Himachal Pradesh High Court
Reserved On: 17.6.2025 vs Roshan Lal on 14 July, 2025
2025:HHC:22617
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No. 614 of 2024
.
Reserved on: 17.6.2025
Date of Decision: 14.7.2025.
Joginder Chauhan ...Petitioner
Versus
Roshan Lal
Coram
r to ...Respondent
Hon’ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 No.
For the Petitioner : Ms. Madhurika Sekhon Verma,
Advocate.
For the Respondent : Mr. P.K. Verma, Advocate, vice
Mr. K.B. Khajuria, Advocate.
Rakesh Kainthla, Judge
The present revision is directed against the judgment
dated 25.7.2025, passed by learned Additional Sessions Judge,
Rohru, District Shimla, H.P. (learned Appellate Court), vide
which the judgment of conviction and order of sentence dated
19.3.2024, passed by learned Additional Chief Judicial
Magistrate, Rohru, Court No.1, District Shimla, H.P. (learned
1
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
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Trial 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 alleged that the accused
approached the complainant on 31st July 2018 for a loan of
₹5,50,000/-. He assured the complainant that he would return
the amount within three months. The complainant paid
₹50,000/- in cash and ₹5.00 lacs through a cheque. The
complainant demanded the money after the expiry of three
months. The accused issued a cheque on 16.9.2019 for
₹5,50,000/-, drawn on Punjab National Bank, Rohru, to
discharge his legal liability. The complainant presented the
cheque to his bank; however, it was dishonoured with an
endorsement ‘funds insufficient’. The complainant sent a notice
to the accused on 21.10.2019 asking him to pay the amount
within 15 days. The notice was returned unclaimed and is
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deemed to be served. The accused failed to pay the amount
despite the deemed service of the notice. Hence, the complaint
.
was filed before the learned Trial Court to take action 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) and
Parvinder (CW2) in support of his complaint.
5. The accused, in his statement recorded under Section
313 of Cr.P.C., admitted that he had cordial relations with the
complainant. He denied that he had taken the loan of
₹5,50,000/- from the complainant; however, he admitted that
he had issued a post-dated cheque in favour of the complainant.
He stated that he had paid the money into the account of the
complainant’s son. He stated that he was innocent, and the
witnesses deposed against him falsely. He examined Ashotosh
Sharma (DW1) and himself (DW2).
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6. Learned Trial Court held that the version of the
complainant that he had advanced a loan of ₹5.00 lacs through a
.
cheque was duly proved. The accused stated that he had taken a
loan of ₹5.00 lacs, which was returned by him by depositing it in
the account of the son of the complainant. This was not
sufficient to discharge the liability. The complainant specifically
stated that his son had no transaction with the accused. The
signatures on the cheque were admitted, and a presumption
under Section 118(a) and 139 of the NI Act would arise that the
cheque was issued in favour of the complainant in discharge of
the liability for valid consideration. The burden is upon the
accused to rebut this presumption, and the evidence of the
accused was insufficient to rebut the presumption. The cheque
was dishonoured with an endorsement ‘funds insufficient’. The
complainant served a notice upon the accused, which was
returned unclaimed and is deemed to be served. The accused
failed to pay the amount despite the receipt of the deemed
receipt of notice of demand; therefore, all the ingredients of the
commission of an offence punishable under Section 138 of the NI
Act were satisfied. Hence, the accused was convicted for the
commission of an offence punishable under Section 138 of the NI
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Act, and he was sentenced to undergo nine months’ simple
imprisonment and to pay compensation of ₹7.00 lacs to the
.
complainant and in default of payment of compensation, to
undergo further simple imprisonment for two months.
7. Being aggrieved by the judgment and order passed by
the learned Trial Court, the accused preferred an appeal which
was decided by the learned Additional Sessions Judge, Rohru
(learned Appellate Court). Learned Appellate Court concurred
with the findings recorded by the learned Trial Court that the
issuance of the cheque was not disputed. Therefore,
presumption under Sections 118(a) and 139 of the NI Act would
arise that the cheque was issued for consideration in discharge
of the legal liability. The accused stated while appearing as
(DW2) that he had borrowed ₹5.00 lacs from the complainant,
whereas he had denied that a loan of ₹5,50,000/- was taken by
him. This denial made his specific statement doubtful. He
admitted that he had issued the cheque for ₹5,50,000/-;
however, he did not provide any explanation for issuing the
cheque. The version of the accused was highly contradictory and
was not sufficient to rebut the presumption attached to the
cheque. The cheque was dishonoured with an endorsement
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‘insufficient funds’. The notice was sent to the accused, and it
was returned unclaimed. Therefore, it is deemed to be served.
.
The learned Trial Court had rightly convicted the accused. The
sentence imposed by the learned Trial Court was adequate, and
no interference was required with it. Hence, the appeal was
dismissed.
8. Being aggrieved by 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 material placed before them. The accused
specifically asserted that he had repaid the amount to the son of
the complainant. Ashutosh (DW1) proved the payment of ₹5.00
lacs to the son of the complainant. The accused had discharged
the legal liability. The money was deposited in the account of the
complainant’s son at the request of the complainant. The
version of the complainant’s son that the money was regarding
the payment for an apple was highly improbable. The accused is
to rebut the presumption by preponderance of probabilities, and
the evidence of the accused was sufficient to rebut that
presumption. Hence, it was prayed that the present revision be
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allowed and the judgments and order passed by learned Courts
below be set aside.
.
9. I have heard Ms. Madhurika Sekhon Verma, learned
counsel for the petitioner/accused, and Mr. P.K. Verma, learned
vice counsel representing the respondent/complainant.
10. Ms. Madhurika Sekhon Verma, learned counsel for
the petitioner/accused, submitted that the learned Courts below
erred in appreciating the material on record. The accused
asserted that he had returned the money by depositing it in the
account of the complainant’s son. This fact was duly proved by
the statement of Ashutosh (DW1) and the record brought by him
to the Court. Learned Courts below erred in rejecting this
version. The complainant wrongly asserted that the money
deposited in the account of the complainant’s son was towards
the payment of the apple crop. This version was highly
improbable. Therefore, she prayed that the present revision be
allowed and the judgments and order passed by learned Courts
below be set aside.
11. Mr. P.K. Verma, learned vice counsel representing the
respondent/complainant, supported the judgments and order
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passed by the learned Courts below. He submitted that the
version of the complainant’s son that he had sold the apple crop
.
to the accused was duly supported on oath. The payment was
made by the complainant by means of a cheque, and there was
no dispute that the accused had deposited money in the account
of the complainant’s son. Learned Courts below had rightly
rejected this version. All the ingredients of Section 138 of the NI
Act were duly satisfied, and there is no infirmity in the
judgments and order passed by the learned Courts below. Hence,
he prayed that the present revision be dismissed.
12. I have given considerable thought to the submissions
made at the bar and have gone through the records carefully.
13. It was laid down by the Hon’ble Supreme Court in
Malkeet Singh Gill v. State of Chhattisgarh, (2022) 8 SCC 204:
(2022) 3 SCC (Cri) 348: 2022 SCC OnLine SC 786 that a revisional
Court is not an Appellate Court and it can only rectify the patent
defect, errors of jurisdiction or the law. It was observed at page
207: –
“10. Before adverting to the merits of the contentions, at
the outset, it is apt to mention that there are concurrent
findings of conviction arrived at by two courts after a
detailed appreciation of the material and evidence::: Downloaded on – 14/07/2025 21:22:00 :::CIS
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2025:HHC:22617brought on record. The High Court in criminal revision
against conviction is not supposed to exercise the
jurisdiction like the appellate court, and the scope of
interference in revision is extremely narrow. Section 397.
of the Criminal Procedure Code (in short “CrPC“) vests
jurisdiction to satisfy itself or himself as to the
correctness, legality or propriety of any finding, sentenceor order, recorded or passed, and as to the regularity of
any proceedings of such inferior court. The object of the
provision is to set right a patent defect or an error of
jurisdiction or law. There has to be a well-founded errorwhich 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 thosefindings.
14. This position was reiterated in State of Gujarat v.
Dilipsinh Kishorsinh Rao, (2023) 17 SCC 688: 2023 SCC OnLine SC
1294, wherein it was observed at page 695:
14. The power and jurisdiction of the Higher Court under
Section 397CrPC, which vests the court with the power to
call for and examine records of an inferior court, is for thepurposes of satisfying itself as to the legality and
regularities 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 in such proceedings.
15. It would be apposite to refer to the judgment of this
Court in Amit Kapoor v. Ramesh Chander [Amit
Kapoor v. Ramesh Chander, (2012) 9 SCC 460: (2012) 4 SCC
(Civ) 687: (2013) 1 SCC (Cri) 986], where scope of Section
397 has been considered and succinctly explained as
under: (SCC p. 475, paras 12-13)
“12. Section 397 of the Code vests the court with the
power to call for and examine the records of an
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inferior court for the purposes of satisfying itself as to
the legality and regularity of any proceedings or order
made in a case. The object of this provision is to set
right a patent defect or an error of jurisdiction or law.
.
There has to be a well-founded error, and it may not
be appropriate for the court to scrutinise the orders,
which, upon the face of it, bear a token of careful
consideration and appear to be in accordance with law.
If one looks into the various judgments of this Court, it
emerges that the revisional jurisdiction can be invoked
where the decisions under challenge are grossly
erroneous, there is no compliance with the provisions
of law, the finding recorded is based on no evidence,
material evidence is ignored or judicial discretion is
exercised arbitrarily or perversely. These are not
exhaustive classes, but are merely indicative. Each
case would have to be determined on its own merits.
13. Another well-accepted norm is that the revisional
jurisdiction of the higher court is a very limited one
and cannot be exercised in a routine manner. One of
the inbuilt restrictions is that it should not be against
an interim or interlocutory order. The Court has to
keep in mind that the exercise of revisional
jurisdiction itself should not lead to injustice ex facie.
Where the Court is dealing with the question as to
whether the charge has been framed properly and in
accordance with law in a given case, it may be
reluctant to interfere in the exercise of its revisional
jurisdiction unless the case substantially falls within
the categories aforestated. Even framing of charge is a
much-advanced stage in the proceedings under CrPC.”
16. This Court in the aforesaid judgment in Amit Kapoor
case [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460 :
(2012) 4 SCC (Civ) 687 : (2013) 1 SCC (Cri) 986] has also laid
down principles to be considered for exercise of
jurisdiction under Section 397 particularly in the context
of prayer for quashing of charge framed under Section
228CrPC is sought for as under : (Amit Kapoor case [Amit::: Downloaded on – 14/07/2025 21:22:00 :::CIS
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2025:HHC:22617Kapoor v. Ramesh Chander, (2012) 9 SCC 460 : (2012) 4 SCC
(Civ) 687 : (2013) 1 SCC (Cri) 986], SCC pp. 482-83, para 27)
“27. Having discussed the scope of jurisdiction under.
these two provisions, i.e. Section 397 and Section 482
of the Code, and the fine line of jurisdictional
distinction, it will now be appropriate for us to enlist
the principles with reference to which the courts
should exercise such jurisdiction. However, it is not
only difficult but inherently impossible to state such
principles with precision. At best and upon objective
analysis of various judgments of this Court, we are
able to cull out some of the principles to be considered
for proper exercise of jurisdiction, particularly, with
regard to quashing of charge either in exercise of
jurisdiction under Section 397 or Section 482 of the
Code or together, as the case may be:
27.1. Though there are no limits to the powers of the
Court under Section 482 of the Code but the more the
power, the more due care and caution is to beexercised in invoking these powers. The power of
quashing criminal proceedings, particularly, the
charge framed in terms of Section 228 of the Code,should be exercised very sparingly and with
circumspection and that too in the rarest of rare cases.
27.2. The Court should apply the test as to whether the
uncontroverted allegations as made from the record of
the case and the documents submitted therewithprima facie establish the offence or not. If the
allegations are so patently absurd and inherently
improbable that no prudent person can ever reach
such a conclusion, and where the basic ingredients of a
criminal offence are not satisfied, then the Court may
interfere.
27.3. The High Court should not unduly interfere. No
meticulous examination of the evidence is needed for
considering whether the case would end in conviction::: Downloaded on – 14/07/2025 21:22:00 :::CIS
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2025:HHC:22617or not at the stage of framing of charge or quashing of
charge.
***
.
27.9. Another very significant caution that the courts
have to observe is that it cannot examine the facts,
evidence and materials on record to determine
whether there is sufficient material on the basis of
which the case would end in a conviction; the court is
concerned primarily with the allegations taken as a
whole whether they will constitute an offence and, if
so, is it an abuse of the process of court leading to
injustice.
***
27.13. Quashing of a charge is an exception to the rule
of continuous prosecution. Where the offence is even
broadly satisfied, the Court should be more inclined to
permit continuation of prosecution rather than its
quashing at that initial stage. The Court is not
expected to marshal the records with a view to decide
admissibility and reliability of the documents or
records, but is an opinion formed prima facie.”
17. The revisional court cannot sit as an appellate court
and start appreciating the evidence by finding out
inconsistencies in the statement of witnesses, and it is
not legally permissible. The High Courts ought to be
cognizant of the fact that the trial court was dealing with
an application for discharge.
15. This position was reiterated in State of Gujarat v.
Dilipsinh Kishorsinh Rao, (2023) 17 SCC 688: 2023 SCC OnLine SC
1294, wherein it was observed at page 695:
14. The power and jurisdiction of the Higher Court under
Section 397CrPC, which vests the court with the power to
call for and examine records of an inferior court, is for the
purposes of satisfying itself as to the legality and::: Downloaded on – 14/07/2025 21:22:00 :::CIS
13
2025:HHC:22617regularities 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 in such proceedings.
.
15. It would be apposite to refer to the judgment of this
Court in Amit Kapoor v. Ramesh Chander [Amit
Kapoor v. Ramesh Chander, (2012) 9 SCC 460: (2012) 4 SCC
(Civ) 687: (2013) 1 SCC (Cri) 986], where scope of Section
397 has been considered and succinctly explained as
under: (SCC p. 475, paras 12-13)
“12. Section 397 of the Code vests the court with the
power to call for and examine the records of an
inferior court for the purposes of satisfying itself as to
the legality and regularity of any proceedings or order
made in a case. The object of this provision is to set
right a patent defect or an error of jurisdiction or law.
There has to be a well-founded error, and it may not
be appropriate for the court to scrutinise the orders,
which, upon the face of it, bear a token of careful
consideration and appear to be in accordance with law.
If one looks into the various judgments of this Court, it
emerges that the revisional jurisdiction can be invoked
where the decisions under challenge are grossly
erroneous, there is no compliance with the provisions
of law, the finding recorded is based on no evidence,
material evidence is ignored or judicial discretion is
exercised arbitrarily or perversely. These are not
exhaustive classes, but are merely indicative. Each
case would have to be determined on its own merits.
13. Another well-accepted norm is that the revisional
jurisdiction of the higher court is a very limited one
and cannot be exercised in a routine manner. One of
the inbuilt restrictions is that it should not be against
an interim or interlocutory order. The Court has to
keep in mind that the exercise of revisional
jurisdiction itself should not lead to injustice ex facie.
Where the Court is dealing with the question as to
whether the charge has been framed properly and in
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2025:HHC:22617
accordance with law in a given case, it may be
reluctant to interfere in the exercise of its revisional
jurisdiction unless the case substantially falls within
the categories aforestated. Even framing of charge is a
.
much-advanced stage in the proceedings under CrPC.”
16. This Court in the aforesaid judgment in Amit Kapoor
case [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460 :
(2012) 4 SCC (Civ) 687 : (2013) 1 SCC (Cri) 986] has also laid
down principles to be considered for exercise of
jurisdiction under Section 397 particularly in the context
of prayer for quashing of charge framed under Section228CrPC is sought for as under : (Amit Kapoor case [Amit
Kapoor v. Ramesh Chander, (2012) 9 SCC 460 : (2012) 4 SCC
(Civ) 687 : (2013) 1 SCC (Cri) 986], SCC pp. 482-83, para 27)“27. Having discussed the scope of jurisdiction under
these two provisions, i.e. Section 397 and Section 482of the Code, and the fine line of jurisdictional
distinction, it will now be appropriate for us to enlist
the principles with reference to which the courtsshould exercise such jurisdiction. However, it is not
only difficult but inherently impossible to state such
principles with precision. At best and upon objectiveanalysis of various judgments of this Court, we are
able to cull out some of the principles to be consideredfor proper exercise of jurisdiction, particularly, with
regard to quashing of charge either in exercise of
jurisdiction under Section 397 or Section 482 of theCode or together, as the case may be:
27.1. Though there are no limits to the powers of the
Court under Section 482 of the Code but the more the
power, the more due care and caution is to be
exercised in invoking these powers. The power of
quashing criminal proceedings, particularly, the
charge framed in terms of Section 228 of the Code,
should be exercised very sparingly and with
circumspection and that too in the rarest of rare cases.
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2025:HHC:22617
27.2. The Court should apply the test as to whether the
uncontroverted allegations as made from the record of
the case and the documents submitted therewith
prima facie establish the offence or not. If the
.
allegations are so patently absurd and inherently
improbable that no prudent person can ever reach
such a conclusion, and where the basic ingredients of a
criminal offence are not satisfied, then the Court may
interfere.
27.3. The High Court should not unduly interfere. No
meticulous examination of the evidence is needed for
considering whether the case would end in conviction
or not at the stage of framing of charge or quashing of
charge.
r ***
27.9. Another very significant caution that the courts
have to observe is that it cannot examine the facts,
evidence and materials on record to determine
whether there is sufficient material on the basis of
which the case would end in a conviction; the court is
concerned primarily with the allegations taken as a
whole whether they will constitute an offence and, if
so, is it an abuse of the process of court leading to
injustice.
***
27.13. Quashing of a charge is an exception to the rule
of continuous prosecution. Where the offence is even
broadly satisfied, the Court should be more inclined to
permit continuation of prosecution rather than its
quashing at that initial stage. The Court is not
expected to marshal the records with a view to decide
admissibility and reliability of the documents or
records, but is an opinion formed prima facie.”
17. The revisional court cannot sit as an appellate court
and start appreciating the evidence by finding out
inconsistencies in the statement of witnesses, and it is
not legally permissible. The High Courts ought to be
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cognizant of the fact that the trial court was dealing with
an application for discharge.
16. 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 ofKerala v. Puttumana Illath Jathavedan Namboodiri [State of
Kerala v. Puttumana Illath Jathavedan Namboodiri, (1999) 2
SCC 452: 1999 SCC (Cri) 275], while considering the scope
of the revisional jurisdiction of the High Court, this Court
has laid down the following: (SCC pp. 454-55, para 5)“5. … In its revisional jurisdiction, the High Court can
call for and examine the record of any proceedings to
satisfy itself as to the correctness, legality or proprietyof any finding, sentence or order. In other words, the
jurisdiction is one of supervisory jurisdiction exercised
by the High Court for correcting a miscarriage of
justice. But the said revisional power cannot beequated with the power of an appellate court, nor can
it be treated even as a second appellate jurisdiction.
Ordinarily, therefore, it would not be appropriate for
the High Court to reappreciate the evidence and come
to its conclusion on the same when the evidence has
already been appreciated by the Magistrate as well as
the Sessions Judge in appeal unless any glaring feature
is brought to the notice of the High Court which would
otherwise tantamount to a gross miscarriage of
justice. On scrutinising the impugned judgment of the
High Court from the aforesaid standpoint, we have no::: Downloaded on – 14/07/2025 21:22:00 :::CIS
17
2025:HHC:22617hesitation in concluding that the High Court exceeded
its jurisdiction in interfering with the conviction of the
respondent by reappreciating the oral evidence. …”
.
13. Another judgment which has also been referred to and
relied on by the High Court is the judgment of this Court
in Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao
Phalke [Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao
Phalke, (2015) 3 SCC 123: (2015) 2 SCC (Cri) 19]. This Court
held that the High Court, in the exercise of revisional
jurisdiction, shall not interfere with the order of the
Magistrate unless it is perverse or wholly unreasonable or
there is non-consideration of any relevant material, the
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 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.
17. 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 of
perversity, upset concurrent factual findings. It is not forthe 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 [SouthernSales & 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 firstquestion is, therefore, in the negative.”
18. The present revision has to be decided as per the
parameters laid down by the Hon’ble Supreme Court.
19. The accused admitted while appearing as DW2 that
the cheque (Ex.C2/CW1) was issued and filled out by him in his
handwriting. 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
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presume that it was issued in discharge of legal liability and the
burden would shift upon the accused to rebut the presumption.
.
It was observed: –
“8. Once signatures on the cheque are not disputed, the
plea with regard to the cheque having not been issued
towards discharge of lawful liability, rightly came to be
rejected by learned Courts below. Reliance is placed upon
Hiten P. Dalal v. Bartender Nath Bannerji, 2001 (6) SCC 16,wherein it has been held as under:
“The words ‘unless the contrary is proved’ which
occur in this provision make it clear that the
presumption has to be rebutted by ‘proof’ and notby a bare explanation which is merely plausible. A
fact is said to be proved when its existence is
directly established or when, upon the material
before it, the Court finds its existence to be so
probable that a reasonable man would act on thesupposition that it exists. Unless, therefore, the
explanation is supported by proof, the presumption
created by the provision cannot be said to berebutted……”
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.
20. 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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21. 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.”
22. 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
came to be dishonoured on the ground of “insufficient::: Downloaded on – 14/07/2025 21:22:00 :::CIS
21
2025:HHC:22617funds” 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
complainant to prove the debt or liability, without::: Downloaded on – 14/07/2025 21:22:00 :::CIS
22
2025:HHC:22617appreciating 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.”
23. 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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2025:HHC:22617
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 – 14/07/2025 21:22:00 :::CIS
25
2025:HHC:22617whether 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.”
24. 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,
which has also been adverted to in Basalingappa::: Downloaded on – 14/07/2025 21:22:00 :::CIS
27
2025:HHC:22617[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…”
25. 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.”
26. This position was reiterated in Rajesh Jain v. Ajay
Singh, (2023) 10 SCC 148: 2023 SCC OnLine SC 1275, wherein it was
observed at page 161:
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33. The NI Act provides for two presumptions: Section 118
and Section 139. Section 118 of the Act inter alia directs
that it shall be presumed until the contrary is proved that
every negotiable instrument was made or drawn for.
consideration. Section 139 of the Act stipulates that
“unless the contrary is proved, it shall be presumed that
the holder of the cheque received the cheque for the
discharge of, whole or part of any debt or liability”. It will
be seen that the “presumed fact” directly relates to one of
the crucial ingredients necessary to sustain a conviction
under Section 138. [The rules discussed hereinbelow are
common to both the presumptions under Section 139 and
Section 118 and are hence not repeated–reference to one
can be taken as reference to another]
34. Section 139 of the NI Act, which takes the form of a
“shall presume” clause, is illustrative of a presumption of
law. Because Section 139 requires that the Court “shall
presume” the fact stated therein, it is obligatory for the
Court to raise this presumption in every case where the
factual basis for the raising of the presumption had been
established. But this does not preclude the person against
whom the presumption is drawn from rebutting it and
proving the contrary, as is clear from the use of the
phrase “unless the contrary is proved”.
35. The Court will necessarily presume that the cheque
had been issued towards the discharge of a legally
enforceable debt/liability in two circumstances. Firstly,
when the drawer of the cheque admits issuance/execution
of the cheque and secondly, in the event where the
complainant proves that the cheque was issued/executed
in his favour by the drawer. The circumstances set out
above form the fact(s) which bring about the activation of
the presumptive clause. [Bharat Barrel & Drum Mfg.
Co. v. Amin Chand Payrelal [Bharat Barrel & Drum Mfg.
Co. v. Amin Chand Payrelal, (1999) 3 SCC 35]]
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
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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]]
27. Therefore, the Court has to start with the
.
presumption that the cheque was issued in discharge of the legal
liability, and the burden is upon the accused to rebut the
presumption by cross-examining the complainant and his
witnesses or by leading the evidence.
28.
The accused appeared as DW2 and stated that he had
taken ₹5.00 lacs as a loan from the complainant. He returned
₹50,000/- through a cheque dated 1.11.2018 and ₹4,50,000/- by
another cheque dated 13.9.2019. He had handed over both the
cheques to the complainant at his home without any name
because the complainant stated that he had no account in the
State Bank of India. He had paid ₹50,000/- in cash to the
complainant, and he was not liable to pay any amount to the
complainant.
29. He admitted in his cross-examination that he had
demanded ₹5,50,000/- from the complainant on 31.7.2018 and
the complainant advanced an amount of ₹5,50,000/- to him. He
admitted that he had issued a cheque to return the money, which
was filled out by him in his handwriting.
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30. He has not provided any explanation as to why he
had handed over a cheque (Ex.C2/CW1) to the complainant on
.
16.9.2019 when he had returned the amount on 1.11.2018 and
13.9.2019. He has not even stated that he had handed over a
blank cheque to the complainant, which was misused by him. He
was quite specific in saying that he had filled in the cheque and
signed it. Thus, the issuance of a cheque on 16.9.2019 for
₹5,50,000/- will make his version doubtful that the payment
made by him in the account of the complainant’s son was to
discharge the liability towards the complainant.
31. The accused admitted in his cross-examination that
he sells/purchases apples and runs an agency of apples. He
denied that he had taken the apple crop from Ravinder, and the
money was paid by him towards the cost of the apples.
32. Parvinder (CW2) stated that he has an ancestral
orchard at Sharog. The accused purchased 50 boxes of apple on
the roadside in September 2018 for @₹1,000/- per box.
₹50,000/- was paid as their cost. The accused purchased 450
boxes of apple in September 2019, and he paid ₹4,50,000/-
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towards their cost. He denied that the cheques were handed over
to the complainant and were deposited in his account.
.
33. The statement of this witness is corroborated by the
statement of the accused that the accused is a seller/purchaser
of the apple. The payments made in November 2018 and
September 2019, corroborates the version of complainant’s son
Pavinder that the payments were made regarding the cost of the
apple. The complainant had advanced the loan to the accused on
31.7.2018, and there was no occasion for the accused to deposit
₹50,000/- in November, 2018 for the repayment of this amount.
34. The admission made by the accused that he is
running an agency for Apple shows that the accused is a
business person. He would not hand over the blank cheque to the
complainant because the complainant did not have any account
in the State Bank of India. He had taken the money using a
cheque from the complainant; he would not have trusted the
complainant by handing over blank cheques to him, especially
when he had handed over the cheque subsequently to the
complainant after filling and signing them. Therefore, both the
learned Courts below had rightly rejected the defence taken by
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the accused that the money was paid by depositing ₹5.00 lacs in
the account of the complainant’s son.
.
35. The accused did not dispute in his statement on oath
that he had taken a loan of ₹5,50,000/-. Learned Appellate Court
had rightly pointed out that the accused had denied this fact in
his statement recorded under Section 313 of Cr.P.C., which shows
that his credibility is suspect. Further, the accused had taken a
defence in an application under Section 145(2) of the NI Act that
the cheque was misused by the complainant. This shows that the
accused was taking different defences at different points of time
which would make it difficult to place reliance upon his version.
Thus, there is no infirmity in the judgments of the learned
Courts below while rejecting the version of the accused.
36. The complainant stated that the cheque was
dishonoured with an endorsement ‘funds insufficient’. This was
duly proved by the memo of dishonour (Ex.C3/CW1) in which the
reason of dishonour was mentioned as ‘funds insufficient’. It
was laid down by the Hon’ble Supreme Court in Mandvi
Cooperative Bank Ltd. v. Nimesh B. Thakore, (2010) 3 SCC 83:
(2010) 1 SCC (Civ) 625: (2010) 2 SCC (Cri) 1: 2010 SCC OnLine SC 155
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34
2025:HHC:22617that the memo issued by the Bank is presumed to be correct and
the burden is upon the accused to rebut the presumption. It was
.
observed at page 95:
24. Section 146, making a major departure from the
principles of the Evidence Act, provides that the bank’s
slip or memo with the official mark showing that the
cheque was dishonoured would, by itself, give rise to the
presumption of dishonour of the cheque, unless and untilthat fact was disproved. Section 147 makes the offences
punishable under the Act compoundable.
37. 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’
38. The complainant stated that he had issued a notice to
the accused asking him to pay the amount within 15 days of the
date of receipt. The notice was returned unclaimed. The
registered cover (Ex.C6/CW1) reads that the addressee was not
available at home; hence, the letter was returned to the sender.
It was laid down by the Hon’ble Supreme Court of India in C.C.
Allavi Haji vs. Pala Pelly Mohd. 2007(6) SCC 555, that when a
notice is returned unclaimed, it is deemed to be served. It was
observed:
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“8. Since in Bhaskaran‘s case (supra), the notice issued in
terms of Clause (b) had been returned unclaimed and not
as refused, the Court, posed the question: “Will there be
any significant difference between the two so far as the.
presumption of service is concerned?” It was observed
that though Section 138 of the Act does not require that
the notice should be given only by “post”, yet in a case
where the sender has dispatched the notice by post with
the correct address written on it, the principle
incorporated in Section 27 of the General Clauses Act,
1897 (for short ‘G.C. Act‘) could profitably be imported in
such a case. It was held that in this situation service of
notice is deemed to have been effected on the sendee
unless he proves that it was not really served and that he
was not responsible for such non-service.”
39. This position was reiterated in Priyanka Kumari vs.
Shailendra Kumar (13.10.2023- SC Order): MANU/ SCOR/ 133284/
2023 wherein it was observed:
“As it was held by the Hon’ble Supreme Court in K.
Bhaskaran Vs. Sankaran Vaidhyan Balan and Another,(1999) 7 Supreme Court Cases 510, that when notice is
returned as ‘unclaimed’, it shall be deemed to be dulyserved upon the addressee, and it is a proper service of
notice. In the case of Ajeet Seeds Limited Vs. K. GopalaKrishnaiah (2014) 12 SCC 685 (2014), the Hon’ble Court,
while interpreting Section 27 of the General Clauses Act
1897 and also Section 114 of the Evidence Act 1872, held as
under: –
“Section 114 of the Evidence Act, 1872 enables the
court to presume that in the common course of
natural events, the communication sent by post
would have been delivered at the address of the
addressee. Further, Section 27 of the General
Clauses Act, 1897 gives rise to a presumption that
service of notice has been effected when it is sent to::: Downloaded on – 14/07/2025 21:22:00 :::CIS
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2025:HHC:22617the correct address by registered post. It is not
necessary to aver in the complaint that in spite of
the return of the notice unserved, it is deemed to
have been served or that the addressee is deemed to.
have knowledge of the notice. Unless and until the
contrary is proved by the addressee, service of
notice is deemed to have been effected at the time atwhich the letter would have been delivered in the
ordinary course of business.”
40. In the present case, the accused has not proved that
he was not responsible for non-service, and the learned Courts
below had rightly held that the notice was duly served upon the
accused.
41. Therefore, it was duly proved that the accused had
issued a cheque in favour of the complainant to discharge his
legal liability, which cheque was dishonoured with an
endorsement ‘insufficient funds’ and the accused failed to pay
the amount despite the deemed receipt of the notice of demand.
Therefore, he was rightly convicted of the commission of an
offence punishable under Section 138 of the NI Act.
42. The learned Trial Court sentenced the accused to
undergo simple imprisonment for nine months. The legislature
had introduced the offence of dishonour of cheques to instil
confidence in the public about the transactions carried out with
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cheques. 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 of the NI Act is a deterrent in nature. It
was observed at page 203:
“6. The object of Section 138 of the Negotiable Instru-
ments Act is to infuse credibility into negotiable instru-
ments, including cheques, and to encourage and promote
the use of negotiable instruments, including cheques, in
financial transactions. The penal provision of Section 138of the Negotiable Instruments Act is intended to be a de-
terrent to callous issuance of negotiable instruments suchas cheques without serious intention to honour the prom-
ise implicit in the issuance of the same.”
43. Therefore, the imprisonment of nine months cannot
be said to be excessive.
44. Learned Trial Court imposed a fine/compensation of
₹7.00 lacs on 19.3.2024. The cheque of ₹5,50,000/- was issued
on 16.9.2019. Thus, the sentence was imposed after more than
four years of the date of the issuance of the cheque. The
complainant lost interest on the amount which he would have
obtained by depositing the money 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
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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 princi-
ples that the object of Chapter XVII of NIA is not only
punitive but also compensatory and restitutive. The pro-
visions of NIA envision a single window for criminal lia-
bility 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 to-
wards awarding compensation, and unless there exist
special circumstances, the courts should uniformly levy
fines up to twice the cheque amount along with simple in-
terest @ 9% p.a. [R. Vijayan v. Baby, (2012) 1 SCC 260, para
20: (2012) 1 SCC (Civ) 79: (2012) 1 SCC (Cri) 520]”
45. The interest on an amount of ₹ 5,50,000/- for four
years @ 9 % p.a. would be ₹ 1,98,000. The learned Trial Court
had awarded an amount of ₹1,50,000/- as compensation on the
principal amount of ₹5,50,000/-, which cannot be said to be
excessive.
46. It was submitted that the learned Trial Court erred in
imposing the sentence in default of the payment of
compensation. This submission is not acceptable. It was laid
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down by the Hon’ble Supreme Court in K.A. Abbas v. Sabu Joseph,
(2010) 6 SCC 230: (2010) 3 SCC (Civ) 744: (2010) 3 SCC (Cri) 127:
.
2010 SCC OnLine SC 612 that the Courts can impose a sentence of
imprisonment in default of payment of compensation. It was
observed at page 237:
“20. Moving over to the question, whether a default
sentence can be imposed on default of payment ofcompensation, this Court in Hari Singh v. Sukhbir
Singh [(1988) 4 SCC 551: 1988 SCC (Cri) 984: AIR 1988 SC
2127] and in Balraj v. State of U.P. [(1994) 4 SCC 29: 1994SCC (Cri) 823: AIR 1995 SC 1935], has held that it was open
to all the courts in India to impose a sentence on defaultof payment of compensation under sub-section (3) of
Section 357. In Hari Singh v. Sukhbir Singh [(1988) 4 SCC
551: 1988 SCC (Cri) 984: AIR 1988 SC 2127], this Court hasnoticed certain factors which are required to be taken into
consideration while passing an order under the section:
(SCC p. 558, para 11)“11. The payment by way of compensation must,
however, be reasonable. What is reasonable maydepend upon the facts and circumstances of each
case. The quantum of compensation may be
determined by taking into account the nature of thecrime, the justness of the claim by the victim and
the ability of the accused to pay. If there is more
than one accused, they may be asked to pay on
equal terms unless their capacity to pay varies
considerably. The payment may also vary
depending on the acts of each accused. A reasonable
period for payment of compensation, if necessary,
by instalments, may also be given. The court may
enforce the order by imposing a sentence in
default.”
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21. This position also finds support in R. v. Oliver John
Huish [(1985) 7 Cri App R (S) 272]. The Lord Justice Croom
Johnson, speaking for the Bench, has observed:
.
“When compensation orders may be made, the
most careful examination is required. Documents
should be obtained, and evidence, either on
affidavit or orally, should be given. The proceedingsshould, if necessary, be adjourned to arrive at the
true state of the defendant’s affairs.
Very often, a compensation order is made and a
very light sentence of imprisonment is imposed,because the court recognises that if the defendant is
to have an opportunity of paying the compensation,
he must be enabled to earn the money with whichto do so. The result is therefore an extremely light
sentence of imprisonment. If the compensationorder turns out to be virtually worthless, the
defendant has got off with a very light sentence of
imprisonment as well as no order of compensation.
In other words, generally speaking, he has got off
with everything.”
22. The law laid down in Hari Singh v. Sukhbir
Singh [(1988) 4 SCC 551: 1988 SCC (Cri) 984: AIR 1988 SC
2127] was reiterated by this Court in Suganthi Suresh
Kumar v. Jagdeeshan [(2002) 2 SCC 420: 2002 SCC (Cri)
344]. The Court observed: (SCC pp. 424-25, paras 5 & 10)
“5. In the said decision, this Court reminded all
concerned that it is well to remember the emphasis
laid on the need for making liberal use of Section
357(3) of the Code. This was observed by reference
to a decision of this Court in Hari Singh v. Sukhbir
Singh [(1988) 4 SCC 551: 1988 SCC (Cri) 984: AIR 1988
SC 2127]. In the said decision, this Court held as
follows: (SCC p. 558, para 11)
’11. … The quantum of compensation may be
determined by taking into account the nature of the
crime, the justness of the claim by the victim and
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the ability of the accused to pay. If there is more
than one accused, they may be asked to pay on
equal terms unless their capacity to pay varies
considerably. The payment may also vary
.
depending on the acts of each accused. A reasonable
period for payment of compensation, if necessary,
by instalments, may also be given. The court may
enforce the order by imposing a sentence in default.’
(emphasis in original)
***
10. That apart, Section 431 of the Code has only
prescribed that any money (other than fine)
payable by an order made under the Code shall be
recoverable ‘as if it were fine’. Two modes of
recovery of the fine have been indicated in Section
421(1) of the Code. The proviso to the sub-section
says that if the sentence directs that in default of
payment of the fine, the offender shall be
imprisoned, and if such offender has undergone the
whole of such imprisonment in default, no court
shall issue such warrant for the levy of the
amount.”
The Court further held: (Jagdeeshan case [(2002) 2 SCC
420: 2002 SCC (Cri) 344], SCC p. 425, para 11)
“11. When this Court pronounced in Hari
Singh v. Sukhbir Singh [(1988) 4 SCC 551: 1988 SCC
(Cri) 984: AIR 1988 SC 2127] that a court may enforce
an order to pay compensation ‘by imposing a
sentence in default’ it is open to all courts in India
to follow the said course. The said legal position
would continue to hold good until it is overruled by
a larger Bench of this Court. Hence learned Single
Judge of the High Court of Kerala has committed an
impropriety by expressing that the said legal
direction of this Court should not be followed by the
subordinate courts in Kerala. We express our
disapproval of the course adopted by the said Judge
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in Rajendran v. Jose [(2001) 3 KLT 431]. It is
unfortunate that when the Sessions Judge has
correctly done a course in accordance with the
discipline, the Single Judge of the High Court has
.
incorrectly reversed it.”
23. In order to set at rest the divergent opinion expressed
in Ahammedkutty case [(2009) 6 SCC 660 : (2009) 3 SCC
(Cri) 302], this Court in Vijayan v. Sadanandan K. [(2009) 6
SCC 652 : (2009) 3 SCC (Cri) 296], after noticing the
provision of Sections 421 and 431 CrPC, which dealt with
mode of recovery of fine and Section 64 IPC, which
empowered the courts to provide for a sentence of
imprisonment on default of payment of fine, the Court
stated: (Vijayan case [(2009) 6 SCC 652 : (2009) 3 SCC (Cri)
296], SCC p. 658, para 24)
“24. We have carefully considered the submissions
made on behalf of the respective parties. Since a
decision on the question raised in this petition is
still in a nebulous state, there appear to be two
views as to whether a default sentence of
imprisonment can be imposed in cases where
compensation is awarded to the complainant under
Section 357(3) CrPC. As pointed out by Mr Basant
in Dilip S. Dahanukar case [(2007) 6 SCC 528 : (2007)
3 SCC (Cri) 209], the distinction between a fine and
compensation as understood under Section 357(1)
(b) and Section 357(3) CrPC had been explained, but
the question as to whether a default sentence clause
could be made in respect of compensation payable
under Section 357(3) CrPC, which is central to the
decision in this case, had not been considered.”
The Court further held: (Vijayan case [(2009) 6 SCC 652:
(2009) 3 SCC (Cri) 296], SCC p. 659, paras 31-32)
“31. The provisions of Sections 357(3) and 431 CrPC,
when read with Section 64 IPC, empower the court,
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2025:HHC:22617compensation, to also include a default sentence in
case of non-payment of the same.
32. The observations made by this Court in Hari
.
Singh case [(1988) 4 SCC 551: 1988 SCC (Cri) 984: AIR
1988 SC 2127] are as important today as they were
when they were made and if, as submitted by Dr.
Pillay, recourse can only be had to Section 421 CrPC
for enforcing the same, the very object of sub-
section (3) of Section 357 would be frustrated and
the relief contemplated therein would be rendered
somewhat illusory.”
24. In Shantilal v. State of M.P. [(2007) 11 SCC 243: (2008) 1
SCC (Cri) 1], it is stated that the sentence of imprisonment
for default in payment of a fine or compensation is
different from a normal sentence of imprisonment. The
Court also delved into the factors to be taken into
consideration while passing an order under Section
357(3) CrPC. This Court stated: (SCC pp. 255-56, para 31)
“31. … The term of imprisonment in default of
payment of a fine is not a sentence. It is a penalty
which a person incurs on account of non-payment
of a fine. The sentence is something which an
offender must undergo unless it is set aside or
remitted in part or in whole, either in appeal or in
revision or other appropriate judicial proceedings,
or ‘otherwise’. A term of imprisonment ordered in
default of payment of a fine stands on a different
footing. A person is required to undergo
imprisonment either because he is unable to pay
the amount of fine or refuse to pay such amount.
He, therefore, can always avoid undergoing
imprisonment in default of payment of the fine by
paying such amount. It is, therefore, not only
the power but the duty of the court to keep in view
the nature of the offence, circumstances under
which it was committed, the position of the
offender and other relevant considerations before
ordering the offender to suffer imprisonment in
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default of payment of a fine.” (emphasis in
original)
25. In Kuldip Kaur v. Surinder Singh [(1989) 1 SCC 405: 1989
.
SCC (Cri) 171: AIR 1989 SC 232], in the context of Section
125 CrPC observed that sentencing a person to jail is
sometimes a mode of enforcement. In this regard, the
Court stated: (SCC p. 409, para 6)
“6. A distinction has to be drawn between a mode of
enforcing recovery on the one hand and effecting
actual recovery of the amount of monthly
allowance which has fallen in arrears on the other.
Sentencing a person to jail is a ‘mode of
enforcement’. It is not a ‘mode of satisfaction’ of the
liability. The liability can be satisfied only by
making actual payment of the arrears. The whole
purpose of sending to jail is to oblige a person liable
to pay the monthly allowance who refuses to
comply with the order without sufficient cause, to
obey the order and to make the payment. The
purpose of sending him to jail is not to wipe out the
liability which he has refused to discharge. It
should also be realised that a person ordered to pay
a monthly allowance can be sent to jail only if he
fails to pay the monthly allowance ‘without
sufficient cause’ to comply with the order. It would
indeed be strange to hold that a person who,
without reasonable cause, refuses to comply with
the order of the court to maintain his neglected
wife or child would be absolved of his liability
merely because he prefers to go to jail. A sentence
of jail is no substitute for the recovery of the
amount of monthly allowance which has fallen in
arrears.”
26. From the above line of cases, it becomes very clear
that a sentence of imprisonment can be granted for
default in payment of compensation awarded under
Section 357(3) CrPC. The whole purpose of the provision
is to accommodate the interests of the victims in the
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criminal justice system. Sometimes the situation becomes
such that there is no purpose served by keeping a person
behind bars. Instead, directing the accused to pay an
amount of compensation to the victim or affected party
.
can ensure the delivery of total justice. Therefore, this
grant of compensation is sometimes in lieu of sending a
person behind bars or in addition to a very light sentence
of imprisonment. Hence, in default of payment of this
compensation, there must be a just recourse. Not
imposing a sentence of imprisonment would mean
allowing the accused to get away without paying the
compensation, and imposing another fine would be
impractical, as it would mean imposing a fine upon
another fine and therefore would not ensure proper
enforcement of the order of compensation. While passing
an order under Section 357(3), it is imperative for the
courts to look at the ability and the capacity of the
accused to pay the same amount as has been laid down by
the cases above; otherwise, the very purpose of granting
an order of compensation would stand defeated.
47. This position was reiterated in R. Mohan v. A.K. Vijaya
Kumar, (2012) 8 SCC 721: (2012) 4 SCC (Civ) 585: (2012) 3 SCC (Cri)
1013: 2012 SCC OnLine SC 486 wherein it was observed at page
729:
29. The idea behind directing the accused to pay
compensation to the complainant is to give him
immediate relief so as to alleviate his grievance. In terms
of Section 357(3), compensation is awarded for the loss or
injury suffered by the person due to the act of the accused
for which he is sentenced. If merely an order directing
compensation is passed, it would be totally ineffective. It
could be an order without any deterrence or apprehension
of immediate adverse consequences in case of its non-
observance. The whole purpose of giving relief to the
complainant under Section 357(3) of the Code would be
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frustrated if he is driven to take recourse to Section 421 of
the Code. An order under Section 357(3) must have the
potential to secure its observance. Deterrence can only be
infused into the order by providing for a default sentence.
.
If Section 421 of the Code puts compensation ordered to
be paid by the court on a par with the fine so far as the
mode of recovery is concerned, then there is no reason
why the court cannot impose a sentence in default of
payment of compensation as it can be done in case of
default in payment of fine under Section 64 IPC. It is
obvious that in view of this, in Vijayan [(2009) 6 SCC 652:
(2009) 3 SCC (Cri) 296], this Court stated that the
abovementioned provisions enabled the court to impose a
sentence in default of payment of compensation and
rejected the submission that the recourse can only be hadto Section 421 of the Code for enforcing the order of
compensation. Pertinently, it was made clear that
observations made by this Court in Hari Singh [(1988) 4
SCC 551: 1988 SCC (Cri) 984] are as important today as they
were when they were made. The conclusion, therefore, isthat the order to pay compensation may be enforced by
awarding a sentence in default.
30. In view of the above, we find no illegality in the order
passed by the learned Magistrate and confirmed by the
Sessions Court in awarding a sentence in default of
payment of compensation. The High Court was in error in
setting aside the sentence imposed in default of payment
of compensation.
48. Thus, there is no infirmity in imposing a sentence of
imprisonment in case of default in the payment of
compensation.
49. No other point was urged.
50. In view of the above, the present revision fails, and
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the same is dismissed.
51. Records of the learned Courts below be sent back
.
forthwith, along with a copy of this judgment.
(Rakesh Kainthla)
Judge
14th July, 2025
(Chander)
r to
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