Himachal Pradesh High Court
Reserved On: 28.05.2025 vs Rajinder Prashad (Since Deceased) … on 24 June, 2025
2025:HHC:19452
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No.192 of 2025
Reserved on: 28.05.2025
Date of Decision: 24.06.2025
Deepak Sharma …Petitioner
Versus
Rajinder Prashad (since deceased) through LRs and others.
…Respondents
Coram
Hon’ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 No
For the Petitioner : Mr. G.R. Palsra, Advocate.
For the Respondent : Nemo
Rakesh Kainthla, Judge
The present revision is directed against the judgment
dated06.03.2025, passed by the learned Sessions Judge, Mandi
(learned Appellate Court) vide which the judgment of conviction
dated 08.11.2024 and order of sentence dated 16.11.2024 passed by
the learned Judicial Magistrate First Class, Court No.3, Mandi,
District Mandi, H.P. (learned Trial Court) were upheld. (Parties
1
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
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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 before the
learned Trial Court against the accused for the commission of an
offence punishable under Section 138 of the Negotiable
Instruments Act, 1881 (in short, ‘NI Act‘). It was asserted that the
accused issued a cheque dated 30.08.2013 for a sum of ₹ 20,000/-
drawn at Punjab National Bank, Rewalsar, District Mandi, H.P., to
discharge his legal liability. The complainant presented the
cheque to his bank, Punjab National Bank, Rewalsar; however, the
cheque was dishonoured with the remarks “insufficient funds’.
The complainant served a legal notice upon the accused asking
him to pay the amount; however, the accused failed to pay the
amount despite the receipt of the notice. Hence, the complaint
was filed to take action against the accused as per the law.
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
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punishable under Section 138 of the NI Act, to which he pleaded
not guilty and claimed to be tried.
4. The complainant examined Lalita Devi (CW-1).
5. The accused, in his statement recorded under Section
313 of CrPC, denied the case of the complainant. He examined
Devesh Sharma (DW-1).
6. Learned Trial Court held that the accused did not
dispute the issuance of the cheque. He claimed that the cheque
was issued as security. He also examined Devesh Sharma (DW-1)
to prove this fact. A presumption under Section 118 (a) and 139 of
the NI Act would arise in such circumstances. The accused did not
file any reply to the legal notice, nor did he enter into witness box.
He did not file any complaint regarding the misuse of the cheque.
The issuance of a cheque for security does not absolve a person of
the commission of an offence punishable under Section 138 of the
NI Act. The cheque was dishonoured with an endorsement
‘insufficient funds’. The notice was duly served upon the accused,
and the accused had failed to pay the money. Hence, the accused
was convicted of the commission of an offence punishable under
Section 138 of the NI Act and was sentenced to undergo simple
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imprisonment for one month, pay a fine of ₹ 40,000/- to the
complainant for the loss suffered by him, and in default of
payment of fine, to undergo further simple imprisonment for 10
days.
7. Being aggrieved from the judgment and order passed
by the learned Trial Court, the accused preferred an appeal which
was decided by the learned Appellate Court. Learned Appellate
Court concurred with the findings recorded by the learned Trial
Court that the cheque was issued to discharge the legal liability.
The plea taken by the accused that the cheque was issued towards
the security was not proved. His denial was not sufficient to rebut
the presumption contained in Sections 139 and 118(a) of the NI Act.
His plea that he was liable to pay a sum of ₹ 10,000/-, which was
paid by him, was not proved by any satisfactory evidence. The
cheque was dishonoured due to insufficient funds. The notice was
served upon the accused, but the accused failed to pay the amount
despite receipt of a valid notice of demand. Hence, the appeal was
dismissed.
8. Being aggrieved from the judgments and order passed
by the learned Courts below, the accused filed the present revision,
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asserting that the date of registration of the complaint was
mentioned on 27.01.2021. The notice was issued on 06.12.2013.
The complaint was filed beyond the period of limitation. The date
of filing of the complaint was mentioned as 31.12.2013 in the case
status, and even if it is treated to be a correct date, the complaint is
beyond the period of limitation. The learned Courts below did not
appreciate this aspect. The testimony of Devesh Sharma (DW-1)
was not properly appreciated. He categorically stated that the
complainant had taken a car from the accused, and the accused
sought time to make the payment of ₹ 10,000/-. The accused
issued the cheque as security till the payment of ₹ 10,000/-. The
accused paid ₹ 10,000/- on 13th/14th April, 2015. The presumption
under Section 139 of the NI Act was duly rebutted by the cross-
examination of Lalita Devi(CW-1) and the statement of Devesh
Sharma (DW-1). The Learned Courts below did not appreciate the
statements of these witnesses properly. Therefore, it was prayed
that the present revision petition be allowed and the judgments
and order passed by the learned Courts below be set aside.
9. I have heard Mr. G.R. Palsra, learned counsel for the
petitioner. He submitted that the complaint was barred by
limitation. The date of registration of the complaint was
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mentioned as 27.01.2021 in the opening page of the judgment of
the learned Trial Court. The year 2015 was mentioned in the
complaint number. These clearly show that the complaint was
filed beyond the period of 45 days from the date of receipt of the
notice. The case status also shows the date of presentation of the
complaint as 31.12.2013, which is beyond the period of 45 days
from the date of issuance of notice; therefore, the complaint was
liable to be dismissed on this short ground alone. The earned Trial
Court failed to consider this aspect. The accused examined Devesh
Sharma (DW-1) and cross-examined Lalita Devi (CW-1). The
cross-examination of Lalita Devi (CW-1) and the statement of
Devesh Sharma (DW-1) rebutted the presumption contained under
Section 139 of the NI Act. Learned Courts below erred in holding
that the presumption was not rebutted. Hence, he prayed that the
present revision be allowed and the judgments and order passed
by learned Courts below be set aside.
10. I have given considerable thought to the submissions
made by him at the bar and have gone through the records
carefully.
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11. It was laid down by the Hon’ble Supreme Court in
Malkeet Singh Gill v. State of Chhattisgarh, (2022) 8 SCC 204: (2022)
3 SCC (Cri) 348: 2022 SCC OnLine SC 786 that the revisional court is
not an appellate court and it can only rectify the patent defect,
errors of jurisdiction or the law. It was observed on page 207: –
“10. Before adverting to the merits of the contentions, at
the outset, it is apt to mention that there are concurrent
findings of conviction arrived at by two courts after a
detailed appreciation of the material and evidence brought
on record. The High Court in criminal revision against
conviction is not supposed to exercise the jurisdiction like
the appellate court, and the scope of interference in revision
is extremely narrow. Section 397 of the Criminal Procedure
Code (in short “CrPC“) vests jurisdiction to satisfy itself or
himself as to the correctness, legality or propriety of any
finding, sentence or order, recorded or passed, and as to the
regularity of any proceedings of such inferior court. The
object of the provision is to set right a patent defect or an
error of jurisdiction or law. There has to be a well-founded
error which is to be determined on the merits of individual
cases. It is also well settled that while considering the same,
the Revisional Court does not dwell at length upon the facts
and evidence of the case to reverse those findings.
12. This position was reiterated in State of Gujarat v.
Dilipsinh Kishorsinh Rao, 2023 SCC OnLine SC 1294, wherein it was
observed:
“13. The power and jurisdiction of the Higher Court under
Section 397 Cr. P.C., which vests the court with the power to
call for and examine records of an inferior court, is for the
purposes of satisfying itself as to the legality and regularity
of any proceeding or order made in a case. The object of this
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2025:HHC:19452provision is to set right a patent defect or an error of
jurisdiction or law or the perversity which has crept into
such proceedings. It would be apposite to refer to the
judgment of this court in Amit Kapoor v. Ramesh
Chandra, (2012) 9 SCC 460, where the scope of Section 397
has been considered and succinctly explained as under:
“12. Section 397 of the Code vests the court with the
power to call for and examine the records of an
inferior court for the purposes of satisfying itself as to
the legality and regularity of any proceedings or order
made in a case. The object of this provision is to set
right a patent defect or an error of jurisdiction or law.
There has to be a well-founded error, and it may not
be appropriate for the court to scrutinise the orders,
which, upon the face of it, bear a token of careful
consideration and appear to be in accordance with the
law. If one looks into the various judgments of this
Court, it emerges that the revisional jurisdiction can
be invoked where the decisions under challenge are
grossly erroneous, there is no compliance with the
provisions of law, the finding recorded is based on no
evidence, material evidence is ignored or judicial
discretion is exercised arbitrarily or perversely. These
are not exhaustive classes but are merely indicative.
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
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2025:HHC:19452categories aforestated. Even framing of charge is a much-
advanced stage in the proceedings under the CrPC.”
13. It was held in Kishan Rao v. Shankargouda, (2018) 8 SCC
165: (2018) 3 SCC (Cri) 544: (2018) 4 SCC (Civ) 37: 2018 SCC OnLine
SC 651 that it is impermissible for the High Court to reappreciate
the evidence and come to its conclusions in the absence of any
perversity. It was observed on page 169:
“12. This Court has time and again examined the scope of
Sections 397/401 CrPC and the ground for exercising the
revisional jurisdiction by the High Court. In State of
Kerala v. Puttumana Illath Jathavedan Namboodiri [State of
Kerala v. Puttumana Illath Jathavedan Namboodiri, (1999) 2
SCC 452: 1999 SCC (Cri) 275], while considering the scope of
the revisional jurisdiction of the High Court, this Court has
laid down the following: (SCC pp. 454-55, para 5)
“5. … In its revisional jurisdiction, the High Court can
call for and examine the record of any proceedings for
the purpose of satisfying itself as to the correctness,
legality or propriety of any finding, sentence or order. In
other words, the jurisdiction is one of supervisory
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 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
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2025:HHC:19452standpoint, we have no hesitation in coming to the
conclusion that the High Court exceeded its jurisdiction
in interfering with the conviction of the respondent by
reappreciating the oral evidence. …”
13. Another judgment which has also been referred to and
relied on by the High Court is the judgment of this Court
in Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao
Phalke [Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao
Phalke, (2015) 3 SCC 123: (2015) 2 SCC (Cri) 19]. This Court
held that the High Court, in the exercise of revisional
jurisdiction, shall not interfere with the order of the
Magistrate unless it is perverse or wholly unreasonable or
there is non-consideration of any relevant material, the
order cannot be set aside merely on the ground that another
view is possible. The following has been laid down in para
14: (SCC p. 135)
“14. … Unless the order passed by the Magistrate is
perverse or the view taken by the court is wholly
unreasonable or there is non-consideration of any
relevant material or there is palpable misreading of
records, the Revisional Court is not justified in setting
aside the order, merely because another view is possible.
The Revisional Court is not meant to act as an appellate
court. The whole purpose of the revisional jurisdiction is
to preserve the power in the court to do justice in
accordance with the principles of criminal jurisprudence.
The revisional power of the court under Sections 397 to
401 CrPC is not to be equated with that of an appeal.
Unless the finding of the court, whose decision is sought
to be revised, is shown to be perverse or untenable in law
or is grossly erroneous or glaringly unreasonable or
where the decision is based on no material or where the
material facts are wholly ignored or where the judicial
discretion is exercised arbitrarily or capriciously, the
courts may not interfere with the decision in exercise of
their revisional jurisdiction.”
14. In the above case, also conviction of the accused was
recorded, and the High Court set aside [Dattatray Gulabrao
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Phalke v. Sanjaysinh Ramrao Chavan, 2013 SCC OnLine Bom
1753] the order of conviction by substituting its own view.
This Court set aside the High Court’s order holding that the
High Court exceeded its jurisdiction in substituting its
views, and that too without any legal basis.
14. This position was reiterated in Bir Singh v. Mukesh
Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ)
309: 2019 SCC OnLine SC 13, wherein it was observed at page 205:
“16. It is well settled that in exercise of revisional
jurisdiction under Section 482 of the Criminal Procedure
Code, the High Court does not, in the absence of perversity,
upset concurrent factual findings. It is not for the Revisional
Court to re-analyse and re-interpret the evidence on record.
17. As held by this Court in Southern Sales &
Services v. Sauermilch Design and Handels GmbH [Southern
Sales & Services v. Sauermilch Design and Handels GmbH,
(2008) 14 SCC 457], it is a well-established principle of law
that the Revisional Court will not interfere even if a wrong
order is passed by a court having jurisdiction, in the absence
of a jurisdictional error. The answer to the first question is
therefore, in the negative.”
15. The present revision has to be decided as per the
parameters laid down by the Hon’ble Supreme Court.
16. The notice was issued on 06.12.2013, and the case
status shows the date of filing of the complaint as 31.12.2013,
which is within 45 days from the date of service of notice;
therefore, it cannot be said that the complaint was barred by
limitation.
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17. A heavy reliance placed upon the date of registration
mentioned as 27.01.2021, however, it was stated in the petition
itself that complaint was initially filed before learned Chief
Judicial Magistrate, Mandi, District Mandi, H.P. 0n 31.12.2013 and
was transferred to the Court of learned Judicial Magistrate, First
Class Court No.3, Mandi, District Mandi, H.P.27.01.2021; therefore,
not much advantage can be derived from the registration of the
case by the Transferee Court. It is pertinent to mention here that
CNR No. HPMA-02-001301-2013 remains the same. Hence, the
submission that the complaint was barred by limitation and was
wrongly taken on record by the learned Trial Court cannot be
accepted.
18. The accused did not dispute the issuance of the cheque
in his statement recorded under Section 313 of Cr.P.C. He claimed
that the cheque was issued as a security cheque. This plea was
reiterated before this Court in the revision petition also. His
witness Devesh Sharma (DW-1) stated that the accused sought
time to make the payment of ₹ 10,000/- and issued the cheque as a
security. The payment was made by the accused on 13th -14th April,
2015. Thus, he also did not dispute the issuance of the cheque. It
was laid down by this Court in Naresh Verma vs. Narinder Chauhan
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2020(1) Shim. L.C. 398 states that where the accused had not
disputed his signatures on the cheque, the Court has to presume
that it was issued in discharge of legal liability and the burden
would shift upon the accused to rebut the presumption. It was
observed: –
“8. Once signatures on the cheque are not disputed, the plea
with regard to the cheque having not been issued towards
discharge of lawful liability, rightly came to be rejected by
learned Courts below. Reliance is placed upon Hiten P. Dalal
v. Bartender Nath Bannerji, 2001 (6) SCC 16, wherein it has
been held as under:
“The words ‘unless the contrary is proved’ which
occur in this provision make it clear that the
presumption has to be rebutted by ‘proof’ and not by
a bare explanation which is merely plausible. A fact is
said to be proved when its existence is directly
established or when, upon the material before it, the
Court finds its existence to be so probable that a
reasonable man would act on the supposition that it
exists. Unless, therefore, the explanation is supported
by proof, the presumption created by the provision
cannot be said to be rebutted……”
9. S.139 of the Act provides that it shall be presumed,
unless the contrary is proved, that the holder of a
cheque received the cheque of nature referred to in
section 138 for the discharge, in whole or in part, of
any debt or other liability.
19. Similar is the judgment in Basalingappa vs.
Mudibasappa 2019 (5) SCC 418 wherein it was held:
“26. Applying the proposition of law as noted above, in the
facts of the present case, it is clear that the signature on the
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2025:HHC:19452cheque, having been admitted, a presumption shall be
raised under Section 139 that the cheque was issued in
discharge of debt or liability.”
20. This position was reiterated in Kalamani Tex v. P.
Balasubramanian, (2021) 5 SCC 283: (2021) 3 SCC (Civ) 25: (2021) 2
SCC (Cri) 555: 2021 SCC OnLine SC 75 wherein it was held at page
289:
“14. Once the 2nd appellant had admitted his signatures on
the cheque and the deed, the trial court ought to have
presumed that the cheque was issued as consideration for a
legally enforceable debt. The trial court fell in error when it
called upon the respondent complainant to explain the
circumstances under which the appellants were liable to
pay. Such an approach of the trial court was directly in the
teeth of the established legal position as discussed above,
and amounts to a patent error of law.”
21. Similar is the judgment in APS Forex Services (P) Ltd. v.
Shakti International Fashion Linkers (2020) 12 SCC 724, wherein it
was observed: –
“7.2. What is emerging from the material on record is that
the issuance of a cheque by the accused and the signature of
the accused on the said cheque are not disputed by the
accused. The accused has also not disputed that there were
transactions between the parties. Even as per the statement
of the accused, which was recorded at the time of the
framing of the charge, he has admitted that some amount
was due and payable. However, it was the case on behalf of
the accused that the cheque was given by way of security,
and the same has been misused by the complainant.
However, nothing is on record that in the reply to the
statutory notice, it was the case on behalf of the accused
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2025:HHC:19452that the cheque was given by way of security. Be that as it
may, however, it is required to be noted that earlier the
accused issued cheques which came to be dishonoured on
the ground of “insufficient funds” and thereafter a fresh
consolidated cheque of ₹9,55,574 was given which has been
returned unpaid on the ground of “STOP PAYMENT”.
Therefore, the cheque in question was issued for the second
time. Therefore, once the accused has admitted the issuance
of a cheque which bears his signature, there is a
presumption that there exists a legally enforceable debt or
liability under Section 139 of the NI Act. However, such a
presumption is rebuttable in nature, and the accused is
required to lead evidence to rebut such presumption. The
accused was required to lead evidence that the entire
amount due and payable to the complainant was paid.
9. Coming back to the facts in the present case and
considering the fact that the accused has admitted the
issuance of the cheques and his signature on the cheque and
that the cheque in question was issued for the second time
after the earlier cheques were dishonoured and that even
according to the accused some amount was due and
payable, there is a presumption under Section 139 of the NI
Act that there exists a legally enforceable debt or liability. Of
course, such presumption is rebuttable in nature. However,
to rebut the presumption, the accused was required to lead
evidence that the full amount due and payable to the
complainant had been paid. In the present case, no such
evidence has been led by the accused. The story put forward
by the accused that the cheques were given by way of
security is not believable in the absence of further evidence
to rebut the presumption, and more particularly, the cheque
in question was issued for the second time after the earlier
cheques were dishonoured. Therefore, both the courts
below have materially erred in not properly appreciating
and considering the presumption in favour of the
complainant that there exists a legally enforceable debt or
liability as per Section 139 of the NI Act. It appears that both
the learned trial court as well as the High Court have
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committed an error in shifting the burden upon the
complainant to prove the debt or liability, without
appreciating the presumption under Section 139 of the NI
Act. As observed above, Section 139 of the Act is an example
of reverse onus clause and therefore, once the issuance of
the cheque has been admitted and even the signature on the
cheque has been admitted, there is always a presumption in
favour of the complainant that there exists legally
enforceable debt or liability and thereafter, it is for the
accused to rebut such presumption by leading evidence.”
22. The presumption under Section 139 of the NI Act was
explained by the Hon’ble Supreme Court in Triyambak S. Hegde v.
Sripad, (2022) 1 SCC 742: (2022) 1 SCC (Civ) 512: 2021 SCC OnLine SC
788 as under at page 747:
“12. From the facts arising in this case and the nature of the
rival contentions, the record would disclose that the
signature on the documents at Exts. P-6 and P-2 are not
disputed. Ext. P-2 is the dishonoured cheque based on
which the complaint was filed. From the evidence tendered
before the JMFC, it is clear that the respondent has not
disputed the signature on the cheque. If that be the
position, as noted by the courts below, a presumption
would arise under Section 139 in favour of the appellant
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 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
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consideration would arise as provided under Section 118(a)
of the NI Act, which reads as hereunder:
“118. Presumptions as to negotiable instruments. —
Until the contrary is proved, the following
presumptions shall be made:
(a) of consideration: that every negotiable instrument
was made or drawn for consideration, and that every
such instrument, when it has been accepted,
indorsed, negotiated or transferred, was accepted,
indorsed, negotiated or transferred for
consideration.”
14. The above-noted provisions are explicit to the effect
that such presumption would remain until the contrary is
proved. The learned counsel for the appellant in that regard
has relied on the decision of this Court in K.
Bhaskaran v. Sankaran Vaidhyan Balan [K.
Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510:
1999 SCC (Cri) 1284] wherein it is held as hereunder: (SCC
pp. 516-17, para 9)
“9. As the signature in the cheque is admitted to be
that of the accused, the presumption envisaged in
Section 118 of the Act can legally be inferred that the
cheque was made or drawn for consideration on the
date which the cheque bears. Section 139 of the Act
enjoins the Court to presume that the holder of the
cheque received it for the discharge of any debt or
liability. The burden was on the accused to rebut the
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. Mudibasapa
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, (2019) 5 SCC 418: (2019) 2 SCC (Cri) 571] wherein it is held as
hereunder: (SCC pp. 432-33, paras 25-26)
“25. We having noticed the ratio laid down by this
Court in the above cases on Sections 118(a) and 139,
we now summarise the principles enumerated by this
Court in the following manner:
25.1. Once the execution of the cheque is admitted,
Section 139 of the Act mandates a presumption that
the cheque was for the discharge of any debt or other
liability.
25.2. The presumption under Section 139 is a
rebuttable presumption, and the onus is on the
accused to raise the probable defence. The standard of
proof for rebutting the presumption is that of
preponderance of probabilities.
25.3. To rebut the presumption, it is open for the
accused to rely on evidence led by him or the accused
can also rely on the materials submitted by the
complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be
drawn not only from the materials brought on record
by the parties but also by reference to the
circumstances upon which they rely.
25.4. That it is not necessary for the accused to come
into the witness box in support of his defence, Section
139 imposed an evidentiary burden and not a
persuasive burden.
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
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cross-examination of PW 1, when the specific
question was put that a cheque was issued in relation
to a loan of ₹ 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 ₹ 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 ₹ 4,50,000 to Balana Gouda towards sale
consideration. Payment of ₹ 4,50,000 being admitted
in the year 2010 and further payment of loan of ₹
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 ₹ 18 lakhs.
During his cross-examination, when the financial
capacity to pay ₹ 6 lakhs to the accused was
questioned, there was no satisfactory reply given by
the complainant. The evidence on record, thus, is a
probable defence on behalf of the accused, which
shifted the burden on the complainant to prove his
financial capacity and other facts.”
16. In that light, it is contended that the very materials
produced by the appellant and the answers relating to lack
of knowledge of property details by PW 1 in his cross-
examination would indicate that the transaction is
doubtful, and no evidence is tendered to indicate that the
amount was paid. In such an event, it was not necessary for
the respondent to tender rebuttal evidence, but the case put
forth would be sufficient to indicate that the respondent has
successfully rebutted the presumption.
17. On the position of law, the provisions referred to in
Sections 118 and 139 of the NI Act, as also the enunciation of
law as made by this Court, need no reiteration as there is no
ambiguity whatsoever. In Basalingappav. Mudibasappa
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[Basalingappa v. Mudibasappa, (2019) 5 SCC 418 : (2019) 2
SCC (Cri) 571] relied on by the learned counsel for the
respondent, though on facts the ultimate conclusion
therein was against raising presumption, the facts and
circumstances are entirely different as the transaction
between the parties as claimed in the said case is peculiar to
the facts of that case where the consideration claimed to
have been paid did not find favour with the Court keeping in
view the various transactions and extent of amount
involved. However, the legal position relating to the
presumption arising under Sections 118 and 139 of the NI
Act on signature being admitted has been reiterated. Hence,
whether there is a rebuttal or not would depend on the facts
and circumstances of each case.”
23. This position was reiterated in Tedhi Singh v. Narayan
Dass Mahant, (2022) 6 SCC 735: (2022) 2 SCC (Cri) 726: (2022) 3 SCC
(Civ) 442: 2022 SCC OnLine SC 302 wherein it was held at page 739:
“8. It is true that this is a case under Section 138 of the
Negotiable Instruments Act. Section 139 of the NI Act
provides that the court shall presume that the holder of 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 [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
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2025:HHC:19452standard of proof. It is accordingly that the principle has
developed that all which the accused needs to establish is a
probable defence. As to whether a probable defence has
been established is a matter to be decided on the facts of
each case on the conspectus of evidence and circumstances
that exist…”
24. Similar is the judgment in P. Rasiya v. Abdul Nazer, 2022
SCC OnLine SC 1131, wherein it was observed:
“As per Section 139 of the N.I. Act, it shall be presumed,
unless the contrary is proved, that the holder of a cheque
received the cheque of the nature referred to in Section 138
for discharge, in whole or in part, of any debt or other
liability. Therefore, once the initial burden is discharged by
the Complainant that the cheque was issued by the accused
and the signature and the issuance of the cheque are not
disputed by the accused, in that case, the onus will shift
upon the accused to prove the contrary that the cheque was
not for any debt or other liability. The presumption under
Section 139 of the N.I. Act is a statutory presumption and
thereafter, once it is presumed that the cheque is issued in
whole or in part of any debt or other liability which is in
favour of the Complainant/holder of the cheque, in that
case, it is for the accused to prove the contrary.”
25. This position was reiterated in Rajesh Jain v. Ajay Singh,
(2023) 10 SCC 148: 2023 SCC OnLine SC 1275, wherein it was
observed at page 161:
33. The NI Act provides for two presumptions: Section 118
and Section 139. Section 118 of the Act inter alia directs that
it shall be presumed until the contrary is proved that every
negotiable instrument was made or drawn for
consideration. Section 139 of the Act stipulates that “unless
the contrary is proved, it shall be presumed that the holder
of the cheque received the cheque for the discharge of,
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2025:HHC:19452whole 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 voluntarily
signed and handed over by him to the complainant. [Bir
Singh v. Mukesh Kumar [Bir Singh v. Mukesh Kumar, (2019) 4
SCC 197: (2019) 2 SCC (Civ) 309: (2019) 2 SCC (Cri) 40] ].
Therefore, the mere admission of the drawer’s signature,
without admitting the execution of the entire contents in
the cheque, is now sufficient to trigger the presumption.
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2025:HHC:19452
37. As soon as the complainant discharges the burden to
prove that the instrument, say a cheque, was issued by the
accused for discharge of debt, the presumptive device under
Section 139 of the Act helps shifting the burden on the
accused. The effect of the presumption, in that sense, is to
transfer the evidential burden on the accused of proving
that the cheque was not received by the Bank towards the
discharge of any liability. Until this evidential burden is
discharged by the accused, the presumed fact will have to be
taken to be true, without expecting the complainant to do
anything further.
38. John Henry Wigmore [John Henry Wigmore and the Rules of
Evidence: The Hidden Origins of Modern Law] on Evidence states as
follows:
“The peculiar effect of the presumption of law is
merely to invoke a rule of law compelling the Jury to
reach the conclusion in the absence of evidence to the
contrary from the opponent but if the opponent does
offer evidence to the contrary (sufficient to satisfy the
Judge’s requirement of some evidence), the
presumption ‘disappears as a rule of law and the case
is in the Jury’s hands free from any rule’.”
39. The standard of proof to discharge this evidential
burden is not as heavy as that usually seen in situations
where the prosecution is required to prove the guilt of an
accused. The accused is not expected to prove the non-
existence of the presumed fact beyond a reasonable doubt.
The accused must meet the standard of “preponderance of
probabilities”, similar to a defendant in a civil proceeding.
[Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010) 11
SCC 441: (2010) 4 SCC (Civ) 477: (2011) 1 SCC (Cri) 184: AIR
2010 SC 1898]]
26. The statement of Divesh Sharma (DW-1) shows that
the accused had made the payment on 13th and 14th April, 2015,
after filing of the complaint. It was held by Hon’ble Supreme Court
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2025:HHC:19452
Rajneesh Aggarwal v. Amit J. Bhalla, (2001) 1 SCC 631, that payment
made by the accused to the complainant during the pendency of
the complaint will not wipe out the offence punishable under
Section 138 of the N.I.Act. It was observed: –
“7. So far as the question of deposit of the money during the
pendency of these appeals is concerned, we may state that
in course of hearing the parties wanted to settle the matter
in Court and it is in that connection, to prove the bona fides,
the respondent deposited the amount covered under all the
three cheques in the Court, but the complainant’s counsel
insisted that if there is going to be a settlement, then all the
pending cases between the parties should be settled, which
was, however not agreed to by the respondent and,
therefore, the matter could not be settled. So far as the
criminal complaint is concerned, once the offence is
committed, any payment made subsequent thereto will not
absolve the accused of the liability of criminal offence, though in
the matter of awarding of sentence, it may have some effect on
the court trying the offence. But by no stretch of imagination, a
criminal proceeding could be quashed on account of the deposit
of money in the court or that an order of quashing of a criminal
proceeding, which is otherwise unsustainable in law, could be
sustained because of the deposit of money in this Court. In this
view of the matter, the so-called deposit of money by the
respondent in this Court is of no consequence.” (emphasis
supplied)
27. In the present case, the offence was committed in the
year 2013 when the accused failed to pay the amount despite
receipt of a valid notice of demand, and the payment of the money
during the pendency of the complaint will have no effect.
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2025:HHC:19452
28. There is no other evidence to rebut the presumption of
the consideration attached to the cheque. The accused never
stepped into the witness box. Hence, there is no infirmity in the
findings recorded by the learned Courts below that the accused
had failed to rebut the presumption attached to the cheque.
29. Both the learned Courts below categorically held that
the cheque was dishonoured with the endorsement of insufficient
funds. This was not disputed in the present revision. 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 cheque
was dishonoured would, by itself, give rise to the
presumption of dishonour of the cheque, unless and until
that fact was disproved. Section 147 makes the offences
punishable under the Act compoundable.
30. In the present case, no evidence was led to rebut the
presumption, and the learned Courts below rightly held that the
cheque was dishonoured with an endorsement ‘insufficient funds’.
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2025:HHC:19452
31. The notice was issued to the accused on 06.12.2013. It
was sent to the correct address and is deemed to be served. No
evidence was led by the accused to rebut the presumption. It was
laid down in C.C. Allavi Haji vs. Pala Pelly Mohd. 2007(6) SCC 555
that the person who claims that he had not received the notice has
to pay the amount within 15 days from the date of the receipt of
the summons from the Court and in case of failure to do so, he
cannot take the advantage of the fact that notice was not received
by him. It was observed:
“It is also to be borne in mind that the requirement of giving
of notice is a clear departure from the rule of Criminal Law,
where there is no stipulation of giving of notice before filing
a complaint. Any drawer who claims that he did not receive the
notice sent by post, can, within 15 days of receipt of summons
from the court in respect of the complaint under Section 138 of
the Act, make payment of the cheque amount and submit to the
Court that he had made payment within 15 days of receipt of
summons (by receiving a copy of the complaint with the
summons) and, therefore, the complaint is liable to be rejected.
A person who does not pay within 15 days of receipt of the
summons from the Court along with the copy of the complaint
under Section 138 of the Act, cannot obviously contend that
there was no proper service of notice as required under Section
138, by ignoring statutory presumption to the contrary under
Section 27 of the G.C. Act and Section 114 of the Evidence Act. In
our view, any other interpretation of the proviso would
defeat the very object of the legislation. As observed in
Bhaskaran‘s case (supra), if the giving of notice in the
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2025:HHC:19452context of Clause (b) of the proviso was the same as the
receipt of notice a trickster cheque drawer would get the
premium to avoid receiving the notice by adopting different
strategies and escape from legal consequences of Section
138 of the Act.” (Emphasis supplied)
32 The accused has not paid any money to the
complainant; hence, it was duly proved that the accused had failed
to pay the money despite the receipt of the notice.
33. Therefore, it was duly proved before the learned Trial
Court that the cheque was issued in discharge of the legal liability,
which was dishonoured with the endorsement ‘funds insufficient’,
and the accused had failed to pay the amount despite the receipt of
a valid notice of demand. Hence, the complainant had proved his
case beyond a reasonable doubt, and the learned Trial Court had
rightly convicted the accused for the commission of an offence
punishable under Section 138 of the NI Act.
34. The learned Trial Court sentenced the accused to
undergo simple imprisonment for one month. It was laid down by
the Hon’ble Supreme Court in Bir Singh v. Mukesh Kumar, (2019) 4
SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ) 309: 2019 SCC
OnLine SC 138 that the penal provision of Section 138 is deterrent in
nature. It was observed at page 203:
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2025:HHC:19452“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
without serious intention to honour the promise implicit in
the issuance of the same.”
35. Keeping in view the deterrent nature of the sentence to
be awarded, the sentence of one month imprisonment cannot be
said to be excessive; rather, same appears to be lenient.
36. Learned Trial Court sentenced the accused to pay a fine
of ₹.40,000/-, the cheque was issued in the year 2013, the
sentence was imposed on 16.11.2024 after the lapse of more than 11
years. The complainant lost interest on the amount, which he
would have gained by depositing the amount in the bank, and he
had to pay the litigation expenses for filing the complaint. He was
entitled to be compensated for the same. It was laid down by the
Hon’ble Supreme Court in Kalamani Tex v. P. Balasubramanian,
(2021) 5 SCC 283: (2021) 3 SCC (Civ) 25: (2021) 2 SCC (Cri) 555: 2021
SCC OnLine SC 75 that the Courts should uniformly levy a fine up to
twice the cheque amount along with simple interest at the rate of
9% per annum. It was observed at page 291: –
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2025:HHC:19452
19. As regards the claim of compensation raised on behalf of
the respondent, we are conscious of the settled principles that
the object of Chapter XVII of NIA is not only punitive but also
compensatory and restitutive. The provisions of NIA envision a
single window for criminal liability for the dishonour of a
cheque as well as civil liability for the realisation of the cheque
amount. It is also well settled that there needs to be a
consistent approach 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]”
37. The amount of ₹ 19,800/- would accrue as interest for a
period of 11 years @9% on the principal of ₹ 20,000/-. The
complainant had also paid money to his lawyer and had incurred
the litigation expenses; therefore, the amount of ₹ 20,000/-
awarded as compensation cannot be said to be excessive.
38. No other point was urged.
39. In view of the above, the present revision fails, and the
same is dismissed.
40. In view of the above, the present petition stands
disposed of, so also the pending miscellaneous application(s), if
any.
( Rakesh Kainthla )
Judge
24th June, 2025
(ravinder)