Himachal Pradesh High Court
Reserved On: 23.6.2025 vs Chattar Singh on 21 July, 2025
2025:HHC:23406
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No. 146 of 2025
.
Reserved on: 23.6.2025
Date of Decision: 21.7.2025.
Rakesh Kumar ...Petitioner
Versus
Chattar Singh
Coram
r to ...Respondent
Hon’ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 No.
For the Petitioner : Mr. Prem Chand Verma, Advocate
For the Respondent : Mr. Rupinder Singh, Advocate.
Rakesh Kainthla, Judge
The present revision is directed against the judgment
dated 21.1.2025, passed by learned Sessions Judge, Sirmour,
District at Nahan, H.P. (learned Appellate Court), vide which the
judgment of conviction and order of sentence dated 27.8.2024,
passed by learned Judicial Magistrate First Class Nahan, District
Sirmour, H.P. (learned Trial Court) were upheld and the appeal
filed by the petitioner (accused before the learned Trial Court)
1
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
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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 alleged that the complainant
and the accused were acquainted with each other. The accused
required money for raising construction of his house. He
contacted the complainant in September 2020 and asked for
financial help of ₹4,50,000/-. He assured the complainant to
repay the amount within two years on or before 15.9.2022. The
complainant advanced a loan of ₹4,50,000/- to the accused. The
accused handed over a post-dated cheque of ₹4,50,000/- to the
complainant, drawn on Jogindra Central Cooperative Bank Ltd.,
Branch at Nauni, to discharge his legal liability. The
complainant asked the accused to return the money, and the
accused requested the complainant to present the cheque to the
bank for its collection. The complainant presented the cheque to
his bank, but the cheque was dishonoured with an endorsement
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‘funds insufficient’. The complainant served a notice upon the
accused asking him to repay the money. The accused failed to
.
repay the money despite the receipt of the notice of demand.
Hence, the complaint was filed before the learned Trial Court to
take action as per 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 himself (CW1) and Luv
Rathore (CW2) to prove his case.
5. The accused, in his statement recorded under Section
313 of Cr.P.C., admitted that he had executed an agreement and it
bears his signatures. He stated that he had handed over a blank
security cheque to the complainant. He denied that he had
received any notice. He admitted his signatures on the cheque.
He stated that he had borrowed ₹1.00 lac, which was returned by
him. He stated that he wanted to lead defence; however, no
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evidence was produced, and a statement was made on 5.8.2024
that no evidence was to be led.
.
6. Learned Trial Court held that the signatures on the
cheque were not disputed, and a presumption arose under
Section 118 (a) and 139 of the NI Act that the cheque was issued
in discharge of the legal liability for valuable consideration. The
burden shifted upon the accused to rebut the presumption. The
accused failed to present any evidence to rebut the presumption.
His plea that he had borrowed ₹1.00 lac, which was repaid by
him, was not supported by any material. The cheque was
dishonoured with an endorsement ‘insufficient funds’. The
notice was sent to the correct address and is presumed to be
served. The accused failed to pay the amount despite the receipt
of a valid notice of demand. Therefore, the accused was
convicted of the commission of an offence punishable under
Section 138 of the NI Act and was sentenced to undergo simple
imprisonment for one year, pay compensation of ₹5,55,000/-
and in default of payment of compensation, to undergo further
simple imprisonment for two months.
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7. Being aggrieved by the judgment and order passed by
the learned Trial Court, the accused preferred an appeal which
.
was decided by the learned Sessions Judge, Sirmour at Nahan
(learned Appellate Court). Learned Appellate Court concurred
with the findings recorded by the learned Trial Court that the
cheque was issued in discharge of legal liability and the accused
had failed to rebut the presumption contained in Sections 118(a)
and 139 of the NI Act. The version of the complainant is
supported by an affidavit (Ex.C6/CW1). The cheque was
dishonoured with an endorsement ‘insufficient funds’. A cheque
issued as a security will attract the provisions of Section 138 of
the NI Act. The plea taken by the accused that he had borrowed
₹1.00 lac and returned the same was not proved. The notice was
deemed to be served upon the accused. The sentence imposed by
the learned Trial Court was not excessive. Therefore, the appeal
filed by the accused was dismissed.
8. Being aggrieved by the judgments and order passed
by the learned Courts below, the petitioner/accused has filed the
present petition, asserting that the learned Courts below erred
in appreciating the evidence. The cheque was taken by the
complainant as security, and it was not issued in discharge of
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any legal liability. The complainant also admitted the receipt of
a blank cheque from the accused. This admission was ignored.
.
The sentence was imposed mechanically. The affidavit sworn by
the accused is forged because extra lines were added to it. The
plea taken by the accused that he had borrowed ₹1.00 lac, which
was returned by him, was highly probable. Therefore, it was
prayed that the present revision be allowed and the judgments
and order passed by learned Courts below be set aside.
9. I have heard Mr. Prem Chand Verma, learned counsel
for the petitioner/accused, and Mr. Rupinder Singh, learned
counsel for the respondent/complainant.
10. Mr. Prem Chand Verma, learned counsel for the
petitioner/accused, submitted that the learned below erred in
convicting and sentencing the accused. It appears to the naked
eye that the affidavit (Ex.C1/CW1) is forged and extra lines have
been added to it. Learned Courts below failed to notice this
aspect and erred in relying upon the same. The cheque was
issued as a security, and the provisions of Section 138 of the NI
Act do not apply to the said cheque. Therefore, he prayed that
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the present revision be allowed and the judgments and order
passed by the learned Courts below be set aside.
.
11. Mr. Rupinder Singh, learned counsel for the
respondent/complainant, submitted that the accused admitted
his signatures on the cheque and learned Courts below were
justified in raising presumption under Sections 118 (a) and 139 of
the NI Act. The accused did not present any evidence to rebut the
presumption. The accused admitted his signatures on the
affidavit (Ex.C1/CW1), and his plea regarding the interpolation is
not acceptable. Therefore, he prayed that the present petition be
dismissed. He relied upon the judgment of the Hon’ble Supreme
Court in Triyambak S. Hegde v. Sripad, (2022) 1 SCC 742 in
support of his 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 the revisional
court does not exercise an appellate jurisdiction and it can only
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2025:HHC:23406rectify 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 adetailed 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 ofinterference in revision is extremely narrow. Section 397
of the Criminal Procedure Code (in short “CrPC“) vests
jurisdiction to satisfy itself or himself as to the
correctness, legality, or propriety of any finding,sentence, or order, recorded or passed, and as to the
regularity of any proceedings of such inferior court. The
object of the provision is to set right a patent defect or an
error of jurisdiction or law. There has to be a well-
founded error which is to be determined on the merits of
individual cases. It is also well settled that while
considering the same, the Revisional Court does not dwell
at length upon the facts and evidence of the case to
reverse those findings.
14. This position was reiterated in State of Gujarat v.
Dilipsinh Kishorsinh Rao, (2023) 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.
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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
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
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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 contextof 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 jurisdictionaldistinction, it will now be appropriate for us to enlist
the principles with reference to which the courtsshould exercise such jurisdiction. However, it is not
only difficult but inherently impossible to state such
principles with precision. At best and upon objectiveanalysis 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, withregard to quashing of charge either in exercise of
jurisdiction under Section 397 or Section 482 of theCode 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 of
the case and the documents submitted therewith
prima facie establish the offence or not. If the::: Downloaded on – 21/07/2025 21:25:57 :::CIS
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2025:HHC:23406allegations are so patently absurd and inherently
improbable that no prudent person can ever reach
such a conclusion, and where the basic ingredients of a
criminal 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 forconsidering 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
concerned 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.
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15. 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
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
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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 Section228CrPC 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 482of 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
should 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::: Downloaded on – 21/07/2025 21:25:57 :::CIS
14
2025:HHC:23406jurisdiction 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 the
power, 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 of
the case and the documents submitted therewith
prima facie establish the offence or not. If the
allegations are so patently absurd and inherently
improbable that no prudent person can ever reach
such a conclusion, and where the basic ingredients of a
criminal 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
concerned 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.
***
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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.
16.
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 ofKerala v. Puttumana Illath Jathavedan Namboodiri [State of
Kerala v. Puttumana Illath Jathavedan Namboodiri, (1999) 2
SCC 452: 1999 SCC (Cri) 275], while considering the scope
of the revisional jurisdiction of the High Court, this Court
has laid down the following: (SCC pp. 454-55, para 5)
“5. … In its revisional jurisdiction, the High Court can
call for and examine the record of any proceedings 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::: Downloaded on – 21/07/2025 21:25:57 :::CIS
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2025:HHC:23406justice. But the said revisional power cannot be
equated with the power of an appellate court, nor can
it be treated even as a second appellate jurisdiction.
Ordinarily, therefore, it would not be appropriate for.
the High Court to reappreciate the evidence and come
to its conclusion on the same when the evidence has
already been appreciated by the Magistrate as well asthe Sessions Judge in appeal unless any glaring feature
is brought to the notice of the High Court which would
otherwise tantamount to a gross miscarriage of
justice. On scrutinising the impugned judgment of theHigh Court from the aforesaid standpoint, we have no
hesitation in concluding that the High Court exceeded
its jurisdiction in interfering with the conviction of the
respondent by reappreciating the oral evidence. …”
13. Another judgment which has also been referred to and
relied on by the High Court is the judgment of this Court
in Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao
Phalke [Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao
Phalke, (2015) 3 SCC 123: (2015) 2 SCC (Cri) 19]. This Court
held that the High Court, in the exercise of revisional
jurisdiction, shall not interfere with the order of the
Magistrate unless it is perverse or wholly unreasonable or
there is non-consideration of any relevant material, the
order cannot be set aside merely on the ground that
another view is possible. The following has been laid
down in para 14: (SCC p. 135)
“14. … Unless the order passed by the Magistrate is
perverse or the view taken by the court is wholly
unreasonable or there is non-consideration of any
relevant material or there is palpable misreading of
records, the Revisional Court is not justified in setting
aside the order, merely because another view is
possible. The Revisional Court is not meant to act as an
appellate court. The whole purpose of the revisional
jurisdiction is to preserve the power in the court to do
justice in accordance with the principles of criminal
jurisprudence. The revisional power of the court under
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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.
17. 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 forthe Revisional Court to re-analyse and re-interpret the
evidence on record.
17. As held by this Court in Southern Sales &
Services v. Sauermilch Design and Handels GmbH [Southern
Sales & Services v. Sauermilch Design and Handels GmbH,
(2008) 14 SCC 457], it is a well-established principle of law
that the Revisional Court will not interfere even if a wrong
order is passed by a court having jurisdiction, in the
absence of a jurisdictional error. The answer to the first
question is, therefore, in the negative.”
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18. The present revision has to be decided as per the
parameters laid down by the Hon’ble Supreme Court.
.
19. The accused admitted his signatures on the cheque in
his statement recorded under Section 313 of Cr.P.C. It was laid
down by this Court in Naresh Verma vs. Narinder Chauhan 2020(1)
Shim. L.C. 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 not
by a bare explanation which is merely plausible. Afact is said to be proved when its existence is
directly established or when, upon the material
before it, the Court finds its existence to be so
probable that a reasonable man would act on the
supposition that it exists. Unless, therefore, the
explanation is supported by proof, the presumption
created by the provision cannot be said to be
rebutted……”
9. S.139 of the Act provides that it shall be
presumed, unless the contrary is proved, that the
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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.
.
20. 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 shall
be raised under Section 139 that the cheque was issued indischarge of debt or liability.”
21. 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 errorwhen 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.”
22. 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::: Downloaded on – 21/07/2025 21:25:57 :::CIS
20
2025:HHC:23406disputed 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 hasbeen 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 requiredto 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 onthe 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 Section139 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 wasrequired 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 that
even according to the accused some amount was due and
payable, there is a presumption under Section 139 of the
NI Act that there exists a legally enforceable debt or
liability. Of course, such presumption is rebuttable in
nature. However, to rebut the presumption, the accused
was required to lead evidence that the full amount due
and payable to the complainant had been paid. In the
present case, no such evidence has been led by the::: Downloaded on – 21/07/2025 21:25:57 :::CIS
21
2025:HHC:23406accused. 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 andconsidering 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 havecommitted an error in shifting the burden upon the
complainant to prove the debt or liability, without
appreciating the presumption under Section 139 of the NI
Act. As observed above, Section 139 of the Act is anexample 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 andthereafter, it is for the accused to rebut such presumption
by leading evidence.”
23. The presumption under Section 139 of the NI Act was
explained by the Hon’ble Supreme Court in Triyambak S. Hegde v.
Sripad, (2022) 1 SCC 742: (2022) 1 SCC (Civ) 512: 2021 SCC OnLine
SC 788 as under at page 747:
“12. From the facts arising in this case and the nature of
the rival contentions, the record would disclose that the
signature on the documents at Exts. P-6 and P-2 are not
disputed. Ext. P-2 is the dishonoured cheque based on
which the complaint was filed. From the evidence
tendered before the JMFC, it is clear that the respondent
has not disputed the signature on the cheque. If that be
the position, as noted by the courts below, a presumption
would arise under Section 139 in favour of the appellant::: Downloaded on – 21/07/2025 21:25:57 :::CIS
22
2025:HHC:23406who 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 followingpresumptions 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 in
Section 118 of the Act can legally be inferred that
the cheque was made or drawn for consideration on
the date which the cheque bears. Section 139 of the
Act enjoins the Court to presume that the holder of
the cheque received it for the discharge of any debt
or liability. The burden was on the accused to rebut::: Downloaded on – 21/07/2025 21:25:57 :::CIS
23
2025:HHC:23406the aforesaid presumption. The trial court was not
persuaded to rely on the interested testimony of
DW 1 to rebut the presumption. The said finding
was upheld [Sankaran Vaidhyan Balan v. K..
Bhaskaran, Criminal Appeal No. 234 of 1995, order
dated 23-10-1998 (Ker)] by the High Court. It is not
now open to the accused to contend differently on
that aspect.”
15. The learned counsel for the respondent has, however,
referred to the decision of this Court
in Basalingappa v. Mudibasappa [Basalingappa v. 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 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,::: Downloaded on – 21/07/2025 21:25:57 :::CIS
24
2025:HHC:23406Section 139 imposed an evidentiary burden and not
a persuasive burden.
25.5. It is not necessary for the accused to come into
.
the witness box to support his defence.
26. Applying the preposition of law as noted above,
in the facts of the present case, it is clear that the
signature on the cheque, having been admitted, a
presumption shall be raised under Section 139 that
the cheque was issued in discharge of debt or
liability. The question to be looked into is as to
whether any probable defence was raised by the
accused. In the cross-examination of PW 1, when
the specific question was put that a cheque was
issued in relation to a loan of Rs 25,000 taken by
the accused, PW 1 said that he does not remember.
PW 1 in his evidence admitted that he retired in
1997, on which date he received a monetary benefit
of Rs 8 lakhs, which was encashed by the
complainant. It was also brought in evidence that in
the year 2010, the complainant entered into a sale
agreement for which he paid an amount of Rs
4,50,000 to Balana Gouda towards sale
consideration. Payment of Rs 4,50,000 being
admitted in the year 2010 and further payment of
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.”
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25
2025:HHC:23406
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
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.”
24. 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::: Downloaded on – 21/07/2025 21:25:57 :::CIS
26
2025:HHC:23406provides 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 inthe 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 probable
defence. As to whether a probable defence has beenestablished is a matter to be decided on the facts of each
case on the conspectus of evidence and circumstances
that exist…”
25. Similar is the judgment in P. Rasiya v. Abdul Nazer,
2022 SCC OnLine SC 1131, wherein it was observed:
“As per Section 139 of the N.I. Act, it shall be presumed,
unless the contrary is proved, that the holder of a cheque
received the cheque of the nature referred to in Section
138 for discharge, in whole or in part, of any debt or other
liability. Therefore, once the initial burden is discharged
by the Complainant that the cheque was issued by the
accused and the signature and the issuance of the cheque
are not disputed by the accused, in that case, the onus will
shift upon the accused to prove the contrary that the
cheque was not for any debt or other liability. The
presumption under Section 139 of the N.I. Act is a::: Downloaded on – 21/07/2025 21:25:57 :::CIS
27
2025:HHC:23406statutory presumption and thereafter, once it is
presumed that the cheque is issued in whole or in part of
any debt or other liability which is in favour of the
Complainant/holder of the cheque, in that case, it is for.
the accused to prove the contrary.”
26. 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 forconsideration. 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 ofthe 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 the
factual basis for the raising of the presumption had been
established. But this does not preclude the person against
whom the presumption is drawn from rebutting it and
proving the contrary, as is clear from the use of the
phrase “unless the contrary is proved”.
35. The Court will necessarily presume that the cheque
had been issued towards the discharge of a legally
enforceable debt/liability in two circumstances. Firstly,::: Downloaded on – 21/07/2025 21:25:57 :::CIS
28
2025:HHC:23406when the drawer of the cheque admits issuance/execution
of the cheque and secondly, in the event where the
complainant proves that the cheque was issued/executed
in his favour by the drawer. The circumstances set out.
above form the fact(s) which bring about the activation of
the presumptive clause. [Bharat Barrel & Drum Mfg.
Co. v. Amin Chand Payrelal [Bharat Barrel & Drum Mfg.
Co. v. Amin Chand Payrelal, (1999) 3 SCC 35]]
36. Recently, this Court has gone to the extent of holding
that presumption takes effect even in a situation where
the accused contends that a blank cheque leaf was
voluntarily signed and handed over by him to the
complainant. [Bir Singh v. Mukesh Kumar [Bir
Singh v. Mukesh Kumar, (2019) 4 SCC 197: (2019) 2 SCC
(Civ) 309: (2019) 2 SCC (Cri) 40] ]. Therefore, the mere
admission of the drawer’s signature, without admitting
the execution of the entire contents in the cheque, is now
sufficient to trigger the presumption.
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::: Downloaded on – 21/07/2025 21:25:57 :::CIS
29
2025:HHC:23406(sufficient to satisfy the Judge’s requirement of
some evidence), the presumption ‘disappears as a
rule of law and the case is in the Jury’s hands free
from any rule’.”
.
39. The standard of proof to discharge this evidential
burden is not as heavy as that usually seen in situations
where the prosecution is required to prove the guilt of an
accused. The accused is not expected to prove the non-
existence of the presumed fact beyond a reasonable
doubt. The accused must meet the standard of
“preponderance of probabilities”, similar to a defendant in
a civil proceeding. [Rangappa v. Sri Mohan
[Rangappa v. Sri Mohan, (2010) 11 SCC 441: (2010) 4 SCC
(Civ) 477: (2011) 1 SCC (Cri) 184: AIR 2010 SC 1898]]
27. 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 this presumption.
28. It was submitted that the affidavit (Ex.C6/CW1) was
forged as the lines were added in para 4 after obtaining the
signatures of the accused. This submission is only stated to be
rejected. The complainant was not cross-examined regarding
the contents of the affidavit (Ex.C6/CW1). It was laid down by the
Hon’ble Supreme Court in State of Uttar Pradesh Versus Nahar
Singh 1998 (3) SCC 561 that where the testimony of a witness is
not challenged in the cross-examination, the same cannot be
challenged during the arguments. This position was reiterated in
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2025:HHC:23406
Arvind Singh v. State of Maharashtra, (2021) 11 SCC 1: (2022) 1 SCC
(Cri) 208: 2020 SCC OnLine SC 4, and it was held at page 34:
.
“58. A witness is required to be cross-examined in a
criminal trial to test his veracity; to discover who he is
and what his position in life is, or to shake his credit, byinjuring his character, although the answer to such
questions may directly or indirectly incriminate him or
may directly or indirectly expose him to a penalty or
forfeiture (Section 146 of the Evidence Act). A witness isrequired to be cross-examined to bring forth
inconsistencies and discrepancies, and to prove the
untruthfulness of the witness. A-1 set up a case of his
arrest on 1-9-2014 from 18:50 hrs; therefore, it wasrequired for him to cross-examine the truthfulness of the
prosecution witnesses with regard to that particular
aspect. The argument that the accused was shown to be
arrested around 19:00 hrs is an incorrect reading of the
arrest form (Ext. 17). In Column 8, it has been specificallymentioned that the accused was taken into custody on 2-
9-2014 at 14:30 hrs at Wanjri Layout, Police Station,
Kalamna. The time, i.e. 17, 10 hrs, mentioned in Column 2,appears to be when A-1 was brought to the Police Station,
Lakadganj. As per the IO, A-1 was called for interrogationas the suspicion was on an employee of Dr Chandak since
the kidnapper was wearing a red colour t-shirt, which
was given by Dr Chandak to his employees. A-1 travelledfrom the stage of suspect to an accused only on 2-9-2014.
Since no cross-examination was conducted on any of the
prosecution witnesses about the place and manner of the
arrest, such an argument that the accused was arrested
on 1-9-2014 at 18:50 hrs is not tenable.
59. The House of Lords in a judgment reported
as Browne v. Dunn [Browne v. Dunn, (1893) 6 R 67 (HL)]
considered the principles of appreciation of evidence.
Lord Chancellor Herschell, held that it is absolutely
essential to the proper conduct of a cause, where it is::: Downloaded on – 21/07/2025 21:25:57 :::CIS
31
2025:HHC:23406intended to suggest that a witness if not speaking the
truth on a particular point, direct his attention to the fact
by some questions put in cross-examination showing
that imputation is intended to be made, and not to take.
his evidence and pass it by as a matter altogether
unchallenged. It was held as under:
“Now, my Lords, I cannot help saying that it seems to
me to be absolutely essential to the proper conduct of a
cause, where it is intended to suggest that a witness is
not speaking the truth on a particular point, to direct
his attention to the fact by some questions put incross-examination showing that that imputation is
intended to be made, and not to take his evidence and
pass it by as a matter altogether unchallenged, and
then, when it is impossible for him to explain, asperhaps he might have been able to do if such
questions had been put to him, the circumstances
which it is suggested indicate that the story he tells
ought not to be believed, to argue that he is a witness
unworthy of credit. My Lords, I have alwaysunderstood that if you intend to impeach a witness you
are bound, whilst he is in the box, to give him an
opportunity of making any explanation which is opento him; and, as it seems to me, that is not only a rule of
professional practice in the conduct of a case, but isessential to fair play and fair dealing with witnesses.
Sometimes reflections have been made upon excessivecross-examination of witnesses, and it has been
complained of as undue, but it seems to me that cross-
examination of a witness which errs in the direction of
excess may be far more fair to him than to leave him
without cross-examination, and afterwards, to
suggest that he is not a witness of truth, I mean upon a
point on which it is not otherwise perfectly clear that
he has had full notice beforehand that there is an
intention to impeach the credibility of the story which
he is telling.”
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2025:HHC:23406
60. Lord Halsbury, in a separate but concurring opinion,
held as under:
“My Lords, with regard to the manner in which the
.
evidence was given in this case, I cannot too heartily
express my concurrence with the Lord Chancellor as to
the mode in which a trial should be conducted. To my
mind, nothing would be more absolutely unjust thannot to cross-examine witnesses upon evidence which
they have given, so as to give them notice, and to give
them an opportunity of explanation, and an
opportunity very often to defend their own character,and, not having given them such an opportunity, to
ask the jury afterwards to disbelieve what they have
said, although not one question has been directed
either to their credit or to the accuracy of the facts theyhave deposed to.”
61. This Court in a judgment reported as State of
U.P. v. Nahar Singh [State of U.P. v. Nahar Singh, (1998) 3
SCC 561: 1998 SCC (Cri) 850], quoted
from Browne [Browne v. Dunn, (1893) 6 R 67 (HL)] to hold
that in the absence of cross-examination on the
explanation of delay, the evidence of PW 1 remained
unchallenged and ought to have been believed by the High
Court. Section 146 of the Evidence Act confers a valuable
right of cross-examining the witness tendered in
evidence by the opposite party. This Court held as under:
(Nahar Singh case [State of U.P. v. Nahar Singh, (1998) 3 SCC
561: 1998 SCC (Cri) 850], SCC pp. 566-67, para 13)
“13. It may be noted here that part of the statement of
PW 1 was not cross-examined by the accused. In the
absence of cross-examination on the explanation of
the delay, the evidence of PW 1 remained unchallenged
and ought to have been believed by the High Court.
Section 138 of the Evidence Act confers a valuable right
of cross-examining the witness tendered in evidence
by the opposite party. The scope of that provision is
enlarged by Section 146 of the Evidence Act by
allowing a witness to be questioned:
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33
2025:HHC:23406
(1) to test his veracity,
(2) to discover who he is and what his position is in
life, or.
(3) to shake his credit by injuring his character,
although the answer to such questions might tend
directly or indirectly to incriminate him or might
expose or tend directly or indirectly to expose himto a penalty or forfeiture.”
62. This Court, in a judgment reported as Muddasani
Venkata Narsaiah v. Muddasani Sarojana [Muddasani
Venkata Narsaiah v. Muddasani Sarojana, (2016) 12 SCC
288: (2017) 1 SCC (Civ) 268], laid down that the party is
obliged to put his case in cross-examination of witnesses
of the opposite party. The rule of putting one’s version in
cross-examination is one of essential justice and not
merely a technical one. It was held as under : (SCC pp.
294-95, paras 15-16)
“15. Moreover, there was no effective cross-
examination made on the plaintiff’s witnesses with
respect to the factum of execution of the sale deed; PW
1 and PW 2 have not been cross-examined as to the
factum of execution of the sale deed. The cross-
examination is a matter of substance, not of
procedure; one is required to put one’s own version in
the cross-examination of the opponent. The effect of
non-cross-examination is that the statement of the
witness has not been disputed. The effect of not cross-
examining the witnesses has been considered by this
Court in Bhoju Mandal v. Debnath Bhagat [Bhoju
Mandal v. Debnath Bhagat, AIR 1963 SC 1906]. This
Court repelled a submission on the ground that the
same was not put either to the witnesses or suggested
before the courts below. A party is required to put his
version to the witness. If no such questions are put,
the Court would presume that the witness account has
been accepted as held in Chuni Lal Dwarka
Nath v. Hartford Fire Insurance Co. Ltd. [Chuni Lal
::: Downloaded on – 21/07/2025 21:25:57 :::CIS
34
2025:HHC:23406
Dwarka Nath v. Hartford Fire Insurance Co. Ltd., 1957 SCC
OnLine P&H 177: AIR 1958 P&H 440]
16. In Maroti Bansi Teli v. Radhabai [Maroti Bansi
.
Teli v. Radhabai, 1943 SCC OnLine MP 128: AIR 1945 Nag
60], it has been laid down that the matters sworn to by
one party in the pleadings, not challenged either in
pleadings or cross-examination by the other party,
must be accepted as fully established. The High Court
of Calcutta in A.E.G. Carapiet v. A.Y. Derderian [A.E.G.
Carapiet v. A.Y. Derderian, 1960 SCC OnLine Cal 44: AIR
1961 Cal 359] has laid down that the party is obliged to
put his case in cross-examination of witnesses of the
opposite party. The rule of putting one’s version in
cross-examination is one of essential justice and not
merely a technical one. A Division Bench of the Nagpur
High Court in Kuwarlal Amritlal v. Rekhlal
Koduram [Kuwarlal Amritlal v. Rekhlal Koduram, 1949
SCC OnLine MP 35: AIR 1950 Nag 83] has laid down that
when attestation is not specifically challenged and the
witness is not cross-examined regarding details of
attestation, it is sufficient for him to say that the
document was attested. If the other side wants to
challenge that statement, it is their duty, quite apart
from raising it in the pleadings, to cross-examine the
witness along those lines. A Division Bench of the
Patna High Court in Karnidan Sarda v. Sailaja Kanta
Mitra [Karnidan Sarda v. Sailaja Kanta Mitra, 1940 SCC
OnLine Pat 288: AIR 1940 Pat 683] has laid down that it
cannot be too strongly emphasised that the system of
administration of justice allows of cross-examination
of opposite party’s witnesses for the purpose of testing
their evidence, and it must be assumed that when the
witnesses were not tested in that way, their evidence is
to be ordinarily accepted. In the aforesaid
circumstances, the High Court has gravely erred in law
in reversing the findings of the first appellate court as
to the factum of execution of the sale deed in favour of
the plaintiff.”
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2025:HHC:23406
29. Therefore, it is impermissible to make this
submission before this Court that the affidavit was manipulated
.
and the words were subsequently added to it.
30. The accused admitted his signatures on the affidavit.
He never stated that the words were added after he had put his
signatures on it. Hence, the submission that the affidavit is
forged cannot be accepted.
31. Even if the words stated to have been added
regarding the handing over of the cheque are taken out of the
consideration, still the affidavit clearly mentions that the
accused required ₹4,50,000/- for the construction of his house.
He requested the complainant to give him money, and assured
to return the money on or before 15.9.2022. It was also stated
that ₹4,50,000/- was received in cash from Chattar Singh, and
the accused had undertaken to return money within the
stipulated period. It was also agreed that in case of failure, the
amount would be paid along with interest @9% per annum.
These averments in the affidavit corroborated the version of the
complainant that he had advanced ₹4,50,000/- to the accused
for the construction of his house. Thus, the learned Courts below
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2025:HHC:23406
had rightly held that the version of the complainant that he had
advanced ₹4,50,000/- to the accused was acceptable.
.
32. The accused claimed in his statement recorded under
Section 313 of Cr.P.C. that he had taken a loan of ₹1.00 lac and
had returned the same; however, he did not examine any person
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 thestatement 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 available
under Section 139 of the Act. The statement of the accusedrecorded under Section 313 of the Code is not substantive
evidence 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)”
33. Therefore, the version of the accused that he had
taken a loan of ₹1.00 lac, which was repaid by him, was rightly
rejected by the learned Courts below in the absence of evidence.
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34. It was submitted that the accused admitted that he
had issued a blank cheque to the complainant at the time of
.
taking money; therefore, the present complaint was not
maintainable. This submission will not help the accused. The
contents of the affidavit clearly show that the accused had taken
a loan of ₹4,50,000/- from the complainant. Therefore, he had a
subsisting liability to repay the amount. He claimed that he had
taken a loan of ₹1.00 lac, which was returned by him; however,
this plea was falsified by the affidavit. 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 a person is liable for the commission of an
offence punishable under Section 138 of the NI Act even if the
cheque is filled by some other person. It was observed:
“33. A meaningful reading of the provisions of the
Negotiable Instruments Act including, in particular,
Sections 20, 87 and 139, makes it amply clear that a
person who signs a cheque and makes it over to the payee
remains liable unless he adduces evidence to rebut the
presumption that the cheque had been issued for
payment of a debt or in discharge of a liability. It is
immaterial that the cheque may have been filled in by any
person other than the drawer if the cheque is duly signed
by the drawer. If the cheque is otherwise valid, the penal
provisions of Section 138 would be attracted.
34. If a signed blank cheque is voluntarily presented to a
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38
2025:HHC:23406payee, towards some payment, the payee may fill up the
amount and other particulars. This in itself would not
invalidate the cheque. The onus would still be on the
accused to prove that the cheque was not in discharge of a.
debt or liability by adducing evidence.
35. It is not the case that the respondent accused him of
either signing the cheque or parted with it under anythreat or coercion. Nor is it the case that the respondent
accused that the unfilled signed cheque had been stolen.
The existence of a fiduciary relationship between the
payee of a cheque and its drawer would not disentitle thepayee to the benefit of the presumption under Section 139
of the Negotiable Instruments Act, in the absence of
evidence of exercise of undue influence or coercion. The
second question is also answered in the negative.
36. Even a blank cheque leaf, voluntarily signed and
handed over by the accused, which is towards some
payment, would attract presumption under Section 139 of
the Negotiable Instruments Act, in the absence of anycogent evidence to show that the cheque was not issued in
discharge of a debt.”
35. This position was reiterated in Oriental Bank of
Commerce v. Prabodh Kumar Tewari, 2022 SCC OnLine SC 1089,
wherein it was observed:
“12. The submission, which has been urged on behalf of
the appellant, is that even assuming, as the first
respondent submits, that the details in the cheque were
not filled in by the drawer, this would not make any
difference to the liability of the drawer.
xxxxxx
32. A drawer who signs a cheque and hands it over to
the payee is presumed to be liable unless the drawer
adduces evidence to rebut the presumption that the
cheque has been issued towards payment of a debt or in::: Downloaded on – 21/07/2025 21:25:57 :::CIS
39
2025:HHC:23406the discharge of a liability. The presumption arises under
Section 139.
36. Therefore, the cheque is not bad even if it is not filled
.
by the drawer.
37. It was submitted that the cheque was issued as a
security, and the provisions of Section 138 of the NI Act are not
attracted to the present case. This submission is not acceptable.
It was laid down by this Court in Hamid Mohammad Versus
Jaimal Dass 2016 (1) HLJ 456, that even if the cheque was issued
towards the security, the accused will be liable. It was observed:
“9. Submission of learned Advocate appearing on behalf
of the revisionist that the cheque in question was issuedto the complainant as security and on this ground,
criminal revision petition be accepted is rejected being
devoid of any force for the reasons hereinaftermentioned. As per Section 138 of the Negotiable
Instruments Act 1881, if any cheque is issued on accountof other liability, then the provisions of Section 138 of the
Negotiable Instruments Act 1881 would be attracted. The
court has perused the original cheque, Ext. C-1 dated30.10.2008, placed on record. There is no recital in the
cheque Ext. C-1, that cheque was issued as a security
cheque. It is well-settled law that a cheque issued as
security would also come under the provision of Section
138 of the Negotiable Instruments Act 1881. See 2016 (3)
SCC page 1 titled Don Ayengia v. State of Assam & another. It
is well-settled law that where there is a conflict between
former law and subsequent law, then subsequent law
always prevails.”
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38. It was laid down by the Hon’ble Supreme Court in
Sampelly Satyanarayana Rao vs. Indian Renewable Energy
.
Development Agency Limited 2016 (10) SCC 458 that issuing a
cheque towards security will also attract the liability for the
commission of an offence punishable under Section 138 of N.I.
Act. It was observed: –
“10. We have given due consideration to the submission
advanced on behalf of the appellant as well as the
observations of this Court in Indus Airways Private Limitedversus Magnum Aviation Private Limited (2014) 12 SCC 53
with reference to the explanation to Section 138 of the Actand the expression “for the discharge of any debt or other
liability” occurring in Section 138 of the Act. We are of the
view that the question of whether a post-dated cheque isfor “discharge of debt or liability” depends on the nature
of the transaction. If on the date of the cheque, liability or
debt exists or the amount has become legally recoverable, theSection is attracted and not otherwise.
11. Reference to the facts of the present case clearly shows
that though the word “security” is used in clause 3.1(iii)
of the agreement, the said expression refers to the
cheques being towards repayment of instalments. Therepayment becomes due under the agreement, the
moment the loan is advanced and the instalment falls
due. It is undisputed that the loan was duly disbursed on
28th February 2002, which was prior to the date of the
cheques. Once the loan was disbursed and instalments
have fallen due on the date of the cheque as per the
agreement, the dishonour of such cheques would fall
under Section 138 of the Act. The cheques undoubtedly
represent the outstanding liability.
12. Judgment in Indus Airways (supra) is clearly
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41
2025:HHC:23406distinguishable. As already noted, it was held therein that
liability arising out of a claim for breach of contract under
Section 138, which arises on account of dishonour of a
cheque issued, was not by itself at par with a criminal.
liability towards discharge of acknowledged and admitted
debt under a loan transaction. Dishonour of a cheque
issued for discharge of a later liability is clearly coveredby the statute in question. Admittedly, on the date of the
cheque, there was a debt/liability in praesenti in terms of
the loan agreement, as against the case of Indus Airways
(supra), where the purchase order had been cancelled anda cheque issued towards advance payment for the
purchase order was dishonoured. In that case, it was
found that the cheque had not been issued for discharge
of liability but as an advance for the purchase order,which was cancelled. Keeping in mind this fine, but the
real distinction, the said judgment cannot be applied to a
case of the present nature where the cheque was for
repayment of a loan instalment which had fallen due,
though such deposit of cheques towards repayment ofinstalments was also described as “security” in the loan
agreement. In applying the judgment in Indus Airways
(supra), one cannot lose sight of the difference between atransaction of the purchase order which is cancelled and
that of a loan transaction where the loan has actuallybeen advanced and its repayment is due on the date of the
cheque.
13. The crucial question to determine the applicability of
Section 138 of the Act is whether the cheque represents
the discharge of existing enforceable debt or liability, or
whether it represents an advance payment without there
being a subsisting debt or liability. While approving the
views of different High Courts noted earlier, this is the
underlying principle as can be discerned from the
discussion of the said cases in the judgment of this
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39. This position was reiterated in Sripati Singh v. State of
Jharkhand, 2021 SCC OnLine SC 1002: AIR 2021 SC 5732, and it was
.
held that a cheque issued as security is not waste paper and a
complaint under Section 138 of the N.I. Act can be filed on its
dishonour. It was observed:
“17. A cheque issued as security pursuant to a financial
transaction cannot be considered as a worthless piece ofpaper under every circumstance. ‘Security’ in its true
sense is the state of being safe, and the security given for
a loan is something given as a pledge of payment. It isgiven, deposited or pledged to make certain the fulfilment
of an obligation to which the parties to the transaction arebound. If in a transaction, a loan is advanced and the
borrower agrees to repay the amount in a specified
timeframe and issues a cheque as security to secure suchrepayment; if the loan amount is not repaid in any other
form before the due date or if there is no other
understanding or agreement between the parties to deferthe payment of the amount, the cheque which is issued as
security would mature for presentation and the drawee ofthe cheque would be entitled to present the same. On such
presentation, if the same is dishonoured, the
consequences contemplated under Section 138 and theother provisions of N.I. Act would flow.
18. When a cheque is issued and is treated as ‘security’
towards repayment of an amount with a time period
being stipulated for repayment, all that it ensures is that
such cheque which is issued as ‘security cannot be
presented prior to the loan or the instalment maturing for
repayment towards which such cheque is issued as
security. Further, the borrower would have the option of
repaying the loan amount or such financial liability in any
other form, and in that manner, if the amount of the loan
due and payable has been discharged within the agreed
period, the cheque issued as security cannot thereafter be::: Downloaded on – 21/07/2025 21:25:57 :::CIS
43
2025:HHC:23406presented. Therefore, the prior discharge of the loan or
there being an altered situation due to which there would
be an understanding between the parties is a sine qua non
to not present the cheque which was issued as security.
.
These are only the defences that would be available to the
drawer of the cheque in proceedings initiated under
Section 138 of the N.I. Act. Therefore, there cannot be a
hard and fast rule that a cheque, which is issued assecurity, can never be presented by the drawee of the
cheque. If such is the understanding, a cheque would also
be reduced to an ‘on-demand promissory note’ and in all
circumstances, it would only be civil litigation to recover
the amount, which is not the intention of the statute.
When a cheque is issued even though as ‘security’ the
consequence flowing therefrom is also known to the
drawer of the cheque and in the circumstance stated
above if the cheque is presented and dishonoured, theholder of the cheque/drawee would have the option of
initiating the civil proceedings for recovery or thecriminal proceedings for punishment in the fact
situation, but in any event, it is not for the drawer of the
cheque to dictate terms with regard to the nature of
litigation.”
40. There is no evidence that the accused had paid the
amount to the complainant, and the accused would be liable
even if the cheque was issued as a security.
41. There is no other evidence to rebut the presumption
attached to the cheque under Section 118 (a) and 139 of the NI
Act. Rather, the version of the complainant is duly corroborated
by the contents of the affidavit executed before the Executive
Magistrate, in which the loan of ₹4,50,000/- was acknowledged.
Therefore, learned Courts below had rightly held that the cheque
was issued in discharge of the legal liability.
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2025:HHC:23406
42. The complainant stated that the cheque was
dishonoured with an endorsement ‘insufficient funds’. This is
.
duly corroborated by the Cheque Returning Memo (Ex.C3/CW1).
Luv Rathor (CW2) stated that the cheque was dishonoured with
an endorsement ‘insufficient funds’. There is nothing in his
cross-examination to show that he is making a false statement.
Thus, it was duly proved on record that the cheque was
dishonoured because of ‘insufficient funds’.
43. Complainant stated that he had issued a notice
(Ex.C4/CW1) asking the accused to repay the amount within 15
days from the date of receipt of the notice. This notice was
issued on 27.10.2022, as is apparent from the receipt
(Ex.C5/CW1). The complainant stated that he had received the
memo of dishonour on 28.9.2002. It was not suggested to be
incorrect. Further, Lov Rathour (CW2) stated that the memo was
dated 27.9.2022; therefore, the statement of the complainant
that the notice was received on 28.9.2022 has to be accepted as
correct. Hence, the notice was issued on the 30th day from the
date of the receipt of the intimation of the dishonour.
.
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2025:HHC:23406
44. Notice was sent to the address mentioned by the
accused in the notice of accusation; statement recorded under
.
Section 313 Cr.P.C., and the bail bonds furnished before the
learned Trial Court. Therefore, it was sent to the correct address
and is deemed to be served.
45. 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 ofCriminal Law, where there is no stipulation of giving of
notice before filing a complaint. Any drawer who claimsthat he did not receive the notice sent by post, can, within 15
days of receipt of summons from the court in respect of thecomplaint under Section 138 of the Act, make payment of the
cheque amount and submit to the Court that he had made
payment within 15 days of receipt of summons (by receiving a
copy of the complaint with the summons) and, therefore, the
complaint is liable to be rejected. A person who does not pay
within 15 days of receipt of the summons from the Court
along with the copy of the complaint under Section 138 of the
Act, cannot obviously contend that there was no proper
service of notice as required under Section 138, by ignoring
statutory presumption to the contrary under Section 27 of the
G.C. Act and Section 114 of the Evidence Act. In our view, any::: Downloaded on – 21/07/2025 21:25:57 :::CIS
46
2025:HHC:23406other 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)
46. The accused has not paid any money to the
complainant; hence, it was duly proved that the accused had
47. to
failed to repay the money despite the receipt of the notice.
Therefore, it was duly proved before the learned Trial
Court that the cheque was issued in discharge of legal liability. It
was dishonoured with an endorsement ‘funds insufficient’ and
the accused had failed to pay the amount despite the 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.
48. The learned Trial Court sentenced the accused to
undergo simple imprisonment for one year. It was laid down by
the Hon’ble Supreme Court in Bir Singh v. Mukesh Kumar, (2019)
4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ) 309: 2019 SCC
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2025:HHC:23406
OnLine SC 138 that the penal provisions of Section 138 of the 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 negotiable
instruments, including cheques, and to encourage andpromote 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 negotiableinstruments such as cheques without serious intention to
honour the promise implicit in the issuance of the same.”
49. Keeping in view the deterrent nature of the sentence
to be awarded, the sentence of one year’s imprisonment cannot
be said to be excessive, and no interference is required with it.
50. Learned Trial Court had ordered the accused to pay a
compensation of ₹5,50,000/-. The cheque of ₹4,50,000/- was
issued on 16.9.2022. The sentence was imposed on 27.8.2024
after the expiry of about two years. The complainant lost
interest on the amount, and he had to pay the litigation
expenses for filing the complaint. He was entitled to be
compensated for the same. It was laid down by the Hon’ble
Supreme Court in Kalamani Tex v. P. Balasubramanian, (2021) 5
SCC 283: (2021) 3 SCC (Civ) 25: (2021) 2 SCC (Cri) 555: 2021 SCC
OnLine SC 75 that the Courts should uniformly levy a fine up to
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2025:HHC:23406
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]”
51. Therefore, the compensation of ₹1.00 lac on the
principal amount of ₹4,50,000/- is not excessive.
52. No other point was urged.
53. 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
21st July, 2025
(Chander)
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