Himachal Pradesh High Court
Reserved On: 3.7.2025 vs D.D. Modgil on 10 July, 2025
2025:HHC:22068
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No. 347 of 2025
.
Reserved on: 3.7.2025
Date of Decision: 10.7.2025.
Radha Krishan ...Petitioner
Versus
D.D. Modgil
Coram
r to ...Respondent
Hon’ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 No.
For the Petitioner : Mr. Parikshit Sharma, Advocate.
For the Respondent : None.
Rakesh Kainthla, Judge
The present revision is directed against the judgment
dated 29.5.2025, passed by learned Additional Sessions Judge-I,
Solan, District Solan, H.P. (learned Appellate Court), vide which
the judgment of conviction and order of sentence dated
5.4.2025, passed by learned Judicial Magistrate First Class,
Kandaghat, District Solan, H.P. (learned Trial Court) were
upheld and the appeal filed by the petitioner (accused before the
1
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
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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
advanced a sum of ₹1.00 lakh to the accused as a friendly loan in
November 2019. The accused issued a postdated cheque dated
28.12.2019, drawn on UCO Bank, Kandaghat, to discharge his
liability. The cheque was dishonoured with an endorsement of
‘funds insufficient’. The complainant issued a legal notice to the
accused asking him to pay the amount within 15 days from the
date of receipt of the notice. The notice was served upon the
accused, but the accused failed to make the payment. Hence, the
complaint was filed before the learned Trial Court to take action
against him as per law.
3. The learned Trial Court found sufficient reasons to
summon the accused. When the accused appeared, notice of
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accusation was put to him for the commission of an offence
punishable under Section 138 of the NI Act, to which he pleaded
.
not guilty and claimed to be tried.
4. The complainant examined himself (CW1) in support
of his complaint.
5. The accused, in his statement recorded under Section
313 of Cr.P.C., stated that he had stood guarantor of one Amit
Kumar at the instance of the complainant. He did not borrow
any money from the complainant. No evidence was produced by
the accused.
6. Learned Trial Court held that issuance of the cheque
was not disputed. The version of the accused that he stood
guarantor for Amit Kumar was denied by the complainant in his
cross-examination. The accused did not examine Amit Kumar or
any other witness to establish this fact. Thus, he had failed to
rebut the presumption attached to the cheque. The cheque was
dishonoured with an endorsement ‘insufficient funds’, and the
accused failed to pay the amount despite the receipt of a valid
notice of demand. Hence, the accused was convicted for the
commission of an offence punishable under Section 138 of the NI
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Act and was sentenced to undergo simple imprisonment for
three months, pay a fine of ₹1,25,000/- and in default of
.
payment of the fine to undergo further imprisonment for one
month.
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 Additional Sessions Judge-I, Solan
(learned Appellate Court). Learned Appellate Court concurred
with the findings recorded by the learned Trial Court that the
accused admitted his signatures on the cheque and a
presumption would arise that the cheque was issued in
discharge of the legal liability for valuable consideration. The
burden would shift upon the accused to rebut the presumption.
The accused failed to rebut the presumption by any satisfactory
evidence. The cheque was dishonoured with an endorsement
‘insufficient funds’. A notice was issued to the accused, which
was served upon the accused, and he failed to repay the amount
despite the receipt of the notice of demand. There was no
infirmity in the judgment and order passed by the learned Trial
Court; hence, the appeal was dismissed.
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8. Being aggrieved from the judgments and order
passed by the learned Courts below, the accused has filed the
.
present petition, asserting that the learned Courts below erred
in appreciating the material placed before them. They relied
upon the inadmissible evidence. There was no evidence to prove
that the cheque was issued in discharge of legal liability. The
legal notice was defective. There were inherent contradictions in
the statement of the complainant, which showed that the
cheque was issued without any legal liability. Learned Courts
below failed to appreciate these contradictions. The imposition
of a fine of ₹1,25,000/- was beyond the competence of the
learned Trial Court. Therefore, it was prayed that the present
revision be allowed and the judgments and order passed by the
learned Courts below be set aside.
9. Mr. Parikshit Sharma, learned counsel for the
petitioner/accused, submitted that the learned Courts below
erred in appreciating the material placed before them. The
statement of the complainant was not sufficient to prove that
the cheque was issued in discharge of the legal liability. The plea
taken by the accused that he had issued the cheque as a
guarantor for repayment of the amount was highly probable.
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The accused had rebutted the presumption attached to the
cheque, and the learned Courts below erred in holding
.
otherwise. Learned Trial Court was not competent to impose a
fine of ₹1,25,000/-. Therefore, he prayed that the present
revision be allowed and the judgments and order passed by
learned Courts below be set aside.
10. I have given considerable thought to his submissions
made at the bar and have gone through the records carefully.
11. It was laid down by the Hon’ble Supreme Court in
Malkeet Singh Gill v. State of Chhattisgarh, (2022) 8 SCC 204:
(2022) 3 SCC (Cri) 348: 2022 SCC OnLine SC 786 that a revisional
court is not an appellate court and it can only rectify the patent
defect, errors of jurisdiction or the law. It was observed at page
207: –
“10. Before adverting to the merits of the contentions, at
the outset, it is apt to mention that there are concurrent
findings of conviction arrived at by two courts after a
detailed appreciation of the material and evidence
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::: Downloaded on – 10/07/2025 21:22:05 :::CIS
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2025:HHC:22068or 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 uponthe facts and evidence of the case to reverse those
findings.
12. This position was reiterated in State of Gujarat v.
Dilipsinh Kishorsinh Rao, (2023) 17 SCC 688: 2023 SCC OnLine SC
1294, wherein it was observed at page 695:
14. The power and jurisdiction of the Higher Court under
Section 397CrPC, which vests the court with the power to
call for and examine records of an inferior court, is for the
purposes of satisfying itself as to the legality and
regularities of any proceeding or order made in a case.
The object of this provision is to set right a patent defect
or an error of jurisdiction or law or the perversity which
has crept in such proceedings.
15. It would be apposite to refer to the judgment of this
Court in Amit Kapoor v. Ramesh Chander [Amit
Kapoor v. Ramesh Chander, (2012) 9 SCC 460: (2012) 4 SCC
(Civ) 687: (2013) 1 SCC (Cri) 986], where scope of Section
397 has been considered and succinctly explained as
under: (SCC p. 475, paras 12-13)
“12. Section 397 of the Code vests the court with the
power to call for and examine the records of an
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
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consideration and appear to be in accordance with law.
If one looks into the various judgments of this Court, it
emerges that the revisional jurisdiction can be invoked
where the decisions under challenge are grossly
.
erroneous, there is no compliance with the provisions
of law, the finding recorded is based on no evidence,
material evidence is ignored or judicial discretion is
exercised arbitrarily or perversely. These are not
exhaustive classes, but are merely indicative. Each
case would have to be determined on its own merits.
13. Another well-accepted norm is that the revisional
jurisdiction of the higher court is a very limited one
and cannot be exercised in a routine manner. One of
the inbuilt restrictions is that it should not be against
an interim or interlocutory order. The Court has to
keep in mind that the exercise of revisional
jurisdiction itself should not lead to injustice ex facie.
Where the Court is dealing with the question as to
whether the charge has been framed properly and in
accordance with law in a given case, it may be
reluctant to interfere in the exercise of its revisional
jurisdiction unless the case substantially falls within
the categories aforestated. Even framing of charge is a
much-advanced stage in the proceedings under CrPC.”
16. This Court in the aforesaid judgment in Amit Kapoor
case [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460 :
(2012) 4 SCC (Civ) 687 : (2013) 1 SCC (Cri) 986] has also laid
down principles to be considered for exercise of
jurisdiction under Section 397 particularly in the context
of prayer for quashing of charge framed under Section
228CrPC is sought for as under : (Amit Kapoor case [Amit
Kapoor v. Ramesh Chander, (2012) 9 SCC 460 : (2012) 4 SCC
(Civ) 687 : (2013) 1 SCC (Cri) 986], SCC pp. 482-83, para 27)
“27. Having discussed the scope of jurisdiction under
these two provisions, i.e. Section 397 and Section 482
of the Code, and the fine line of jurisdictional
distinction, it will now be appropriate for us to enlist
the principles with reference to which the courts::: Downloaded on – 10/07/2025 21:22:05 :::CIS
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2025:HHC:22068should exercise such jurisdiction. However, it is not
only difficult but inherently impossible to state such
principles with precision. At best and upon objective
analysis of various judgments of this Court, we are.
able to cull out some of the principles to be considered
for proper exercise of jurisdiction, particularly, with
regard to quashing of charge either in exercise of
jurisdiction under Section 397 or Section 482 of the
Code or together, as the case may be:
27.1. Though there are no limits to the powers of the
Court under Section 482 of the Code but the more thepower, the more due care and caution is to be
exercised in invoking these powers. The power of
quashing criminal proceedings, particularly, the
charge framed in terms of Section 228 of the Code,should be exercised very sparingly and with
circumspection and that too in the rarest of rare cases.
27.2. The Court should apply the test as to whether the
uncontroverted allegations as made from the record ofthe case and the documents submitted therewith
prima facie establish the offence or not. If the
allegations are so patently absurd and inherentlyimprobable that no prudent person can ever reach
such a conclusion, and where the basic ingredients of acriminal offence are not satisfied, then the Court may
interfere.
27.3. The High Court should not unduly interfere. No
meticulous examination of the evidence is needed for
considering whether the case would end in conviction
or not at the stage of framing of charge or quashing of
charge.
***
27.9. Another very significant caution that the courts
have to observe is that it cannot examine the facts,
evidence and materials on record to determine
whether there is sufficient material on the basis of
which the case would end in a conviction; the court is::: Downloaded on – 10/07/2025 21:22:05 :::CIS
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2025:HHC:22068concerned primarily with the allegations taken as a
whole whether they will constitute an offence and, if
so, is it an abuse of the process of court leading to
injustice.
.
***
27.13. Quashing of a charge is an exception to the rule
of continuous prosecution. Where the offence is even
broadly satisfied, the Court should be more inclined to
permit continuation of prosecution rather than its
quashing at that initial stage. The Court is not
expected to marshal the records with a view to decide
admissibility and reliability of the documents or
records, but is an opinion formed prima facie.”
17. The revisional court cannot sit as an appellate court
and start appreciating the evidence by finding out
inconsistencies in the statement of witnesses, and it is
not legally permissible. The High Courts ought to be
cognizant of the fact that the trial court was dealing with
an application for discharge.
13. It was held in Kishan Rao v. Shankargouda, (2018) 8
SCC 165: (2018) 3 SCC (Cri) 544: (2018) 4 SCC (Civ) 37: 2018 SCC
OnLine SC 651 that it is impermissible for the High Court to
reappreciate the evidence and come to its conclusions in the
absence of any perversity. It was observed on page 169:
“12. This Court has time and again examined the scope of
Sections 397/401 CrPC and the ground for exercising the
revisional jurisdiction by the High Court. In State of
Kerala v. Puttumana Illath Jathavedan Namboodiri [State of
Kerala v. Puttumana Illath Jathavedan Namboodiri, (1999) 2
SCC 452: 1999 SCC (Cri) 275], while considering the scope
of the revisional jurisdiction of the High Court, this Court
has laid down the following: (SCC pp. 454-55, para 5)::: Downloaded on – 10/07/2025 21:22:05 :::CIS
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2025:HHC:22068“5. … In its revisional jurisdiction, the High Court can
call for and examine the record of any proceedings to
satisfy itself as to the correctness, legality or 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 beequated with the power of an appellate court, nor can
it be treated even as a second appellate jurisdiction.
Ordinarily, therefore, it would not be appropriate for
the High Court to reappreciate the evidence and cometo its conclusion on the same when the evidence has
already been appreciated by the Magistrate as well as
the Sessions Judge in appeal unless any glaring feature
is brought to the notice of the High Court which wouldotherwise 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 concluding that the High Court exceeded
its jurisdiction in interfering with the conviction of therespondent by reappreciating the oral evidence. …”
13. Another judgment which has also been referred to and
relied on by the High Court is the judgment of this Court
in Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao
Phalke [Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao
Phalke, (2015) 3 SCC 123: (2015) 2 SCC (Cri) 19]. This Court
held that the High Court, in the exercise of revisional
jurisdiction, shall not interfere with the order of the
Magistrate unless it is perverse or wholly unreasonable or
there is non-consideration of any relevant material, the
order cannot be set aside merely on the ground that
another view is possible. The following has been laid
down in para 14: (SCC p. 135)
“14. … Unless the order passed by the Magistrate is
perverse or the view taken by the court is wholly
unreasonable or there is non-consideration of any
relevant material or there is palpable misreading of
records, the Revisional Court is not justified in setting
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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 view. This
Court set aside the High Court’s order holding that the
High Court exceeded its jurisdiction in substituting its
views, and that too without any legal basis.
14. This position was reiterated in Bir Singh v. Mukesh
Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ)
309: 2019 SCC OnLine SC 13, wherein it was observed at page 205:
“16. It is well settled that in 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,::: Downloaded on – 10/07/2025 21:22:05 :::CIS
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2025:HHC:22068(2008) 14 SCC 457], it is a well-established principle of law
that the Revisional Court will not interfere even if a wrong
order is passed by a court having jurisdiction, in the
absence of a jurisdictional error. The answer to the first.
question is, therefore, in the negative.”
15. The present revision has to be decided as per the
parameters laid down by the Hon’ble Supreme Court.
16. The accused did not dispute in his statement
recorded under Section 313 of Cr.P.C. that he had issued the
cheque. He claimed that the cheque was issued by him as a
guarantor of Amit Kumar. The memo of revision petition also
does not mention that the accused had not issued the cheque.
Therefore, the learned Courts below had rightly proceeded on
the premise that the accused had issued the cheque. It was laid
down by this Court in Naresh Verma vs. Narinder Chauhan 2020(1)
Shim LC 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 issued
towards discharge of lawful liability, rightly came to be
rejected by learned Courts below. Reliance is placed upon
Hiten P. Dalal v. Bartender Nath Bannerji, 2001 (6) SCC 16,
wherein it has been held as under:
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“The words ‘unless the contrary is proved’ which
occur in this provision make it clear that the
presumption has to be rebutted by ‘proof’ and not
by a bare explanation which is merely plausible. A.
fact is said to be proved when its existence is
directly established or when, upon the material
before it, the Court finds its existence to be soprobable that a reasonable man would act on the
supposition that it exists. Unless, therefore, the
explanation is supported by proof, the presumption
created by the provision cannot be said to berebutted……”
9. S.139 of the Act provides that it shall be
presumed, unless the contrary is proved, that the
holder of a cheque received the cheque of nature
referred to in section 138 for the discharge, in whole
or in part, of any debt or other liability.
17. Similar is the judgment in Basalingappa vs.
Mudibasappa 2019 (5) SCC 418 wherein it was held:
“26. Applying the proposition of law as noted above, in
the facts of the present case, it is clear that the signature
on the cheque, having been admitted, a presumption shallbe raised under Section 139 that the cheque was issued in
discharge of debt or liability.”
18. This position was reiterated in Kalamani Tex v. P.
Balasubramanian, (2021) 5 SCC 283: (2021) 3 SCC (Civ) 25: (2021) 2
SCC (Cri) 555: 2021 SCC OnLine SC 75 wherein it was held at page
289:
“14. Once the 2nd appellant had admitted his signatures
on the cheque and the deed, the trial court ought to have
presumed that the cheque was issued as consideration for
a legally enforceable debt. The trial court fell in error::: Downloaded on – 10/07/2025 21:22:05 :::CIS
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2025:HHC:22068when it called upon the respondent complainant to
explain the circumstances under which the appellants
were liable to pay. Such an approach of the trial court was
directly in the teeth of the established legal position as.
discussed above, and amounts to a patent error of law.”
19. 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 notdisputed that there were transactions between the
parties. Even as per the statement of the accused, which
was recorded at the time of the framing of the charge, he
has admitted that some amount was due and payable.
However, it was the case on behalf of the accused that thecheque was given by way of security, and the same has
been misused by the complainant. However, nothing is on
record that in the reply to the statutory notice, it was thecase on behalf of the accused that the cheque was given by
way of security. Be that as it may, however, it is requiredto be noted that earlier the accused issued cheques which
came to be dishonoured on the ground of “insufficientfunds” and thereafter a fresh consolidated cheque of
₹9,55,574 was given which has been returned unpaid on
the ground of “STOP PAYMENT”. Therefore, the cheque in
question was issued for the second time. Therefore, once
the accused has admitted the issuance of a cheque which
bears his signature, there is a presumption that there
exists a legally enforceable debt or liability under Section
139 of the NI Act. However, such a presumption is
rebuttable in nature, and the accused is required to lead
evidence to rebut such presumption. The accused was::: Downloaded on – 10/07/2025 21:22:05 :::CIS
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2025:HHC:22068required to lead evidence that the entire amount due and
payable to the complainant was paid.
9. Coming back to the facts in the present case and
.
considering the fact that the accused has admitted the
issuance of the cheques and his signature on the cheque
and that the cheque in question was issued for the second
time after the earlier cheques were dishonoured and thateven according to the accused some amount was due and
payable, there is a presumption under Section 139 of the
NI Act that there exists a legally enforceable debt or
liability. Of course, such presumption is rebuttable 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 theaccused. 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 weredishonoured. Therefore, both the courts below have
materially erred in not properly appreciating and
considering the presumption in favour of thecomplainant that there exists a legally enforceable debt or
liability as per Section 139 of the NI Act. It appears thatboth the learned trial court as well as the High Court have
committed an error in shifting the burden upon thecomplainant to prove the debt or liability, without
appreciating the presumption under Section 139 of the NI
Act. As observed above, Section 139 of the Act is an
example of reverse onus clause and therefore, once the
issuance of the cheque has been admitted and even the
signature on the cheque has been admitted, there is
always a presumption in favour of the complainant that
there exists legally enforceable debt or liability and
thereafter, it is for the accused to rebut such presumption
by leading evidence.”
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20. The presumption under Section 139 of the NI Act was
explained by the Hon’ble Supreme Court in Triyambak S. Hegde v.
.
Sripad, (2022) 1 SCC 742: (2022) 1 SCC (Civ) 512: 2021 SCC OnLine
SC 788 as under at page 747:
“12. From the facts arising in this case and the nature of
the rival contentions, the record would disclose that the
signature on the documents at Exts. P-6 and P-2 are notdisputed. Ext. P-2 is the dishonoured cheque based on
which the complaint was filed. From the evidence
tendered before the JMFC, it is clear that the respondent
has not disputed the signature on the cheque. If that bethe position, as noted by the courts below, a presumption
would arise under Section 139 in favour of the appellant
who was the holder of the cheque. Section 139 of the NI
Act reads as hereunder:
“139. Presumption in favour of the holder. –It shall
be presumed, unless the contrary is proved, that
the holder of a cheque received the cheque of the
nature referred to in Section 138 for the discharge,in whole or in part, of any debt or other liability.”
13. Insofar as the payment of the amount by the appellant
in the context of the cheque having been signed by the
respondent, the presumption for passing of the
consideration would arise as provided under Section
118(a) of the NI Act, which reads as hereunder:
“118. Presumptions as to negotiable instruments. —
Until the contrary is proved, the following
presumptions shall be made:
(a) of consideration: that every negotiable
instrument was made or drawn for consideration,
and that every such instrument, when it has been
accepted, indorsed, negotiated or transferred, was
accepted, indorsed, negotiated or transferred for
consideration.”
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14. The above-noted provisions are explicit to the effect
that such presumption would remain until the contrary is
proved. The learned counsel for the appellant in that
regard has relied on the decision of this Court in K.
.
Bhaskaran v. Sankaran Vaidhyan Balan [K.
Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510:
1999 SCC (Cri) 1284] wherein it is held as hereunder: (SCC
pp. 516-17, para 9)
“9. As the signature in the cheque is admitted to be
that of the accused, the presumption envisaged in
Section 118 of the Act can legally be inferred thatthe 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 debtor liability. The burden was on the accused to rebut
the aforesaid presumption. The trial court was not
persuaded to rely on the interested testimony of
DW 1 to rebut the presumption. The said finding
was upheld [Sankaran Vaidhyan Balan v. K.Bhaskaran, Criminal Appeal No. 234 of 1995, order
dated 23-10-1998 (Ker)] by the High Court. It is not
now open to the accused to contend differently onthat 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 that
the cheque was for the discharge of any debt or
other liability.
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25.2. The presumption under Section 139 is a
rebuttable presumption, and the onus is on the
accused to raise the probable defence. The standard
of proof for rebutting the presumption is that of
.
preponderance of probabilities.
25.3. To rebut the presumption, it is open for the
accused to rely on evidence led by him or the
accused can also rely on the materials submitted by
the complainant in order to raise a probable
defence. Inference of preponderance of
probabilities can be drawn not only from the
materials brought on record by the parties but also
by reference to the circumstances upon which they
rely.
25.4. That it is not necessary for the accused to
come into the witness box in support of his defence,
Section 139 imposed an evidentiary burden and not
a persuasive burden.
25.5. It is not necessary for the accused to come into
the witness box to support his defence.
26. Applying the preposition of law as noted above,
in the facts of the present case, it is clear that the
signature on the cheque, having been admitted, a
presumption shall be raised under Section 139 that
the cheque was issued in discharge of debt or
liability. The question to be looked into is as to
whether any probable defence was raised by the
accused. In the 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
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4,50,000 to Balana Gouda towards sale
consideration. Payment of Rs 4,50,000 being
admitted in the year 2010 and further payment of
loan of Rs 50,000 with regard to which Complaint
.
No. 119 of 2012 was filed by the complainant, a copy
of which complaint was also filed as Ext. D-2, there
was a burden on the complainant to prove his
financial capacity. In the years 2010-2011, as per
own case of the complainant, he made a payment of
Rs 18 lakhs. During his cross-examination, when
the financial capacity to pay Rs 6 lakhs to the
accused was questioned, there was no satisfactory
reply given by the complainant. The evidence on
record, thus, is a probable defence on behalf of the
accused, which shifted the burden on the
complainant to prove his financial capacity and
other facts.”
16. In that light, it is contended that the very materials
produced by the appellant and the answers relating to
lack of knowledge of property details by PW 1 in his cross-
examination would indicate that the transaction is
doubtful, and no evidence is tendered to indicate that the
amount was paid. In such an event, it was not necessary
for the respondent to tender rebuttal evidence, but the
case put forth would be sufficient to indicate that the
respondent has successfully rebutted the presumption.
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
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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.”
21. 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: r
“8. It is true that this is a case under Section 138 of the
Negotiable Instruments Act. Section 139 of the NI Act
provides that the court shall presume that the holder of a
cheque received the cheque of the nature referred to in
Section 138 for the discharge, in whole or in part, of any
debt or other liability. This presumption, however, is
expressly made subject to the position being proved to
the contrary. In other words, it is open to the accused to
establish that there is no consideration received. It is in
the context of this provision that the theory of “probable
defence” has grown. In an earlier judgment, in fact,
which has also been adverted to in Basalingappa
[Basalingappa v. Mudibasappa, (2019) 5 SCC 418: (2019) 2
SCC (Cri) 571], this Court notes that Section 139 of the NI
Act is an example of reverse onus (see Rangappa v. Sri
Mohan [Rangappa v. Sri Mohan, (2010) 11 SCC 441: (2010) 4
SCC (Civ) 477: (2011) 1 SCC (Cri) 184]). It is also true that
this Court has found that the accused is not expected to
discharge an unduly high standard of proof. It is
accordingly that the principle has developed that all
which the accused needs to establish is a probable
defence. As to whether a probable defence has been
established is a matter to be decided on the facts of each
case on the conspectus of evidence and circumstances
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that exist…”
22. Similar is the judgment in P. Rasiya v. Abdul Nazer,
.
2022 SCC OnLine SC 1131, wherein it was observed:
“As per Section 139 of the N.I. Act, it shall be presumed,
unless the contrary is proved, that the holder of a chequereceived the cheque of the nature referred to in Section
138 for discharge, in whole or in part, of any debt or other
liability. Therefore, once the initial burden is discharged
by the Complainant that the cheque was issued by theaccused and the signature and the issuance of the cheque
are not disputed by the accused, in that case, the onus will
shift upon the accused to prove the contrary that the
cheque was not for any debt or other liability. Thepresumption under Section 139 of the N.I. Act is a
statutory presumption and thereafter, once it is
presumed that the cheque is issued in whole or in part of
any debt or other liability which is in favour of the
Complainant/holder of the cheque, in that case, it is forthe accused to prove the contrary.”
23. This position was reiterated in Rajesh Jain v. Ajay
Singh, (2023) 10 SCC 148: 2023 SCC OnLine SC 1275, wherein it was
observed at page 161:
33. The NI Act provides for two presumptions: Section 118
and Section 139. Section 118 of the Act inter alia directs
that it shall be presumed until the contrary is proved that
every negotiable instrument was made or drawn for
consideration. Section 139 of the Act stipulates that
“unless the contrary is proved, it shall be presumed that
the holder of the cheque received the cheque for the
discharge of, 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::: Downloaded on – 10/07/2025 21:22:05 :::CIS
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2025:HHC:22068common to both the presumptions under Section 139 and
Section 118 and are hence not repeated–reference to one
can be taken as reference to another].
34. Section 139 of the NI Act, which takes the form of a
“shall presume” clause, is illustrative of a presumption of
law. Because Section 139 requires that the Court “shall
presume” the fact stated therein, it is obligatory for theCourt to raise this presumption in every case where the
factual basis for the raising of the presumption had been
established. But this does not preclude the person against
whom the presumption is drawn from rebutting it andproving 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/executedin 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
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under Section 139 of the Act helps shifting the burden on
the accused. The effect of the presumption, in that sense,
is to transfer the evidential burden on the accused of
proving that the cheque was not received by the Bank
.
towards the discharge of any liability. Until this evidential
burden is discharged by the accused, the presumed fact
will have to be taken to be true, without expecting the
complainant to do anything further.
38. John Henry Wigmore [John Henry Wigmore and the Rules of
Evidence: The Hidden Origins of Modern Law] on Evidence states
as follows:
“The peculiar effect of the presumption of law is
merely to invoke a rule of law compelling the Jury
to reach the conclusion in the absence of evidenceto the contrary from the opponent but if the
opponent does offer evidence to the contrary(sufficient to satisfy the Judge’s requirement of
some evidence), the presumption ‘disappears as a
rule of law and the case is in the Jury’s hands freefrom 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]]
24. Therefore, the Court has to start with the
presumption that the cheque was issued for valuable
consideration in discharge of the legal liability, and the burden
is upon the accused to rebut the presumption.
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25. The accused claimed in his reply to Question No. 8 of
the statement recorded under Section 313 of CrPC that Amit
.
Kumar had repaid the entire amount to the complainant;
however, he did not step into the witness box to establish this
version. He did not examine Amit Kumar to prove this fact. It
was held in Sumeti Vij v. Paramount Tech Fab Industries, (2022) 15
SCC 689: 2021 SCC OnLine SC 201 that the accused has to lead
defence evidence to rebut the presumption and mere denial in
his statement under Section 313 of Cr.P.C. is not sufficient to
rebut the presumption. It was observed at page 700:
“20. That apart, when the complainant exhibited all these
documents in support of his complaints and recorded the
statement of three witnesses in support thereof, the
appellant has recorded her statement under Section 313 ofthe Code but failed to record evidence to disprove or rebut
the presumption in support of her defence availableunder Section 139 of the Act. The statement of the accused
recorded under Section 313 of the Code is not substantiveevidence of defence, but only an opportunity for the accused
to explain the incriminating circumstances appearing in the
prosecution’s case against the accused. Therefore, there is no
evidence to rebut the presumption that the cheques were
issued for consideration.” (Emphasis supplied)”
26. It was submitted that there are various
contradictions in the statement of the complainant, which made
his version highly doubtful that the cheque was issued in
discharge of the legal liability. This submission will not help the
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petitioner. Firstly, it is impermissible to re-appreciate the
evidence while exercising the revisional jurisdiction; secondly
.
minor contradictions are not sufficient to doubt the statement of
a witness; and thirdly, the admission of the signatures on the
cheque leads to a presumption that the cheque was issued in
discharge of the legal liability and minor contradictions are not
sufficient to rebut this presumption.
27. It was submitted that the complainant admitted in
his cross-examination that he had not reflected the amount in
the income tax return, which makes the complainant’s case
highly doubtful. This submission cannot be accepted. It was laid
down by this Court in Surinder Singh vs. State of H.P. 2018(1)
D.C.R. 45 that the failure to mention the loan in the income tax
return will not entitle the accused to acquittal. It was observed:-
10. It would further be noticed that the learned trial
Magistrate has acquitted the accused on the ground that
the loan has not been shown in the Income Tax Return
furnished by the complainant and while recording such
finding has placed reliance upon the judgment of the
Hon’ble Delhi High Court in Vipul Kumar Gupta vs. Vipin
Gupta 2012 (V) AD (CRI) 189. However, after having perused
the said judgment, it would be noticed that the amount
in the said case was ₹ 9 lacs, and it is in that background
that the Court observed as under: –
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“9. I find myself in agreement with the reasoning
given by the learned ACMM that before a person is
convicted for having committed an offence
under Section 138 of the Act, it must be proved.
beyond a reasonable doubt that the cheque in
question, which has been made as a basis for
prosecuting the respondent/accused, must have
been issued by him in the discharge of his liability
or a legally recoverable debt. In the facts and
circumstances of this case, there is every reason to
doubt the version given by the appellant that the
cheque was issued in the discharge of a liability or a
legally recoverable debt. The reasons for this are a
number of factors which have been enumerated by
the learned ACMM also. Some of them are that non-
mentioning by the appellant in his Income Tax
Return or the Books of Accounts, the factum of the
loan having been given by him because by no
measure, an amount of ₹ 9,00,000/- can be said to
be a small amount which a person would not reflect
in his Books of Accounts or the Income Tax Return,
in case the same has been lent to a person. The
appellant, neither in the complaint nor in his
evidence, has mentioned the date, time or year
when the loan was sought or given. The appellant
has presented a cheque, which obviously is written
with two different inks, as the signature appears in
one ink, while the remaining portion, which has
been filled in the cheque, is in a different ink. All
these factors prove the defence of the respondent to
be plausible to the effect that he had issued these
cheques by way of security to the appellant for
getting a loan from the Prime Minister Rojgar
Yojana. The respondent/accused has only to create
doubt in the version of the appellant, while the
appellant has to prove the guilt of the accused
beyond a reasonable doubt, in which, in my
opinion, he has failed miserably. There is no cogent
reason which has been shown by the appellant
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which will persuade this Court to grant leave to
appeal against the impugned order, as there is no
infirmity in the impugned order.”
.
28. Therefore, the submission that the complaint was
liable to be dismissed because the amount was not reflected in
the income tax return cannot be accepted.
29. There is no other evidence to rebut the presumption
attached to the cheque, and the learned Courts below had rightly
held that the accused had failed to rebut the presumption
attached to the cheque.
30. The complainant stated that the cheque was
dishonoured with an endorsement ‘insufficient funds’. This is
duly corroborated by the memo of dishonour (Ex.PW1/C). It was
laid down by the Hon’ble Supreme Court in Mandvi Cooperative
Bank Ltd. v. Nimesh B. Thakore, (2010) 3 SCC 83: (2010) 1 SCC (Civ)
625: (2010) 2 SCC (Cri) 1: 2010 SCC OnLine SC 155 that the memo
issued by the Bank is presumed to be correct and the burden is
upon the accused to rebut the presumption. It was observed at
page 95:
24. Section 146, making a major departure from the
principles of the Evidence Act, provides that the bank’s
slip or memo with the official mark showing that the
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2025:HHC:22068presumption of dishonour of the cheque, unless and until
that fact was disproved. Section 147 makes the offences
punishable under the Act compoundable.
.
31. 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’
32. The complainant stated that the notice was issued to
the accused. The postal receipt (Ex.CW1/E) was also placed on
record. It was submitted that the notice was defective, and no
such defect was pointed out. There is a presumption that a
notice sent to the correct address is deemed to be served, and the
burden shifts upon the accused to rebut the presumption. There
is nothing on record to rebut the presumption, and learned
Courts below had rightly proceeded on the premise that the
notice was served upon the accused.
33. 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:
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“It is also to be borne in mind that the requirement of
giving of notice is a clear departure from the rule of
Criminal Law, where there is no stipulation of giving of
notice before filing a complaint. Any drawer who claims.
that he did not receive the notice sent by post, can, within 15
days of receipt of summons from the court in respect of the
complaint under Section 138 of the Act, make payment of thecheque amount and submit to the Court that he had made
payment within 15 days of receipt of summons (by receiving a
copy of the complaint with the summons) and, therefore, the
complaint is liable to be rejected. A person who does not paywithin 15 days of receipt of the summons from the Court
along with the copy of the complaint under Section 138 of the
Act, cannot obviously contend that there was no proper
service of notice as required under Section 138, by ignoringstatutory presumption to the contrary under Section 27 of the
G.C. Act and Section 114 of the Evidence Act. In our view, any
other interpretation of the proviso would defeat the very
object of the legislation. As observed in Bhaskaran‘s case
(supra), if the giving of notice in the context of Clause (b)of the proviso was the same as the receipt of notice a
trickster cheque drawer would get the premium to avoid
receiving the notice by adopting different strategies andescape from legal consequences of Section 138 of the Act.”
(Emphasis supplied)
34. In the present case, the accused has not paid any
money to the complainant; hence, it was duly proved that the
accused had failed to pay the money despite the receipt of the
notice.
35. Therefore, it was duly proved on record that the
cheque was issued in discharge of the legal liability, which was
dishonoured with an endorsement ‘funds insufficient’, and the
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accused failed to pay the amount despite the deemed receipt of
the notice of demand. Hence, the complainant had proved his
.
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 NI Act.
36. Learned Trial Court had sentenced the accused to
undergo simple imprisonment for 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 of NI Act 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 negotiableinstruments, including cheques, and to encourage and
promote the use of negotiable instruments, includingcheques, in financial transactions. The penal provision of
Section 138 of the Negotiable Instruments Act is intendedto 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.”
37. Keeping in view the deterrent nature of the
punishment, no interference is required with the sentence
imposed by the learned Trial Court.
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38. Learned Trial Court imposed a fine of ₹1,25,000/- for
the loss suffered by the complainant. It was submitted that the
.
learned Trial Court could not have imposed a fine of
₹1,25,000/-. This is not acceptable. Section 143 proviso reads
that it shall be lawful for the Magistrate to pass the sentence of
imprisonment not exceeding one year and an amount of fine
exceeding ₹5,000/-, therefore, the restriction imposed by the
Cr.P.C. as the limit of the fine has been removed by Section 143
and the Magistrate was competent to impose the fine up to
double the cheque amount as per Section 138 of NI Act. It was
laid down by the Hon’ble Supreme Court in R. Vijayan v. Baby,
(2012) 1 SCC 260: (2012) 1 SCC (Civ) 79: (2012) 1 SCC (Cri) 520: 2011
SCC OnLine SC 1363 that the Magistrate can impose fine in excess
of the limits provided under Section 29 (2) of CrPC. It was
observed at page 265:
13. It is of some interest to note, though may not be of any
assistance in this case, that the difficulty caused by the
ceiling imposed by Section 29(2) of the Code has been
subsequently solved by insertion of Section 143 in the Act
(by Amendment Act 55 of 2002) with effect from 6-2-
2003. Section 143(1) provides that notwithstanding
anything contained in the Code, all offences under
Chapter XVII of the Act should be tried by a Judicial
Magistrate of the First Class or by a Metropolitan
Magistrate and the provisions of Sections 262 to 265 of
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the Code (relating to summary trials) shall, as far as may
be, apply to such trials. The proviso thereto provides that
it shall be lawful for the Magistrate to pass a sentence of
imprisonment for a term extending one year and an
.
amount of fine exceeding Rs 5000, in case of conviction in
a summary trial under that section. In view of the
conferment of such special power and jurisdiction upon
the First-Class Magistrate, the ceiling as to the amount of
fine stipulated in Section 29(2) of the Code is removed.
Consequently, in regard to any prosecution for offences
punishable under Section 138 of the Act, a First-Class
Magistrate may impose a fine exceeding Rs 5000, the
ceiling being twice the amount of the cheque.
39. Hence, the submission that the learned Trial Court
exceeded its jurisdiction while imposing the fine cannot be
accepted.
40. The cheque was issued for ₹1.00 lakh and bears the
date 28.12.2019. Learned Trial Court imposed the fine on
5.4.2024 after the lapse of more than four years. The
complainant lost interest on the amount which he would have
obtained by depositing the money in the bank. 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
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2025:HHC:22068fine 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 notonly punitive but also compensatory and restitutive. The
provisions of NIA envision a single window for criminal
liability for the dishonour of a cheque as well as civil
liability for the realisation of the cheque amount. It is alsowell 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 simpleinterest @ 9% p.a. [R. Vijayan v. Baby, (2012) 1 SCC 260,
para 20: (2012) 1 SCC (Civ) 79: (2012) 1 SCC (Cri) 520]”
41. Hence, the compensation of ₹25,000/- awarded on
the cheque amount of ₹1.00 lakh by the learned Trial Court is not
excessive.
42. No other point was urged.
43. In view of the above, the present revision fails, and
the same is dismissed, so also the pending miscellaneous
application(s), if any.
(Rakesh Kainthla)
Judge
10th July, 2025
(Chander)
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