Himachal Pradesh High Court
Reserved On: 15.5.2025 vs Himachal Pradesh Gramin Bank on 2 July, 2025
2025:HHC:20832
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision Nos. 196 of 2022
.
Reserved on: 15.5.2025
Date of Decision: 02.07.2025.
Ranjeet Singh ...Petitioner
Versus
Himachal Pradesh Gramin Bank, Kharsi
through its Branch Manager
...Respondent
Coram
Hon’ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 No.
For the Petitioner : Mr. Sanket Sankhyan, Advocate.
For the Respondent : Ms. Devyani Sharma, Senior
Advocate, with Mr. Shivam
Sharma, Advocate.
Rakesh Kainthla, Judge
The petitioner has filed the present petition against
the judgment dated 10.3.2022, passed by learned Sessions Judge,
Bilaspur, District Bilaspur, H.P. (learned Appellate Court), vide
which the judgment of conviction and order of sentence dated
14.2.2020, passed by learned Judicial Magistrate First Class,
1
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
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Bilaspur, District Bilaspur, H.P. (learned Trial Court) were
upheld and the appeal filed by the petitioner (accused before the
.
learned Trial Court) was dismissed. (Parties shall hereinafter be
referred to in the same manner as they were arrayed before the
learned Trial Court for convenience.)
2. Briefly stated, the facts giving rise to the present
revision are that the complainant filed a complaint before the
learned Trial Court against the accused for the commission of an
offence punishable under Section 138 of the Negotiable
Instruments Act (NI Act). It was asserted that the complainant is
a Body Corporate constituted under the Regional Rural Bank Act,
1976. It is engaged in banking activities. The accused
approached the complainant on 11.6.2013 for obtaining a loan of
₹21,05,000/- for the purchase of a new truck. The accused was
to repay the loan in 72 equal monthly instalments plus a
contractual rate of interest @13.25% per annum with monthly
rests and 20% penal interest in case of default. The accused
defaulted in depositing the monthly instalments. The
complainant demanded money from the accused, and he issued
the cheque for ₹16,81,425.40 to discharge his legal liability. The
complainant presented the cheque to the bank, but it was
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dishonoured with an endorsement ‘insufficient funds’. The
complainant sent a notice to the accused demanding the amount
.
mentioned in the cheque from the complainant. The notice was
duly served upon the accused, but he failed to pay the amount.
Hence, the complaint was filed against the accused for taking
action against him as per the law.
3. The learned Trial Court found sufficient reasons to
summon the accused. When the accused appeared, notice of
accusation was put to him for the commission of an offence
punishable under Section 138 of the NI Act, to which he pleaded
not guilty and claimed to be tried.
4. The complainant examined Harinder Kumar (CW1) in
support of its complaint.
5. The accused, in his statement recorded under Section
313 of Cr.P.C., admitted that he had approached the bank for
seeking a loan of ₹21,05,000/-, which was duly sanctioned to
him. He stated that he had handed over the security cheque to
the complainant. No intimation regarding dishonour was
received. Statements of Babu Ram (DW1) and Ravi Kumar (DW2)
were recorded in defence.
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6. Learned Trial Court held that the issuance of the
cheque was not disputed. The cheque carried with it the
.
presumption that it was issued for consideration in discharge of
legal liability. The evidence led by the accused was not sufficient
to rebut this presumption. The sale was made as per the terms
and conditions agreed between the parties. The cheque was
dishonoured with an endorsement ‘insufficient funds’, and the
accused failed to pay the amount despite receipt of a valid notice
on demand. 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 imprisonment for
three months and pay compensation of ₹20.00 lacs.
7. Being aggrieved from the judgment and order passed
by the learned Trial Court, the accused filed an appeal, which
was decided by the learned Sessions Judge, Bilaspur (learned
Appellate Court). Learned Appellate Court concurred with the
findings recorded by the learned Trial Court that the accused
had failed to rebut the presumption attached to the cheque. His
plea that the cheque was issued as a security was not proved.
The money realised under the CGTMSE Scheme was duly
adjusted, and an amount of ₹16,81,425/- was due. The amount
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of ₹7,30,000/- was realised on 3.8.2015 and 8.8.2015 by the sale,
and it was also adjusted in the statement of account. The cheque
.
was dishonoured with an endorsement ‘funds insufficient’ and
the accused failed to pay the money despite receipt of a valid
notice of demand. Learned Trial Court rightly appreciated the
evidence. The sentence imposed was also adequate, and no
interference was required with the judgment and order passed
by the learned Trial Court. Hence, the appeal filed by the accused
was dismissed.
8. Being aggrieved from the judgments and order
passed by learned Courts below, the accused has filed the
present revision asserting that the learned Courts below erred in
appreciating the evidence. The bank claimed the amount due
from the CGTMSC Scheme and failed to credit the same to the
account of the accused. The plea taken by the accused that the
blank signed security cheque was issued was highly probable in
view of the statements of the defence witnesses. Learned Courts
below erred in rejecting this plea. The interest was not
calculated correctly, and the accused had no liability to pay
₹16,81,425/- on 17.10.2015. Therefore, it was prayed that the
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present revision be allowed and the judgments and order passed
by learned Courts below be set aside.
.
9. I have heard Mr. Sanket Sankhyan, learned counsel
for the petitioner/accused, and Ms. Devyani Sharma, learned
Senior Counsel, assisted by Mr. Shivam Sharma, learned counsel
for the respondent/complainant.
10.
Mr. Sanket Sankhyan, learned counsel for the
petitioner/accused, submitted that the learned Courts below
failed to appreciate the evidence on record. It was duly proved on
record that the money under the CGTMSE Scheme was received
by the complainant, which was not credited to the account of the
accused. The accused had issued a blank signed cheque as
security, which was misused by the complainant. The accused
did not have the liability to pay the amount mentioned in the
cheque at the time of its presentation. The cheque was not
issued in the name of the complainant but in the account
mentioned by the accused. Therefore, the complaint at the
instance of the complainant is not maintainable. The notice was
not served upon the accused; therefore, he prayed that the
present revision be allowed and the judgments and order passed
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by the learned Courts below be set aside. He relied upon the
judgment titled Dashrathbhai Trikambhai Patel Vs. Hitesh
.
Mahendrabhai Patel & Anr., Criminal Appeal No. 1497 of 2022 in
support of his submission.
11. Ms. Devyani Sharma, learned Senior Counsel for the
respondent/complainant, submitted that the learned Courts
below had properly appreciated the evidence and this Court
should not interfere with the concurrent findings of fact while
deciding the revisional jurisdiction. The payment made under
the CGTMSE Scheme is not for the benefit of the borrower and is
to be reimbursed to the fund. The amount realised by the sale of
the vehicle was duly credited, and the submission that the
accused had no subsisting liability is not acceptable. She prayed
that the present petition be dismissed. She relied upon the
judgments of Ajeet Kumar Kurup v. State Bank of Travancore
WP(C) No. 25332 of 2016 (N), Kiran Sharma Vs. Brinda Jewellers
and another, 2024:HHC:7951, India Saree Museum Vs. P.
Kapurchand & others 1989 SCC OnLine Kar 124, Jeet Ram Vs. HP
Gramin Bank 2023:HHC:2849, Yashpal Singh Vs. Guman Singh
2024:HHC:9540, Balak Ram Vs. Ajay Kumar Sharma and another
2024:HHC:8601, B.R. Bhatia Vs. Amarjit Singh 2024:HHC:10249,
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Vee Kay Concast Pvt. Ltd. Vs. M/s Stanely Products and anr. 2025
NCPHHC 20038, Vee Kay Concast Private Limited Vs. M/s Stanley
.
Products and another 2023:PHHC:028762 and ICICI Bank Ltd. Vs.
Prafull Chandra and others ILR (2007) II Delhi 250 in support of
her submission.
12. I have given considerable thought to the submissions
made at the bar and have gone through the records carefully.
13. It was laid down by the Hon’ble Supreme Court in
Malkeet Singh Gill v. State of Chhattisgarh, (2022) 8 SCC 204:
(2022) 3 SCC (Cri) 348: 2022 SCC OnLine SC 786 that a revisional
court is not an appellate court and it can only rectify the patent
defect, errors of jurisdiction or the law. It was observed at page
207: –
“10. Before adverting to the merits of the contentions, at
the outset, it is apt to mention that there are concurrentfindings 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::: Downloaded on – 02/07/2025 21:23:09 :::CIS
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2025:HHC:20832provision 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 powerto 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 hascrept 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 397has been considered and succinctly explained as under:
“12. Section 397 of the Code vests the court with the
power to call for and examine the records of an
inferior court for the purposes of satisfying itself asto the legality and regularity of any proceedings or
order made in a case. The object of this provision is
to set right a patent defect or an error of 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
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2025:HHC:20832there 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 inmind 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 agiven 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 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)::: Downloaded on – 02/07/2025 21:23:09 :::CIS
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2025:HHC:20832“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 powercannot 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 theevidence 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 ofthe 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 itsjurisdiction 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
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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.
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::: Downloaded on – 02/07/2025 21:23:09 :::CIS
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2025:HHC:20832Sales & 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 cheque was issued in the name of Ranjeet Singh,
Account No. 88865K00000049. The statement of account
(Ex.DW2/A) mentions the account number as 8886JK00000049.
Therefore, it is apparent that the cheque was issued in the loan
account of the accused. The amount deposited in the loan
account of the accused is for the benefit of the complainant
bank, which had advanced the loan. Therefore, the bank will fall
within the definition of the holder in due course.
19. A similar cheque was issued in Sada Vijay Kumar Vs.
State of Maharashtra 2012 SCC Online Bombay 1866. It was
submitted that the complainant could not have filed the
complaint, as it was not a payee. This contention was noticed in
paras 8 and 9 as under: –
“8. The cheque was crossed and issued to the HDFC Bank
Account, M/s. K. Sada Vijay Kumar Beedi Leaves Merchant
against Account No. 3752790000051. The drawer of the::: Downloaded on – 02/07/2025 21:23:09 :::CIS
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2025:HHC:20832cheque was M/s. K. Sada Vijay Kumar Beedi Leaves
Merchant, by authorised signatories of cheque No.
414892 drawn on the said Bank, dated 30th September,
2009. The cheque returning memo refers to K. Sada Vijay.
Kumar Beedi Leaves Merchant dated 30th September,
2009.
9. Mr. Tiwari submits that the legal position in an
identically placed situation was indicated by this Court in
the matter of Credential Finance Limited v. State of
Maharashtra decided on 1st March, 2000, reported
in (2000) 3 Mah LJ 544. The learned Single Judge of thisCourt giving reference to the provisions of Sections 7, 123,
124, 125 and 131 of the Negotiable Instrument Act, 1881
has held that there could not be any liability in terms of
Section 138 of the Negotiable Instrument Act against thePayee of the cheque and the observations of the learned
Additional Sessions Judge was disapproved.”
20. The Bombay High Court held that the bank would be
a holder in due course and entitled to file a complaint. It was
observed: –
10. The same learned Single Judge in the matter
of Ramesh Deshpande v. Panjab and Sind Bank, reported in
(2000) 0 AIJ-MH 123889, by order dated 3rd April, 2000
explained the effect of drawee, drawer’s cheque, bills ofexchange, dishonor of cheque for insufficiency of fund in
the account and placed reliance on the aforementioned
Judgment of Credential Finance Limited Later order was
carried to Supreme Court and the Hon’ble Supreme Court
in the matter of Panjab and Sind Bank v. Vinkar Sahakari
Bank Ltd., reported in (2001) 7 SCC 721 overruled the
Judgment and order dated 3rd April, 2000.
11. The cheques were post-dated cheques, totally valued
at Rs. 3.70 crores. There is non-compliance with the
decision of the meeting with the officials of the HDFC
Bank in discharging of liability. In the banking system, a::: Downloaded on – 02/07/2025 21:23:09 :::CIS
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2025:HHC:20832borrower issues a cheque to the financier Bank from his
account, and the same is credited to the loan account. In such
an event, the endorsement as above is not unusual or illegal.
It was thus a payment made by the borrower to HDFC Bank in
.
the loan account M/s. K. Sada Vijay Kumar and consequently,
in terms of Section 9 of the Negotiable Instrument Act, the
bank will be the holder in due course of the said cheque.
12. Section 9 of Negotiable Instrument Act conceive
“Holder in due course” means any person who for
consideration became the possessor of a promissory note,
bill of exchange or cheque if payable to bearer, or the
payee or indorsee thereof, if (payable to order), before the
amount mentioned in it became payable, and without
having sufficient cause to believe that any defect existed
in the title of the person from whom he derived his title.
Thus, the three stipulations envisaged therein are
necessarily carved out. These facts are explained by the
Hon’ble Supreme Court in the matter referred above.
13. The argument canvassed by Mr. Tiwari in respect of the
non-existence of the drawee or the Payee, M/s. K. Sada Vijay
Kumar and the drawer being the same, could not be
prosecuted, is inconceivable. Section 139 of the Act reveals
that the first factor to be satisfied for presumption is that such
a person should be the Holder of the cheque. The complainant
has to be either a payee or a holder in due course of the
cheque. Legislative object behind the provisions has to be
borne in mind and need not be defeated. The Bedrock of
section 9 is the entitlement of the holder. The
presumption available under Section 118(G) of the
Negotiable Instrument Act comes into operation only at
the time of the trial. In the present case, presumption will
prevail against the Applicant. The cheque was issued by
the Applicant in discharge of the liability of the loan to
the Bank and naturally will have reference to his account
where it was to be credited. The court has to presume a
negotiable instrument to be for consideration unless the
existence of consideration is disproved. Taking a survey
of the above facts, the view expressed by the learned
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Single Judge of this Court, having not been approved by
the Supreme Court as recorded hereinabove, I find no
force in the contentions of the Applicant.” (Emphasis
supplied)
.
21. In the present case, the cheque was drawn in the
account number mentioned on the cheque. The accused did not
dispute in his statement recorded under Section 313 of Cr.P.C.
that he had taken the loan from the complainant. It is not shown
that the account number mentioned in the cheque is incorrect.
Therefore, the cheque was drawn by the accused in the loan
account in his name. Since the loan account was maintained by
the complainant and the complainant was entitled to the money
deposited in the loan account, therefore, the complainant was
the holder in the due course and entitled to file the complaint.
Hence, the submission that the cheque was not issued in the
name of the complainant and the complaint filed by the
complainant is not maintainable cannot be accepted.
22. The accused stated in his statement recorded under
Section 313 of Cr.P.C. that the cheque was issued for a security
purpose. Ravi Kumar (DW2) stated that there were no security
cheques in the name of Ranjeet Singh in the loan case file of the
Bank, and the Bank does not take security cheques at the time of
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the sanction of the loan. Hence, the plea taken by the accused
that he had issued blank security cheques is not proved by his
.
witness.
23. Babu Ram (DW1) filed an affidavit (Ex.DW1/A) in
which he stated that the accused had signed the documents;
however, the bank had not taken any cheque from the accused.
The statement of this witness also does not establish the defence
that the accused had issued a blank security cheque in favour of
the petitioner.
24. There is no other evidence to prove that the accused
had issued blank security cheques in favour of the Bank, and the
plea taken by the accused that he had issued blank signed
security cheques in favour of the bank cannot be accepted.
25. The accused did not dispute that the cheque was
issued by him. It was stated in para (g) of the grounds of revision
that the complainant had taken the cheque from the accused in
advance and filled the amount as per its connivance, which is
evident from (Ex.C9) at Serial No.6(b). It was stated in para (g)
of the grounds of revision that the cheque was never filled by the
accused and there was tampering with the cheque. These two
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pleas clearly show that the issuance of the cheque has not been
disputed. It was laid down by this Court in Naresh Verma vs.
.
Narinder Chauhan 2020(1) ShimLC 398 that where the accused
had not disputed his signatures on the cheque, the Court has to
presume that it was issued in discharge of legal liability 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 issuedtowards discharge of lawful liability, rightly came to be
rejected by learned Courts below. Reliance is placed upon
Hiten P. Dalal v. Bartender Nath Bannerji, 2001 (6) SCC 16,
wherein it has been held as under:
“The words ‘unless the contrary is proved’ which
occur in this provision make it clear that the
presumption has to be rebutted by ‘proof’ and notby a bare explanation which is merely plausible. A
fact is said to be proved when its existence isdirectly established or when, upon the material
before it, the Court finds its existence to be so
probable that a reasonable man would act on thesupposition 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.
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“26. Applying the proposition of law as noted above, in
the facts of the present case, it is clear that the signature
on the cheque, having been admitted, a presumption shall
be raised under Section 139 that the cheque was issued in
.
discharge of debt or liability.”
26. 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 havepresumed 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 wasdirectly in the teeth of the established legal position as
discussed above, and amounts to a patent error of law.”
27. 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::: Downloaded on – 02/07/2025 21:23:09 :::CIS
20
2025:HHC:20832been misused by the complainant. However, nothing is on
record that in the reply to the statutory notice, it was the
case on behalf of the accused that the cheque was given by
way of security. Be that as it may, however, it is required.
to be noted that earlier the accused issued cheques which
came to be dishonoured on the ground of “insufficient
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 whichbears 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 leadevidence 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 theissuance 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 thateven according to the accused some amount was due and
payable, there is a presumption under Section 139 of theNI Act that there exists a legally enforceable debt or
liability. Of course, such presumption is rebuttable innature. 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::: Downloaded on – 02/07/2025 21:23:09 :::CIS
21
2025:HHC:20832considering 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 NIAct. 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 isalways 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.”
28. 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 thesignature on the documents at Exts. P-6 and P-2 are not
disputed. Ext. P-2 is the dishonoured cheque based onwhich 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::: Downloaded on – 02/07/2025 21:23:09 :::CIS
22
2025:HHC:20832nature referred to in Section 138 for the discharge,
in whole or in part, of any debt or other liability.”
13. Insofar as the payment of the amount by the appellant
.
in the context of the cheque having been signed by the
respondent, the presumption for passing of the
consideration would arise as provided under Section
118(a) of the NI Act, which reads as hereunder:
“118. Presumptions as to negotiable instruments. —
Until the contrary is proved, the following
presumptions shall be made:
(a) of consideration: that every negotiable
instrument was made or drawn for consideration,
and that every such instrument, when it has been
accepted, indorsed, negotiated or transferred, wasaccepted, indorsed, negotiated or transferred for
consideration.”
14. The above-noted provisions are explicit to the effect
that such presumption would remain until the contrary is
proved. The learned counsel for the appellant in that
regard has relied on the decision of this Court in K.
Bhaskaran v. Sankaran Vaidhyan Balan [K.
Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510:
1999 SCC (Cri) 1284] wherein it is held as hereunder: (SCC
pp. 516-17, para 9)“9. As the signature in the cheque is admitted to be
that of the accused, the presumption envisaged inSection 118 of the Act can legally be inferred that
the cheque was made or drawn for consideration on
the date which the cheque bears. Section 139 of 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::: Downloaded on – 02/07/2025 21:23:09 :::CIS
23
2025:HHC:20832dated 23-10-1998 (Ker)] by the High Court. It is not
now open to the accused to contend differently on
that aspect.”
.
15. The learned counsel for the respondent has, however,
referred to the decision of this Court
in Basalingappa v. Mudibasappa [Basalingappa v. Mudibasa
ppa, (2019) 5 SCC 418: (2019) 2 SCC (Cri) 571] wherein it is
held as hereunder: (SCC pp. 432-33, paras 25-26)
“25. We having noticed the ratio laid down by this
Court in the above cases on Sections 118(a) and 139,
we now summarise the principles enumerated by
this Court in the following manner:
25.1. Once the execution of the cheque is admitted,
Section 139 of the Act mandates a presumption thatthe 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 standardof 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 theaccused can also rely on the materials submitted by
the complainant in order to raise a probable
defence. Inference of preponderance ofprobabilities 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.
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2025:HHC:20832
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
loan of Rs 50,000 with regard to which Complaint
No. 119 of 2012 was filed by the complainant, a copy
of which complaint was also filed as Ext. D-2, there
was a burden on the complainant to prove his
financial capacity. In the years 2010-2011, as per
own case of the complainant, he made a payment of
Rs 18 lakhs. During his cross-examination, when
the financial capacity to pay Rs 6 lakhs to the
accused was questioned, there was no satisfactory
reply given by the complainant. The evidence on
record, thus, is a probable defence on behalf of the
accused, which shifted the burden on the
complainant to prove his financial capacity and
other facts.”
16. In that light, it is contended that the very materials
produced by the appellant and the answers relating to
lack of knowledge of property details by PW 1 in his cross-
examination would indicate that the transaction is
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2025:HHC:20832
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.”
29. 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::: Downloaded on – 02/07/2025 21:23:09 :::CIS
26
2025:HHC:20832expressly 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) 2SCC (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 thatthis Court has found that the accused is not expected to
discharge an unduly high standard of proof. It is
accordingly that the principle has developed that all
which the accused needs to establish is a probabledefence. 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…”
30. 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 otherliability. 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::: Downloaded on – 02/07/2025 21:23:09 :::CIS
27
2025:HHC:20832Complainant/holder of the cheque, in that case, it is for
the accused to prove the contrary.”
31. 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 thatevery 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 thedischarge 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 andSection 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 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::: Downloaded on – 02/07/2025 21:23:09 :::CIS
28
2025:HHC:20832in 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.
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::: Downloaded on – 02/07/2025 21:23:09 :::CIS
29
2025:HHC:20832rule 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]]
32. Thus, the Court has to start with a presumption that
the cheque was issued by the accused for consideration, and the
burden is upon the accused to rebut this presumption.
33. It was submitted that the amount of ₹ 10,09,314/-
was received under the CGTMSE Scheme, and this amount was
not credited to the account. The copy of the scheme has been
filed. Responsibility of the lending institution provided in Para
7(v) reads that the payment of the guarantee claim by the trust
to the lending institution does not take away the responsibility
of the lending institution to recover the entire outstanding
amount from the borrower and the lender shall initiate
necessary actions for the recovery of the outstanding amount. It
was laid down by the Kerala High Court in Ajit Kumar (supra)
that the CTMSE Scheme is an insurance scheme to protect the
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2025:HHC:20832
interest of the bank, and the benefits are to be reimbursed after
realising the dues from the borrower. It was observed:
.
“3. As noted above, the case of the petitioners is that since
the credit facility availed by the second petitioner is
covered by the CGTMSE Scheme, they have no liability toliquidate the outstanding in the account. The petitioners,
having obtained a judgment from this Court earlier
permitting them to liquidate the liability in the loan
account in instalments, according to me, are not entitledto file a fresh writ petition on the aforesaid ground. In
other words, this is a contention which might, and ought
to have been raised in the earlier writ petition. Further,
there is also no substance in the contention of thepetitioners that they have no liability to liquidate the
outstanding in the loan account since the credit facility
availed by the second petitioner is covered by the
CGTMSE Scheme. CGTMSE Scheme is an insurance
scheme to protect the interest of the banks in the event ofdefault by the borrowers, and the premium payable for
the coverage of the loan under the scheme is debited from
the account of the borrowers based on the terms of theagreements executed by the borrowers. The benefits of
the Scheme are to be reimbursed by the banks afterrealising the dues from the borrowers concerned. If the
contention of the petitioners is accepted, the borrowers
will have no obligation to repay the loans/credit facilitiesavailed.”
34. A similar view was taken by this Court in Jeet Ram
(supra), wherein it was observed: –
“11. During proceedings of the case, Ms. Devyani Sharma,
learned senior counsel appearing for the respondent-
complainant/bank invited attention of this court to Credit
Guarantee Fund Scheme for Micro and Small Enterprises,
under which, some amount is alleged to have been::: Downloaded on – 02/07/2025 21:23:09 :::CIS
31
2025:HHC:20832recovered, to state that amount, if any, recovered under
this scheme is liable to be repaid to the Central
Government.”
.
35. A similar view was taken in Indian Overseas Bank vs.
Global Marine Products 2003 STPL 580 Kerala, wherein it was
observed:
9. The appellant has contended that though the total loss
claimed by the appellant was much more, the ECGC ofIndia Ltd. admitted only a lesser amount and paid the
same. It is clear from Clause 18 of Ext. A65 agreement
entered into between the appellant and the ECGC of India
Ltd. that the amount paid by the Corporation to theappellant is on condition that the appellant should
institute recovery proceedings against exporter or any
other person from whom such recovery can be effected
towards the insured debt and after recovery the amount
as well as the cost incurred for recovery should beapportioned between the appellant and the ECGC of India
Ltd. in accordance with the proportion stipulated in the
agreement. Therefore the payments made by the ECGC tothe appellant, being insured is only for the purpose of
making good the proportionate loss admitted by the ECGCsubject to recovery of the same under due process of law
from the exporter or from any other person from whomsuch amount can be recovered and apportioned as per the
ratio provided in the insurance agreement. Hence, that
amount paid by the ECGC to the appellant in terms of the
insurance agreement cannot be credited to the account of
the first defendant exporter from whom the amounts are
due and to be recovered by the appellant towards the
claim.
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2025:HHC:20832
36. Therefore, the submission that the money paid under
the Scheme is to be credited to the account of the accused and he
.
is not liable to pay the amount cannot be accepted.
37. It was submitted that the bank seized the vehicle and
did not credit the sale proceeds to the account of the accused.
This submission is not correct. The statement of account shows
that an amount of ₹1,80,000/- was credited on 3.8.2015, being
25% of the auction amount, and ₹5,50,000/- was credited on
8.8.2015, being the remaining amount of the sale. Thus, the bank
had credited the sale proceeds to the account, and the amount of
₹16,81,425.40 was payable on 28.9.2015. The cheque was issued
for this amount on 17.10.2015; therefore, the accused had a
subsisting liability to pay the amount on the date of presentation
of the cheque. Hence, the judgment in Dashrath (supra) does not
apply to the present case.
38. Harinder Kumar (CW1) stated that the cheque was
dishonoured with an endorsement ‘insufficient funds’, which is
corroborated by the memo (Ex.C3), which mentions the reason
for dishonour as ‘insufficient funds’. It was laid down by the
Hon’ble Supreme Court in Mandvi Cooperative Bank Ltd. v.
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33
2025:HHC:20832
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 thecheque 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.
39. 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’.
40. Harinder Kumar (CW1) stated that the complainant
had issued a notice (Ex.C4) to the accused through registered
post. The receipt (Ex.C5) was also placed on record. This notice
was sent to the address mentioned by the accused in the notice
of accusation; the statement recorded under Section 313 of
Cr.P.C., and the personal bonds furnished before the learned
Trial Court. Therefore, the notice was sent to the correct address
and is being deemed to have been served.
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34
2025:HHC:20832
41. 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 ofnotice before filing a complaint. Any drawer who claims
that he did not receive the notice sent by post, can, within15 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 hadmade 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 personwho does not pay within 15 days of receipt of the
summons from the Court along with the copy of thecomplaint under Section 138 of the Act, cannot obviously
contend that there was no proper service of notice as
required under Section 138, by ignoring statutorypresumption 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 Section 138 of the Act.”
(Emphasis supplied)
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2025:HHC:20832
42. The accused did not pay the amount to the
complainant despite the receipt of a valid notice of demand.
.
Therefore, it was duly proved on record that the accused had
issued the cheque in discharge of the legal liability, but this
cheque was dishonoured with an endorsement ‘insufficient
funds’ and the accused failed to pay the amount despite the
deemed receipt of the notice of demand. Hence, the complainant
had proved its case beyond a reasonable doubt, and the learned
Trial Court had rightly convicted the accused of the commission
of an offence punishable under Section 138 of the Act.
43. The learned Trial Court sentenced the accused to
undergo simple imprisonment for a period of three 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 is deterrent in nature. It was observed at page 203:
“6. The object of Section 138 of the Negotiable
Instruments Act is to infuse credibility into negotiable
instruments, including cheques, and to encourage and
promote the use of negotiable instruments, 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::: Downloaded on – 02/07/2025 21:23:09 :::CIS
36
2025:HHC:20832honour the promise implicit in the issuance of the same.”
44. Keeping in view the deterrent nature of the sentence
.
to be awarded, the sentence of three months cannot be said to be
excessive, and no interference is required with it.
45. Learned Trial Court had ordered the accused to pay a
compensation of ₹20.00 lacs to the complainant. The cheque of
₹16,81,425/- was issued on 17.10.2015, and the sentence was
imposed on 14.2.2020 after the expiry of more than four years.
The complainant lost interest on the amount which it would
have obtained by lending the amount to other persons. The
complainant also paid 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:-
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::: Downloaded on – 02/07/2025 21:23:09 :::CIS
37
2025:HHC:20832liability 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]”
46. The amount of ₹3,18,574.60 awarded as
compensation on an amount of ₹16,81,425/- cannot be said to be
excessive, and no
interference is
compensation awarded by the learned Trial Court.
r required with the
47. No other point was urged.
48. In view of the above, the present revision fails, and
the same is dismissed.
49. Records of the learned Courts below be sent back
forthwith, along with a copy of this judgment.
(Rakesh Kainthla)
Judge
2nd July, 2025
(Chander)
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