Himachal Pradesh High Court
Dalel Singh Patial vs Sarwans Kaur Chopra on 4 July, 2025
Neutral Citation No. ( 2025:HHC:21187 )
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No.4135 of 2013
.
Reserved on: 24.06.2025
Date of Decision: 04.07.2025
Dalel Singh Patial ...Petitioner
Versus
Sarwans Kaur Chopra
r ...Respondent
Coram
Hon’ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 Yes
For the Petitioner : Mr. B.P. Sharma, Sr. Advocate, with
Mr. Arun Kumar, Advocate.
For the Respondent : Ms. Devyani Sharma, Sr. Advocate,
with Mr. Srishti Negi, Advocate.
Rakesh Kainthla, Judge
The petitioner has filed the present petition against the
judgment dated 05.07.2013 passed by learned Additional Sessions
Judge, Ghumarwin, District Bilaspur (learned Appellate Court)
vide which the judgment of conviction dated 02.03.2010 and order
of sentence dated 03.03.2010 passed by learned Judicial
Magistrate, First Class Court No.1 Ghumarwin (learned Trial
1
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
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Court) were upheld. (Parties shall hereinafter be referred to in the
same manner as they were arrayed before the learned Trial Court for
.
convenience.)
2. Briefly stated, the facts giving rise to the present
petition are that the complainant filed a complaint against the
accused before the learned Trial Court for the commission of an
offence punishable under Section 138 of the Negotiable
Instruments Act (in short, ‘NI Act‘). It was asserted that the
complainant is running a business of a petrol pump in the name
and style of M/s Sai Filling Station at VPO Naswal, Tehsil
Ghumarwin, District Bilaspur, H.P. The accused is a contractor. He
purchased the diesel from the complainant’s Petrol pump for his
vehicles w.e.f. 07.10.2006 to 29.01.2007. He made the part
payments for the diesel purchased by him. An amount of
₹6,16,310/- was calculated as outstanding with interest till
31.01.2007. The accused issued a cheque for ₹6,16,310/- drawn on
Punjab National Bank in favour of the complainant to discharge
his legal liability. The complainant presented the cheque to the
bank, but it was dishonoured with an endorsement ‘insufficient
funds’. The complainant sent a notice to the accused, asking him
to pay the amount within 15 days of the receipt of the notice of
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demand. The notice was duly served upon the accused, but the
accused failed to pay the amount; hence, the complaint was filed
.
to take action against the accused as per the law.
3. Learned Trial Court found sufficient reasons to
summon the accused. When the accused appeared, a notice of
accusation was put to him for the commission of an offence
punishable under Section 138 of the NI Act, to which he pleaded
not guilty and claimed to be tried.
4. The complainant examined herself (CW1), Mansa Ram
(CW2), and Rajeev Singh (CW3).
5. The accused in his statement recorded under section
313 of Cr.P.C. admitted that a notice was served upon him. He
stated that he had no concern with the case; therefore, he had not
sent any reply to the notice. He denied the rest of the
complainant’s case. He stated that his cheques were misplaced
and he had reported this fact to the police. A false case was made
against him. The statements of Om Prakash (DW-1) and the
accused (DW-2) were recorded in defence.
6. Learned Trial court held that the plea taken by the
accused that he had misplaced the signed cheques was not
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believable. The accused did not dispute his signatures on the
cheque and a presumption under Sections 118 (a) and 139 of the NI
.
Act would arise that the cheque was issued in discharge of the
legal liability. The accused made a complaint to the police on
12.01.2007 and to the Bank on 15.01.2007, however, there was
nothing on record to show that the letter was delivered to the
Bank. The statement of account showed that the money in the
account of the accused was not sufficient to honour the cheque.
The accused admitted the receipt of the notice. He failed to pay the
amount; hence, he was convicted of the commission of an offence
punishable under Section 138 of the NI Act and was sentenced to
undergo simple imprisonment for 06 months, pay a fine of
₹5,000/-, compensation of ₹7,50,000/- and in default of payment
of fine to undergo further simple imprisonment for one month.
7. Being aggrieved by the judgment and order passed by
the learned Trial Court, the accused filed an appeal which was
decided by the learned Additional Sessions Judge Ghumarwin,
District Bilaspur, H.P. (learned Appellate Court). Learned
Appellate Court concurred with the findings recorded by the
learned Trial Court that the signatures on the cheque were not
disputed, and a presumption under Sections 118 (a) and 139 of the
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NI Act would arise. The explanation provided by the accused that
he had misplaced the signed cheques was not believable. The
.
accused received the legal notice but did not send any reply to it.
The cheque was dishonoured with an endorsement ‘funds
insufficient’. All the ingredients of Section 138 of the NI Act were
satisfied. The sentence was adequate, and no interference was
required with it.
8. Being aggrieved from the judgments and order passed
by the learned Courts below, the accused has filed the present
revision, asserting that the learned Courts below erred in
appreciating the material on record. The cheque was not issued in
discharge of the debt. The accused had lodged an FIR regarding
the loss of the cheque. The learned Courts below did not examine
the question whether the cheque was filled by the
petitioner/accused. The defence that the blank cheque was taken
by the complainant was highly probable, and learned Courts below
erred in rejecting it. The complainant did not produce any record
of the sale of petrol/diesel, and the learned Courts below erred in
drawing the presumption; therefore, it was prayed that the
present revision be allowed and judgments and order passed by
the learned Courts below be set aside.
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9. An application (Cr.MP No. 2590/2023) under Section
142 of the NI Act for compounding the complaint was filed. It was
.
asserted that the accused agreed with the complainant’s husband
to compromise the matter. He executed a gift deed in favour of the
complainant’s husband. It was agreed that the complainant would
withdraw the complaint as compromised; however, the
complainant, instead of withdrawing the complaint, is insisting
on an early hearing of the matter. The continuation of the
proceedings amounts to an abuse of the process of the Court;
therefore, it was prayed that the present petition be allowed and
the complaint be disposed of as compromised.
10. The application is opposed by filing a reply making a
preliminary submission regarding the lack of maintainability. The
contents of the application were denied on merits. It was asserted
that no compensation was paid to the complainant either in cash
or kind. The parties agreed to settle the matter, and an agreement
dated 27.06.2017 was executed between them. The accused agreed
to pay a sum of ₹4,50,000/- to the complainant. The accused had
no money, so he agreed to sell his share in 10 bighas for a sum of
₹4,50,000/-. The sale deed was to be executed on or before
31.12.2020, and in case of failure, the rebate of ₹3,00,000/- was
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not to be granted to him. A post-dated cheque was also given to
the complainant, which was dishonoured; hence, the terms and
.
conditions of the compromise have not been fulfilled. The gift
deed is regarding some other land. The complainant was also
made to withdraw the civil suit filed by her for the recovery of the
amount of the cheque; therefore, it was prayed that the present
application be dismissed.
11. A rejoinder denying the contents of the reply and
affirming those of the application was filed.
12. I have heard Mr. B.P. Sharma, learned Senior Counsel,
assisted by Mr. Arun Kumar, learned counsel for the petitioner,
and Ms. Devyani Sharma, learned Senior Counsel, assisted by Ms.
Srishti Negi, learned counsel for the respondent/complainant.
13. Mr. B.P. Sharma, learned Senior Counsel for the
petitioner/accused, submitted that the matter has been
compromised between the parties. The accused executed a gift
deed in favour of the complainant’s husband, and the complainant
had agreed to withdraw the complaint filed by her. She is not
adhering to her promise; therefore, it was prayed that the
application for composition be allowed and the complaint be
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dismissed as compromised. He submitted in the alternative that
the complaint was not maintainable. The cheque was issued on
.
28.01.2007 for the amount due on 31.01.2007. This was
impermissible because the future liability could not have been
calculated by the parties; even otherwise, the cheque has to be
issued for existing debt/liability and not for the future liability.
Learned Courts below failed to appreciate this aspect. The version
of the accused that a signed cheque was lost by him was highly
probable, and learned Courts below erred in rejecting it; therefore,
it was prayed that the present revision be allowed and the
judgments and order passed by learned Courts below be set aside.
14. Ms. Devyani Sharma, learned Senior Counsel for the
respondent/complainant, submitted that no compromise was
effected between the parties. The gift deed was executed by the
accused in favour of the complainant’s husband out of love and
affection. A complaint cannot be compounded without the consent
of the complainant; therefore, she prayed that the present
application be dismissed. She submitted that the learned Courts
below had rightly appreciated the evidence on record, and this
Court should not interfere with the concurrent finding of fact
while exercising the revisional jurisdiction. Learned Courts below
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had rightly held that the accused had manipulated the documents
to wriggle out of his liability and the plea regarding the loss of the
.
cheque was rightly rejected. Otherwise also, this plea is highly
improbable because the accused being a contractor will not deal
with the cheques so lightly, as to put his signatures on the blank
cheque. There is no infirmity in the judgments and order passed
by learned courts below; hence, she prayed that the present
revision be dismissed. She relied upon A.S. Pharma Pvt. Ltd. vs.
Nayati Medical Pvt. Ltd and ors, 2024 SCC Online SC 2539 and Soft
Touch Computer vs. State of Maharashtra and ors, 2014 (2) MWN
(Cr.) DCC 39 (Bom.) in support of her submission.
15. I have given considerable thought to the submissions
made at the bar and have gone through the records carefully.
16. It was laid down by the Hon’ble Supreme Court in
Malkeet Singh Gill v. State of Chhattisgarh, (2022) 8 SCC 204: (2022)
3 SCC (Cri) 348: 2022 SCC OnLine SC 786 that the revisional court is
not an appellate court and it can only rectify the patent defect,
errors of jurisdiction or the law. It was observed 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
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Neutral Citation No. ( 2025:HHC:21187 )on record. The High Court in criminal revision against
conviction is not supposed to exercise the jurisdiction like
the appellate court, and the scope of interference in revision.
is extremely narrow. Section 397 of the Criminal Procedure
Code (in short “CrPC“) vests jurisdiction to satisfy itself or
himself as to the correctness, legality or propriety of any
finding, sentence or order, recorded or passed, and as to theregularity 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 individualcases. 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.
17. This position was reiterated in State of Gujarat v.
Dilipsinh Kishorsinh Rao, 2023 SCC OnLine SC 1294, wherein it was
observed:
“13. The power and jurisdiction of the Higher Court under
Section 397 Cr. P.C., which vests the court with the power to
call for and examine records of an inferior court, is for thepurposes of satisfying itself as to the legality and regularity
of any proceeding or order made in a case. The object of thisprovision is to set right a patent defect or an error of
jurisdiction or law or the perversity which has crept intosuch proceedings. It would be apposite to refer to the
judgment of this court in Amit Kapoor v. Ramesh
Chandra, (2012) 9 SCC 460, where the scope of Section 397
has been considered and succinctly explained as under:
“12. Section 397 of the Code vests the court with the
power to call for and examine the records of an
inferior court for the purposes of satisfying itself as to
the legality and regularity of any proceedings or order
made in a case. The object of this provision is to set
right a patent defect or an error of jurisdiction or law.
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Neutral Citation No. ( 2025:HHC:21187 )be appropriate for the court to scrutinise the orders,
which, upon the face of it, bear a token of careful
consideration and appear to be in accordance with the.
law. If one looks into the various judgments of this
Court, it emerges that the revisional jurisdiction can
be invoked where the decisions under challenge are
grossly erroneous, there is no compliance with theprovisions 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 andcannot 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 thequestion 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 revisionaljurisdiction unless the case substantially falls within the
categories aforestated. Even framing of charge is a much-
advanced stage in the proceedings under the CrPC.”
18. 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
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Neutral Citation No. ( 2025:HHC:21187 )revisional jurisdiction by the High Court. In State of
Kerala v. Puttumana Illath Jathavedan Namboodiri [State of
Kerala v. Puttumana Illath Jathavedan Namboodiri, (1999) 2.
SCC 452: 1999 SCC (Cri) 275], while considering the scope of
the revisional jurisdiction of the High Court, this Court has
laid down the following: (SCC pp. 454-55, para 5)
“5. … In its revisional jurisdiction, the High Court cancall for and examine the record of any proceedings for
the purpose of satisfying itself as to the correctness,
legality or propriety of any finding, sentence or order. In
other words, the jurisdiction is one of supervisoryjurisdiction exercised by the High Court for correcting a
miscarriage of justice. But the said revisional power
cannot be equated with the power of an appellate court,
nor can it be treated even as a second appellatejurisdiction. Ordinarily, therefore, it would not be
appropriate for the High Court to reappreciate the
evidence and come to its own conclusion on the same
when the evidence has already been appreciated by the
Magistrate as well as the Sessions Judge in appeal unlessany glaring feature is brought to the notice of the High
Court which would otherwise tantamount to a gross
miscarriage of justice. On scrutinising the impugnedjudgment of the High Court from the aforesaid
standpoint, we have no hesitation in coming to theconclusion that the High Court exceeded its jurisdiction
in interfering with the conviction of the respondent byreappreciating 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
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view is possible. The following has been laid down in para
14: (SCC p. 135)
“14. … Unless the order passed by the Magistrate is
.
perverse or the view taken by the court is wholly
unreasonable or there is non-consideration of any
relevant material or there is palpable misreading of
records, the Revisional Court is not justified in setting
aside the order, merely because another view is possible.
The Revisional Court is not meant to act as an appellate
court. The whole purpose of the revisional jurisdiction is
to preserve the power in the court to do justice in
accordance with the principles of criminal jurisprudence.
The revisional power of the court under Sections 397 to
401 CrPC is not to be equated with that of an appeal.
Unless the finding of the court, whose decision is sought
to be revised, is shown to be perverse or untenable in law
or is grossly erroneous or glaringly unreasonable or
where the decision is based on no material or where the
material facts are wholly ignored or where the judicial
discretion is exercised arbitrarily or capriciously, the
courts may not interfere with the decision in exercise of
their revisional jurisdiction.”
14. In the above case, also conviction of the accused was
recorded, and the High Court set aside [Dattatray Gulabrao
Phalke v. Sanjaysinh Ramrao Chavan, 2013 SCC OnLine Bom
1753] the order of conviction by substituting its own view.
This Court set aside the High Court’s order holding that the
High Court exceeded its jurisdiction in substituting its
views, and that too without any legal basis.
19. This position was reiterated in Bir Singh v. Mukesh
Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ)
309: 2019 SCC OnLine SC 13, wherein it was observed at page 205:
“16. It is well settled that in exercise of revisional
jurisdiction under Section 482 of the Criminal Procedure
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Neutral Citation No. ( 2025:HHC:21187 )upset concurrent factual findings. It is not for the Revisional
Court to re-analyse and re-interpret the evidence on record.
17. As held by this Court in Southern Sales &
.
Services v. Sauermilch Design and Handels GmbH [Southern
Sales & Services v. Sauermilch Design and Handels GmbH,
(2008) 14 SCC 457], it is a well-established principle of law
that the Revisional Court will not interfere even if a wrongorder 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.”
20. The present revision has to be decided as per the
21.
r to
parameters laid down by the Hon’ble Supreme Court.
Before adverting to the merits of the case, it is
necessary to dispose of the application seeking the composition of
the offence. This application is opposed by the complainant. It was
rightly submitted on behalf of the complainant that the complaint
can be compounded only with the consent of the complainant and
not otherwise.
22. It was laid down by the Hon’ble Supreme Court in JIK
Industries Ltd. v. Amarlal V. Jumani, (2012) 3 SCC 255: (2012) 2 SCC
(Civ) 82: (2012) 2 SCC (Cri) 125: 2012 SCC OnLine SC 104 that the
offence punishable under section 138 of NI Act cannot be
compounded without the consent of the complainant. It was
observed:
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Neutral Citation No. ( 2025:HHC:21187 )“82. A perusal of Section 320 makes it clear that the
provisions contained in Section 320 and the various sub-
sections are a code by itself relating to the compounding of
.
offences. It provides for the various parameters,
procedures, and guidelines in the matter of compounding.
If this Court upholds the contention of the appellant that as
a result of the incorporation of Section 147 in the NI Act, the
entire gamut of procedure of Section 320 of the Code is
made inapplicable to the compounding of an offence under
the NI Act, in that case, the compounding of an offence
under the NI Act will be left totally unguided or
uncontrolled. Such an interpretation, apart from being an
absurd or unreasonable one, will also be contrary to the
provisions of Section 4(2) of the Code, which has been
discussed above. There is no other statutory procedure for
the compounding of an offence under the NI Act. Therefore,
Section 147 of the NI Act must be reasonably construed to
mean that as a result of the said section the offences under
the NI Act are made compoundable, but the main principle of
such compounding, namely, the consent of the person
aggrieved or the person injured or the complainant cannot be
wished away nor can the same be substituted by virtue of
Section 147 of the NI Act.” (emphasis supplied)
23. This judgment was considered in Raj Reddy
Kallem v. State of Haryana (2024) 8 SCC 588, and it was held that
where both sides agree to compound the offence, there can be no
difficulty in compounding the offence, however, if the
complainant does consent to the compromise, the Court cannot
compel him to give consent even if he has been adequately
compensated. It was observed:-
“21. All the same, in this particular given case, even though
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Neutral Citation No. ( 2025:HHC:21187 )the complainant does not agree to the compounding of the
offence, the courts cannot compel the complainant to give
“consent” for compounding of the matter. It is also true.
that mere repayment of the amount cannot mean that the
appellant is absolved from the criminal liabilities under
Section 138 of the NI Act.”
24. It was held in A.S. Pharma (P) Ltd. v. Nayati Medical (P)
Ltd., 2024 SCC OnLine SC 2539, that the Court could not quash the
complaint under Section 138 of the NI Act in the exercise of its
inherent jurisdiction without the consent of the complainant
based on the fact that the complainant has been adequately
compensated. It was observed:-
“15. In the contextual situation, it is relevant to refer to a
recent decision of this Court in Raj Reddy Kallem v. The Stateof Haryana [2024 INSC 347]. The said decision would reveal
that this Court took note of earlier decisions of this Court
in JIK Industries Ltd. case (supra) as also in the decisionin Meters and Instruments Private Ltd. v. Kanchan
Mehta [(2018) 1 SCC 560] and in un-ambiguous terms heldthat for compounding the offence under Section 138, N.I.
Act, the ‘consent’ of the complainant is required.
In Kanchan Mehta‘s case (supra), even after referring to thedecision in JIK Industries Ltd. Case (supra), this Court held
that even in the absence of ‘consent’, the Court could close
criminal proceedings against an accused in a case under
Section 138, N.I. Act, if the accused had compensated the
complainant. It was held therein thus:–
18.3. Though compounding requires the consent of both
parties, even in the absence of such consent, the court, in
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Neutral Citation No. ( 2025:HHC:21187 )discretion, close the proceedings and discharge the
accused.
16. But then, it is to be noted that later a five-judge
.
Constitution Bench in Expeditious Trial of Cases Under Section
138, N.I. Act, 1881, In re, (2021) 16 SCC 116 held that
observation in Kanchan Mehta’s decision giving discretion to
the trial Court “to close the proceedings and discharge the
accused”, by reading Section 258, Cr. P.C., which confers the
power to stop proceedings in certain cases, is ‘not a good
law’. In Raj Reddy Kallem‘s case (supra), after referring to
the above positions, this Court further observed that even
in Kanchan Mehta‘s case (supra) nowhere it was never
contemplated that ‘compounding’ could be done without
the ‘consent’ of the parties. It is worthwhile to note at this
juncture that in Raj Reddy Kallem‘s case, this Court drew a
nice distinction between ‘quashing of a case’ and
‘compounding an offence’. To drive that point home, this
Court referred to the decision in the JIK Industries Ltd.
case (supra), where this Court distinguished the quashing of
a case from compounding as hereunder:–
“Quashing of a case is different from compounding. In
quashing, the Court applies it, but in compounding, it isprimarily based on the consent of the injured party.
Therefore, the two cannot be equated.”
17. It is in the aforesaid circumstances that we hold that the
question whether the offence under Section 138 of the NI Act
could be compounded by invoking the power under Section 147,
N.I. Act, without the consent of the complainant concerned, is no
longer res integra. In short, the position is that an offence under
Section 138, the NI Act, could be compounded under Section 147
thereof, only with the consent of the complainant concerned. In
that view of the matter, the impugned judgment of the High
Court, wherein, despite the absence of the consent of the
appellant-complainant, compounded the offence under Section
138, N.I. Act, on the ground that the appellant was equitably
compensated, could not be sustained.
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Neutral Citation No. ( 2025:HHC:21187 )
18. In the context of the issues involved, another aspect of
the matter also requires consideration. The decision in Raj
Reddy Kallem‘s case (supra) also stands on a similar footing
.
inasmuch as the complainant therein was duly compensated
by the accused, but the complainant did not agree for
compounding the offence. After observing that, the Courts
could not compel the complainant to give consent for
compounding the offence under Section 138, N.I. Act, this
Court in Raj Reddy Kallem‘s case (supra) took note of the
peculiar factual situation obtained and invoked the power
under Section 142 of the Constitution of India to quash the
proceeding pending against the appellant-accused under
Section 138, N.I. Act. True that in Raj Reddy Kallem‘s case, it
was despite the non-consent of the complainant-
respondent that the proceedings were quashed against the
appellant therein, inter alia, taking note of the fact that the
accused therein had compensated the complainant and
furthermore deposited the additional amount, as has been
ordered by this Court. We have no doubt in holding that
merely because taking into account such aspects and
circumstances, this Court ‘quashed’ the proceedings by
invocation of the power under Article 142 of the Constitution of
India, cannot be a reason for ‘compounding’ an offence under
Section 138, N.I. Act, invoking the power under Section 482, Cr.
P.C. and the power under Section 147, N.I. Act, in the absence of
the consent of the complainant concerned, in view of the
decision referred to hereinbefore. In this context, this is to be
noted that the fact that this Court quashed the proceedings
under Section 138, N.I. Act, invoking the power under
Article 142 of the Constitution of India, can be no reason at all
for High Courts to pass an order quashing a proceeding under
Section 138, N.I. Act, on similar lines as the power under
Article 142 of the Constitution of India is available only to the
Supreme Court of India. In this context, it is relevant to refer
to the three-judge Bench of this Court in State of
Punjab v. Surinder Kumar [(1992) 1 SCC 489], this Court in
paragraphs 6 to 8 therein held thus: —
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Neutral Citation No. ( 2025:HHC:21187 )
6. A decision is available as a precedent only if it decides a
question of law. The respondents are, therefore, not
entitled to rely upon an order of this Court which directs a
.
temporary employee to be regularised in his service
without assigning reasons. It has to be presumed that, for
special grounds which must have been available to the
temporary employees in those cases, they were entitled to
the relief granted. Merely because grounds are not
mentioned in a judgment of this Court, it cannot be
understood to have been passed without an adequate
legal basis therefor. On the question of the requirement to
assign reasons for an order, a distinction has to be kept in
mind between a court whose judgment is not subject to
further appeal and other courts. One of the main reasons
for disclosing and discussing the grounds in support of a
judgment is to enable a higher court to examine the same
in case of a challenge. It is, of course, desirable to assign
reasons for every order or judgment, but the requirement
is not imperative in the case of this Court. It is, therefore,
futile to suggest that if this Court has issued an order
which apparently seems to be similar to the impugned
order, the High Court can also do so. There is still another
reason why the High Court cannot be equated with this
Court. The Constitution has, by Article 142, empowered
the Supreme Court to make such orders as may be
necessary “for doing complete justice in any case or
matter pending before it”, which authority the High
Court does not enjoy. The jurisdiction of the High Court,
while dealing with a writ petition, is circumscribed by the
limitations discussed and declared by the judicial
decisions, and it cannot transgress the limits on the basis
of whims or a subjective sense of justice varying from
Judge to Judge.
7. It is true that the High Court is entitled to exercise its
judicial discretion in deciding writ petitions or civil
revision applications but this discretion has to be confined
to declining to entertain petitions and refusing to grant
relief, asked for by petitioners, on adequate
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considerations; and it does not permit the High Court to
grant relief on such a consideration alone.
8. We, therefore, reject the argument addressed on behalf
.
of the respondents that the High Court was entitled to
pass any order which it thought fit in the interest of
justice. Accordingly, we set aside the impugned order and
allow the appeal, but in the circumstances without costs.
19. The upshot of the discussion is that the High Court had
clearly fallen into error in invoking the power under
Section 482, Cr. P.C., as also the power under Section 147,
N.I. Act, to compound the offence under Section 138 of the
N.I. Act qua the respondent-accused. Hence, the impugned
judgment to the extent it compounded the offence under
Section 138, N.I. Act invoking the inherent power under
Section 482, Cr. P.C. and the power under Section 147, N.I.
Act stands quashed and set aside.” (Emphasis supplied).
25. Therefore, it is impermissible to quash the complaint
as having been compromised without the consent of the
complainant.
26. Even otherwise, the accused is relying upon the gift
deed (Annexure-A1) executed by him in favour of the
complainant’s husband on 04.5.2017. It was specifically
mentioned in the gift deed that the donee was maintaining and
looking after the donor, and the donor executed a gift deed in
favour of the donee out of his natural love and affection. Thus, the
gift deed was out of natural love and affection because the donee
was maintaining the donor; hence, the plea taken by the accused
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Neutral Citation No. ( 2025:HHC:21187 )
that the gift deed was related to the present litigation cannot be
accepted.
.
27. It was submitted that the signatures of the accused
were obtained on the gift deed, and it was not read over and
explained to him. This submission is not acceptable. No steps were
taken by the accused to set aside the gift deed on the ground of
misrepresentation or fraud. There is an endorsement of the Sub-
Registrar that the gift deed was read over and explained to the
donee, who accepted it to be correct. This endorsement carries
with it a presumption of correctness under Section 60(3) of the
Registration Act, and the burden was upon the accused to rebut the
same. Since he has not taken any steps to get the gift deed set
aside; hence, his plea that the contents of the gift deed were not
read over and explained to him cannot be accepted.
28. The complainant produced an Agreement (Annexure
R1) dated 27.06.2017, executed by the parties, in which it was
agreed that the Cr. Revision No.4135 of 2013 would be disposed of
as per the settlement arrived at between the parties. It was agreed
that 10 bighas of land would be sold by the accused to the
complainant for a consideration of ₹4,50,000/- on or before
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31.12.2020, and in case the sale deed was not executed until that
day, the rebate of ₹3,00,000/- would be withdrawn. The accused
.
had also handed over a cheque to the complainant.
29. This agreement does not mention the execution of the
gift deed dated 04.05.2017, executed by the accused in favour of
the complainant’s husband. Had the matter been settled as per the
gift deed, the Agreement would have mentioned this fact
specifically. The failure to mention this fact shows that the gift
deed was not executed in relation to the present revision;
therefore, it is impermissible to dismiss the complaint as having
been compromised between the parties. Consequently, the present
application fails, and the same is dismissed.
30. The accused, while appearing as DW-2, stated that he
lost a chequebook containing signed cheques bearing Sr. Nos.
716791 to 716800. He reported the matter to the Police Station,
Ghumarwin on 12.01.2007. He forwarded a copy of the police
report and the application dated 15.01.2007 to the Branch
Manager, PNB, Bilaspur. This plea clearly shows that the accused
has not disputed his signatures on the cheque. It was laid down by
this Court in Naresh Verma vs. Narinder Chauhan 2020(1) ShimLC
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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 bylearned Courts below. Reliance is placed upon Hiten P. Dalal
v. Bartender Nath Bannerji, 2001 (6) SCC 16, wherein it has
been held as under:
“The words ‘unless the contrary is proved’ which
occur in this provision make it clear that the
presumption has to be rebutted by ‘proof’ and not by
a bare explanation which is merely plausible. A fact is
said to be proved when its existence is directly
established or when, upon the material before it, theCourt finds its existence to be so probable that a
reasonable man would act on the supposition that it
exists. Unless, therefore, the explanation is supportedby proof, the presumption created by the provision
cannot be said to be rebutted……”
9. S.139 of the Act provides that it shall be presumed,
unless the contrary is proved, that the holder of a
cheque received the cheque of nature referred to in
section 138 for the discharge, in whole or in part, of
any debt or other liability.
31. 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
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Neutral Citation No. ( 2025:HHC:21187 )discharge of debt or liability.”
32. This position was reiterated in Kalamani Tex v. P.
.
Balasubramanian, (2021) 5 SCC 283: (2021) 3 SCC (Civ) 25: (2021) 2
SCC (Cri) 555: 2021 SCC OnLine SC 75 wherein it was held at page
289:
“14. Once the 2nd appellant had admitted his signatures on
the cheque and the deed, the trial court ought to havepresumed that the cheque was issued as consideration for a
legally enforceable debt. The trial court fell in error when it
called upon the respondent complainant to explain the
circumstances under which the appellants were liable topay. 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.”
33. 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 theaccused. The accused has also not disputed that there were
transactions between the parties. Even as per the statement
of the accused, which was recorded at the time of the
framing of the charge, he has admitted that some amount
was due and payable. However, it was the case on behalf of
the accused that the cheque was given by way of security,
and the same has been misused by the complainant.
However, nothing is on record that in the reply to the
statutory notice, it was the case on behalf of the accused
that the cheque was given by way of security. Be that as it
may, however, it is required to be noted that earlier the::: Downloaded on – 04/07/2025 21:31:37 :::CIS
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Neutral Citation No. ( 2025:HHC:21187 )accused issued cheques which came to be dishonoured on
the ground of “insufficient funds” and thereafter a fresh
consolidated cheque of ₹9,55,574 was given which has been.
returned unpaid on the ground of ” STOP PAYMENT”.
Therefore, the cheque in question was issued for the second
time. Therefore, once the accused has admitted the issuance
of a cheque which bears his signature, there is a
presumption that there exists a legally enforceable debt or
liability under Section 139 of the NI Act. However, such a
presumption is rebuttable in nature, and the accused is
required to lead evidence to rebut such presumption. The
accused was required to lead evidence that the entire
amount due and payable to the complainant was paid.
9. Coming back to the facts in the present case and
considering the fact that the accused has admitted the
issuance of the cheques and his signature on the cheque and
that the cheque in question was issued for the second time
after the earlier cheques were dishonoured and that even
according to the accused some amount was due and
payable, there is a presumption under Section 139 of the NI
Act that there exists a legally enforceable debt or liability. Of
course, such presumption is rebuttable in nature. However,
to rebut the presumption, the accused was required to lead
evidence that the full amount due and payable to the
complainant had been paid. In the present case, no such
evidence has been led by the accused. The story put forward
by the accused that the cheques were given by way of
security is not believable in the absence of further evidence
to rebut the presumption, and more particularly, the cheque
in question was issued for the second time after the earlier
cheques were dishonoured. Therefore, both the courts
below have materially erred in not properly appreciating
and considering the presumption in favour of the
complainant that there exists a legally enforceable debt or
liability as per Section 139 of the NI Act. It appears that both
the learned trial court as well as the High Court have
committed an error in shifting the burden upon the
complainant to prove the debt or liability, without
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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.”
34. The presumption under Section 139 of the NI Act was
explained by the Hon’ble Supreme Court in Triyambak S. Hegde v.
788 as under at page 747:
r to
Sripad, (2022) 1 SCC 742: (2022) 1 SCC (Civ) 512: 2021 SCC OnLine SC
“12. From the facts arising in this case and the nature of the
rival contentions, the record would disclose that the
signature on the documents at Exts. P-6 and P-2 are not
disputed. Ext. P-2 is the dishonoured cheque based on
which the complaint was filed. From the evidence tendered
before the JMFC, it is clear that the respondent has not
disputed the signature on the cheque. If that be the
position, as noted by the courts below, a presumption
would arise under Section 139 in favour of the appellant
who was the holder of the cheque. Section 139 of the NI Act
reads as hereunder:
“139. Presumption in favour of the holder. –It shall be
presumed, unless the contrary is proved, that the
holder of a cheque received the cheque of the nature
referred to in Section 138 for the discharge, in whole
or in part, of any debt or other liability.”
13. Insofar as the payment of the amount by the appellant in
the context of the cheque having been signed by the
respondent, the presumption for passing of the
consideration would arise as provided under Section 118(a)
of the NI Act, which reads as hereunder:
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Neutral Citation No. ( 2025:HHC:21187 )“118. Presumptions as to negotiable instruments. —
Until the contrary is proved, the following
presumptions shall be made:
.
(a) of consideration: that every negotiable instrument
was made or drawn for consideration, and that every
such instrument, when it has been accepted,
indorsed, negotiated or transferred, was accepted,indorsed, negotiated or transferred for
consideration.”
14. The above-noted provisions are explicit to the effect
that such presumption would remain until the contrary is
proved. The learned counsel for the appellant in that regard
has relied on the decision of this Court in K.
Bhaskaran v. Sankaran Vaidhyan Balan [K.
Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510:
1999 SCC (Cri) 1284] wherein it is held as hereunder: (SCC
pp. 516-17, para 9)
“9. As the signature in the cheque is admitted to be
that of the accused, the presumption envisaged inSection 118 of the Act can legally be inferred that the
cheque was made or drawn for consideration on the
date which the cheque bears. Section 139 of the Actenjoins the Court to presume that the holder of the
cheque received it for the discharge of any debt orliability. 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 1to 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. Mudibasap
pa, (2019) 5 SCC 418: (2019) 2 SCC (Cri) 571] wherein it is held
as hereunder: (SCC pp. 432-33, paras 25-26)
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“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 otherliability.
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 ofproof 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
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that he does not remember. PW 1 in his evidence
admitted that he retired in 1997, on which date he
received a monetary benefit of Rs 8 lakhs, which was
.
encashed by the complainant. It was also brought in
evidence that in the year 2010, the complainant
entered into a sale agreement for which he paid an
amount of Rs 4,50,000 to Balana Gouda towards sale
consideration. Payment of Rs 4,50,000 being
admitted in the year 2010 and further payment of
loan of Rs 50,000 with regard to which Complaint No.
119 of 2012 was filed by the complainant, a copy of
which complaint was also filed as Ext. D-2, there was
a burden on the complainant to prove his financial
capacity. In the years 2010-2011, as per own case of
the complainant, he made a payment of Rs 18 lakhs.
During his cross-examination, when the financial
capacity to pay Rs 6 lakhs to the accused was
questioned, there was no satisfactory reply given by
the complainant. The evidence on record, thus, is a
probable defence on behalf of the accused, which
shifted the burden on the complainant to prove his
financial capacity and other facts.”
16. In that light, it is contended that the very materials
produced by the appellant and the answers relating to lack
of knowledge of property details by PW 1 in his cross-
examination would indicate that the transaction is
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
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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.”
35. This position was reiterated in Tedhi Singh v. Narayan
Dass Mahant, (2022) 6 SCC 735: (2022) 2 SCC (Cri) 726: (2022) 3 SCC
(Civ) 442: 2022 SCC OnLine SC 302 wherein it was held at page 739:
“8. It is true that this is a case under Section 138 of the
Negotiable Instruments Act. Section 139 of the NI Act
provides that the court shall presume that the holder of acheque 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, isexpressly made subject to the position being proved to the
contrary. In other words, it is open to the accused toestablish that there is no consideration received. It is in the
context of this provision that the theory of “probabledefence” 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::: Downloaded on – 04/07/2025 21:31:37 :::CIS
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Neutral Citation No. ( 2025:HHC:21187 )been established is a matter to be decided on the facts of
each case on the conspectus of evidence and circumstances
that exist…”
.
36. Similar is the judgment in P. Rasiya v. Abdul Nazer, 2022
SCC OnLine SC 1131, wherein it was observed:
“As per Section 139 of the N.I. Act, it shall be presumed,
unless the contrary is proved, that the holder of a cheque
received the cheque of the nature referred to in Section 138
for discharge, in whole or in part, of any debt or otherliability. Therefore, once the initial burden is discharged by
the Complainant that the cheque was issued by the accused
and the signature and the issuance of the cheque are not
disputed by the accused, in that case, the onus will shiftupon the accused to prove the contrary that the cheque was
not for any debt or other liability. The presumption under
Section 139 of the N.I. Act is a statutory presumption and
thereafter, once it is presumed that the cheque is issued inwhole 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.”
37. 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
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Neutral Citation No. ( 2025:HHC:21187 )
138. [The rules discussed hereinbelow are common to both
the presumptions under Section 139 and Section 118 and are
hence not repeated–reference to one can be taken as.
reference to another]
34. Section 139 of the NI Act, which takes the form of a
“shall presume” clause, is illustrative of a presumption of
law. Because Section 139 requires that the Court “shall
presume” the fact stated therein, it is obligatory for the
Court to raise this presumption in every case where the
factual basis for the raising of the presumption had been
established. But this does not preclude the person against
whom the presumption is drawn from rebutting it and
proving the contrary, as is clear from the use of the phrase
“unless the contrary is proved”.
35. The Court will necessarily presume that the cheque had
been issued towards the discharge of a legally enforceable
debt/liability in two circumstances. Firstly, when the drawer
of the cheque admits issuance/execution of the cheque
and secondly, in the event where the complainant proves
that the cheque was issued/executed in his favour by the
drawer. The circumstances set out above form the fact(s)
which bring about the activation of the presumptive clause.
[Bharat Barrel & Drum Mfg. Co. v. Amin Chand
Payrelal [Bharat Barrel & Drum Mfg. Co. v. Amin Chand
Payrelal, (1999) 3 SCC 35]]
36. Recently, this Court has gone to the extent of holding
that presumption takes effect even in a situation where the
accused contends that a blank cheque leaf was voluntarily
signed and handed over by him to the complainant. [Bir
Singh v. Mukesh Kumar [Bir Singh v. Mukesh Kumar, (2019) 4
SCC 197: (2019) 2 SCC (Civ) 309: (2019) 2 SCC (Cri) 40] ].
Therefore, the mere admission of the drawer’s signature,
without admitting the execution of the entire contents in
the cheque, is now sufficient to trigger the presumption.
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
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Neutral Citation No. ( 2025:HHC:21187 )
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 thecontrary from the opponent but if the opponent does
offer evidence to the contrary (sufficient to satisfy theJudge’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]]
38. Therefore, the Court has to start with the presumption
that the cheque was issued for consideration in discharge of the
legal liability, and the burden is upon the accused to rebut the
presumption.
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Neutral Citation No. ( 2025:HHC:21187 )
39. The accused claimed that he had lost signed cheques
bearing Sr. Nos 716791 to 716800. He made a report to this effect
.
on 12.01.2007. The report (Ext. DW1/A) reads that the accused had
produced an affidavit asserting that he came to Ghumarwin to
make a payment to a customer and lost cheques bearing Sr. Nos.
716791 to 716800 bearing his signatures. Learned Courts below
had rightly pointed out that the accused, being a Contractor, is not
supposed to deal with the cheques so lightly, as to keep the signed
cheque with him. The plea taken by him in the affidavit that he was
supposed to make the payment of some money to the contractor at
Ghumarwin, and this was the reason that he had kept the signed
cheques with him, is not plausible. He was visiting Ghumarwin,
and when he was to fill in the amount, he could have put the
signatures on the cheques as well. Further, the cheque was
dishonoured with an endorsement ‘funds insufficient’ and not
with the endorsement ‘payment stopped by the drawer’. The
memo of dishonour bears the date 07.02.2007, which was after the
intimation given to the police and the Bank. Had any intimation
been given to the Bank, the cheque would have been dishonoured
with an endorsement ‘Payment stopped by the drawer’, and not
with ‘insufficient funds’.
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Neutral Citation No. ( 2025:HHC:21187 )
40. Statement of account (Ext. CW2/A) does not show that
the payment of the remaining cheques was not made. Mansa Ram-
.
Manager, PNB (CW2), was not asked regarding the payment of
other cheques stated to have been lost by the accused. In the
absence of any evidence that the payment of the cheques
mentioned in the report made to the police was not made, his plea
that he had lost the chequebook containing his signed cheques
cannot be accepted.
41. Subsequent conduct of the accused also does not
support his version that the cheque was issued without any
consideration. He settled the matter with the complainant for
₹4,50,000/-. He claimed that he had gifted the land to the
complainant’s husband regarding this transaction. He would not
have settled the matter with the complainant or her husband if the
chequebook had been lost. He has not taken any action against his
Bank for dishonouring the cheque with endorsement ‘funds
insufficient’ when he had informed the bank about the loss of the
cheque, vide his letter (Ext. D3). Thus, the learned Courts below
had rightly doubted the version of the accused that he had lost the
cheque book and had intimated the Bank regarding the loss.
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Neutral Citation No. ( 2025:HHC:21187 )
42. It was submitted that the complaint mentions that a
cheque dated 28.01.2007 was issued for the transaction up to
.
31.01.2007. The cheque has to be issued for existing liability and
not for the future liability; hence, the cheque does not fall within
the purview of Section 138 of the N.I. Act. This submission is not
acceptable. Para 2 of the complaint mentions that interest and
balance were calculated up to 31.01.2007, for which the accused
issued a cheque for ₹6,10,310/-. A similar statement was made in
the affidavit (Ext. CW1/A); hence, the interest liability was
calculated till 31.01.2007. Since the future interest can always be
calculated, therefore, there can be no infirmity in the calculation
of the interest made by the parties.
43. The cheque was presented before the Bank of the
accused on 07.02.2007. The liability of ₹6,16,310/- was calculated
till 31.01.2007, and the accused had a subsisting liability on the
date of the presentation of the cheque; hence, the plea that the
accused had no subsisting liability on the date of the presentation
of the cheque cannot be accepted.
44. It was submitted that the complainant had failed to
produce the bills of sale, and the learned Courts below erred in
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Neutral Citation No. ( 2025:HHC:21187 )
relying upon her version. This submission is only stated to be
rejected. It was laid down by Hon’ble Surpeme Court in Uttam Ram
.
v. Devinder Singh Hudan, (2019) 10 SCC 287: (2020) 1 SCC (Cri) 154:
(2020) 1 SCC (Civ) 126: 2019 SCC OnLine SC 1361,, that the
complainant is not supposed to prove the existence of
consideration because of the presumption contained in Section 139
of the NI Act. It was observed:
“19. A negotiable instrument, including a cheque, carries a
presumption of consideration in terms of Section 118(a) and
under Section 139 of the Act. Sections 118(a) and 139 read asunder:
“118. Presumptions as to negotiable instruments. –Until
the contrary is proved, the following presumptions shallbe made:
(a) of consideration: that every negotiable
instrument was made or drawn for consideration, andthat every such instrument, when it has been
accepted, indorsed, negotiated or transferred, wasaccepted, indorsed, negotiated or transferred for
consideration;
***
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.”
20. The trial court and the High Court proceeded as if the
appellant were to prove a debt before the civil court,
wherein the plaintiff is required to prove his claim on the
basis of evidence to be laid in support of his claim for the
recovery of the amount due. A dishonour of a cheque carries
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Neutral Citation No. ( 2025:HHC:21187 )
a statutory presumption of consideration. The holder of the
cheque in due course is required to prove that the cheque
was issued by the accused and that when the same was
.
presented, it was not honoured. Since there is a statutory
presumption of consideration, the burden is on the accused
to rebut the presumption that the cheque was issued not for
any debt or other liability.
21. There is the mandate of presumption of consideration in
terms of the provisions of the Act. The onus shifts to the
accused on proof of issuance of cheque to rebut the
presumption that the cheque was issued not for discharge of
any debt or liability in terms of Section 138 of the Act, which
reads as under:
“138. Dishonour of cheque for insufficiency, etc. of funds in
the account.–Where any cheque drawn by a person on an
account maintained by him with a banker for payment ofany amount of money to another person from out of that
account for the discharge, in whole or in part, of any debt
or other liability, is returned by the bank unpaid, eitherbecause of the amount of money standing to the credit of
that account is insufficient to honour the cheque or that
it exceeds the amount arranged to be paid from thataccount by an agreement made with that bank, such
person shall be deemed to have committed an offenceand shall, …”
22. In Kumar Exports [Kumar Exports v. Sharma Carpets,
(2009) 2 SCC 513: (2009) 1 SCC (Civ) 629: (2009) 1 SCC (Cri)
823], it was held that mere denial of the existence of debt
will not serve any purpose but the accused may adduce
evidence to rebut the presumption. This Court held as
under: (SCC pp. 520-21, para 20)
“20. The accused in a trial under Section 138 of the Act
has two options. He can either show that consideration
and debt did not exist or that, under the particular
circumstances of the case, the non-existence of
consideration and debt is so probable that a prudent man
ought to suppose that no consideration and debt existed.
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To rebut the statutory presumptions, an accused is not
expected to prove his defence beyond a reasonable doubt,
as is expected of the complainant in a criminal trial. The
.
accused may adduce direct evidence to prove that the
note in question was not supported by consideration and
that there was no debt or liability to be discharged by
him. However, the court need not insist in every case that
the accused should disprove the non-existence of
consideration and debt by leading direct evidence
because the existence of negative evidence is neither
possible nor contemplated. At the same time, it is clear that
bare denial of the passing of the consideration and existence
of debt, apparently, would not serve the purpose of the
accused. Something which is probable has to be brought on
record for getting the burden of proof shifted to the
complainant. To disprove the presumptions, the accused
should bring on record such facts and circumstances, upon
consideration of which, the court may either believe that the
consideration and debt did not exist or their non-existence
was so probable that a prudent man would under the
circumstances of the case, act upon the plea that they did not
exist. Apart from adducing direct evidence to prove that
the note in question was not supported by consideration
or that he had not incurred any debt or liability, the
accused may also rely upon circumstantial evidence, and
if the circumstances so relied upon are compelling, the
burden may likewise shift again onto the complainant.
The accused may also rely upon presumptions of fact, for
instance, those mentioned in Section 114 of the Evidence
Act, to rebut the presumptions arising under Sections 118
and 139 of the Act.” (emphasis supplied)
23. In the judgment Kishan Rao v. Shankargouda [Kishan
Rao v. Shankargouda, (2018) 8 SCC 165 : (2018) 4 SCC (Civ) 37 :
(2018) 3 SCC (Cri) 544], this Court referring to Kumar
Exports [Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 :
(2009) 1 SCC (Civ) 629 : (2009) 1 SCC (Cri) 823]
and Rangappa [Rangappa v. Sri Mohan, (2010) 11 SCC 441 :
(2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri) 184] returned the::: Downloaded on – 04/07/2025 21:31:37 :::CIS
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Neutral Citation No. ( 2025:HHC:21187 )following findings : (Kishan Rao case [Kishan
Rao v. Shankargouda, (2018) 8 SCC 165 : (2018) 4 SCC (Civ) 37 :
(2018) 3 SCC (Cri) 544], SCC pp. 173-74, para 22).
“22. Another judgment which needs to be looked into
is Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010)
11 SCC 441: (2010) 4 SCC (Civ) 477: (2011) 1 SCC (Cri) 184]. A
three-judge Bench of this Court had occasion to examinethe presumption under Section 139 of the 1881 Act. This
Court in the aforesaid case has held that in the event the
accused is able to raise a probable defence which creates
doubt with regard to the existence of a debt or liability,the presumption may fail. The following was laid down
in paras 26 and 27: (SCC pp. 453-54)
’26. In light of these extracts, we are in agreementwith the respondent claimant that the presumption
mandated by Section 139 of the Act does indeedinclude the existence of a legally enforceable debt or
liability. To that extent, the impugned observations
in Krishna Janardhan Bhat [Krishna JanardhanBhat v. Dattatraya G. Hegde, (2008) 4 SCC 54: (2008) 2
SCC (Cri) 166] may not be correct. However, this does
not in any way cast doubt on the correctness of thedecision in that case since it was based on the specific
facts and circumstances therein. As noted in thecitations, this is, of course, in the nature of a
rebuttable presumption, and it is open to the accused
to raise a defence wherein the existence of a legallyenforceable debt or liability can be contested.
However, there can be no doubt that there is an initial
presumption which favours the complainant.
27. Section 139 of the Act is an example of a reverse
onus clause that has been included in furtherance of
the legislative objective of improving the credibility of
negotiable instruments. While Section 138 of the Act
specifies a strong criminal remedy in relation to the
dishonour of cheques, the rebuttable presumption
under Section 139 is a device to prevent undue delay in
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Neutral Citation No. ( 2025:HHC:21187 )remembered that the offence made punishable by
Section 138 can be better described as a regulatory
offence since the bouncing of a cheque is largely in.
the nature of a civil wrong whose impact is usually
confined to the private parties involved in commercial
transactions. In such a scenario, the test of
proportionality should guide the construction andinterpretation of reverse onus clauses and the
defendant-accused cannot be expected to discharge
an unduly high standard of proof.”
24. In the judgment Bir Singh v. Mukesh Kumar [Bir
Singh v. Mukesh Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Civ)
309: (2019) 2 SCC (Cri) 40], this Court held that presumption
under Section 139 of the Act is a presumption of law. The
Court held as under: (SCC pp. 206 & 208-09, paras 20, 33 &
36)
“20. Section 139 introduces an exception to the general
rule as to the burden of proof and shifts the onus on the
accused. The presumption under Section 139 of the
Negotiable Instruments Act is a presumption of law, as
distinguished from a presumption of facts. Presumptions
are rules of evidence and do not conflict with the
presumption of innocence, which requires the
prosecution to prove the case against the accused beyond
reasonable doubt. The obligation on the prosecution may
be discharged with the help of presumptions of law and
presumptions of fact unless the accused adduces
evidence showing the reasonable possibility of the non-
existence of the presumed fact as held in Hiten P.
Dalal [Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6
SCC 16: 2001 SCC (Cri) 960].
***
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
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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.
***
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 any
cogent evidence to show that the cheque was not issued
in discharge of a debt.”
25. In other judgment Rohitbhai Jivanlal Patel v. State of
Gujarat [Rohitbhai Jivanlal Patel v. State of Gujarat, (2019) 18
SCC 106: 2019 SCC OnLine SC 389: AIR 2019 SC 1876] this
Court held as under: (SCC paras 15, 17 and 22)
“15. So far the question of the existence of basic
ingredients for drawing of presumption under
Sections 118 and 139 of the NI Act is concerned,
apparent it is that the appellant-accused could not
deny his signature on the cheques in question that
had been drawn in favour of the complainant on a
bank account maintained by the accused for a sum of
Rs 3 lakhs each. The said cheques were presented to
the bank concerned within the period of their validity
and were returned unpaid for the reason of either the
balance being insufficient or the account being
closed. All the basic ingredients of Section 138 as also
of Sections 118 and 139 are apparent on the face of the
record. The trial court had also consciously taken note
of these facts and had drawn the requisite
presumption. Therefore, it is required to be presumed
that the cheques in question were drawn for
consideration and the holder of the cheques i.e. the
complainant received the same in discharge of an
existing debt. The onus, therefore, shifts on the
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appellant-accused to establish a probable defence so
as to rebut such a presumption.
***
.
17. On the aspects relating to a preponderance of
probabilities, the accused has to bring on record such
facts and such circumstances which may lead the Court
to conclude either that the consideration did not exist or
that its non-existence was so probable that a prudent
man would, under the circumstances of the case, act
upon the plea that the consideration did not exist. This
Court has, time and again, emphasised that though there
may not be sufficient negative evidence which could be
brought on record by the accused to discharge his
burden, yet mere denial would not fulfil the
requirements of rebuttal as envisaged under Sections 118
and 139 of the NI Act….
***
22. The result of the discussion in the foregoing
paragraphs is that the major considerations on which the
trial court chose to proceed clearly show its fundamental
error of approach, where, even after drawing the
presumption, it had proceeded as if the complainant was
to prove his case beyond a reasonable doubt. Such being
the fundamental flaw on the part of the trial court, the
High Court [Shashi Mohan Goyanka v. State of Gujarat,
2018 SCC OnLine Guj 3674] cannot be said to have acted
illegally or having exceeded its jurisdiction in reversing
the judgment of acquittal. As noticed hereinabove, in the
present matter, the High Court has conscientiously and
carefully taken into consideration the views of the trial
court and, after examining the evidence on the record as
a whole, found that the findings of the trial court are
vitiated by perversity. Hence, interference by the High
Court was inevitable; rather had to be made for a just and
proper decision of the matter.”
“20. The Trial Court and the High Court proceeded as if the
appellant were to prove a debt before a civil court, wherein::: Downloaded on – 04/07/2025 21:31:37 :::CIS
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Neutral Citation No. ( 2025:HHC:21187 )the plaintiff is required to prove his claim on the basis of
evidence to be laid in support of his claim for the recovery
of the amount due. Dishonour of a cheque carries a.
statutory presumption of consideration. The holder of the
cheque in due course is required to prove that the cheque
was issued by the accused and that when the same was
presented, it was not honoured. Since there is a statutorypresumption of consideration, the burden is on the accused
to rebut the presumption that the cheque was issued not for
any debt or other liability.”
45. A similar view was taken in Rohitbhai Jivanlal Patel v.
State of Gujarat (2019) 18 SCC 106, and it was held that once a
presumption has been drawn, the onus shifts to the accused. It
was observed: –
12. According to the the learned counsel for the appellant-
accused, the impugned judgment is contrary to the
principles laid down by this Court in Arulvelu [Arulvelum v.
State, (2009) 10 SCC 206 : (2010) 1 SCC (Cri) 288] because the
High Court has set aside the judgment of the trial court
without pointing out any perversity therein. The said case
of Arulvelu [Arulvelum v. State, (2009) 10 SCC 206 : (2010) 1
SCC (Cri) 288] related to the offences under Sections 304-B
and 498-A IPC. Therein, on the scope of the powers of the
appellate court in an appeal against acquittal, this Court
observed as follows : (SCC p. 221, para 36)
“36. Careful scrutiny of all these judgments leads to
the definite conclusion that the appellate court should be
very slow in setting aside a judgment of acquittal,
particularly in a case where two views are possible. The
trial court judgment cannot be set aside because the
appellate court’s view is more probable. The appellate
court would not be justified in setting aside the trial
court judgment unless it arrives at a clear finding on
marshalling the entire evidence on record that the
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judgment of the trial court is either perverse or wholly
unsustainable in law.”
The principles aforesaid are not of much debate. In other
.
words, ordinarily, the appellate court will not be upsetting
the judgment of acquittal, if the view taken by the trial court
is one of the possible views of the matter and unless the
appellate court arrives at a clear finding that the judgment
of the trial court is perverse i.e. not supported by evidence
on record or contrary to what is regarded as normal or
reasonable; or is wholly unsustainable in law. Such general
restrictions are essential to remind the appellate court that
an accused is presumed to be innocent unless proved guilty
beyond a reasonable doubt, and a judgment of acquittal
further strengthens such presumption in favour of the
accused. However, such restrictions need to be visualised in
the context of the particular matter before the appellate
court and the nature of the inquiry therein. The same rule
with the same rigour cannot be applied in a matter relating
to the offence under Section 138 of the NI Act, particularly
where a presumption is drawn that the holder has received
the cheque for the discharge, wholly or in part, of any debt
or liability. Of course, the accused is entitled to bring on
record the relevant material to rebut such presumption and
to show that preponderance of probabilities are in favour of
his defence but while examining if the accused has brought
about a probable defence so as to rebut the presumption,
the appellate court is certainly entitled to examine the
evidence on record in order to find if preponderance indeed
leans in favour of the accused.
13. For determination of the point as to whether the High
Court was justified in reversing the judgment and orders of
the trial court and convicting the appellant for the offence
under Section 138 of the NI Act, the basic questions to be
addressed are twofold: as to whether the complainant
Respondent 2 had established the ingredients of Sections
118 and 139 of the NI Act, so as to justify drawing of the
presumption envisaged therein; and if so, as to whether the
appellant-accused had been able to displace such
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presumption and to establish a probable defence whereby,
the onus would again shift to the complainant?
46. This position was reiterated in Ashok Singh v. State of
.
U.P., 2025 SCC OnLine SC 706, wherein it was observed:
22. The High Court while allowing the criminal revision has
primarily proceeded on the presumption that it was
obligatory on the part of the complainant to establish his
case on the basis of evidence by giving the details of the
bank account as well as the date and time of the withdrawalof the said amount which was given to the accused and also
the date and time of the payment made to the accused,
including the date and time of receiving of the cheque,
which has not been done in the present case. Pausing here,such presumption on the complainant, by the High Court,
appears to be erroneous. The onus is not on the complainant
at the threshold to prove his capacity/financial wherewithal
to make the payment in discharge of which the cheque isalleged to have been issued in his favour. Only if an
objection is raised that the complainant was not in a
financial position to pay the amount so claimed by him to
have been given as a loan to the accused, only then thecomplainant would have to bring before the Court cogent
material to indicate that he had the financial capacity and
had actually advanced the amount in question by way of
loan. In the case at hand, the appellant had categoricallystated in his deposition and reiterated in the cross-
examination that he had withdrawn the amount from the
bank in Faizabad (Typed Copy of his deposition in the
paperbook wrongly mentions this as ‘Firozabad’). The Court
ought not to have summarily rejected such a stand, more so
when respondent no. 2 did not make any serious attempt to
dispel/negate such a stand/statement of the appellant.
Thus, on the one hand, the statement made before the
Court, both in examination-in-chief and cross-
examination, by the appellant with regard to withdrawing
the money from the bank for giving it to the accused has
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Neutral Citation No. ( 2025:HHC:21187 )
been disbelieved whereas the argument on behalf of the
accused that he had not received any payment of any loan
amount has been accepted. In our decision in S. S.
.
Production v. Tr. Pavithran Prasanth, 2024 INSC 1059, we
opined:
‘8. From the order impugned, it is clear that though the
contention of the petitioners was that the said amounts weregiven for producing a film and were not by way of return of
any loan taken, which may have been a probable defence for
the petitioners in the case, but rightly, the High Court has
taken the view that evidence had to be adduced on this pointwhich has not been done by the petitioners. Pausing here,
the Court would only comment that the reasoning of the
High Court, as well as the First Appellate Court and Trial
Court, on this issue is sound. Just by taking a counter-standto raise a probable defence would not shift the onus on the
complainant in such a case, for the plea of defence has to be
buttressed by evidence, either oral or documentary, which in
the present case has not been done. Moreover, even if it is
presumed that the complainant had not proved the source ofthe money given to the petitioners by way of loan by
producing statement of accounts and/or Income Tax
Returns, the same ipso facto, would not negate such claimfor the reason that the cheques having being issued and
signed by the petitioners has not been denied, and noevidence has been led to show that the respondent lacked
capacity to provide the amount(s) in question. In thisregard, we may make profitable reference to the decision
in Tedhi Singh v. Narayan Dass Mahant, (2022) 6 SCC 735:
’10. The trial court and the first appellate court have
noted that in the case under Section 138 of the NI Act, the
complainant need not show in the first instance that he
had the capacity. The proceedings under Section 138 of
the NI Act is not a civil suit. At the time, when the
complainant gives his evidence, unless a case is set up in
the reply notice to the statutory notice sent, that the
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Neutral Citation No. ( 2025:HHC:21187 )show that he had the financial capacity. To that extent,
the courts in our view were right in holding on those
lines. However, the accused has the right to demonstrate.
that the complainant in a particular case did not have
the capacity and therefore, the case of the accused is
acceptable, which he can do by producing independent
materials, namely, by examining his witnesses andproducing documents. It is also open to him to establish
the very same aspect by pointing to the materials
produced by the complainant himself. He can further,
more importantly, achieve this result through the cross-
examination of the witnesses of the
complainant. Ultimately, it becomes the duty of the
courts to consider carefully and appreciate the totality of
the evidence and then come to a conclusion whether, inthe given case, the accused has shown that the case of the
complainant is in peril for the reason that the accused
has established a probable defence.’
(emphasis supplied)’(underlining in original; emphasis supplied by us in bold)
47. Therefore, the complainant’s version could not be
rejected because of the failure to produce the receipts of the sale of
the petrol/diesel.
48. There was no other material to rebut the presumption
of consideration attached to the cheque, and both the learned
Courts below had rightly held that the version of the complainant
was proved that the cheque was issued by the accused to the
complainant in discharge of the legal liability.
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Neutral Citation No. ( 2025:HHC:21187 )
49. Mansa Ram (CW2) stated that the cheque was
dishonoured because the amount was insufficient to honour the
.
same. ₹ 1,337/- stood as the balance in the account of the accused.
This is duly corroborated by the Statement of Account
(Ext. CW2/A); therefore, it was duly proved on record that the
cheque was dishonoured because the accused had insufficient
funds in his account
50 The accused admitted in his statement recorded under
Section 313 of Cr.P.C. that he had received the notice. He claimed
that he was not supposed to pay the money to the complainant;
therefore, no action was taken by him. Thus, the receipt of notice
by the accused was duly admitted. There is no evidence that the
accused had paid any money to the complainant after the receipt
of the notice.
51. Thus, it was duly proved on record that the accused had
issued a cheque in favour of the complainant in discharge of his
legal liability, which cheque was dishonoured with an
endorsement ‘funds insufficient’, and the accused failed to pay the
amount despite the receipt of a valid notice of demand. Therefore,
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Neutral Citation No. ( 2025:HHC:21187 )
he was rightly convicted by the learned Trial Court, and this
judgment was rightly affirmed by the learned Appellate Court.
.
52. The learned Trial Court sentenced the accused to
undergo simple imprisonment for a period of six 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 N.I. 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 and promote the use of
negotiable instruments, including cheques, in financialtransactions. The penal provision of Section 138 of the
Negotiable Instruments Act is intended to be a deterrent to
callous issuance of negotiable instruments such as chequeswithout serious intention to honour the promise implicit in
the issuance of the same.”
53. Keeping in view the deterrent nature of the sentence to
be awarded, the sentence of six months imprisonment cannot be
said to be excessive, and no interference is required with it.
54. Learned Trial Court ordered the payment of a fine of
₹5,000/- and compensation of ₹7,50,000/-. Section 357 of the
Cr.P.C. reads as under: –
357. Order to pay compensation.
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(1) When a court imposes a sentence of fine or a sentence
(including a sentence of death) of which fine forms a part,
.
the court may, when passing judgment, order the whole or
any part of the fine recovered to be applied-
(a) In defraying the expenses properly incurred in the
prosecution,
(b) In the payment to any person of compensation for
any loss or injury caused by the offence, when
compensation is, in the opinion of the court,
recoverable by such person in a Civil Court;
(c) When, any person is convicted of any offence for
having caused the death of another person or of
having abetted the commission of shelf all offence, in
paying in, compensation to the persons who are,
under the Fatal Accidents Act, 1855 (13 of 1855)
entitled to recover damages from the person
sentenced for the loss resulting to them from such
death;
(d) When any person is convicted of any offence
which includes theft, criminal, misappropriation,
criminal breach of trust or cheating, or of having
dishonestly received or retained, or of having
voluntarily assisted in disposing of stolen property
knowing or having reason to believe the same to be
stolen in compensating any bona fide purchaser of
such property for the loss of the same if such property
is restored to the possession of the person entitled
thereto.
(2) If the fine is imposed in a case, which is subject to
appeal, no such payment shall be made before the period
allowed for presenting the appeal his elapsed, or if an
appeal be presented, before the decision of the appeal.
(3) When a court imposes a sentence, of which fine does not
form a part, the court may, when passing judgment order
the accused person to pay, by way of compensation such
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amount as may be specified in the order to the person who
has suffered any loss or injury reason of the act for which
the accused person his been so sentenced.
.
(4) An order under this section may also be made by all
Appellate Court or by the High Court or Court of Session
when exercising its powers of revision.
(5) At the time of awarding compensation in any
subsequent civil suit relating to the same matter, the court
shall take into account any sum paid or recovered as
compensation under this section.
55. It is apparent from the perusal of the Section that when
the Court orders the payment of a fine, the whole or part of the
fine can be ordered to be paid as compensation. It was laid down by
the Hon’ble Supreme Court in Dilip S. Dahanukar v. Kotak Mahindra
Co. Ltd., (2007) 6 SCC 528: 2007 SCC OnLine SC 489, that when the
fine is imposed, the compensation has to be awarded from that
amount. It was observed at page 538: –
“10. It is, therefore, apparent that if a court imposes a
sentence of fine or a sentence or where it forms a part
thereof, the court is entitled to direct that whole or any partof the fine recovered, to be applied to in respect of the
factors enumerated in Clauses (a), (b), (c) or (d). Section 421
of the Code deals with the mode and manner in which the
fine levied is to be recovered. Section 424 deals with the
steps required to be taken by the court where the amount of
fine has not been paid forthwith. Section 357 deals with two
types of cases, namely, (i) where only a sentence has been
imposed, and (ii) where a fine also forms part of the
sentence. When a fine is imposed simpliciter, Section 421
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application.
xxxxxx
.
26. The distinction between sub-sections (1) and (3) of
Section 357 is apparent. Sub-section (1) provides for the
application of an amount of fine while imposing a sentence
of which fine forms a part; whereas sub-section (3) calls fora situation where a court imposes a sentence of which fine
does not form a part of the sentence.
xxxxx
44. Magistrates cannot award compensation in addition to a
fine. When a fine is imposed, however, the private party has
no right to insist that compensation may be awarded to him
out of the amount of the fine. The power to award
compensation under Section 357(3) is not an ancillarypower. It is an additional power. (See Balraj v. State of
U.P. [(1994) 4 SCC 29: 1994 SCC (Cri) 823: 1995 Cri LJ 3217] )
56. Therefore, it was impermissible for the learned Trial
Court to impose a fine as well as compensation. The learned Trial
Court could have imposed a fine and ordered the compensation to
be paid out of the fine amount. It was impermissible to separately
award the compensation.
57. It was laid down by the Hon’ble Supreme Court in
Kalamani Tex v. P. Balasubramanian, (2021) 5 SCC 283: (2021) 3 SCC
(Civ) 25: (2021) 2 SCC (Cri) 555: 2021 SCC OnLine SC 75 that the
Courts should uniformly levy a fine up to twice the cheque amount
along with simple interest at the rate of 9% per annum. It was
observed at page 291: –
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19. As regards the claim of compensation raised on behalf of
the respondent, we are conscious of the settled principles
that the object of Chapter XVII of NIA is not only punitive.
but also compensatory and restitutive. The provisions of
NIA envision a single window for criminal liability for the
dishonour of a cheque as well as civil liability for the
realisation of the cheque amount. It is also well settled that
there needs to be a consistent approach towards awarding
compensation, and unless there exist special circumstances,
the courts should uniformly levy fines up to twice the
cheque amount along with simple interest @ 9% p.a. [R.
Vijayan v. Baby, (2012) 1 SCC 260, para 20: (2012) 1 SCC (Civ)
79: (2012) 1 SCC (Cri) 520]”
58. Therefore, in view of the binding precedent of the
Hon’ble Supreme Court, the complainant is entitled to
compensation; hence, the compensation awarded by the learned
Trial Court has to be upheld, whereas the fine imposed by the
learned Trial Court has to be set aside.
59. The learned Trial Court had ordered the compensation
of ₹7,50,000/-. The cheque was issued on 28.01.2007, and
sentence was imposed on 03.03.2010 after the expiry of about
three years. The complainant lost interest on the amount, which
she would have got by depositing in the Bank. She had to pay the
litigation expenses and spend time in pursuing the litigation;
hence, the amount of ₹1,33,690/- awarded as compensation on
the amount of ₹6,16,310/- is not excessive, and no interference is
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required with the compensation imposed by the learned Trial
Court as affirmed by the learned Appellate Court.
.
60. No other point was urged.
61. In view of the above, the present appeal is partly
allowed. The order of sentence imposing a fine awarded by the
learned Trial Court is ordered to be set aside, while the rest of the
judgment ordering the sentence of imprisonment and the
payment of compensation are upheld.
62. Records of the learned Courts below be sent back
forthwith, along with a copy of this judgment.
(Rakesh Kainthla)
Judge
4th July, 2025
(Saurav pathania)
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