
factual basis for the raising of the presumption had been
established. But this does not preclude the person against
whom the presumption is drawn from rebutting it and
proving the contrary, as is clear from the use of the
phrase “unless the contrary is proved”.
35. The Court will necessarily presume that the cheque
had been issued towards the discharge of a legally
enforceable debt/liability in two circumstances. Firstly,
when the drawer of the cheque admits issuance/execution
of the cheque and secondly, in the event where the
complainant proves that the cheque was issued/executed
in his favour by the drawer. The circumstances set out
above form the fact(s) which bring about the activation of
the presumptive clause. [Bharat Barrel & Drum Mfg.
Co. v. Amin Chand Payrelal [Bharat Barrel & Drum Mfg.
Co. v. Amin Chand Payrelal, (1999) 3 SCC 35]]
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
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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 evidenceto the contrary from the opponent but if the
opponent does offer evidence to the contrary
(sufficient to satisfy the Judge’s requirement ofsome evidence), the presumption ‘disappears as a
rule of law and the case is in the Jury’s hands free
from any rule’.”
39. The standard of proof to discharge this evidential
burden is not as heavy as that usually seen in situations
where the prosecution is required to prove the guilt of an
accused. The accused is not expected to prove the non-
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
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Mohan [Rangappa v. Sri Mohan, (2010) 11 SCC 441: (2010) 4
SCC (Civ) 477: (2011) 1 SCC (Cri) 184: AIR 2010 SC 1898]]
29. Secondly, the statement was made after more than
.
four years of the transaction and the discrepancy is not
sufficient to rebut the presumption attached to the cheque.
30. It was suggested to the complainant that the cost of
the ornaments was to be adjusted towards the amount
mentioned in the cheque. This suggestion shows that the
accused has not disputed his liability to pay the amount. Rather,
it was asserted that the amount was to be adjusted towards the
cost of the ornaments. 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 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 a witness.
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 the order passed by the Designated Court,
Guwahati, in TADA Sessions case wherein the appellant
was convicted under Section 365IPC read with Sections::: Downloaded on – 26/06/2025 21:24:54 :::CIS
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2025:HHC:198623(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 thesuggestion put by the accused, arrived at the conclusion
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 Boracase [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 opened, he could see hisyounger 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 was he who took him in an Ambassador
car from the residence of Nandeswar Bora on the date
of the incident.
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 clearly 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)
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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 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
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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.”
31. Therefore, learned Courts below had rightly held that
the presumption contained in Sections 118 (a) and 139 of the NI
Act was not rebutted by the material on record.
32. The complainant asserted that the cheque was
dishonoured with an endorsement ‘funds insufficient’. The
memo of dishonour (Ex.C2) shows that the cheque was
dishonoured with an endorsement ‘funds insufficient’. It was
laid down by the Hon’ble Supreme Court in Mandvi Cooperative
Bank Ltd. v. Nimesh B. Thakore, (2010) 3 SCC 83: (2010) 1 SCC (Civ)
625: (2010) 2 SCC (Cri) 1: 2010 SCC OnLine SC 155 that the memo
issued by the Bank is presumed to be correct and the burden is
upon the accused to rebut the presumption. It was observed at
page 95:
24. Section 146, making a major departure from the
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2025:HHC:19862slip 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.
33. 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’
34. The complainant stated that he had issued a notice to
the accused asking him to pay the money within 15 days. An
acknowledgement (Ex.C5) was received, which bears the
signatures of the accused. Notice was sent to the correct address
and is deemed to be served. No evidence was led to rebut this
presumption contained in Section 27 of the General Clauses Act.
Therefore, learned Courts below had rightly held that the notice
was duly served upon the accused.
35. 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:
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“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 thecheque 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 paywithin 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 ignoringstatutory 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 andescape from legal consequences of Section 138 of the Act.”
(Emphasis supplied)
36. 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.
37. 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
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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.
38. Learned Trial Court sentenced the accused to
undergo simple imprisonment for a period of six months. 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 provision 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, includingcheques, 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 tohonour the promise implicit in the issuance of the same.”
39. Keeping in view the deterrent nature of the sentence,
the period of six months cannot be said to be excessive.
40. Learned Trial Court ordered the payment of
compensation of ₹11,50,000/-. The cheque bears the date
13.4.2016. The sentence was imposed on 17.8.2022 after the lapse
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of more than six years. The complainant lost interest on the
amount which he would have gained by depositing the same in
.
his bank. He also paid the fees to the Advocate and bore the
litigation expenses; therefore, 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. Theprovisions of NIA envision a single window for criminal
liability for the dishonour of a cheque as well as civilliability for the realisation of the cheque amount. It is also
well settled that there needs to be a consistent approachtowards 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]”
41. The amount of ₹1,50,000/- of ₹10.00 lacs for the loss
of interest of six years cannot be said to be excessive, and no
interference is required with the sentence imposed by the
learned Trial Court as affirmed by the learned Appellate Court.
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42. No other point was urged.
43. In view of the above, the present revision fails, and
.
the same is dismissed.
44. Records of the learned Courts below be sent back
forthwith, along with a copy of this judgment.
(Rakesh Kainthla)
Judge
26th June, 2025
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