Himachal Pradesh High Court
Darshan Dass vs The Sbi Main Branch on 28 August, 2025
1
( 2025:HHC:29189 )
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No.410 of 2025
Reserved on: 20.08.2025
.
Decided on: 28.08.2025
Darshan Dass ........Petitioner
Versus
The SBI Main Branch, Rohru .....Respondent
Coram
The Hon’ble Mr. Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 No.
For the Petitioner: Mr. Pritam Singh Chandel,
Advocate.
For the Respondent: Nemo.
Rakesh Kainthla, Judge
The present revision is directed against the
judgment dated 28.05.2025 passed by learned Additional
Sessions Judge, Rohru (learned Appellate Court) vide which
judgment of conviction and order of sentence dated 16.08.2024
passed by learned Additional Chief Judicial Magistrate, Court
No.1, Rohru, District Shimla (learned Trial Court) were affirmed.
(Parties shall hereinafter be referred to in the same manner as
1
Whether the reporters of the local papers may be allowed to see the Judgment?Yes.
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
2
( 2025:HHC:29189 )
they were arrayed before the learned Trial Court for
convenience.)
2. Briefly stated, the facts giving rise to the present
.
revision are that the complainant filed a complaint before the
learned Trial Court against the accused for the commission of
an offence punishable under Section 138 of the Negotiable
Instruments Act, 1881 (NI Act). It was asserted that the
complainant is engaged in banking activities. The complainant
has a branch located at Rohru. The complainant advanced a loan
to the accused. The accused issued a cheque of ₹3,50,000/- to
discharge his liability. The complainant presented the cheque to
the bank, but it was dishonoured with an endorsement “funds
insufficient”. The complainant issued a legal notice to the
accused asking him to repay the amount. The notice was duly
served upon the accused, but the accused failed to repay the
money despite the receipt of the notice of demand. Hence, a
complaint was filed before the learned Trial Court for taking
action as per the law.
3. Learned Trial Court found sufficient reasons to
summon the accused. When the accused appeared, notice of
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
3
( 2025:HHC:29189 )
accusation was put to him, to which he pleaded not guilty and
claimed to be tried.
4. The complainant examined Vipul Negi (CW1) to
.
prove its case.
5. The accused, in his statement recorded under
Section 313 of Cr. P.C. denied his liability. He admitted that he
had taken a loan from the complainant bank. He claimed that
the cheque was issued by him as security at the time of taking
the loan. He stated that he wanted to lead defence evidence, but
he did not produce any evidence despite various opportunities
granted to him and his evidence was closed by the learned Trial
Court on 10.05.2024.
6. Learned Trial Court held that the issuance of the
cheque was not disputed, therefore, a statutory presumption
under Section 118(a) and 139 of the NI Act would arise that the
cheque was issued for consideration in discharge of the liability.
The burden would shift upon the accused to rebut this
presumption. The accused did not produce any evidence, and
the cross-examination of Vipul Negi (CW1) was not sufficient to
rebut the presumption. The plea taken by the accused that the
cheque was issued as a security will not help the accused
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
4
( 2025:HHC:29189 )
because the cheque issued as a security will attract the
provisions of Section 138 of the NI Act. The cheque was
dishonoured with an endorsement “funds insufficient”. The
.
notice was served upon the accused, and he failed to repay the
amount. Hence, the accused was convicted of the commission of
an offence punishable under Section 138 of the NI Act and was
sentenced to undergo simple imprisonment for four months,
pay a fine of ₹3,50,000/-, and in default of payment of fine, to
undergo further simple imprisonment for one month. The
amount of fine was ordered to be paid to the complainant as
compensation.
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, Rohru
(learned Appellate Court). Learned Appellate Court concurred
with the findings recorded by the learned Trial Court that the
issuance of the cheque was not disputed by the accused. The
plea taken by the accused that the cheque was issued as security
will not help him because the cheque issued towards the
security would also attract the provisions of Section 138 of the
NI Act. The cheque was dishonoured with an endorsement
“funds insufficient”. The accused received a valid notice of
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
5
( 2025:HHC:29189 )
demand, but he failed to repay the amount. Hence, he was
rightly convicted by the learned Trial Court. The sentence
imposed was also not excessive. Hence, the appeal filed by the
.
accused was dismissed.
8. Being aggrieved by the judgments and order passed
by the learned Courts below, the accused has filed the present
petition asserting that the learned Courts below passed the
judgments on conjectures and surmises. The evidence was not
properly appreciated. The evidence produced by the accused
was not considered. There was no proper service of notice, and
the essential requirement of Section 138 of the NI Act was not
satisfied. The complainant failed to produce any material to
show that the cheque was issued in discharge of the liability.
The statement of account was not produced on record, and the
accused could not have been convicted and sentenced. Hence, it
was prayed that the present revision be allowed and the
judgments and order passed by the learned Courts below be set
aside.
9. Mr. Pritam Singh Chandel, learned counsel for the
petitioner/accused, submitted that the learned Courts below
erred in appreciating the material placed before them. The
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
6
( 2025:HHC:29189 )
complainant failed to produce the statement of account, and
there was no evidence on record to show that the accused was
liable to pay ₹3,50,000/- to the complainant. The notice was
.
not served upon the accused, and this aspect was ignored by the
learned Courts below. He prayed that the present revision be
allowed and the judgments and order passed by the learned
Courts below be set aside.
10. I have given
to considerable thought
submissions made at the bar and have gone through the records
r to the
carefully.
11. It was laid down by the Hon’ble Supreme Court in
Malkeet Singh Gill v. State of Chhattisgarh, (2022) 8 SCC 204:
(2022) 3 SCC (Cri) 348: 2022 SCC OnLine SC 786 that the
revisional court does not exercise an appellate jurisdiction and
it can only rectify the patent defect, errors of jurisdiction or the
law. It was observed at page 207: –
“10. Before adverting to the merits of the contentions, at
the outset, it is apt to mention that there are concurrent
findings of conviction arrived at by two courts after a
detailed appreciation of the material and evidence
brought on record. The High Court in criminal revision
against conviction is not supposed to exercise
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::: Downloaded on – 28/08/2025 21:27:48 :::CIS
7
( 2025:HHC:29189 )correctness, legality, or propriety of any finding,
sentence, or order, recorded or passed, and as to the
regularity of any proceedings of such inferior court. The
object of the provision is to set right a patent defect or an
error of jurisdiction or law. There has to be a well-
.
founded error which is to be determined on the merits of
individual cases. It is also well settled that while
considering the same, the Revisional Court does not
dwell at length upon the facts and evidence of the case toreverse those findings.
12. This position was reiterated in State of Gujarat v.
Dilipsinh Kishorsinh Rao, (2023) 17 SCC 688: 2023 SCC OnLine
r to
SC 1294, wherein it was observed at page 695:
14. The power and jurisdiction of the Higher Court under
Section 397CrPC, which vests the court with the power to
call for and examine records of an inferior court, is for
the purposes of satisfying itself as to the legality and
regularities of any proceeding or order made in a case.
The object of this provision is to set right a patent defect
or an error of jurisdiction or law or the perversity which
has crept in such proceedings.
15. It would be apposite to refer to the judgment of this
Court in Amit Kapoor v. Ramesh Chander [Amit
Kapoor v. Ramesh Chander, (2012) 9 SCC 460: (2012) 4
SCC (Civ) 687: (2013) 1 SCC (Cri) 986], where scope of
Section 397 has been considered and succinctly explained
as under: (SCC p. 475, paras 12-13)
“12. Section 397 of the Code vests the court with
the power to call for and examine the records of
an inferior court for the purposes of satisfying
itself as to the legality and regularity of any
proceedings or order made in a case. The object
of this provision is to set right a patent defect or
an error of jurisdiction or law. There has to be a
well-founded error, and it may not be
appropriate for the court to scrutinise the
orders, which, upon the face of it, bear a token
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
8
( 2025:HHC:29189 )
of careful consideration and appear to be in
accordance with law. If one looks into the
various judgments of this Court, it emerges that
the revisional jurisdiction can be invoked where
the decisions under challenge are grossly
.
erroneous, there is no compliance with the
provisions of law, the finding recorded is based
on no evidence, material evidence is ignored, or
judicial discretion is exercised arbitrarily or
perversely. These are not exhaustive classes,
but are merely indicative. Each case would have
to be determined on its own merits.
13. Another well-accepted norm is that the
revisional jurisdiction of the higher court is a
very limited one and cannot be exercised in a
routine manner. One of the inbuilt restrictions
r is that it should not be against an interim or
interlocutory order. The Court has to keep in
mind that the exercise of revisional jurisdiction
itself should not lead to injustice ex facie. Where
the Court is dealing with the question as to
whether the charge has been framed properly
and in accordance with law in a given case, it
may be reluctant to interfere in the exercise of
its revisional jurisdiction unless the case
substantially falls within the categories
aforestated. Even the framing of a charge is a
much-advanced stage in the proceedings under
CrPC.”
16. This Court in the aforesaid judgment in Amit Kapoor
case [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460 :
(2012) 4 SCC (Civ) 687 : (2013) 1 SCC (Cri) 986 ] has also
laid down principles to be considered for exercise of
jurisdiction under Section 397 particularly in the context
of prayer for quashing of charge framed under Section
228CrPC is sought for as under : (Amit Kapoor case [Amit
Kapoor v. Ramesh Chander, (2012) 9 SCC 460 : (2012) 4
SCC (Civ) 687 : (2013) 1 SCC (Cri) 986], SCC pp. 482-83,
para 27)::: Downloaded on – 28/08/2025 21:27:48 :::CIS
9
( 2025:HHC:29189 )“27. Having discussed the scope of jurisdiction
under these two provisions, i.e., Section 397 and
Section 482 of the Code, and the fine line of
jurisdictional distinction, it will now be
appropriate for us to enlist the principles with.
reference to which the courts should exercise
such jurisdiction. However, it is not only
difficult but inherently impossible to state such
principles with precision. At best and upon
objective analysis of various judgments of this
Court, we are able to cull out some of the
principles to be considered for proper exercise
of jurisdiction, particularly, with regard to
quashing of charge either in exercise of
jurisdiction under Section 397 or Section 482 of
the Code or together, as the case may be.
27.1. Though there are no limits to the powers of
the Court under Section 482 of the Code but the
more the power, the more due care and caution
is to be exercised in invoking these powers. The
power of quashing criminal proceedings,
particularly the charge framed in terms of
Section 228 of the Code, should be exercised
very sparingly and with circumspection, and
that too in the rarest of rare cases.
27.2. The Court should apply the test as to
whether the uncontroverted allegations as
made from the record of the case and the
documents submitted therewith prima facie
establish the offence or not. If the allegations
are so patently absurd and inherently
improbable that no prudent person can ever
reach such a conclusion, and where the basic
ingredients of a criminal offence are not
satisfied, then the Court may interfere.
27.3. The High Court should not unduly
interfere. No meticulous examination of the
evidence is needed for considering whether the
case would end in a conviction or not at the
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
10
( 2025:HHC:29189 )
stage of framing of charge or quashing of
charge.
***
27.9. Another very significant caution that the
.
courts have to observe is that it cannot examine
the facts, evidence and materials on record to
determine whether there is sufficient material
on the basis of which the case would end in a
conviction; the court is concerned primarily
with the allegations taken as a whole whether
they will constitute an offence and, if so, is it an
abuse of the process of court leading to
injustice.
***
27.13. Quashing of a charge is an exception to
r the rule of continuous prosecution. Where the
offence is even broadly satisfied, the Court
should be more inclined to permit continuation
of prosecution rather than its quashing at that
initial stage. The Court is not expected to
marshal the records with a view to decide
admissibility and reliability of the documents or
records, but is an opinion formed prima facie.”
17. The revisional court cannot sit as an appellate court
and start appreciating the evidence by finding out
inconsistencies in the statements of witnesses, and it is
not legally permissible. The High Courts ought to be
cognizant of the fact that the trial court was dealing with
an application for discharge.
13. This position was reiterated in State of Gujarat v.
Dilipsinh Kishorsinh Rao, (2023) 17 SCC 688: 2023 SCC OnLine
SC 1294, wherein it was observed at page 695:
14. The power and jurisdiction of the Higher Court under
Section 397CrPC, which vests the court with the power to
call for and examine records of an inferior court, is for
the purposes of satisfying itself as to the legality and
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
11
( 2025:HHC:29189 )
regularities of any proceeding or order made in a case.
The object of this provision is to set right a patent defect
or an error of jurisdiction or law or the perversity which
has crept in such proceedings.
15. It would be apposite to refer to the judgment of this
.
Court in Amit Kapoor v. Ramesh Chander [Amit
Kapoor v. Ramesh Chander, (2012) 9 SCC 460: (2012) 4
SCC (Civ) 687: (2013) 1 SCC (Cri) 986] , where scope of
Section 397 has been considered and succinctly
explained as under: (SCC p. 475, paras 12-13)
“12. Section 397 of the Code vests the court with
the power to call for and examine the records of
an inferior court for the purposes of satisfying
itself as to the legality and regularity of any
proceedings or order made in a case. The object
of this provision is to set right a patent defect or
r an error of jurisdiction or law. There has to be a
well-founded error, and it may not be
appropriate for the court to scrutinise the
orders, which, upon the face of it, bear a token
of careful consideration and appear to be in
accordance with law. If one looks into the
various judgments of this Court, it emerges that
the revisional jurisdiction can be invoked where
the decisions under challenge are grossly
erroneous, there is no compliance with the
provisions of law, the finding recorded is based
on no evidence, material evidence is ignored, or
judicial discretion is exercised arbitrarily or
perversely. These are not exhaustive classes,
but are merely indicative. Each case would have
to be determined on its own merits.
13. Another well-accepted norm is that the
revisional jurisdiction of the higher court is a
very limited one and cannot be exercised in a
routine manner. One of the inbuilt restrictions
is that it should not be against an interim or
interlocutory order. The Court has to keep in
mind that the exercise of revisional jurisdiction
itself should not lead to injustice ex facie. Where
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
12
( 2025:HHC:29189 )
the Court is dealing with the question as to
whether the charge has been framed properly
and in accordance with law in a given case, it
may be reluctant to interfere in the exercise of
its revisional jurisdiction unless the case
.
substantially falls within the categories
aforestated. Even framing of a charge is a
much-advanced stage in the proceedings under
CrPC.”
16. This Court in the aforesaid judgment in Amit Kapoor
case [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460 :
(2012) 4 SCC (Civ) 687 : (2013) 1 SCC (Cri) 986 ] has also
laid down principles to be considered for exercise of
jurisdiction under Section 397 particularly in the context
of prayer for quashing of charge framed under Section
228CrPC is sought for as under : (Amit Kapoor case [AmitKapoor v. Ramesh Chander, (2012) 9 SCC 460 : (2012) 4
SCC (Civ) 687 : (2013) 1 SCC (Cri) 986], SCC pp. 482-83,
para 27)
“27. Having discussed the scope of jurisdiction
under these two provisions, i.e. Section 397 andSection 482 of the Code, and the fine line of
jurisdictional distinction, it will now be
appropriate for us to enlist the principles withreference to which the courts should exercise
such jurisdiction. However, it is not onlydifficult but inherently impossible to state such
principles with precision. At best and uponobjective analysis of various judgments of this
Court, we are able to cull out some of the
principles to be considered for proper exercise
of jurisdiction, particularly, with regard to
quashing of charge either in exercise of
jurisdiction under Section 397 or Section 482 of
the Code or together, as the case may be.
27.1. Though there are no limits to the powers of
the Court under Section 482 of the Code but the
more the power, the more due care and caution
is to be exercised in invoking these powers. The
power of quashing criminal proceedings,
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
13
( 2025:HHC:29189 )
particularly the charge framed in terms of
Section 228 of the Code, should be exercised
very sparingly and with circumspection and
that too in the rarest of rare cases.
27.2. The Court should apply the test as to
.
whether the uncontroverted allegations as
made from the record of the case and the
documents submitted therewith prima facie
establish the offence or not. If the allegations
are so patently absurd and inherently
improbable that no prudent person can ever
reach such a conclusion, and where the basic
ingredients of a criminal offence are not
satisfied, then the Court may interfere.
27.3. The High Court should not unduly
interfere. No meticulous examination of the
evidence is needed for considering whether the
case would end in a conviction or not at the
stage of framing of charge or quashing of
charge.
***
27.9. Another very significant caution that the
courts have to observe is that it cannot examine
the facts, evidence and materials on record to
determine whether there is sufficient material
on the basis of which the case would end in a
conviction; the court is concerned primarily
with the allegations taken as a whole whether
they will constitute an offence and, if so, is it an
abuse of the process of court leading to
injustice.
***
27.13. Quashing of a charge is an exception to
the rule of continuous prosecution. Where the
offence is even broadly satisfied, the Court
should be more inclined to permit continuation
of prosecution rather than its quashing at that
initial stage. The Court is not expected to
marshal the records with a view to decide
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
14
( 2025:HHC:29189 )
admissibility and reliability of the documents or
records, but is an opinion formed prima facie.”
17. The revisional court cannot sit as an appellate court
and start appreciating the evidence by finding out
inconsistencies in the statements of witnesses, and it is
.
not legally permissible. The High Courts ought to be
cognizant of the fact that the trial court was dealing with
an application for discharge.
14. 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 at page 169:
“12. This Court has time and again examined the scope of
Sections 397/401 CrPC and the grounds for exercising the
revisional jurisdiction by the High Court. In State ofKerala v. Puttumana Illath Jathavedan Namboodiri [State
of Kerala v. Puttumana Illath Jathavedan Namboodiri,
(1999) 2 SCC 452: 1999 SCC (Cri) 275], while consideringthe 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 HighCourt can call for and examine the record of any
proceedings to satisfy itself as to the
correctness, legality or propriety of any finding,
sentence or order. In other words, the
jurisdiction is one of supervisory jurisdiction
exercised by the High Court for correcting a
miscarriage of justice. But the said revisional
power cannot be equated with the power of an
appellate court, nor can it be treated even as a
second appellate jurisdiction. Ordinarily,
therefore, it would not be appropriate for the
High Court to reappreciate the evidence and::: Downloaded on – 28/08/2025 21:27:48 :::CIS
15
( 2025:HHC:29189 )come to its conclusion on the same when the
evidence has already been appreciated by the
Magistrate as well as the Sessions Judge in
appeal unless any glaring feature is brought to
the notice of the High Court which would.
otherwise tantamount to a gross miscarriage of
justice. On scrutinising the impugned judgment
of the High Court from the aforesaid
standpoint, we have no hesitation in concluding
that the High Court exceeded its jurisdiction in
interfering with the conviction of the
respondent by reappreciating the oral evidence.
…”
13. Another judgment which has also been referred to and
relied on by the High Court is the judgment of this Court
in Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao
Phalke [Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao
Phalke, (2015) 3 SCC 123: (2015) 2 SCC (Cri) 19] . This
Court held that the High Court, in the exercise of
revisional jurisdiction, shall not interfere with the order
of the Magistrate unless it is perverse or wholly
unreasonable or there is non-consideration of any
relevant material; the order cannot be set aside merely
on the ground that another view is possible. The
following has been laid down in para 14: (SCC p. 135)
“14. … Unless the order passed by the
Magistrate is perverse or the view taken by the
court is wholly unreasonable or there is non-
consideration of any relevant material or there
is palpable misreading of records, the
Revisional Court is not justified in setting aside
the order, merely because another view is
possible. The Revisional Court is not meant to
act as an appellate court. The whole purpose of
the revisional jurisdiction is to preserve the
power of 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
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
16
( 2025:HHC:29189 )
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, the conviction of the accused was
also recorded, and the High Court set aside [ Dattatray
Gulabrao Phalke v. Sanjaysinh Ramrao Chavan, 2013 SCC
OnLine Bom 1753] the order of conviction by substituting
its view. This Court set aside the High Court’s order,
holding that the High Court exceeded its jurisdiction in
substituting its views, and that too without any legal
basis.
15. This position was reiterated in Bir Singh v. Mukesh
Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC
(Civ) 309: 2019 SCC OnLine SC 13, wherein it was observed at
page 205:
“16. It is well settled that in the exercise of revisional
jurisdiction under Section 482 of the Criminal Procedure
Code, the High Court does not, in the absence of
perversity, upset concurrent factual findings. It is not for
the Revisional Court to re-analyse and re-interpret the
evidence on record.
17. As held by this Court in Southern Sales &
Services v. Sauermilch Design and Handels
GmbH [Southern Sales & Services v. Sauermilch Design
and Handels GmbH, (2008) 14 SCC 457], it is a well-
established principle of law that the Revisional Court will
not interfere even if a wrong order is passed by a court
having jurisdiction, in the absence of a jurisdictional
error. The answer to the first question is, therefore, in
the negative.”
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
17
( 2025:HHC:29189 )
16. The present revision has to be decided as per the
parameters laid down by the Hon’ble Supreme Court.
17. The accused did not dispute in his statement
.
recorded under Section 313 of Cr. P.C. that he had issued a
cheque. Therefore, the learned Courts below had rightly
proceeded on the premise that the issuance of the cheque was
not disputed, and the presumption that the cheque was issued
in discharge of legal liability would arise. It was laid down by
the Hon’ble Supreme Court in APS Forex Services (P) Ltd. v.
Shakti International Fashion Linkers (2020) 12 SCC 724, that
when the issuance of a cheque and signature on the cheque are
not disputed, a presumption would arise that the cheque was
issued in discharge of the legal liability. It was observed: –
“7.2. What is emerging from the material on record is
that the issuance of a cheque by the accused and the
signature of the accused on the said cheque are not
disputed by the accused. The accused has also notdisputed that there were transactions between the
parties. Even as per the statement of the accused, which
was recorded at the time of the framing of the charge, he
has admitted that some amount was due and payable.
However, it was the case on behalf of the accused that 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 accused issued
cheques which came to be dishonoured on the ground of::: Downloaded on – 28/08/2025 21:27:48 :::CIS
18
( 2025:HHC:29189 )“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 isrequired to lead evidence to rebut such a 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 secondtime 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 a presumption is rebuttable.
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 presentcase, no such evidence has been led by the accused. The
story put forward by the accused that the cheques weregiven 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 thesecond 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 appreciating the presumption
under Section 139 of the NI Act. As observed above,
Section 139 of the Act is an example of reverse onus::: Downloaded on – 28/08/2025 21:27:48 :::CIS
19
( 2025:HHC:29189 )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.”
18. The presumption under Section 139 of the NI Act was
explained by the Hon’ble Supreme Court in Triyambak S. Hegde
v. Sripad, (2022) 1 SCC 742: (2022) 1 SCC (Civ) 512: 2021 SCC
OnLine SC 788 at page 747:
r to
“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 thedischarge, in whole or in part, of any debt or other
liability.”
13. Insofar as the payment of the amount by the appellant
in the context of the cheque having been signed by the
respondent, the presumption for passing of the
consideration would arise as provided under Section
118(a) of the NI Act, which reads as hereunder:
“118. Presumptions as to negotiable instruments .
–Until the contrary is proved, the following
presumptions shall be made:
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
20
( 2025:HHC:29189 )
(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 tobe that of the accused, the presumption envisaged
in Section 118 of the Act can legally be inferred
that the cheque was made or drawn for
consideration on the date which the cheque bears.
Section 139 of the Act enjoins the Court to
presume that the holder of the cheque received it
for the discharge of any debt or liability. The
burden was on the accused to rebut the aforesaid
presumption. The trial court was not persuaded to
rely on the interested testimony of DW 1 to rebut
the presumption. The said finding was upheld
[Sankaran Vaidhyan Balan v. K. Bhaskaran,
Criminal Appeal No. 234 of 1995, order dated 23-
10-1998 (Ker)] by the High Court. It is not now
open to the accused to contend differently 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. Mudiba
sappa, (2019) 5 SCC 418: (2019) 2 SCC (Cri) 571] wherein
it is held as hereunder: (SCC pp. 432-33, paras 25-26)
“25. We having noticed the ratio laid down by this
Court in the above cases on Sections 118( a) and
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
21
( 2025:HHC:29189 )
139, we now summarise the principles
enumerated by this Court in the following
manner:
25.1. Once the execution of the cheque is
admitted, Section 139 of the Act mandates a.
presumption that the cheque was for the
discharge of any debt or other liability.
25.2. The presumption under Section 139 is a
rebuttable presumption, and the onus is on
the accused to raise the probable defence.
The standard of proof for rebutting the
presumption is that of preponderance of
probabilities.
25.3. To rebut the presumption, it is open for
the accused to rely on evidence led by him, or
the accused can also rely on the materials
submitted by the complainant in order to
raise a probable defence. Inference of
preponderance of probabilities can be drawn
not only from the materials brought on
record by the parties but also by reference to
the circumstances upon which they rely.
25.4. That it is not necessary for the accused
to come into the witness box in support of
his defence, Section 139 imposed an
evidentiary burden and not a persuasive
burden.
25.5. It is not necessary for the accused to
come into the witness box to support his
defence.
26. Applying the preposition of law as noted
above, in the facts of the present case, it is
clear that the signature on the cheque,
having been admitted, a presumption shall
be raised under Section 139 that the cheque
was issued in discharge of debt or liability.
The question to be looked into is as to
whether any probable defence was raised by
the accused. In the cross-examination of PW
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
22
( 2025:HHC:29189 )
1, when the specific question was put that a
cheque was issued in relation to a loan of Rs
25,000 taken by the accused, PW 1 said that
he does not remember. PW 1, in his evidence,
admitted that he retired in 1997, on which
.
date he received a monetary benefit of Rs 8
lakhs, which was encashed by the
complainant. It was also brought in evidence
that in the year 2010, the complainant
entered into a sale agreement for which he
paid an amount of Rs 4,50,000 to Balana
Gouda towards sale consideration. Payment
of Rs 4,50,000 being admitted in the year
2010, and further payment of the 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 the
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
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
23
( 2025:HHC:29189 )
of law as made by this Court, need no reiteration as there
is no ambiguity whatsoever. In Basalingappav.
Mudibasappa [Basalingappa v. Mudibasappa, (2019) 5
SCC 418 : (2019) 2 SCC (Cri) 571] relied on by the learned
counsel for the respondent, though on facts the ultimate
.
conclusion therein was against raising presumption, the
facts and circumstances are entirely different as the
transaction between the parties as claimed in the said
case is peculiar to the facts of that case where the
consideration claimed to have been paid did not find
favour with the Court keeping in view the various
transactions and extent of amount involved. However,
the legal position relating to the presumption arising
under Sections 118 and 139 of the NI Act on signature
being admitted has been reiterated. Hence, whether there
is a rebuttal or not would depend on the facts and
circumstances of each case.”
19. This position was reiterated in Tedhi Singh v.
Narayan Dass Mahant, (2022) 6 SCC 735: (2022) 2 SCC (Cri)
726: (2022) 3 SCC (Civ) 442: 2022 SCC OnLine SC 302, wherein it
was held at page 739.
“8. It is true that this is a case under Section 138 of the
Negotiable Instruments Act. Section 139 of the NI Act
provides that the court shall presume that the holder of a
cheque received the cheque of the nature referred to inSection 138 for the discharge, in whole or in part, of any
debt or other liability. This presumption, however, is
expressly made subject to the position being proved to
the contrary. In other words, it is open to the accused to
establish that there is no consideration received. It is in
the context of this provision that the theory of “probable
defence” has grown. In an earlier judgment, in fact,
which has also been adverted to in Basalingappa
[Basalingappa v. Mudibasappa, (2019) 5 SCC 418: (2019)
2 SCC (Cri) 571], this Court notes that Section 139 of the
NI Act is an example of reverse onus (see Rangappa v. Sri::: Downloaded on – 28/08/2025 21:27:48 :::CIS
24
( 2025:HHC:29189 )Mohan [Rangappa v. Sri Mohan, (2010) 11 SCC 441: (2010)
4 SCC (Civ) 477: (2011) 1 SCC (Cri) 184] ). It is also true
that this Court has found that the accused is not expected
to discharge an unduly high standard of proof. It is
accordingly that the principle has developed that all.
which the accused needs to establish is a probable
defence. As to whether a probable defence has been
established is a matter to be decided on the facts of each
case on the conspectus of evidence and circumstancesthat exist…”
20. Similar is the judgment in P. Rasiya v. Abdul Nazer,
2022 SCC OnLine SC 1131, wherein it was observed:
“As per Section 139 of the N.I. Act, it shall be presumed,
unless the contrary is proved, that the holder of a chequereceived the cheque of the nature referred to in Section
138 for discharge, in whole or in part, of any debt or other
liability. Therefore, once the initial burden is discharged
by the Complainant that the cheque was issued by the
accused and the signature and the issuance of the chequeare not disputed by the accused, in that case, the onus
will shift upon the accused to prove the contrary that the
cheque was not for any debt or other liability. Thepresumption under Section 139 of the N.I. Act is a
statutory presumption and thereafter, once it ispresumed that the cheque is issued in whole or in part of
any debt or other liability which is in favour of the
Complainant/holder of the cheque, in that case, it is forthe accused to prove the contrary.”
21. 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::: Downloaded on – 28/08/2025 21:27:48 :::CIS
25
( 2025:HHC:29189 )consideration. Section 139 of the Act stipulates that
“unless the contrary is proved, it shall be presumed that
the holder of the cheque received the cheque for the
discharge of, whole or part of any debt or liability”. It will
be seen that the “presumed fact” directly relates to one.
of the crucial ingredients necessary to sustain a
conviction under Section 138. [The rules discussed herein
below 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 has 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 a 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
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
26
( 2025:HHC:29189 )
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 the discharge of debt, the presumptive
.
device under Section 139 of the Act helps shifting the
burden on the accused. The effect of the presumption, in
that sense, is to transfer the evidential burden on the
accused of proving that the cheque was not received by
the Bank towards the discharge of any liability. Until this
evidential burden is discharged by the accused, the
presumed fact will have to be taken to be true, without
expecting the complainant to do anything further.
38. John Henry Wigmore [John Henry Wigmore and the
Rules of Evidence: The Hidden Origins of Modern
Law] on Evidence states as follows:
“The peculiar effect of the presumption of law is
merely to invoke a rule of law compelling the Jury
to reach the conclusion in the absence of
evidence to the contrary from the opponent but ifthe opponent does offer evidence to the contrary
(sufficient to satisfy the Judge’s requirement of
some evidence), the presumption ‘disappears as
a rule of law and the case is in the Jury’s handsfree 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]]
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
27
( 2025:HHC:29189 )
22. Thus, the learned Courts below had rightly held that
a presumption would arise in the present case that the cheque
was issued for consideration in discharge of the liability.
.
23. The accused claimed that the cheque was issued as
security at the time of taking the loan, however, he did not
produce any evidence to support this plea. Vipul Negi (CW1)
specifically denied in his cross-examination that the bank had
taken a signed blank cheque at the time of advancing the loan.
Therefore, the cross-examination of this witness does not
establish the plea taken by the accused. It was held in Sumeti Vij
v. Paramount Tech Fab Industries, (2022) 15 SCC 689: 2021 SCC
OnLine SC 201 that the accused has to lead defence evidence to
rebut the presumption and mere denial in his statement under
Section 313 of Cr.P.C. is not sufficient. It was observed at page
700:
“20. That apart, when the complainant exhibited all
these documents in support of his complaints and
recorded the statement of three witnesses in support
thereof, the appellant recorded her statement under
Section 313 of the Code but failed to record evidence to
disprove or rebut the presumption in support of her
defence available under Section 139 of the Act. The
statement of the accused recorded under Section 313 of
the Code is not substantive evidence of defence, but only
an opportunity for the accused to explain the
incriminating circumstances appearing in the
prosecution’s case against the accused. Therefore, there::: Downloaded on – 28/08/2025 21:27:48 :::CIS
28
( 2025:HHC:29189 )is no evidence to rebut the presumption that the cheques
were issued for consideration.” (Emphasis supplied)”
24. Therefore, the statement of the accused recorded
under Section 313 of Cr. P.C. does not constitute any legal
.
admissible evidence, and the learned Courts below were
justified in rejecting the plea taken by the accused in his
statement recorded under Section 313 of Cr.P.C.
25. It was submitted that the complainant failed to
produce the statement of account to establish the liability of the
accused. Reliance was placed upon the judgment of Hon’ble
Supreme Court in M.S. Narayana Menon v. State of Kerala,
(2006) 6 SCC 39: (2006) 3 SCC (Cri) 30: (2006) 132 Comp Cas
450: 2006 SCC OnLine SC 660 in support of this submission.
This submission is not acceptable. The judgment of
M.S.Narayana Menon @ Mani (supra) does not lay down that
the complainant is required to prove the existence of the debt
rather it was stated that in view of Section 118(a) and 139 of the
NI Act, a presumption would arise that the cheque was issued
for consideration in discharge of liability and the burden is
upon the accused to rebut the presumption. It was observed at
page 50:
30. Applying the said definitions of “proved” or “dis-
proved” to the principle behind Section 118( a) of the Act,
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
29
( 2025:HHC:29189 )
the court shall presume a negotiable instrument to be for
consideration unless and until after considering the
matter before it, it either believes that the consideration
does not exist or considers the non-existence of the con-
sideration so probable that a prudent man ought, under
.
the circumstances of the particular case, to act upon the
supposition that the consideration does not exist. For re-
butting such a presumption, what is needed is to raise a
probable defence. Even for the said purpose, the evidence
adduced on behalf of the complainant could be relied
upon.”
26. It was laid down by Hon’ble Supreme 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 as under:
“118. Presumptions as to negotiable
instruments. –Until the contrary is proved, thefollowing 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;
***
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
30
( 2025:HHC:29189 )
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 was 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 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 the cheque to rebut
the presumption that the cheque was issued not for the
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 of any amountof 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, either because 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
that account by an agreement made with that
bank, such person shall be deemed to have
committed an offence and shall, …”
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
31
( 2025:HHC:29189 )
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.
To rebut the statutory presumptions, an
accused is not expected to prove his defence
beyond a reasonable doubt, as is expected of the
r 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 .
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
32
( 2025:HHC:29189 )
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 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 examine the 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
agreement with the respondent claimant
that the presumption mandated by Section
139 of the Act does indeed include the::: Downloaded on – 28/08/2025 21:27:48 :::CIS
33
( 2025:HHC:29189 )existence of a legally enforceable debt or
liability. To that extent, the impugned
observations in Krishna Janardhan
Bhat [Krishna Janardhan Bhat 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 the decision in that case since
it was based on the specific facts and
circumstances therein. As noted in the
citations, 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 legally enforceable 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 the course
of litigation. However, it must be
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 and interpretation of reverse
onus clauses, and the defendant-accused
cannot be expected to discharge an unduly
high standard of proof.”
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
34
( 2025:HHC:29189 )
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 the
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 fact. 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 a reasonable doubt. The
r 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 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.
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
35
( 2025:HHC:29189 )
***
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 the 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 appellant-accused to establish
a probable defence so as to rebut such a
presumption.
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
36
( 2025:HHC:29189 )
***
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….
r ***
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.”
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
37
( 2025:HHC:29189 )
“20. The Trial Court and the High Court proceeded
as if the appellant were to prove a debt before a
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. 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 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.”
27. 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 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
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
38
( 2025:HHC:29189 )
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 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.
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
39
( 2025:HHC:29189 )
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
presumption and to establish a probable defence
whereby, the onus would again shift to the
complainant?
28. 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 hiscase on the basis of evidence by giving the details of the
bank account as well as the date and time of the
withdrawal of the said amount which was given to theaccused and also the date and time of the payment made
to the accused, including the date and time of receivingof 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 is alleged 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 the
complainant 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 categorically
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
40
( 2025:HHC:29189 )
stated 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 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:
r ‘8. From the order impugned, it is clear that
though the contention of the petitioners was
that the said amounts were given for producing
a film and were not by way of return of any loan
taken, which may have been a probable defencefor the petitioners in the case, but rightly, the
High Court has taken the view that evidence had
to be adduced on this point which has not beendone by the petitioners. Pausing here, the Court
would only comment that the reasoning of theHigh Court, as well as the First Appellate Court
and Trial Court, on this issue is sound. Just by
taking a counter-stand to raise a probabledefence 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 of the 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 claim for the
reason that the cheques having being issued and::: Downloaded on – 28/08/2025 21:27:48 :::CIS
41
( 2025:HHC:29189 )signed by the petitioners has not been denied,
and no evidence has been led to show that the
respondent lacked capacity to provide the
amount(s) in question. In this regard, 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. Atthe time, when the complainant gives his
evidence, unless a case is set up in the reply
notice to the statutory notice sent, that thecomplainant did not have the wherewithal, it
cannot be expected of the complainant to
initially lead evidence to show that he had
the financial capacity. To that extent, the
courts in our view were right in holding onthose lines. However, the accused has the
right to demonstrate that the complainant in
a particular case did not have the capacityand therefore, the case of the accused is
acceptable, which he can do by producingindependent materials, namely, by
examining his witnesses and producing
documents. It is also open to him to establishthe very same aspect by pointing to the
materials produced by the complainant
himself. He can further, more importantly,
further 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, in the
given case, the accused has shown that the
case of the complainant is in peril for the::: Downloaded on – 28/08/2025 21:27:48 :::CIS
42
( 2025:HHC:29189 )reason that the accused has established a
probable defence.’
(emphasis supplied)’
(underlining in original; emphasis supplied by
us in bold).
29. Thus, the case of the complainant will not become
suspect simply because the statement of account was not
produced.
30. There is no other evidence to rebut the presumption
attached to the cheque.
The accused did not dispute in his
statement recorded under Section 313 of Cr. P.C. that he had
taken the loan from the complainant; thus, he acknowledged
the existence of liability. Once the accused admitted the taking
of loan, the burden was upon him to show that he had refunded
the same, and in the absence of the same, the plea of the
complainant, duly supported by the issuance of a cheque, was to
be accepted as correct that the cheque was issued in discharge
of the liability.
31. Vipul Negi stated that the cheque was dishonoured
with an endorsement “insufficient funds”. He filed the memo
of dishonour (Ex. C3/CW1) to establish this fact. The memo
shows that the cheque was dishonoured with the endorsement
“insufficient funds”. It was laid down by the Hon’ble Supreme
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
43
( 2025:HHC:29189 )
Court in Mandvi Cooperative Bank Ltd. v. Nimesh B. Thakore ,
(2010) 3 SCC 83: (2010) 1 SCC (Civ) 625: (2010) 2 SCC (Cri) 1:
2010 SCC OnLine SC 155 that the memo issued by the Bank is
.
presumed to be correct and the burden is upon the accused to
rebut the presumption. It was observed at page 95:
24. Section 146, making a major departure from the
principles of the Evidence Act, provides that the bank’s
slip or memo with the official mark showing that thecheque was dishonoured would, by itself, give rise to the
presumption of dishonour of the cheque, unless and until
that fact was disproved. Section 147 makes the offences
punishable under the Act compoundable.
32. In the present case, no evidence was produced to
rebut the presumption, and the learned Courts below had
rightly held that the cheque was dishonoured with an
endorsement ‘insufficient funds’.
33. Vipul Negi (CW1) stated that notice (Ex. C4/CW1) was
issued to the accused. He has proved the postal receipt
(Ex.C5/CW1). The notice was sent to the correct address and is
deemed to be served under Section 27 of the General Clauses
Act. The burden was upon the accused to establish that the
notice was not served upon him. However, he did not step into
the witness box to rebut the presumption. Thus, the plea of the
complainant that the notice was served upon the accused has to
be accepted as correct.
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
44
( 2025:HHC:29189 )
34. In any case, it was laid down in C.C. Alavi Haji vs.
Palapetty Muhammed and another (2006) 6 SCC 555 that the
person who claims that he had not received the notice has to
.
pay the amount within 15 days from the date of the receipt of
the summons from the Court and in case of failure to do so, he
cannot take the advantage of the fact that notice was not
received by him. It was observed:
“It is also to be borne in mind that the requirement of
giving notice is a clear departure from the rule of
Criminal Law, where there is no stipulation of givingnotice before filing a complaint. Any drawer who claims
that he did not receive the notice sent by post, can,
within 15 days of receipt of summons from the court in
respect of the complaint under Section 138 of the Act,
make payment of the cheque amount and submit to theCourt that he had made payment within 15 days of
receipt of summons (by receiving a copy of the complaint
with the summons) and, therefore, the complaint isliable to be rejected. A person who does not pay within 15
days of receipt of the summons from the Court alongwith the copy of the complaint under Section 138 of the
Act, cannot obviously contend that there was no proper
service of notice as required under Section 138, byignoring statutory presumption to the contrary under
Section 27 of the G.C. Act and Section 114 of the Evidence
Act. In our view, any other interpretation of the proviso
would defeat the very object of the legislation. As
observed in Bhaskaran‘s case (supra), if the giving of
notice in the context of Clause (b) of the proviso was the
same as the receipt of notice, a trickster cheque drawer
would get the premium to avoid receiving the notice by
adopting different strategies and escape from legal
consequences of Section 138 of the Act.” (Emphasis
supplied)::: Downloaded on – 28/08/2025 21:27:48 :::CIS
45
( 2025:HHC:29189 )
35. In the present case, the accused had not paid the
money mentioned in the cheque within 15 days of his
appearance in the Court. Therefore, the plea taken by him that
.
notice was not served upon him will not help him.
36. Learned Trial Court sentenced the accused to
undergo simple imprisonment for four months and pay a fine of
₹3,50,000/-. 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 the NI Act are deterrent in
nature. It was observed at page 203:
“6. The object of Section 138 of the Negotiable
Instruments Act is to infuse credibility into negotiable
instruments, including cheques, and to encourage andpromote the use of negotiable instruments, including
cheques, in financial transactions. The penal provision ofSection 138 of the Negotiable Instruments Act is intended
to be a deterrent to callous issuance of negotiable
instruments such as cheques without serious intention tohonour the promise implicit in the issuance of the same.”
37. Keeping in view the deterrent nature of the sentence
to be awarded, the sentence of six months’ imprisonment
cannot be said to be excessive.
38. The cheque was issued for an amount of ₹3,50,000/.
Learned Trial Court imposed a fine of ₹3,50,000/- and did not
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
46
( 2025:HHC:29189 )
award any compensation. It was laid down by the Hon’ble
Supreme Court in Kalamani Tex v. P. Balasubramanian, (2021) 5
SCC 283: (2021) 3 SCC (Civ) 25: (2021) 2 SCC (Cri) 555: 2021 SCC
.
OnLine SC 75 that the Courts should uniformly levy a fine up to
twice the cheque amount along with simple interest at the rate
of 9% per annum. It was observed at page 291: –
19. As regards the claim of compensation raised on
behalf of the respondent, we are conscious of the settled
principles that the object of Chapter XVII of NIA is not
only punitive but also compensatory and restitutive. The
provisions of NIA envision a single window for criminalliability 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 shoulduniformly 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) 1SCC (Cri) 520]”
39. Therefore, the fine imposed by the learned Trial
Court is grossly inadequate. However, in the absence of any
appeal for enhancement, it is not possible to interfere with the
fine imposed by the learned Trial Court.
40. No other point was urged.
41. In view of the above, there is no infirmity in the
judgments and order passed by the learned Courts below, and
no inference is required with them. Hence, the present revision
::: Downloaded on – 28/08/2025 21:27:48 :::CIS
47
( 2025:HHC:29189 )
fails and the same is dismissed, so also the pending
miscellaneous application(s), if any.
(Rakesh Kainthla)
.
Judge
28 August 2025.
(yogesh)
r to
::: Downloaded on - 28/08/2025 21:27:48 :::CIS
[ad_1]
Source link