Himachal Pradesh High Court
Reserved On: 19.08.2025 vs Yogesh Kumar & Another on 28 August, 2025
2025:HHC:29058
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No.17 of 2025
Reserved on: 19.08.2025
.
Date of Decision: 28.08.2025
Manish Gautam ...Petitioner
Versus
Yogesh Kumar & another ...Respondents
Coram
Hon’ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 No
For the Petitioner : Mr. Naveen Kumar Bhardwaj,
Advocate.
For the Respondents : Ms. Suchitra Sen, Advocate, for
respondent No.1
Mr. Ajit Sharma, Deputy Advocate
General, for respondent No.2.
Rakesh Kainthla, Judge
The present revision is directed against the judgment
dated 03.07.2024, passed by learned Sessions Judge, Mandi,
District Mandi, H.P. (learned Appellate Court) vide which the
appeal filed by the petitioner (accused before learned Trial Court)
was dismissed and the judgment of conviction and order of
sentence dated 21.12.2023, passed by learned Judicial Magistrate,
1
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
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First Class, Court No.III, Mandi, District Mandi, H.P. (learned Trial
Court), were upheld. (Parties shall hereinafter be referred to in the
.
same manner as they were arrayed before the learned Trial Court for
convenience.)
2. Briefly stated, the facts giving rise to the present
petition are that the complainant filed a complaint against the
accused before the learned Trial Court for the commission of an
offence punishable
under Section 138 of the
Instruments Act (in short, ‘NI Act‘). It was asserted that the
r Negotiable
complainant is the proprietor of Mittal Traders, Ner Chowk. He
had supplied articles to the accused worth ₹90,000/- on credit
basis. The accused issued a cheque for ₹90,000/- drawn on
Punjab National Bank, Ner Chowk, Mandi, to discharge his
liability. The complainant presented the cheque to Punjab
National Bank, Ner Chowk, on 26.03.2013; however, the cheque
was dishonoured by the bank on the same day with an
endorsement ‘funds insufficient’. The complainant issued a legal
notice dated 17.04.2013, which was duly served upon the accused;
however, the accused failed to repay the amount despite receipt of
a valid notice of demand. Therefore, a complaint was filed before
the learned Trial Court for taking action as per law.
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3. The learned Trial Court found sufficient reasons to
summon the accused. When the accused appeared, a notice of
.
accusation was put to him for the commission of an offence
punishable under Section 138 of the NI Act, to which he pleaded
not guilty and claimed to be tried.
4. The complainant examined himself (CW1) to prove his
complaint.
5.
The accused, in his statement recorded under Section
313 of CrPC, asserted that he and the complainant were on friendly
terms. The complainant used to visit his house. He had kept the
cheque in the house. The cheque bore his signature. There was
some dispute between the family of the complainant and the
accused. He was not liable to make payment. He examined himself
(DW-1) to prove his defence.
6. Learned Trial Court held that the accused admitted his
signatures on the cheque; therefore, a presumption arose that the
cheque was issued for consideration to discharge the liability. The
burden shifted upon the accused to rebut the presumption. The
evidence of the accused was not sufficient to rebut the
presumption. The cheque was dishonoured with an endorsement
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‘funds insufficient’. The notice was duly served upon the accused,
but he failed to repay the amount. Hence, the accused was
.
convicted for the commission of an offence punishable under
Section 138 of the NI Act and was sentenced to undergo simple
imprisonment for two months, pay a fine of ₹1,60,000/- and in
default of payment of fine, to undergo further simple
imprisonment for 15 days. It was also ordered that the fine
7. to
amount shall be given to the complainant as compensation.
Feeling aggrieved and dissatisfied with the judgment
and order passed by the learned Trial Court, the accused filed an
appeal, which was decided by the learned Sessions Judge, Mandi
(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, a presumption arose
that the cheque was issued for consideration to discharge the
liability. The statement of the accused was not sufficient to rebut
the presumption. He claimed that he had paid the money to the
complainant; however, he failed to produce his account statement
to substantiate this plea. The cheque was dishonoured with an
endorsement ‘funds insufficient’. The notice was duly served upon
the accused. All the ingredients of the commission of an offence
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punishable under Section 138 of the NI Act were satisfied. The
sentence and compensation awarded by the learned Trial Court
.
were not excessive; 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 properly
appreciate the material placed before them. The notice was not
served upon the accused, and the ingredients of Section 138 of the
N.I. Act were not satisfied. The complaint was filed beyond the
period of limitation; therefore, it was prayed that the present
petition be allowed and the judgments and order passed by the
learned Courts below be set aside.
9. I have heard Mr. Naveen K. Bhardwaj, learned counsel
for the petitioner/accused, Ms. Suchitra Sen, learned counsel for
respondent No.1/complainant and Mr. Ajit Sharma, learned Deputy
Advocate General, for respondent No.2/State.
10. Mr. Naveen K. Bhardwaj, learned counsel for the
petitioner, submitted that the complainant did not produce any
bill books or any other documents showing that any material was
handed over to the accused. The statement of accused that he used
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to receive the payment on behalf of the complainant and had
issued the security cheques was highly probable. Learned Courts
.
below erred in rejecting this defence. There was no proof of the
service of the notice. The ingredients of Section 138 of the NI Act
were not satisfied. The sentence imposed by the learned Trial
Court is excessive; therefore, he prayed that the present revision
be allowed and the judgments and order passed by the learned
Courts below be set aside.
11. to
Ms. Suchitra Sen, learned counsel for respondent No.1
and Mr. Ajit Sharma, Deputy Advocate General for respondent
No.2, supported the judgments and order passed by the learned
Courts below and submitted that no interference is required with
them.
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 the revisional court is
not an appellate court and it can only rectify the patent defect,
errors of jurisdiction or the law. It was observed at page 207: –
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2025:HHC:29058“10. Before adverting to the merits of the contentions, at
the outset, it is apt to mention that there are concurrent
findings of conviction arrived at by two courts after a
detailed appreciation of the material and evidence brought.
on record. The High Court in criminal revision against
conviction is not supposed to exercise the jurisdiction like
the appellate court, and the scope of interference in revision
is extremely narrow. Section 397 of the Criminal Procedure
Code (in short “CrPC“) vests jurisdiction to satisfy itself or
himself as to the correctness, legality or propriety of any
finding, sentence or order, recorded or passed, and as to the
regularity of any proceedings of such inferior court. The
object of the provision is to set right a patent defect or an
error of jurisdiction or law. There has to be a well-founded
error which is to be determined on the merits of individual
cases. It is also well settled that while considering the same,
the Revisional Court does not dwell at length upon the facts
and evidence of the case to reverse those findings.
14. This position was reiterated in State of Gujarat v.
Dilipsinh Kishorsinh Rao, 2023 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 tocall 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 thisprovision is to set right a patent defect or an error of
jurisdiction or law or the perversity which has crept into
such proceedings. It would be apposite to refer to the
judgment of this court in Amit Kapoor v. Ramesh
Chandra, (2012) 9 SCC 460, where the scope of Section 397
has been considered and succinctly explained as under:
“12. Section 397 of the Code vests the court with the
power to call for and examine the records of an
inferior court for the purposes of satisfying itself as to::: Downloaded on – 28/08/2025 21:27:44 :::CIS
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2025:HHC:29058the legality and regularity of any proceedings or order
made in a case. The object of this provision is to set
right a patent defect or an error of jurisdiction or law.
There has to be a well-founded error, and it may not.
be appropriate for the court to scrutinise the orders,
which, upon the face of it, bear a token of careful
consideration and appear to be in accordance with the
law. If one looks into the various judgments of thisCourt, it emerges that the revisional jurisdiction can
be invoked where the decisions under challenge are
grossly erroneous, there is no compliance with the
provisions of law, the finding recorded is based on noevidence, material evidence is ignored, or judicial
discretion is exercised arbitrarily or perversely. These
are not exhaustive classes but are merely indicative.
Each case would have to be determined on its own
rmerits.
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 orinterlocutory 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 thequestion as to whether the charge has been framed properly
and in accordance with law in a given case, it may bereluctant to interfere in the exercise of its revisional
jurisdiction unless the case substantially falls within the
categories aforestated. Even the framing of a charge is amuch-advanced stage in the proceedings under the CrPC.”
15. It was held in Kishan Rao v. Shankargouda, (2018) 8 SCC
165: (2018) 3 SCC (Cri) 544: (2018) 4 SCC (Civ) 37: 2018 SCC OnLine
SC 651 that it is impermissible for the High Court to reappreciate
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the evidence and come to its conclusions in the absence of any
perversity. It was observed at 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 otherwords, the jurisdiction is one of supervisory jurisdiction
exercised by the High Court for correcting a miscarriage
of justice. But the said revisional power cannot be
equated with the power of an appellate court, nor can it
be treated even as a second appellate jurisdiction.
Ordinarily, therefore, it would not be appropriate for the
High Court to reappreciate the evidence and come to its
own conclusion on the same when the evidence hasalready been appreciated by the Magistrate as well as the
Sessions Judge in appeal unless any glaring feature isbrought to the notice of the High Court which would
otherwise tantamount to a gross miscarriage of justice.
On scrutinising the impugned judgment of the HighCourt from the aforesaid standpoint, we have no
hesitation in coming to the conclusion that the High
Court exceeded its jurisdiction in interfering with the
conviction of the respondent by reappreciating the oral
evidence. …”
13. Another judgment which has also been referred to and
relied on by the High Court is the judgment of this Court
in Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao
Phalke [Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao
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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 a 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.
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16. This position was reiterated in Bir Singh v. Mukesh
Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ)
.
309: 2019 SCC OnLine SC 13, wherein it was observed at page 205:
“16. It is well settled that in exercise of revisional
jurisdiction under Section 482 of the Criminal ProcedureCode, the High Court does not, in the absence of perversity,
upset concurrent factual findings. It is not for the Revisional
Court to re-analyse and re-interpret the evidence on record.
17. As held by this Court in Southern Sales &
Services v. Sauermilch Design and Handels GmbH [Southern
Sales & Services v. Sauermilch Design and Handels GmbH,
(2008) 14 SCC 457], it is a well-established principle of law
that the Revisional Court will not interfere even if a wrongorder is passed by a court having jurisdiction, in the absence
of a jurisdictional error. The answer to the first question is,
therefore, in the negative.”
17. The present revision has to be decided as per the
parameters laid down by the Hon’ble Supreme Court.
18. The accused admitted in his statement recorded under
Section 313 of Cr.P.C. that the cheque bears his signature. He
admitted while appearing as DW-1 that the Cheque (Ext.CW-1/B)
was signed by him, and it pertained to his account. It was laid
down by the Hon’ble Supreme Court in APS Forex Services (P) Ltd. v.
Shakti International Fashion Linkers(2020) 12 SCC 724, that when
the issuance of a cheque and signature on the cheque are not
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disputed, the presumption would arise that the cheque was issued
in discharge of the legal liability. It was observed: –
.
“7.2. What is emerging from the material on record is that
the issuance of a cheque by the accused and the signature of
the accused on the said cheque are not disputed by the
accused. The accused has also not disputed that there weretransactions 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 ofthe 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 accusedthat the cheque was given by way of security. Be that as it
may, however, it is required to be noted that earlier the
accused issued cheques which came to be dishonoured on
the ground of “insufficient funds” and thereafter a fresh
consolidated cheque of ₹9,55,574 was given which has beenreturned unpaid on the ground of “STOP PAYMENT”.
Therefore, the cheque in question was issued for the second
time. Therefore, once the accused has admitted the issuance
of a cheque which bears his signature, there is a
presumption that there exists a legally enforceable debt or
liability under Section 139 of the NI Act. However, such a
presumption is rebuttable in nature, and the accused is
required to lead evidence to rebut such a presumption. The
accused was required to lead evidence that the entire
amount due and payable to the complainant was paid.
9. Coming back to the facts in the present case and
considering the fact that the accused has admitted the
issuance of the cheques and his signature on the cheque and
that the cheque in question was issued for the second time
after the earlier cheques were dishonoured and that even
according to the accused some amount was due and payable,
there is a presumption under Section 139 of the NI Act that
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there exists a legally enforceable debt or liability. Of course,
such a presumption is rebuttable. However, to rebut the
presumption, the accused was required to lead evidence that
the full amount due and payable to the complainant had
.
been paid. In the present case, no such evidence has been led
by the accused. The story put forward by the accused that
the cheques were given by way of security is not believable
in the absence of further evidence to rebut the presumption,
and more particularly, the cheque in question was issued for
the second time after the earlier cheques were dishonoured.
Therefore, both the courts below have materially erred in
not properly appreciating and considering the presumption
in favour of the complainant that there exists a legally
enforceable debt or liability as per Section 139 of the NI Act.
It appears that both the learned trial court as well as the
High Court have committed an error in shifting the burden
upon the complainant to prove the debt or liability, without
appreciating the presumption under Section 139 of the NI
Act. As observed above, Section 139 of the Act is an example
of reverse onus clause and therefore, once the issuance of
the cheque has been admitted and even the signature on the
cheque has been admitted, there is always a presumption in
favour of the complainant that there exists legally
enforceable debt or liability and thereafter, it is for the
accused to rebut such presumption by leading evidence.”
19. The presumption under Section 139 of the NI Act was
explained by the Hon’ble Supreme Court in Triyambak S. Hegde v.
Sripad, (2022) 1 SCC 742: (2022) 1 SCC (Civ) 512: 2021 SCC OnLine SC
788 as under at page 747:
“12. From the facts arising in this case and the nature of the
rival contentions, the record would disclose that the
signature on the documents at Exts. P-6 and P-2 are not
disputed. Ext. P-2 is the dishonoured cheque based on
which the complaint was filed. From the evidence tendered
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2025:HHC:29058disputed the signature on the cheque. If that be the position,
as noted by the courts below, a presumption would arise
under Section 139 in favour of the appellant who was the
holder of the cheque. Section 139 of the NI Act reads as.
hereunder:
“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 naturereferred 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:
r “118. Presumptions as to negotiable instruments. —
Until the contrary is proved, the followingpresumptions shall be made:
(a) of consideration: that every negotiable
instrument was made or drawn forconsideration, and that every such instrument,
when it has been accepted, indorsed, negotiated
or transferred, was accepted, indorsed,negotiated or transferred for consideration.”
14. The above-noted provisions are explicit to the effect that
such presumption would remain until the contrary is
proved. The learned counsel for the appellant in that regard
has relied on the decision of this Court in K.
Bhaskaran v. Sankaran Vaidhyan Balan [K.
Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510: 1999
SCC (Cri) 1284] wherein it is held as hereunder: (SCC pp.
516-17, para 9)
“9. As the signature in the cheque is admitted to be
that of the accused, the presumption envisaged in
Section 118 of the Act can legally be inferred that the
cheque was made or drawn for consideration on the
date which the cheque bears. Section 139 of the Act
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enjoins the Court to presume that the holder of the
cheque received it for the discharge of any debt or
liability. The burden was on the accused to rebut the
aforesaid presumption. The trial court was not
.
persuaded to rely on the interested testimony of DW
1 to rebut the presumption. The said finding was
upheld [Sankaran Vaidhyan Balan v. K. Bhaskaran,
Criminal Appeal No. 234 of 1995, order dated 23-10-
1998 (Ker)] by the High Court. It is not now open to
the accused to contend differently on that aspect.”
15. The learned counsel for the respondent has, however,
referred to the decision of this Court
in Basalingappa v. Mudibasappa [Basalingappa v. Mudibasapp
a, (2019) 5 SCC 418: (2019) 2 SCC (Cri) 571] wherein it is held
as hereunder: (SCC pp. 432-33, paras 25-26)
“25. We having noticed the ratio laid down by this
Court in the above cases on Sections 118(a) and 139,
we now summarise the principles enumerated by this
Court in the following manner:
25.1. Once the execution of the cheque is
admitted, Section 139 of the Act mandates apresumption 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 theaccused to raise the probable defence. The
standard of proof for rebutting the presumption
is that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for
the accused to rely on evidence led by him, or
the accused can also rely on the materials
submitted by the complainant in order to raise a
probable defence. Inference of preponderance
of probabilities can be drawn not only from the
materials brought on record by the parties but
also by reference to the circumstances upon
which they rely.
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25.4. That it is not necessary for the accused to
come into the witness box in support of his
defence, Section 139 imposed an evidentiary
burden and not a persuasive burden.
.
25.5. It is not necessary for the accused to come
into the witness box to support his defence.
26. Applying the preposition of law as noted
above, in the facts of the present case, it is clear
that the signature on the cheque, having been
admitted, a presumption shall be raised under
Section 139 that the cheque was issued in
discharge of debt or liability. The question to be
looked into is as to whether any 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 the 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
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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 the
lack of knowledge of property details by PW 1 in his cross-
examination would indicate that the transaction is doubtful,
and no evidence is tendered to indicate that the amount was
paid. In such an event, it was not necessary for the
respondent to tender rebuttal evidence, but the case put
forth would be sufficient to indicate that the respondent has
successfully rebutted the presumption.
17. On the position of law, the provisions referred to in
Sections 118 and 139 of the NI Act, as also the enunciation of
law as made by this Court, need no reiteration as there is no
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.”
20. 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
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2025:HHC:29058Negotiable 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 thecontext of this provision that the theory of “probable
defence” has grown. In an earlier judgment, in fact, which
has also been adverted to in Basalingappa [Basalingappa v.
Mudibasappa, (2019) 5 SCC 418: (2019) 2 SCC (Cri) 571], thisCourt 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 theaccused is not expected to discharge an unduly high
standard of proof. It is accordingly that the principle hasdeveloped that all which the accused needs to establish is a
probable defence. As to whether a probable defence has been
established is a matter to be decided on the facts of each
case on the conspectus of evidence and circumstances thatexist…”
21. 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 chequereceived the cheque of the nature referred to in Section 138
for discharge, in whole or in part, of any debt or other
liability. Therefore, once the initial burden is discharged by
the Complainant that the cheque was issued by the accused
and the signature and the issuance of the cheque are not
disputed by the accused, in that case, the onus will shift
upon the accused to prove the contrary that the cheque was
not for any debt or other liability. The presumption under
Section 139 of the N.I. Act is a statutory presumption and::: Downloaded on – 28/08/2025 21:27:44 :::CIS
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2025:HHC:29058thereafter, 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.”
.
22. This position was reiterated in Rajesh Jain v. Ajay Singh,
(2023) 10 SCC 148: 2023 SCC OnLine SC 1275, wherein it was
observed at page 161:
33. The NI Act provides for two presumptions: Section 118
and Section 139. Section 118 of the Act inter alia directs thatit 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 holderof 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 oflaw. 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 thefactual basis for the raising of the presumption has 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
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2025:HHC:29058and 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 a presumption takes effect even in a situation where
the accused contends that a blank cheque leaf was
voluntarily signed and handed over by him to the
complainant. [Bir Singh v. Mukesh Kumar [Bir
Singh v. Mukesh Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Civ)
309: (2019) 2 SCC (Cri) 40] ]. Therefore, the mere admission
of the drawer’s signature, without admitting the execution
of the entire contents in the cheque, is now sufficient to
trigger the presumption.
37. As soon as the complainant discharges the burden to
prove that the instrument, say a cheque, was issued by the
accused for the discharge of debt, the presumptive device
under Section 139 of the Act helps shifting the burden on the
accused. The effect of the presumption, in that sense, is to
transfer the evidential burden on the accused of proving
that the cheque was not received by the Bank towards the
discharge of any liability. Until this evidential burden is
discharged by the accused, the presumed fact will have to be
taken to be true, without expecting the complainant to do
anything further.
38. John Henry Wigmore [John Henry Wigmore and the Rules
of Evidence: The Hidden Origins of Modern Law] on
Evidence states as follows:
“The peculiar effect of the presumption of law is
merely to invoke a rule of law compelling the Jury to
reach the conclusion in the absence of evidence to
the contrary from the opponent but if the opponent
does offer evidence to the contrary (sufficient to
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2025:HHC:29058the 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 Mohan [Rangappa v. Sri Mohan, (2010) 11
SCC 441: (2010) 4 SCC (Civ) 477: (2011) 1 SCC (Cri) 184: AIR
2010 SC 1898]]
23. Thus, the learned Courts below had rightly held that a
presumption would arise in the present case that the cheque was
issued for consideration in discharge of the liability.
24. It was suggested to the complainant that the amount
payable to him used to be credited in the account of the accused,
and he had taken the security cheque to ensure the repayment of
the amount. The accused stated in his statement recorded under
Section 313 of Cr.P.C. that he and the complainant were on friendly
terms. The cheque was kept by him in his house, and the accused
used to visit his home. This plea suggested that the cheque was
taken by the complainant in the absence of the accused. The
accused filed an application under Section 145(2) of the NI Act
seeking cross-examination of the complainant and his witnesses,
asserting that he had not issued any cheque nor was he to
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discharge any legal liability. Therefore, it is apparent that the
accused had taken contradictory deposes at different points in
.
time, and the learned Courts below were justified in discarding
such a contradictory defence.
25. Accused Manish Gautam (DW-1) in his examination-
in-chief stated that the complainant used to credit his payment in
his account and take cash from him. The complainant had taken
3-4 blank cheques from the accused. This is hardly any
explanation. No reason has been assigned as to why the payment
of the complainant used to be credited to the account of the
accused. The accused did not assert that the complainant does not
have his own independent account where the payment can be
credited. Further, the learned Courts below had rightly held that
the account statement was not produced by the accused to
establish this plea. Therefore, the plea taken by the accused that a
security cheque was issued by him to ensure the repayment to the
complainant was rightly rejected by the learned Courts below.
26. It was submitted that no document was produced to
show that articles were delivered to the accused. This submission
will not help the accused. It was laid down by the Hon’ble
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Surpeme Court in Uttam Ram v. Devinder Singh Hudan, (2019) 10
SCC 287: (2020) 1 SCC (Cri) 154: (2020) 1 SCC (Civ) 126: 2019 SCC
.
OnLine SC 1361, that the complainant is not supposed to prove the
existence of consideration because of the presumption contained
in Section 139 of the NI Act. It was observed:
“19. A negotiable instrument, including a cheque, carries a
presumption of consideration in terms of Section 118(a) and
under Section 139 of the Act. Sections 118(a) and 139 read asunder:
“118. Presumptions as to negotiable instruments. —
Until the contrary is proved, the following
r 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, negotiatedor transferred, was accepted, indorsed,
negotiated or transferred for consideration;
***
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.”
20. The trial court and the High Court proceeded as if the
appellant was to prove a debt before the civil court, wherein
the plaintiff is required to prove his claim on the basis of
evidence to be laid in support of his claim for the recovery of
the amount due. A dishonour of a cheque carries a statutory
presumption of consideration. The holder of the cheque in
due course is required to prove that the cheque was issued
by the accused and that when the same was presented, it
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was not honoured. Since there is a statutory presumption of
consideration, the burden is on the accused to rebut the
presumption that the cheque was issued not for any debt or
other liability.
.
21. There is the mandate of presumption of consideration in
terms of the provisions of the Act. The onus shifts to the
accused on proof of issuance of the cheque to rebut the
presumption that the cheque was issued not for the
discharge of any debt or liability in terms of Section 138 of
the Act, which reads as under:
“138. Dishonour of cheque for insufficiency, etc. of
funds in the account.–Where any cheque drawn bya person on an account maintained by him with a
banker for payment of any amount of money to
another person from out of that account for the
discharge, in whole or in part, of any debt or otherliability, is returned by the bank unpaid, either
because of the amount of money standing to the
credit of that account is insufficient to honour the
cheque or that it exceeds the amount arranged to
be paid from that account by an agreement madewith that bank, such person shall be deemed to
have committed an offence and shall, …”
22. In Kumar Exports [Kumar Exports v. Sharma Carpets,
(2009) 2 SCC 513: (2009) 1 SCC (Civ) 629: (2009) 1 SCC (Cri)
823], it was held that mere denial of the existence of debt
will not serve any purpose but the accused may adduce
evidence to rebut the presumption. This Court held as
under: (SCC pp. 520-21, para 20)
“20. The accused in a trial under Section 138 of the
Act has two options. He can either show that
consideration and debt did not exist or that, under
the particular circumstances of the case, the non-
existence of consideration and debt is so probable
that a prudent man ought to suppose that no
consideration and debt existed. To rebut the
statutory presumptions, an accused is not expected
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to prove his defence beyond a reasonable doubt, as
is expected of the complainant in a criminal trial.
The accused may adduce direct evidence to prove
that the note in question was not supported by
.
consideration and that there was no debt or
liability to be discharged by him. However, the
court need not insist in every case that the accused
should disprove the non-existence of
consideration and debt by leading direct evidence
because the existence of negative evidence is
neither possible nor contemplated. At the same
time, it is clear that bare denial of the passing of the
consideration and existence of debt, apparently, would
not serve the purpose of the accused. Something which
is probable has to be brought on record for getting the
burden of proof shifted to the complainant. To
r disprove the presumptions, the accused should bring
on record such facts and circumstances, upon
consideration of which, the court may either believe
that the consideration and debt did not exist or their
non-existence was so probable that a prudent man
would, under the circumstances of the case, act upon
the plea that they did not exist. Apart from adducing
direct evidence to prove that the note in question
was not supported by consideration or that he had
not incurred any debt or liability, the accused may
also rely upon circumstantial evidence, and if the
circumstances so relied upon are compelling, the
burden may likewise shift again onto the
complainant. The accused may also rely upon
presumptions of fact, for instance, those
mentioned in Section 114 of the Evidence Act to
rebut the presumptions arising under Sections 118
and 139 of the Act.”(emphasis supplied)
23. In the judgment Kishan Rao v. Shankargouda [Kishan
Rao v. Shankargouda, (2018) 8 SCC 165 : (2018) 4 SCC (Civ) 37 :
(2018) 3 SCC (Cri) 544], this Court referring to Kumar
Exports [Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 :
::: Downloaded on – 28/08/2025 21:27:44 :::CIS
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2025:HHC:29058(2009) 1 SCC (Civ) 629 : (2009) 1 SCC (Cri) 823]
and Rangappa [Rangappa v. Sri Mohan, (2010) 11 SCC 441 :
(2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri) 184] returned the
following findings : (Kishan Rao case [Kishan.
Rao v. Shankargouda, (2018) 8 SCC 165 : (2018) 4 SCC (Civ) 37 :
(2018) 3 SCC (Cri) 544], SCC pp. 173-74, para 22)
“22. Another judgment which needs to be looked
into is Rangappa v. Sri Mohan [Rangappa v. SriMohan, (2010) 11 SCC 441: (2010) 4 SCC (Civ) 477:
(2011) 1 SCC (Cri) 184]. A three-judge Bench of this
Court had occasion to examine the presumption
under Section 139 of the 1881 Act. This Court in theaforesaid case has held that in the event the
accused is able to raise a probable defence which
creates doubt with regard to the existence of a debt
or liability, the presumption may fail. The
r following was laid down in paras 26 and 27: (SCCpp. 453-54)
’26. In light of these extracts, we are in
agreement with the respondent claimant that
the presumption mandated by Section 139 ofthe Act does indeed include the existence of a
legally enforceable debt or liability. To that
extent, the impugned observations in KrishnaJanardhan Bhat [Krishna Janardhan
Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54:
(2008) 2 SCC (Cri) 166] may not be correct.
However, this does not in any way cast doubt on
the correctness of the decision in that case since
it was based on the specific facts and
circumstances therein. As noted in the citations,
this is, of course, in the nature of a rebuttable
presumption, and it is open to the accused to
raise a defence wherein the existence of a
legally enforceable debt or liability can be
contested. However, there can be no doubt that
there is an initial presumption which favours
the complainant.
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27. Section 139 of the Act is an example of a
reverse onus clause that has been included in
furtherance of the legislative objective of
improving the credibility of negotiable
.
instruments. While Section 138 of the Act
specifies a strong criminal remedy in relation to
the dishonour of cheques, the rebuttable
presumption under Section 139 is a device to
prevent undue delay in the course of litigation.
However, it must be remembered that the
offence made punishable by Section 138 can be
better described as a regulatory offence since
the bouncing of a cheque is largely in the nature
of a civil wrong whose impact is usually
confined to the private parties involved in
commercial transactions. In such a scenario,
r the test of proportionality should guide the
construction and interpretation of reverse onus
clauses, and the defendant-accused cannot be
expected to discharge an unduly high standard
of proof.”
24. In the judgment Bir Singh v. Mukesh Kumar [Bir
Singh v. Mukesh Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Civ)
309: (2019) 2 SCC (Cri) 40], this Court held that the
presumption under Section 139 of the Act is a presumption
of law. The Court held as under: (SCC pp. 206 & 208-09,
paras 20, 33 & 36)
“20. Section 139 introduces an exception to the
general rule as to the burden of proof and shifts the
onus on the accused. The presumption under
Section 139 of the Negotiable Instruments Act is a
presumption of law, as distinguished from a
presumption of fact. Presumptions are rules of
evidence and do not conflict with the presumption
of innocence, which requires the prosecution to
prove the case against the accused beyond a
reasonable doubt. The obligation on the
prosecution may be discharged with the help of
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presumptions of law and presumptions of fact
unless the accused adduces evidence showing the
reasonable possibility of the non-existence of the
presumed fact, as held in Hiten P. Dalal [Hiten P.
.
Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16:
2001 SCC (Cri) 960].
***
33. A meaningful reading of the provisions of the
Negotiable Instruments Act including, in
particular, Sections 20, 87 and 139, makes it amply
clear that a person who signs a cheque and makes
it over to the payee remains liable unless headduces evidence to rebut the presumption that
the cheque had been issued for payment of a debt
or in discharge of a liability. It is immaterial that
the cheque may have been filled in by any personother than the drawer if the cheque is duly signed
by the drawer. If the cheque is otherwise valid, the
penal provisions of Section 138 would be attracted.
***
36. Even a blank cheque leaf, voluntarily signed
and handed over by the accused, which is towards
some payment, would attract presumption under
Section 139 of the Negotiable Instruments Act, in
the absence of any cogent evidence to show that
the cheque was not issued in discharge of a debt.”
25. In the other judgment Rohitbhai Jivanlal Patel v. State of
Gujarat [Rohitbhai Jivanlal Patel v. State of Gujarat, (2019) 18
SCC 106: 2019 SCC OnLine SC 389: AIR 2019 SC 1876], this
Court held as under: (SCC paras 15, 17 and 22)
“15. So far the question of the existence of basic
ingredients for drawing of presumption under
Sections 118 and 139 of the NI Act is concerned,
apparent it is that the appellant-accused could not
deny his signature on the cheques in question that
had been drawn in favour of the complainant on a
bank account maintained by the accused for a sum
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of Rs 3 lakhs each. The said cheques were presented
to the bank concerned within the period of their
validity and were returned unpaid for the reason of
either the balance being insufficient or the account
.
being closed. All the basic ingredients of Section
138, as also of Sections 118 and 139, are apparent on
the face of the record. The trial court had also
consciously taken note of these facts and had
drawn the requisite presumption. Therefore, it is
required to be presumed that the cheques in
question were drawn for consideration and the
holder of the cheques, i.e. the complainant,
received the same in discharge of an existing debt.
The onus, therefore, shifts on the appellant-
accused to establish a probable defence so as to
rebut such a presumption.
r ***
17. On the aspects relating to a preponderance of
probabilities, the accused has to bring on record
such facts and such circumstances which may lead
the Court to conclude either that the consideration
did not exist or that its non-existence was so
probable that a prudent man would, under the
circumstances of the case, act upon the plea that
the consideration did not exist. This Court has,
time and again, emphasised that though there may
not be sufficient negative evidence which could be
brought on record by the accused to discharge his
burden, yet mere denial would not fulfil the
requirements of rebuttal as envisaged under
Sections 118 and 139 of the NI Act….
***
22. The result of the discussion in the foregoing
paragraphs is that the major considerations on
which the trial court chose to proceed clearly show
its fundamental error of approach, where, even
after drawing the presumption, it had proceeded as
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if the complainant was to prove his case beyond a
reasonable doubt. Such being the fundamental flaw
on the part of the trial court, the High Court
[Shashi Mohan Goyanka v. State of Gujarat, 2018 SCC
.
OnLine Guj 3674] cannot be said to have acted
illegally or having exceeded its jurisdiction in
reversing the judgment of acquittal. As noticed
hereinabove, in the present matter, the High Court
has conscientiously and carefully taken into
consideration the views of the trial court and, after
examining the evidence on the record as a whole,
found that the findings of the trial court are
vitiated by perversity. Hence, interference by the
High Court was inevitable; rather had to be made
for a just and proper decision of the matter.”
“20. The Trial Court and the High Court proceeded as
if the appellant were to prove a debt before a civil
court, wherein the plaintiff is required to prove his
claim on the basis of evidence to be laid in support of
his claim for the recovery of the amount due.
Dishonour of a cheque carries a statutorypresumption of consideration. The holder of the
cheque in due course is required to prove that the
cheque was issued by the accused and that when thesame was presented, it was not honoured. Since there
is a statutory presumption of consideration, theburden is on the accused to rebut the presumption
that the cheque was issued not for any debt or other
liability.”
27. A similar view was taken in Rohitbhai Jivanlal Patel v.
State of Gujarat (2019) 18 SCC 106, and it was held that once a
presumption has been drawn, the onus shifts to the accused. It was
observed: –
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12. According to the learned counsel for the appellant-
accused, the impugned judgment is contrary to the
principles laid down by this Court in Arulvelu [Arulvelum v.
State, (2009) 10 SCC 206 : (2010) 1 SCC (Cri) 288] because the
.
High Court has set aside the judgment of the trial court
without pointing out any perversity therein. The said case of
Arulvelu [Arulvelum v. State, (2009) 10 SCC 206 : (2010) 1 SCC
(Cri) 288] related to the offences under Sections 304-B and
498-A IPC. Therein, on the scope of the powers of the
appellate court in an appeal against acquittal, this Court
observed as follows : (SCC p. 221, para 36)
“36. Careful scrutiny of all these judgments
leads to the definite conclusion that the appellate
court should be very slow in setting aside a
judgment of acquittal, particularly in a case where
two views are possible. The trial court judgment
r cannot be set aside because the appellate court’s
view is more probable. The appellate court would
not be justified in setting aside the trial court
judgment unless it arrives at a clear finding on
marshalling the entire evidence on record that the
judgment of the trial court is either perverse or
wholly unsustainable in law.”
The principles aforesaid are not of much debate. In
other words, ordinarily, the appellate court will not be
upsetting the judgment of acquittal, if the view taken
by the trial court is one of the possible views of the
matter and unless the appellate court arrives at a clear
finding that the judgment of the trial court is perverse
i.e. not supported by evidence on record or contrary to
what is regarded as normal or reasonable; or is wholly
unsustainable in law. Such general restrictions are
essential to remind the appellate court that an
accused is presumed to be innocent unless proved
guilty beyond a reasonable doubt, and a judgment of
acquittal further strengthens such presumption in
favour of the accused. However, such restrictions
need to be visualised in the context of the particular
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matter before the appellate court and the nature of
the inquiry therein. The same rule with the same
rigour cannot be applied in a matter relating to the
offence under Section 138 of the NI Act, particularly
.
where a presumption is drawn that the holder has
received the cheque for the discharge, wholly or in
part, of any debt or liability. Of course, the accused is
entitled to bring on record the relevant material to
rebut such presumption and to show that
preponderance of probabilities are in favour of his
defence but while examining if the accused has
brought about a probable defence so as to rebut the
presumption, the appellate court is certainly entitled
to examine the evidence on record in order to find if
preponderance indeed leans in favour of the accused.
13. For determination of the point as to whether the
r High Court was justified in reversing the judgment
and orders of the trial court and convicting the
appellant for the offence under Section 138 of the NI
Act, the basic questions to be addressed are twofold:
as to whether the complainant Respondent 2 had
established the ingredients of Sections 118 and 139 of
the NI Act, so as to justify drawing of the presumption
envisaged therein; and if so, as to whether theappellant-accused had been able to displace such
presumption and to establish a probable defencewhereby, the onus would again shift to the
complainant?
28. This position was reiterated in Ashok Singh v. State of
U.P., 2025 SCC OnLine SC 706, wherein it was observed:
22. The High Court while allowing the criminal revision has
primarily proceeded on the presumption that it was
obligatory on the part of the complainant to establish his
case on the basis of evidence by giving the details of the
bank account as well as the date and time of the withdrawal
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2025:HHC:29058the date and time of the payment made to the accused,
including the date and time of receiving of the cheque,
which has not been done in the present case. Pausing here,
such presumption on the complainant, by the High Court,.
appears to be erroneous. The onus is not on the complainant
at the threshold to prove his capacity/financial wherewithal
to make the payment in discharge of which the cheque is
alleged to have been issued in his favour. Only if an
objection is raised that the complainant was not in a
financial position to pay the amount so claimed by him to
have been given as a loan to the accused, only then the
complainant would have to bring before the Court cogent
material to indicate that he had the financial capacity and
had actually advanced the amount in question by way of
loan. In the case at hand, the appellant had categorically
stated in his deposition and reiterated in the cross-
examination that he had withdrawn the amount from the
bank in Faizabad (Typed Copy of his deposition in the
paperbook wrongly mentions this as ‘Firozabad’). The Court
ought not to have summarily rejected such a stand, more so
when respondent no. 2 did not make any serious attempt to
dispel/negate such a stand/statement of the appellant.
Thus, on the one hand, the statement made before the
Court, both in examination-in-chief and cross-
examination, by the appellant with regard to withdrawing
the money from the bank for giving it to the accused has
been disbelieved, whereas the argument on behalf of the
accused that he had not received any payment of any loan
amount has been accepted. In our decision in S. S.
Production v. Tr. Pavithran Prasanth, 2024 INSC 1059, we
opined:
‘8. From the order impugned, it is clear that though
the contention of the petitioners was that the said
amounts were given for producing a film and were not
by way of return of any loan taken, which may have
been a probable defence for the petitioners in the case,
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2025:HHC:29058not been done by the petitioners. Pausing here, the
Court would only comment that the reasoning of the
High Court, as well as the First Appellate Court and
Trial Court, on this issue is sound. Just by taking a.
counter-stand to raise a probable defence would not
shift the onus on the complainant in such a case, for
the plea of defence has to be buttressed by evidence,
either oral or documentary, which in the present casehas not been done. Moreover, even if it is presumed
that the complainant had not proved the source of the
money given to the petitioners by way of loan by
producing statement of accounts and/or Income TaxReturns, the same ipso facto, would not negate such
claim for the reason that the cheques having being
issued and signed by the petitioners has not been
denied, and no evidence has been led to show that therespondent lacked capacity to provide the amount(s)
in question. In this regard, we may make profitablereference to the decision in Tedhi Singh v. Narayan
Dass Mahant, (2022) 6 SCC 735:
’10. The trial court and the first appellate court
have noted that in the case under Section 138 of
the NI Act, the complainant need not show in the
first instance that he had the capacity. Theproceedings under Section 138 of the NI Act is not a
civil suit. At the time, when the complainant giveshis evidence, unless a case is set up in the reply
notice to the statutory notice sent, that the
complainant did not have the wherewithal, itcannot be expected of the complainant to initially
lead evidence to show that he had the financial
capacity. To that extent, the courts in our view
were right in holding on those lines. However,
the accused has the right to demonstrate that the
complainant in a particular case did not have the
capacity and therefore, the case of the accused is
acceptable, which he can do by producing
independent materials, namely, by examining his::: Downloaded on – 28/08/2025 21:27:44 :::CIS
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2025:HHC:29058witnesses and producing documents. It is also
open to him to establish the very same aspect by
pointing to the materials produced by the
complainant himself. He can further, more.
importantly, further achieve this result through
the cross-examination of the witnesses of the
complainant. Ultimately, it becomes the duty of
the courts to consider carefully and appreciate thetotality of the evidence and then come to a
conclusion whether, in the given case, the accused
has shown that the case of the complainant is in
peril for the reason that the accused hasestablished a probable defence.’
(emphasis supplied)’
(underlining in original; emphasis supplied by us in bold)
29. Hence, the absence of the documents to show the
delivery of the articles to the accused will not make the case of the
complainant suspect.
30. There is nothing in the cross-examination of the
complainant to show that he was making a false statement. The
defence taken by the accused was contradictory and was rightly
discarded by the learned Courts below. Thus, the findings recorded
by the learned Courts below that the accused had failed to rebut
the presumption cannot be faulted.
31. The complainant stated that the cheque was
dishonoured with an endorsement ‘funds insufficient’. He has
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2025:HHC:29058produced a memorandum (Ext.CW-1/C), in which the reason for
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 that the memo issued by the
Bank is presumed to be correct and the burden is upon the accused
to rebut the presumption. It was observed at page 95:
24. Section 146, making a major departure from the
principles of the Evidence Act, provides that the bank’s slip
or memo with the official mark showing that the chequewas 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.
32. 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’.
33. The complainant stated that he had issued notice
(Ext.CW-1/E) to the accused, which was duly served upon him. The
accused denied that notice was received; however, the same was
sent to the correct address and is deemed to have been served as
per Section 27 of the General Clauses Act. No evidence was led by
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2025:HHC:29058the accused to rebut this presumption. Therefore, the plea that the
notice was not served upon the accused cannot be accepted.
.
34. In any case, it was laid down in C.C. Alavi Haji (supra)
that the person who claims that he had not received the notice has
to repay 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 the notice was not
received by him. It was observed:
“It is also to be borne in mind that the requirement of
giving 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 underSection 138 of the Act, make payment of the cheque amount and
submit to the Court that he had made payment within 15 days
of receipt of summons (by receiving a copy of the complaintwith the summons) and, therefore, the complaint is liable to be
rejected. A person who does not pay within 15 days of receipt ofthe 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 requiredunder Section 138, by ignoring statutory presumption to the
contrary under Section 27 of the G.C. Act and Section 114 of the
Evidence Act. In our view, any other interpretation of the
proviso would defeat the very object of the legislation. As
observed in Bhaskaran‘s case (supra), if the giving of notice
in the context of Clause (b) of the proviso was the same as
the receipt of notice, a trickster cheque drawer would get
the premium to avoid receiving the notice by adopting
different strategies and escape from legal consequences of::: Downloaded on – 28/08/2025 21:27:44 :::CIS
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2025:HHC:29058Section 138 of the Act.” (Emphasis supplied)
35. In the present case, no payment was made by the
accused, and the plea taken by him that notice was not served
.
upon him will not help him.
36. Therefore, it was duly proved on record that the
accused had issued the cheque in discharge of his legal liability,
which was dishonoured due to ‘funds insufficient’, and the
accused failed to repay the amount despite receipt of a valid
notice of demand. Therefore, the learned Courts below rightly
convicted the accused.
37. The learned Trial Court had sentenced the accused to
undergo simple imprisonment for two 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 provisions of Section 138 of the
NI Act are deterrent in nature. It was observed at page 203:
“6. The object of Section 138 of the Negotiable Instruments
Act is to infuse credibility into negotiable instruments,
including cheques, and to encourage and promote the use
of negotiable instruments, including cheques, in financial
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::: Downloaded on – 28/08/2025 21:27:44 :::CIS
P a g e | 39
2025:HHC:29058without serious intention to honour the promise implicit in
the issuance of the same.”
38. Keeping in view the deterrent nature of the sentence,
.
the period of two months cannot be said to be excessive.
39. Learned Trial Court ordered the accused to pay a
compensation of ₹1,60,000/- as compensation to the
complainant. The cheque was issued on 25.03.2013. The sentence
was imposed on 21.12.2023 after the lapse of more than 10 years.
The complainant lost interest on the amount which he would have
gained by depositing the same in the bank or by investing it
somewhere else. He had to engage a counsel to prosecute the
complaint filed by him. 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. The provisions of
NIA envision a single window for criminal liability for the
dishonour of a cheque as well as civil liability for the::: Downloaded on – 28/08/2025 21:27:44 :::CIS
P a g e | 40
2025:HHC:29058realisation of the cheque amount. It is also well settled that
there needs to be a consistent approach towards awarding
compensation, and unless there exist special
circumstances, the courts should uniformly levy fines up to.
twice the cheque amount along with simple interest @ 9%
p.a. [R. Vijayan v. Baby, (2012) 1 SCC 260, para 20: (2012) 1
SCC (Civ) 79: (2012) 1 SCC (Cri) 520]”
40. Thus, an amount of ₹70,000/- paid as compensation
on the principal amount of ₹90,000/- cannot be said to be
excessive, and no interference is required with the compensation
awarded by the learned Trial Court.
41. No other point was urged.
42. In view of the above, the present revision fails, and the
same is dismissed. Pending applications, if any, also stand
disposed of.
43. A copy of this judgment, along with records of the
learned Courts below, be sent back forthwith.
(Rakesh Kainthla)
Judge28th August,2025
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