Himachal Pradesh High Court
Mahesh Gautam vs Rajeev Kohli on 17 June, 2025
Neutral Citation No. ( 2025:HHC:18361 )
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No. 56 of 2024
Reserved on: 30.05.2025
Date of Decision: 17.06.2025
Mahesh Gautam …Petitioner
Versus
Rajeev Kohli …Respondent
Coram
Hon’ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 Yes
For the Petitioner : Mr. N.K. Thakur, Sr. Advocate with
Mr. Divya Raj Singh, Advocate.
For the Respondent : Mr. Surinder K. Saklani, Advocate.
Rakesh Kainthla, Judge
The petitioner (accused before learned Trial Court) has
filed the present petition against the judgment dated 28.12.2023
passed by learned Additional Sessions Judge-II, Una, District Una,
H.P (learned Appellate Court), vide which the appeal filed by the
petitioner was dismissed and the judgment and order dated
30.08.2022 passed by learned Additional Chief Judicial Magistrate
1
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
Page |2
Court No.1, Una, District Una, (learned Trial Court) convicting and
sentencing the petitioner 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 before the
learned Trial Court for the commission of an offence punishable
under Section 138 of the Negotiable Instruments Act (in short ‘NI
Act‘). It was asserted that the complainant is the proprietor of M/s
Kohli Traders and deals in cold drinks and other items. The
accused No.1 is the proprietor of M/s MVASKT India. He purchased
various items of cold drinks from the complainant vide Bill No.51
dated 25.05.2015 for a sum of ₹2,90,440/-. The accused paid
₹27,224/- in cash and issued a cheque of ₹2,63,216/- to discharge
the remaining liability. The complainant presented the cheque
before his Bank-Bank of Baroda, Una Branch. The cheque was
forwarded to the Bank of the accused but it was dishonoured with
the remarks ‘funds insufficient’. The complainant issued a legal
notice dated 25.08.2015 to the accused requesting him to pay the
amount of ₹2,63,216/- within 15 days from the date of the receipt
of the legal notice. The accused refused to receive the notice and
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the same is deemed to be served. The accused failed to pay the
amount despite the deemed receipt of the notice; hence, the
complaint was filed before the learned Trial Court 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
punishable under Section 138 of the NI Act to which the accused
pleaded not guilty and claimed to be tried.
4. The complainant examined himself (CW1), Arun Guleri
(CW2), and Dipti (CW3) to prove his case.
5. The accused in his statement recorded under Section
313 of Cr.P.C. admitted that the complainant is the proprietor of
M/s Kohli Traders and that he is a proprietor of M/s MVASKT. He
denied the rest of the prosecution case. He stated that the cheque
was given in lieu of the transfer of the stock of the Company in
which the accused was an employee and the Company to which the
stock was transferred gave another cheque. The complainant
undertook to return the blank cheque of the accused, however, he
failed to do so. A legal notice was also served upon the
Page |4
complainant. He examined Lovekesh Patial (DW1) and himself
(DW2).
6. Learned Trial Court held that it was duly proved that
the cheque was issued by the accused. There is a presumption
under the NI Act that the cheque was issued for valid
consideration in the discharge of the legal liability. The plea taken
by the accused, that the cheque was issued as a security for the
transfer of some articles and the payment was made by the
transferee, was not proved. The cheque was dishonoured with an
endorsement of ‘insufficient funds’ and the accused had refused
to receive the notice. Therefore, the accused was convicted of the
commission of an offence punishable under Section 138 of the NI
Act and was sentenced to undergo simple imprisonment for one
year and pay a compensation of ₹4,80,000/- to the complainant.
7. Being aggrieved by the judgment and order passed by
the learned Trial Court, the accused preferred an appeal, which
was decided by learned Additional Sessions Judge-II, Una, District
Una, H.P. (learned Appellate Court). Learned Appellate Court
concurred with the findings recorded by the learned Trial Court
that the issuance of the cheque was duly proved. The accused had
Page |5
failed to rebut the presumption of consideration. The cheque was
dishonoured due to insufficient funds. The plea taken by the
accused that signatures were different was also not established.
The cheque was not returned due to a mismatch of the signatures
on the cheque but due to insufficient funds. Accused failed to pay
the amount despite a deemed notice of demand; hence, the appeal
was dismissed.
8. Being aggrieved from the judgments and order passed
by learned Courts below, the accused has filed the present petition
asserting that learned Courts below erred in convicting and
sentencing the accused. Learned Courts below did not appreciate
the evidence in its right perspective. The cheque was given as a
guarantee of the goods supplied to some unknown person. No
evidence was led regarding the supply of the articles to the
accused. The complainant had ordered certain goods from Shah
Bihari Foods and when the consignment reached Una, the
complainant refused to take the delivery of the goods. The accused
sorted the difference between Shah Bihari Foods and the
complainant. The accused issued a cheque to the complainant
regarding the payment to be received from Baldev Kansal
proprietor of TR Associates. The complainant misused the cheque
Page |6
and filed a false complaint against the accused, therefore, it was
prayed that the present petition be allowed and the judgments and
order passed by learned Courts below be set aside.
9. I have heard Mr. N.K. Thakur, learned Senior Counsel
assisted by Mr. Divya Raj Singh, learned counsel for the
petitioner/accused and Mr. Surinder K. Saklani, learned counsel
for the respondent/complainant.
10. Mr. N.K. Thakur, learned Senior Counsel for the
petitioner/accused submitted that the learned Courts below failed
to appreciate the evidence correctly. The accused admitted that
the cheque was issued as a security towards the transaction with
TR Associates. The signatures of the accused on the cheque and
the specimen signatures are entirely different, therefore, the
accused cannot be held liable for the commission of an offence
punishable under Section 138 of the NI Act. The complainant had
failed to prove the delivery of the articles to the accused and the
plea taken by the accused that the cheque was issued as a security
was highly probable, therefore, he prayed that the present
revision be allowed and the judgments and order passed by
learned Courts below be set aside.
Page |7
11. Mr. Surinder K. Saklani, learned counsel for the
respondent/complainant submitted that the accused had failed to
rebut the presumption of consideration attached to the cheque.
The plea taken by him that the cheque was issued towards the
liability of T.R. Associates was not proved on record. Learned
Courts below had examined the evidence thoroughly and this
Court should not interfere with the concurrent findings of fact
recorded by learned Courts below while exercising revisional
jurisdiction. The evidence of the complainant was misread by the
learned Senior Counsel and only a suggestion made to the
complainant was denied by him. All the necessary ingredients of
the commission of an offence punishable under Section 138 of the
NI Act were duly satisfied and learned Courts below had rightly
convicted and sentenced the accused; hence, he prayed that the
present revision be dismissed.
12. I have given considerable thought to the submissions
made at the bar and have gone through the records carefully.
13. It was laid down by the Hon’ble Supreme Court in
Malkeet Singh Gill v. State of Chhattisgarh, (2022) 8 SCC 204: (2022)
3 SCC (Cri) 348: 2022 SCC OnLine SC 786 that a revisional court is
Page |8
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.
14. This position was reiterated in State of Gujarat v.
Dilipsinh Kishorsinh Rao, 2023 SCC OnLine SC 1294, wherein it was
observed:
“13. The power and jurisdiction of the Higher Court under
Section 397 Cr. P.C., which vests the court with the power to
call for and examine records of an inferior court, is for the
purposes of satisfying itself as to the legality and regularity
of any proceeding or order made in a case. The object of this
provision is to set right a patent defect or an error of
jurisdiction or law or the perversity which has crept into
such proceedings. It would be apposite to refer to the
judgment of this court in Amit Kapoor v. Ramesh
Page |9Chandra, (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
categories aforestated. Even framing of charge is a much-
advanced stage in the proceedings under the CrPC.”
15. It was held in Kishan Rao v. Shankargouda, (2018) 8 SCC
165: (2018) 3 SCC (Cri) 544: (2018) 4 SCC (Civ) 37: 2018 SCC OnLine
P a g e | 10
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
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
P a g e | 11
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
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.
P a g e | 12
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 the exercise of revisional
jurisdiction under Section 482 of the Criminal Procedure
Code, the High Court does not, in the absence of perversity,
upset concurrent factual findings. It is not 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.”
17. The present revision has to be decided as per the
parameters laid down by the Hon’ble Supreme Court.
18. The accused claimed in his statement recorded under
Section 313 of Cr.P.C. that the cheque was given in lieu of the
transfer of the stock to a Company in which the accused was an
employee and the Firm, to which the stock was transferred had
given another cheque. The name of any Firm was not mentioned in
this statement, therefore, the plea taken by the accused regarding
the issuance of the cheque on behalf of T.R. Associates was an
P a g e | 13
afterthought and was rightly discarded by the learned Courts
below.
19. The accused in his statement on oath stated that the
complainant had ordered pickle and tomato ketchup from Shah
Bihari Foods in April 2015; however, the complainant refused to
accept the consignment. One person from Shah Bihari Foods was
connected to the accused in a WhatsApp group. He called the
accused and told him that the complainant was not accepting the
consignment. This consignment should be sold to some other
person so that Shah Bihari Foods does not suffer any loss. He
talked to the complainant and put him in contact with Baldev
Kansal, owner of T.R. Associates, who agreed to purchase the
consignment. The accused issued a bill in the name of his Firm,
MVASKT India, and subsequently, he issued a bill in the name of
T.R. Associates. T.R. Associates did not have any chequebook or
cash so the complainant asked the accused to hand over the
cheque as a security which would be returned after the receipt of
the cheque or the money from T.R. Associates. He handed over a
blank cheque (Ext. CW1/C) without any signatures to the
complainant. Subsequently, T.R. Associates paid the money. The
complainant promised to return the cheque but the cheque was
P a g e | 14
not returned. He also served a notice to the complainant for not
returning the cheque. He has never purchased any article from the
complainant.
20. This version was never put forth in the statement
recorded under Section 313 CrPC and is an afterthought. Further,
this version is highly improbable. The accused claimed the
consignment was sent by Shah Bihari Foods and the complainant
had refused to accept the consignment, therefore, the ownership
of the goods never passed to the complainant and he was not
entitled to payment of any money. The payment was to be made to
Shah Bihari Foods. Further, the accused said that he had delivered
a blank unsigned cheque as a security for the payment on behalf of
T.R. Associates. A blank unsigned cheque does not carry any value
and cannot constitute any security; therefore, it is highly
improbable that the complainant would have accepted the blank
unsigned cheque as a security. The accused did not examine any
witness from Shah Bihari Foods or T.R. Associates to establish his
version and in the absence of the statement of any officials of Shah
Bihari Foods or T.R. Associates, learned Courts below were
justified in rejecting the version of the accused.
P a g e | 15
21. The accused stated that the complainant issued a bill in
the name of MVASKT India instead of T.R. Associates which means
that the complainant issued the same bill in favour of T.R.
Associates. A perusal of the bills (Ext. CW1/A and Ext. DA, D1 and
D2) shows that these were issued on different dates for different
amounts. Even the items mentioned in the bill, their MRP and
quantity are different. The sub-total of the bills (Ext. DA, D1 and
D2) is ₹2,82,668/-, which is quite distinct from ₹2,90,440/-
mentioned in the bills (Ext. CW1/A). Hence, these bills do not
establish the version of the accused that the complainant had
issued a bill first in the name of the accused regarding the
consignment received from Shah Bihari Foods and thereafter a bill
in favour of T.R. Associates regarding the same items. Hence, this
version was rightly discarded by the learned Courts below.
22. A heavy reliance was placed upon the notice (Ext.D3)
issued to the complainant by the accused. Learned Appellate Court
had rightly pointed out that the cheque was dishonored by the
Bank of the accused on 02.06.2015 on account of insufficiency of
funds which is apparent from the stamp put on the reverse of the
cheque. The notice was issued on 21.07.2015 after the accused
came to know of the dishonour of the cheque and he could have
P a g e | 16
issued a notice to wriggle out of his liability. In any case, the notice
was in the nature of an admission made by the accused in his
favour and is inadmissible in view of Section 21 of the Indian
Evidence Act. Therefore, not much advantage can be derived from
the notice.
23. It was submitted that the complainant admitted in his
cross-examination that a blank unsigned cheque was received
from the accused and this admission was ignored by the learned
Trial Court. It was rightly submitted on behalf of the complainant
that this is a misreading of the evidence. The complainant stated
in his cross-examination that it was incorrect that the items
mentioned in the bills (Ext. D1 and D2) were given to T.R.
Associates on credit, whose name was struck off and the
complainant obtained a blank unsigned cheque as a security. This
was a suggestion made to the complainant and the complainant
denied the same. There was no admission made by the
complainant, which was ignored by the learned Trial Court.
24. Learned Courts below had rightly pointed out that the
accused did not state in the notice (Ext. D3) that he had issued a
blank unsigned cheque. Further, the plea taken by the accused
P a g e | 17
regarding the refusal to accept the consignment for Shah Bihari
Foods was never stated in the notice as well as an application
under Section 145 of the NI Act filed to cross-examine the
complainant and the witnesses, which shows that this story was
propounded for the first time during the examination of witnesses.
25. The accused never requisitioned the record from T.R.
Associates regarding the payment of the money made by it to the
complainant. No statement of account of the complainant was
proved to establish that the complainant had received payment
from T.R. Associates. Arun Guleri (CW2) appeared on behalf of the
Bank of Baroda, the banker of the complainant. He was never
asked to produce the statement of account of the complainant,
therefore, the learned Courts below had rightly refused to place
reliance upon the uncorroborated testimony of the accused. This
was a possible view, which could have been taken based on the
evidence led before the learned Trial Court and cannot be
interfered with while exercising a revisional jurisdiction.
26. It was submitted that the signatures on the cheque are
quite distinct from the specimen signatures (Ext.DW1/A) in the
Bank. It was rightly held by learned Courts below that the cheque
P a g e | 18
was not dishonoured with an endorsement “signatures differ” but
with an endorsement ‘funds insufficient’. Even if there is a
mismatch of the signatures, it does not take away the liability
under Section 138 of the NI Act. It was laid down by the Hon’ble
Supreme Court in Laxmi Dyechem v. State of Gujarat, (2012) 13 SCC
375: (2012) 4 SCC (Cri) 283: 2012 SCC OnLine SC 970, that the
dishonour of cheque with an endorsement of signature mismatch
attracts the provisions of Section 138 of N.I. Act. It was observed at
page 388: –
16. The above line of decisions leaves no room for holding
that the two contingencies envisaged under Section 138 of
the Act must be interpreted strictly or literally. We find
ourselves in respectful agreement with the decision in the
Magma case [(1999) 4 SCC 253: 1999 SCC (Cri) 524] that the
expression “amount of money … is insufficient” appearing
in Section 138 of the Act is a genus and dishonour for
reasons such “as account closed”, “payment stopped”,
“referred to the drawer” are only species of that genus. Just
as dishonour of a cheque on the ground that the account has
been closed is a dishonour falling in the first contingency
referred to in Section 138, so also dishonour on the ground that
the “signatures do not match” or that the “image is not found”,
which too implies that the specimen signatures do not match
the signatures on the cheque would constitute a dishonour
within the meaning of Section 138 of the Act.” (Emphasis
supplied)
27. Karnataka High Court held in Peeranbi v. Hajimalang,
2013 SCC OnLine Kar 10420: (2013) 2 Kant LJ 569 : (2013) 3 KCCR
P a g e | 19
2223 : (2014) 1 AIR Kant R 405 : (2013) 3 BC 532 : (2014) 5 RCR (Cri)
757 that the dishonour of the cheque due to signature mismatch
will attract penal liability under Section 138 of the NI Act. It was
observed:
“9. In the facts and circumstances, as rightly contended by
the learned Counsel for the appellant, the cheque having
been drawn on the account of the respondent, is not in
dispute. However, it is the defence set up that there was a
business relationship between the appellant and the
respondent, and the appellant could have accessed a
cheque leaf belonging to the respondent, which is sought
to be misused. In this regard, there is no positive evidence
put forward by the respondent. In other words, in terms of
Section 139, the presumption is in favour of the holder of
the cheque of the same having been issued by the account
holder in discharge of a legal liability. It is for the person
issuing the cheque to prove otherwise. This, the Apex Court
has held in the case of Rangappa v. Sri Mohan. [AIR 2010 SC
1898 : (2010) 11 SCC 441 : (2011) 1 SCC (Cri) 184: 2010 Cri. L.J.
2871 (SC)] That, not only is it possible for the accused to
establish this by leading positive evidence, but he could
also place reliance on the evidence tendered by the
complainant himself to discharge that burden. Hence, if it
was the contention of the respondent that there were
cheque leaves misplaced by him and which were sought to
be misused by the appellant, it was for the respondent to
have tendered evidence of the approximate date when
there was a dissolution of the partnership business
between the appellant and the respondent, and the
respondent having operated his Bank Account thereafter
using other cheque leaves and that the cheque leaves which
were left behind upon such dissolution having fallen into
disuse over a period of time, sought to be forged and
fabricated at a later date by the appellant, was clearly on
the respondent. There is no such evidence forthcoming
P a g e | 20except the self-serving evidence of the respondent.
Further, in the event that any such cheque leaves were
misused, a duty was cast on the respondent to inform his
banker to stop payment, against such cheques which were
lost or misplaced. There is no such evidence forthcoming.
Nor is it the case of the respondent that the cheques being
misplaced, he had reported to the nearest Police Station of
such loss. There was no demand made on the appellant to
return such cheque leaves left behind. Therefore, the
evidence of the respondent was clearly self-serving and it
was a burden cast on the respondent to establish the fact
that there were cheque leaves which were left behind and it
was possible for the appellant to misuse the same. If once
it is apparent that the cheque had been issued on the
account held by the respondent, the presumption under
Section 139 is clearly in favour of the appellant to establish
that it was forged by the accused. The burden is clearly on
the respondent and it is not for the appellant to establish
that the respondent had deliberately changed his signature
in order that it would be dishonoured by his Bank. This
may indeed have been the intention in changing his
signature at the time of issuing of the cheque. As already
stated, the burden to establish that it was lost and it has
been misused by the appellant, was clearly on the
respondent. The Court below has also committed an error
in holding that the liability in respect of which the cheque
had been issued was required to be proved by the appellant.
The proceedings were not in the nature of a suit for
recovery of money but for prosecution of an offence
punishable under Section 138 of the NI Act. The limited
scope of those proceedings is whether there was dishonour
of the cheque issued by the accused. That aspect of the
matter has been established on the face of it. Therefore,
the Court below has clearly committed an error in
addressing the case of the complainant and in dismissing
the complaint. Consequently, the appeal is allowed. The
complainant has established his case beyond all reasonable
doubt. The respondent therefore is liable for punishment.
Accordingly, he shall pay a fine of Rs. 3,50,000/- in default
P a g e | 21of which, the respondent shall suffer simple imprisonment
for a period of six months. The fine amount shall be paid
forthwith, in any event, within a period of 15 days. Out of
the fine amount, a sum of Rs. 3,40,000/- shall be paid as
compensation to the appellant.”
28. Madras High Court also held in R. Manimehalai v.
Banumathi, 2018 SCC OnLine Mad 13802 that the dishonour of a
cheque due to signature mismatch attracts the provisions of
Section 138 of NI Act. It was observed:
“10…. It is true that the impugned cheque was returned on
two grounds, namely, (a) insufficient funds, and (b) the
signature of the drawer differs. On receipt of, the statutory
notice, dated 31.12.2013, [EX-P3] from the complainant, the
accused, has sent a belated reply notice, dated 17.3.2014,
[EX-P5], in which also the accused, did not take the plea
that her signature has been forged in the cheque. She has
taken, a plea that the impugned cheque was issued by her
for a different debt. The accused took pains to examine
Ganeshamoorthy, Senior Manager of Syndicate Bank, in
which the accused has an account, to say that the signature
in the cheque differed from the specimen signature with the
Bank. This only shows that the accused had deliberately put
her signature differently in the impugned cheque with the
intention of cheating the complainant. However, a charge of
cheating has not been framed against the accused. This
conduct of the accused in giving the cheque by affixing her
signature differently is relevant under Section 8 of the
Indian Evidence Act, 1872. The presumption under. Section
139 of the Negotiable Instruments Act, 1881, comes into
force, when once the cheque has been issued by the accused
for the debt in question. Of course, this is a rebuttable
presumption and the same can be dislodged by the accused
by preponderance of probabilities and not by proof beyond
reasonable doubt, as held by the Supreme Court
in Rangappa v. Sri Mohan, (2010) 2 BC 693 (SC): II (2010) CCR
P a g e | 22433 (SC) : (2010) 4 SLT 56 : (2010) 2 DLT (Cri) 699
(SC) : (2010) 11 SCC 441. In this case, the accused has failed to
discharge her burden even by a preponderance of
probabilities. She was trying to take advantage of the
difference in signature in order to wriggle out of the
prosecution…..”
29. Thus, even if the cheque is dishonoured with the
endorsement signature differs, it will attract the provisions of
Section 138 of the NI Act and not much advantage can be derived
from the submission that the signatures on the cheque and the
specimen kept in the bank do not match.
30. The complainant specifically stated in his affidavit that
he had sold various items to the accused vide Bill No. 51 dated
25.05.2015 for ₹2,90,440/-. The accused paid ₹27,224/- in cash
and issued a cheque of ₹2,63,216/- to discharge his legal liability.
His statement is corroborated by the bill (Ext. CW1/A) in which an
amount of ₹2,90,440/- was written as due out of which
₹27,224/- was received as cash and Cheque No.976361 dated
01.06.2015 drawn on ICICI Bank was received for the payment of
₹2,63,216/-. This bill was maintained in the course of the
business and is presumed to be correct under Section 114 of
Indian Evidence Act. Therefore, learned Courts below had rightly
relied upon the statement of the complainant to hold that the
P a g e | 23
accused had purchased the articles from the complainant
mentioned in the bill and had issued a cheque to discharge his
legal liability.
31. It was submitted that the accused is not shown to be
connected to MVASKT. This submission is not acceptable. The
accused admitted in his statement recorded under Section 313 of
Cr.P.C. that he is the proprietor of accused No.2. He stated on oath
that Rajeev Kohli issued a bill in the name of his Firm MVASKT
India. These admissions clearly show that the accused is the
proprietor of MVASKT India and the plea that he is not connected
to accused No.2 cannot be accepted.
32. The complainant specifically stated that the cheque
was issued in the discharge of the legal liability. This was duly
corroborated by the bill, whereas the plea taken by the accused
that he had issued an unsigned blank cheque was not at all
probable, therefore, the learned Courts below had rightly held
that the cheque was issued in discharge of the legal liability.
33. Memo of dishonour (Ext. CW1/A) shows that it was
dishonoured with an endorsement of ‘insufficient funds’. Dipti
(CW3), the Officer of the ICICI Bank proved that the cheque was
P a g e | 24
dishonoured due to insufficient funds. Her statement is
corroborated by the statement of account of the accused, in
which, an amount of ₹4819.16/- was shown balance on
02.06.2015. Lovekesh Patial (DW1) also proved that the memo
(Ext. DW1/B) was issued by the Bank. Therefore, it was duly
proved that the cheque was dishonoured with an endorsement of
funds insufficient.
34. The complainant stated that he issued a notice to the
accused by means of a registered A.D. cover, which was returned
with an endorsement ‘refused’. The registered A.D. covers were
placed on record, in which, an endorsement ‘refused’ was made. It
was laid down by the Hon’ble Supreme Court of India in C.C. Allavi
Haji vs. Pala Pelly Mohd. 2007(6) SCC 555, that when a notice is
returned unclaimed, it is deemed to be served. It was observed:
“8. Since in Bhaskaran’s case (supra), the notice issued in
terms of Clause (b) had been returned unclaimed and not as
refused, the Court, posed the question: “Will there be any
significant difference between the two so far as the
presumption of service is concerned?” It was observed that
though Section 138 of the Act does not require that the
notice should be given only by “post”, yet in a case where
the sender has dispatched the notice by post with the
correct address written on it, the principle incorporated in
Section 27 of the General Clauses Act, 1897 (for short ‘G.C.
Act‘) could profitably be imported in such a case. It was held
that in this situation service of notice is deemed to have
P a g e | 25been effected on the sendee unless he proves that it was not
really served and that he was not responsible for such non-
service.”
35. This position was reiterated in Priyanka Kumari vs.
Shailendra Kumar (13.10.2023- SC Order): MANU/ SCOR/ 133284/
2023 wherein it was observed:
“As it was held by the Hon’ble Supreme Court in K.
Bhaskaran Vs. Sankaran Vaidhyan Balan and Another, (1999) 7
Supreme Court Cases 510, that when notice is returned as
‘unclaimed’, it shall be deemed to be duly served upon the
addressee, and it is a proper service of notice. In the case of
Ajeet Seeds Limited Vs. K. Gopala Krishnaiah (2014) 12 SCC 685
(2014), the Hon’ble Court, while interpreting Section 27 of
the General Clauses Act 1897 and also Section 114 of the
Evidence Act 1872, held as under: –
“Section 114 of the Evidence Act, 1872 enables the
court to presume that in the common course of
natural events, the communication sent by post would
have been delivered at the address of the addressee.
Further, Section 27 of the General Clauses Act, 1897
gives rise to a presumption that service of notice has
been effected when it is sent to the correct address by
registered post. It is not necessary to aver in the
complaint that in spite of the return of the notice
unserved, it is deemed to have been served or that the
addressee is deemed to have knowledge of the notice.
Unless and until the contrary is proved by the
addressee, service of notice is deemed to have been
effected at the time at which the letter would have
been delivered in the ordinary course of business.”
36. In the present case, the accused has not proved that he
was not responsible for non-service; therefore, the learned Courts
P a g e | 26
below had rightly held that the notice was duly served upon the
accused.
37. Therefore, it was duly proved on record that the
accused had issued a cheque to discharge his legal liability, which
cheque was dishonoured with an endorsement ‘funds
insufficient’ and the notice was deemed to be served upon the
accused but he failed to pay the amount; hence, he was rightly
convicted by the learned Trial Court.
38. The learned Trial Court sentenced the accused to
undergo simple imprisonment for one year. It was laid down by
the Hon’ble Supreme Court in Bir Singh v. Mukesh Kumar, (2019) 4
SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ) 309: 2019 SCC
OnLine SC 138 that the penal provisions of Section 138 is a
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
without serious intention to honour the promise implicit in
the issuance of the same.”
P a g e | 27
39. Keeping in view the deterrent nature of the sentence to
be awarded, the sentence of one year of simple imprisonment
cannot be said to be excessive, and no interference is required with
it.
40. Learned Trial Court awarded a compensation of
₹4,80,000/- to the complainant. The cheque was issued on
01.06.2015. The sentence was imposed on 30.08.2022 after the
lapse of more than 07 years. The complainant lost interest, which
he would have obtained by depositing the amount in the bank and
he had to pay the litigation expenses for filing and prosecuting 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 on
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
P a g e | 28realisation 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]”
41. Therefore, the amount of ₹1,86,784/- on the principal
amount of ₹2,63,216/- cannot be said to be excessive and no
interference is required with the compensation awarded by the
learned Trial Court.
42. No other point was urged.
43. In view of the above, the present revision fails and the
same is dismissed.
44. Records of the learned Courts below be sent back
forthwith, along with a copy of this judgment.
(Rakesh Kainthla)
Judge
17th June, 2025
(Saurav pathania)