Himachal Pradesh High Court
Gopal Singh vs Hira Lal (Since Deceased) Through Lrs on 10 April, 2025
Neutral Citation No. ( 2025:HHC:10019 )
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No. 243 of 2023
Reserved on: 10.03.2025
Date of Decision: 10.04.2025
Gopal Singh …Petitioner
Versus
Hira Lal (since deceased) through LRs …Respondents
Coram
Hon’ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 No
For the Petitioner : M/s B.L. Soni and Aman Parth
Sharma, Advocates.
For the Respondent : M/s Balwant Singh Thakur and
Anchal Sharma, Advocates.
Rakesh Kainthla, Judge
The present revision is directed against the judgment
dated 21.04.2023, passed by learned Additional Sessions Judge
Kullu, District Kullu, vide which the judgment and order passed
by learned Judicial Magistrate, First Class, Banjar, District Kullu
(learned Trial Court) were upheld. (Parties shall hereinafter be
1
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
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Neutral Citation No. ( 2025:HHC:10019 )
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 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 and the accused were
known to each other. The accused borrowed a sum of
₹6,50,000/- from the complainant. The accused issued a cheque
of ₹ 6,50,000/- drawn on the State Bank of India,Banjar to
discharge his liability. The complainant presented the cheque
before 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. The registered A.D. containing the
notice was received unclaimed. The accused is deemed to be
served. He failed to pay the amount despite the deemed service;
hence, the complaint was filed to take action against the accused
as per the law.
3. The learned Trial Court found sufficient reasons to
summon the accused. When the accused appeared, notice of
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Neutral Citation No. ( 2025:HHC:10019 )
accusation was put to him for the commission of an offence
punishable under Section 138 of the NI Act. The accused pleaded
not guilty and claimed to be tried.
4. The complainant examined himself (CW1).
5. The accused in his statement recorded under Section
313 of Cr.P.C. admitted that he was known to the accused. He
stated that there was a business transaction between him and the
complainant. They used to hand over cheques to each other. He
was not aware how the cheque reached the hands of the
complainant in the present case. No evidence was produced
despite having been granted sufficient opportunities; hence, the
evidence was closed by the order of the Court on 12.10.2021.
6. Learned Trial Court held that the issuance of the
cheque was not disputed. There is a presumption that the cheque
was issued in discharge of the legal liability for valid
consideration. The accused failed to rebut the presumption on
the balance of probability. The cheque was dishonoured with an
endorsement ‘funds insufficient’. Notice was sent to the accused
and is deemed to be served. He failed to pay the amount despite
the deemed receipt of the notice. Hence, the accused was
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Neutral Citation No. ( 2025:HHC:10019 )
convicted of the commission of an offence punishable under
Section 138 of the NI Act and was sentenced to undergo simple
imprisonment for two months and to pay a compensation of
₹8,00,000/-
7. Being aggrieved by the judgment and order passed by
learned Trial Court, the accused filed an appeal, which was
decided by learned Additional Sessions Judge, Kullu (learned
Appellate Court). An application under Section 311 of Cr.P.C. was
filed before the learned Appellate Court for summoning the
additional evidence. Learned Appellate Court held that sufficient
opportunities were granted to the accused to lead the evidence,
and the plea taken in the application under Section 311 of Cr.P.C.
that sufficient opportunities were not granted to the complainant
is not correct. The learned Trial Court had rightly held that the
cheque was issued in discharge of the legal liability, and the
accused had failed to rebut the presumption contained in Section
139 of the NI Act. The cheque was dishonoured with an
endorsement ‘funds insufficient’. The accused failed to pay the
amount despite the deemed service of the notice, therefore, he
was rightly convicted and sentenced by the learned Trial Court.
Consequently, the appeal was dismissed.
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Neutral Citation No. ( 2025:HHC:10019 )
8. Being aggrieved by the judgment passed by learned
Courts below, the accused has filed the present revision,
asserting that the learned Courts below failed to appreciate that
notice was never served upon the accused; hence, the essential
ingredient to establish the offence punishable under Section 138
of the NI Act was not satisfied. The evidence was not appreciated
in its proper perspective. The accused asserted that he and the
complainant intended to start a garments business jointly, and
the cheques were issued to the complainant to establish the
business. The cheque was not issued to discharge any legal
liability. Learned Judicial Magistrate, First Class did not provide
sufficient opportunity to lead the evidence. Learned Appellate
Court wrongly dismissed the application filed under Section 311
of Cr.P.C.; hence, it was prayed that the present revision be
allowed and the Judgments and order passed by learned Courts
below be set aside.
9. I have heard Mr. B.L. Soni and Mr. Aman Parth
Sharma, learned counsel for the petitioner/accused, and Mr.
Balwant Singh Thakur and Ms. Anchal, learned counsel for the
legal heir of the original complainant.
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Neutral Citation No. ( 2025:HHC:10019 )
10. Mr. B.L. Soni, learned counsel for the
petitioner/accused, submitted that the learned Trial Court erred
in convicting and sentencing the accused. The notice was not
served upon the accused, and the essential ingredient of Section
138 of the NI Act was not satisfied. Learned Trial Court erred in
not providing sufficient opportunity to the accused to lead the
evidence, and learned Appellate Court erred in dismissing the
application under Section 311 of Cr.P.C., therefore, he prayed that
the present revision be allowed and the judgments and order
passed by learned Courts below be set aside. He relied upon the
judgment of this Court in Baljit Singh Vs M/s Rangar Breweries
Limited, 2024 (1) Shimla Law Cases 64, Rajinder Prasad versus
Narcotic Cell 1999 (6) SCC 110 and Raja Ram Prasad Yadav versus
State of Bihar, 2013 (14) SCC 461 in support of his submission.
11. Mr. Balwant Singh Thakur, learned counsel for the
respondent-legal heirs of the original complainant, submitted
that the learned Trial Court had granted sufficient opportunities
to the petitioner/accused to lead the evidence, but the accused
had failed to produce the evidence. He filed an application under
Section 311 of Cr.P.C., which was not maintainable. The
application should have been filed under Section 391 of Cr.P.C.;
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Neutral Citation No. ( 2025:HHC:10019 )
therefore, he prayed that the present petition be dismissed. He
relied upon the judgments in Vijay Kumar versus State of UP, 2011
(8) SCC 136, Manju Devi versus State of Rajasthan, 2019 (6) SCC 203
and Swapan Kumar Chatterjee versus State of UP, 2019 (14) SCC 328
in support of his submission.
12. I have given considerable thought to the submissions
made at the bar and have gone through the records carefully.
13. It was laid down by the Hon’ble Supreme Court in
Malkeet Singh Gill v. State of Chhattisgarh, (2022) 8 SCC 204:
(2022) 3 SCC (Cri) 348: 2022 SCC OnLine SC 786 that the revisional
court is not an appellate court and it can only rectify the patent
defect, errors of jurisdiction or the law. It was observed on page
207: –
“10. Before adverting to the merits of the contentions, at
the outset, it is apt to mention that there are concurrent
findings of conviction arrived at by two courts after a
detailed appreciation of the material and evidence brought
on record. The High Court in criminal revision against
conviction is not supposed to exercise the jurisdiction like
the appellate court, and the scope of interference in
revision is extremely narrow. Section 397 of the Criminal
Procedure Code (in short “CrPC“) vests jurisdiction to
satisfy itself or himself as to the correctness, legality or
propriety of any finding, sentence 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
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Neutral Citation No. ( 2025:HHC:10019 )patent defect or an error of jurisdiction or law. There has
to be a well-founded error which is to be determined on
the merits of individual cases. It is also well settled that
while considering the same, the Revisional Court does not
dwell at length upon the facts and evidence of the case to
reverse those findings.
14. This position was reiterated in State of Gujarat v.
Dilipsinh Kishorsinh Rao, 2023 SCC OnLine SC 1294, wherein it was
observed:
“13. The power and jurisdiction of the Higher Court under
Section 397 Cr. P.C., which vests the court with the power
to call for and examine records of an inferior court, is for
the purposes of satisfying itself as to the legality and
regularity of any proceeding or order made in a case. The
object of this provision is to set right a patent defect or an
error of jurisdiction or law or the perversity which has
crept into such proceedings. It would be apposite to refer
to the judgment of this court in Amit Kapoor v. Ramesh
Chandra, (2012) 9 SCC 460, where the scope of Section 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. There has to be a well-founded error, and it
may not be appropriate for the court to scrutinise the
orders, which, upon the face of it, bear a token of
careful consideration and appear to be in accordance
with the law. If one looks into the various judgments
of this Court, it emerges that the revisional
jurisdiction can be invoked where the decisions
under challenge are grossly erroneous, there is no
compliance with the provisions of law, the finding
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Neutral Citation No. ( 2025:HHC:10019 )recorded is based on no evidence, material evidence
is ignored or judicial discretion is exercised
arbitrarily or perversely. These are not exhaustive
classes but are merely indicative. Each case would
have to be determined on its own merits.
13. Another well-accepted norm is that the revisional
jurisdiction of the higher court is a very limited one and
cannot be exercised in a routine manner. One of the inbuilt
restrictions is that it should not be against an interim or
interlocutory order. The Court has to keep in mind that the
exercise of revisional jurisdiction itself should not lead to
injustice ex facie. Where the Court is dealing with the
question as to whether the charge has been framed
properly and in accordance with law in a given case, it may
be reluctant to interfere in the exercise of its revisional
jurisdiction unless the case substantially falls within the
categories aforestated. Even framing of charge is a much-
advanced stage in the proceedings under the CrPC.”
15. The present revision has to be decided as per the
parameters laid down by the Hon’ble Supreme Court.
16. It was asserted that the learned Trial Court had not
granted sufficient opportunity to the accused to lead the
evidence. This is not correct. A perusal of the record of the
learned Trial Court shows that the statement of the accused
under Section 313 of Cr.P.C. was recorded on 13.03.2019. The
matter was listed for defence evidence on 05.04.2019. No
evidence was produced on that day. The matter was again listed
for the defence evidence on 04.08.2022. No evidence was
produced, and the matter was adjourned for 12.10.2022. No
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Neutral Citation No. ( 2025:HHC:10019 )
evidence was produced on that day as well; hence, the evidence
was closed by the order of the Court. The record shows that
sufficient opportunities were granted by the learned Trial Court
and the accused had failed to produce the evidence, assign any
reasonable cause for not producing the evidence or to take any
steps for summoning the witnesses; hence, learned Trial Court
cannot be faulted for closing the evidence of the accused by the
order of the Court.
17. The accused filed an application under Section 311 of
Cr.P.C. before the learned Additional Sessions Judge on the
ground that sufficient opportunities were not granted to him to
lead the evidence. He wanted to examine Prashant Sharma, Budhi
Singh, Anu and Maheshwar to prove that the cheque was issued
in favour of the complainant towards the joint liability of the
business. Learned Trial Court had not granted sufficient
opportunity and therefore, it was prayed that the opportunity be
granted to lead the evidence.
18. Learned Appellate Court dismissed the application
after noticing that sufficient opportunities were granted to the
petitioner to lead the evidence.
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19. It was submitted that the learned Appellate Court had
erred in dismissing the application. The Court should receive the
relevant evidence, and a person should not be penalized for his
lapses. It was rightly submitted on behalf of the accused that the
application should have been filed under Section 391 of the CrPC
and not under Section 311 of the CrPC. It was laid down by the
Hon’ble Supreme Court in State of Rajasthan v. Asharam, 2023 SCC
OnLine SC 423, that Sections 311 and 391 of Cr.P.C. deal with the
power of the Court to take additional evidence. Section 311 deals
with the trial, while Section 391 deals with the appeal. The
Appellate Court can examine the evidence, but it does not possess
the wide powers conferred upon the Trial Court. It was observed:
“6. Both Sections 311 and 391 of the Cr. P.C. relate to the
power of the court to take additional evidence; the former
at the stage of trial and before the judgment is
pronounced; and the latter at the appellate stage after
judgment by the trial court has been pronounced. It may
not be totally correct to state that the same considerations
would apply to both situations, as there is a difference in
the stages. Section 311 of the Cr. P.C. consists of two parts;
the first gives power to the court to summon any witness
at any stage of inquiry, trial or other proceedings, whether
the person is listed as a witness, or is in attendance though
not summoned as a witness. Secondly, the trial court has
the power to recall and re-examine any person already
examined if his evidence appears to be essential to the just
decision of the case. On the other hand, the discretion
under Section 391 of the Cr. P.C. should be read as
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Neutral Citation No. ( 2025:HHC:10019 )somewhat more restricted in comparison to Section 311 of
the Cr. P.C., as the appellate court is dealing with an
appeal, after the trial court has come to a conclusion with
regard to the guilt or otherwise of the person being
prosecuted. The appellate court can examine the evidence
in depth and detail, yet it does not possess all the powers
of the trial court, as it deals with cases wherein the
decision has already been pronounced.”
20. It was laid down in Sukhjeet Singh v. State of U.P.,
(2019) 16 SCC 712: (2020) 2 SCC (Cri) 434: 2019 SCC OnLine SC 72,
that the additional evidence can be taken by the Appellate Court if
the evidence is necessary for just determination of the case,
however, Section 391 cannot be used for retrial. The order should
not be made if the party had sufficient opportunities and had not
availed it. It was observed at page 721:
“22. Chapter XXIX of the Code of Criminal Procedure, 1973
deals with “Appeals”. Section 391 CrPC empowers the
appellate court to take further evidence or direct it to be
taken. Section 391 is as follows:
“391. Appellate court may take further evidence or
direct it to be taken.–(1) In dealing with any appeal
under this Chapter, the appellate court, if it thinks
additional evidence to be necessary, shall record its
reasons and may either take such evidence itself, or
direct it to be taken by a Magistrate, or when the
appellate court is a High Court, by a Court of Session
or a Magistrate.
(2) When the additional evidence is taken by the
Court of Session or the Magistrate, it or he shall
certify such evidence to the appellate court, and such
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Neutral Citation No. ( 2025:HHC:10019 )court shall thereupon proceed to dispose of the
appeal.
(3) The accused or his pleader shall have the right to
be present when the additional evidence is taken.
(4) The taking of evidence under this section shall be
subject to the provisions of Chapter XXIII, as if it
were an inquiry.”
23. The key words in Section 391(1) are “if it thinks
additional evidence to be necessary”. The word
“necessary” used in Section 391(1) is to mean necessary
for deciding the appeal. The appeal has been filed by the
accused, who have been convicted. The powers of the
appellate court are contained in Section 386. In an appeal
from a conviction, an appellate court can exercise power
under Section 386(b), which is to the following effect:
“386. (b) In an appeal from a conviction–
(i) reverse the finding and sentence and acquit or
discharge the accused, or order him to be re-tried by
a court of competent jurisdiction subordinate to such
appellate court or committed for trial, or
(ii) alter the finding, maintaining the sentence, or
(iii) with or without altering the finding, alter the
nature or the extent, or the nature and extent, of the
sentence, but not so as to enhance the same;”
24. Power to take additional evidence under Section 391 is,
thus, with an object to appropriately decide the appeal by
the appellate court to secure ends of justice. The scope and
ambit of Section 391 CrPC has come up for consideration
before this Court in Rajeswar Prasad Misra v. State of
W.B. [Rajeswar Prasad Misra v. State of W.B., AIR 1965 SC
1887: (1965) 2 Cri LJ 817] Hidayatullah, J., speaking for the
Bench held that a wide discretion is conferred on the
appellate courts and the additional evidence may be
necessary for a variety of reasons. He held that additional
evidence must be necessary not because it would be
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Neutral Citation No. ( 2025:HHC:10019 )
impossible to pronounce judgment but because there would
be a failure of justice without it. The following was laid down
in paras 8 and 9: (AIR p. 1892)
“8. … Since a wide discretion is conferred on
appellate courts, the limits of that court’s
jurisdiction must obviously be dictated by the
exigency of the situation and fair play and good
sense appear to be the only safe guides. There is, no
doubt, some analogy between the power to order a
retrial and the power to take additional evidence.
The former is an extreme step appropriately taken if
additional evidence will not suffice. Both actions
subsume failure of justice as a condition precedent.
There, the resemblance ends, and it is hardly proper
to construe one section with the aid of observations
made by this Court in the interpretation of the other
section.
9. Additional evidence may be necessary for a variety
of reasons, which it is hardly necessary (even if it
was possible) to list here. We do not propose to do
what the legislature has refrained from doing,
namely, to control the discretion of the appellate
court under certain stated circumstances. It may,
however, be said that additional evidence must be
necessary not because it would be impossible to
pronounce judgment but because there would be a
failure of justice without it. The power must be
exercised sparingly and only in suitable cases. Once
such action is justified, there is no restriction on the
kind of evidence which may be received. It may be
formal or substantial. It must, of course, not be
received in such a way as to cause prejudice to the
accused, as, for example, it should not be received as
a disguise for a retrial or to change the nature of the
case against him. The order must not ordinarily be
made if the prosecution has had a fair opportunity
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Neutral Citation No. ( 2025:HHC:10019 )
and has not availed of it unless the requirements of
justice dictate otherwise.”
25. This Court again in Rambhau v. State of
Maharashtra [Rambhau v. State of Maharashtra, (2001) 4
SCC 759: 2001 SCC (Cri) 812] had noted the power under
Section 391 CrPC of the appellate court. Following was
stated in paras 1 and 2 : (SCC p. 761)
“1. There is available a very wide discretion available
in the matter of obtaining additional evidence in
terms of Section 391 of the Code of Criminal
Procedure. A plain look at the statutory provisions
(Section 391) would reveal the same…
2. A word of caution, however, ought to be
introduced for guidance, to wit: that this additional
evidence cannot and ought not to be received in such
a way so as to cause any prejudice to the accused. It is
not a disguise for a retrial or to change the nature of
the case against the accused. This Court in Rajeswar
Prasad Misra v. State of W.B. [Rajeswar Prasad
Misra v. State of W.B., AIR 1965 SC 1887: (1965) 2 Cri LJ
817] in no uncertain terms observed that the order
must not ordinarily be made if the prosecution has had a
fair opportunity and has not availed of it. This Court
was candid enough to record, however, that it is the
concept of justice which ought to prevail, and in the
event, the same dictates exercise of power as
conferred by the Code, there ought not to be any
hesitation in that regard.”
26. From the law laid down by this Court as noted above, it
is clear that there are no fetters on the power under
Section 391 CrPC of the appellate court. All powers are
conferred on the court to secure the ends of justice. The
ultimate object of judicial administration is to secure the
ends of justice. The court exists for rendering justice to the
people.” (Emphasis supplied)
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Neutral Citation No. ( 2025:HHC:10019 )
21. This position was reiterated in State (NCT of Delhi) v.
Pankaj Chaudhary, (2019) 11 SCC 575: (2019) 4 SCC (Cri) 264: 2018
SCC OnLine SC 2256, and it was held that this power should not be
exercised to fill up the gaps by the other side and especially to
reverse the judgment of learned Trial Court. It was observed at
page 586:
“25. The High Court observed that the trial court erred in
saying that the accused failed to prove the making of
previous complaints against the prosecutrix. While saying
so, the High Court referred to certain complaints made
against the prosecutrix, including the one allegedly given
on 21-7-1997, which were produced by the Bar at the time
of arguments. The power conferred under Section 391 CrPC
is to be exercised with great care and caution. In dealing
with any appeal, the appellate court can refer to the
additional evidence only if the same has been recorded as
provided under Section 391 CrPC. Any material produced
before the appellate court to fill in the gaps by either side
cannot be considered by the appellate court; more so, to
reverse the judgment of the trial court.”
22. Similarly, it was held in H.N. Jagadeesh v. R.
Rajeshwari, (2019) 16 SCC 730: (2020) 2 SCC (Cri) 450 : (2020) 2
SCC (Civ) 758: 2017 SCC OnLine SC 1813, that where the
complainant had failed to produce the notice before the learned
Trial Court, he could not be permitted to lead the evidence before
the learned Appellate Court to prove it. It was observed at page
731:
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Neutral Citation No. ( 2025:HHC:10019 )“6. We are unable to agree with this approach of the High
Court, in the facts of this case, which is inappropriate in
law. The service of the statutory notice calling upon the
drawer of the cheque (after it has been disowned) to pay
the amount of the cheque is a necessary precondition for
filing the complaint under Section 138 of the Act.
Therefore, it was incumbent upon the respondent to
produce the said statutory notice on record to prove the
same as well. In this case, this document was not even filed
by the respondent along with the complaint, and the
question of proving the same was, therefore, a far cry. In a
case like this, we fail to understand how the aforesaid
omission on the part of the respondent in not prosecuting
the complaint properly could be ignored, and another
chance could have been given to the respondent to prove
the case by producing further evidence. It clearly amounts
to giving an opportunity to the respondent to fill up the
lacuna.”
23. It was laid down in Rajvinder Singh v. State of Haryana,
(2016) 14 SCC 671: (2016) 4 SCC (Cri) 421: 2015 SCC OnLine SC 971
that where it was possible to examine the Forensic Expert at the
trial stage, an application to examine him at the appellate stage
cannot be allowed. It was observed at page 677
“12. At the outset, we must deal with submissions as
regards the application for leading additional evidence at
the appellate stage. It has been the consistent defence of
the appellant that the dead body found in agricultural
fields in District Muzaffarnagar was that of Pushpa Verma,
and he went to the extent of producing a photograph of the
dead body in the present trial. He also examined Brahm Pal
Singh, Sub-Inspector and other witnesses. It was certainly
possible to examine a forensic expert at the trial court
stage itself, and the High Court was right and justified in
rejecting the prayer to lead additional evidence at the
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Neutral Citation No. ( 2025:HHC:10019 )
appellate stage. Nonetheless, we have gone through the
report of the said forensic expert engaged by the appellant.
The exercise undertaken by that expert is to start with the
admitted photograph of Pushpa Verma on a computer,
then remove the “bindi” by some process on the
computer, then by same process remove her spectacles and
by computer imaging change the image as it would have
looked if the lady was lying down in an injured condition.
The computer image so changed was then compared with
the photograph of the dead body. We have seen both the
images, and we are not convinced at all about any element
of similarity. We do not, therefore, see any reason to differ
from the view taken by the High Court.”
24. It was held in Ajitsinh Chehuji Rathod v. State of
Gujarat, (2024) 4 SCC 453: 2024 SCC OnLine SC 77, that the power
under Section 391 of Cr.P.C. can be exercised when the party was
prevented from presenting the evidence despite the exercise of
due diligence or the facts giving rise to such prayer came to light
during the pendency of the appeal. It was observed at page 455:
“8. At the outset, we may note that the law is well-settled
by a catena of judgments rendered by this Court that power
to record additional evidence under Section 391CrPC
should only be exercised when the party making such
request was prevented from presenting the evidence in the
trial despite due diligence being exercised or that the facts
giving rise to such prayer came to light at a later stage
during pendency of the appeal and that non-recording of
such evidence may lead to failure of justice.”
25. In the present case, the application does not mention
that the applicant was prevented from leading the evidence
before the learned Trial Court despite the exercise of due
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diligence or the evidence came to the notice of the accused during
the pendency of the appeal rather it was asserted that the accused
and complainant had entered into a business transaction and
cheques were handed over as part of the business between the
parties. This fact was anterior to the filing of the complaint, and
such evidence could have been led before the learned Trial Court.
Therefore, the learned Appellate Court was justified in dismissing
the application for leading additional evidence, and the plea that
the application was wrongly dismissed cannot be accepted. The
Judgments cited at the bar deal with the scope of Section 311 of
Cr.P.C. and are not relevant as this court is concerned with
Section 391 of Cr.P.C. which is different from Section 311 Cr.P.C.
26. The accused has not disputed the issuance of the
cheque in his statement recorded under Section 313 of Cr.P.C. or
in the application filed for leading additional evidence. He
asserted that the cheque was issued regarding some business
transaction between the complainant and him. Learned Courts
below had rightly held that once the execution of the cheque was
admitted, a presumption under Section 118 and Section 139 of the
NI Act would arise. It was laid down by this Court in Naresh Verma
vs. Narinder Chauhan 2020(1) Shim. L.C. 398 that where the
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accused had not disputed his signatures on the cheque, the Court
has to presume that it was issued in discharge of legal liability
and the burden would shift upon the accused to rebut the
presumption. It was observed: –
“8. Once signatures on the cheque are not disputed, the
plea with regard to the cheque having not been issued
towards discharge of lawful liability, rightly came to be
rejected by learned Courts below. Reliance is placed upon
Hiten P. Dalal v. Bartender Nath Bannerji, 2001 (6) SCC 16,
wherein it has been held as under:
“The words ‘unless the contrary is proved’ which
occur in this provision make it clear that the
presumption has to be rebutted by ‘proof’ and not by
a bare explanation which is merely plausible. A fact
is said to be proved when its existence is directly
established or when, upon the material before it, the
Court finds its existence to be so probable that a
reasonable man would act on the supposition that it
exists. Unless, therefore, the explanation is
supported by proof, the presumption created by the
provision cannot be said to be rebutted……”
9. S.139 of the Act provides that it shall be presumed,
unless the contrary is proved, that the 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.
27. Similar is the judgment in Basalingappa vs.
Mudibasappa 2019 (5) SCC 418 wherein it was held:
“26. Applying the proposition of law as noted above, in the
facts of the present case, it is clear that the signature on
the cheque, having been admitted, a presumption shall be
raised under Section 139 that the cheque was issued in
P a g e | 21
Neutral Citation No. ( 2025:HHC:10019 )discharge of debt or liability.”
28. This position was reiterated in Kalamani Tex v. P.
Balasubramanian, (2021) 5 SCC 283: (2021) 3 SCC (Civ) 25: (2021) 2
SCC (Cri) 555: 2021 SCC OnLine SC 75 wherein it was held at page
289:
“14. Once the 2nd appellant had admitted his signatures
on the cheque and the deed, the trial court ought to have
presumed that the cheque was issued as consideration for
a legally enforceable debt. The trial court fell in error when
it called upon the respondent complainant to explain the
circumstances under which the appellants were liable to
pay. Such an approach of the trial court was directly in the
teeth of the established legal position as discussed above,
and amounts to a patent error of law.”
29. Similar is the judgment in APS Forex Services (P) Ltd. v.
Shakti International Fashion Linkers (2020) 12 SCC 724, wherein it
was observed: –
7.2. What is emerging from the material on record is that
the issuance of a cheque by the accused and the signature
of the accused on the said cheque are not disputed by the
accused. The accused has also not disputed that there were
transactions between the parties. Even as per the
statement of the accused, which was recorded at the time
of the framing of the charge, he has admitted that some
amount was due and payable. However, it was the case on
behalf of the accused that the cheque was given by way of
security, and the same has 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
P a g e | 22
Neutral Citation No. ( 2025:HHC:10019 )
earlier the accused issued cheques which came to be
dishonoured on the ground of “insufficient funds” and
thereafter a fresh consolidated cheque of ₹9,55,574 was
given which has been returned unpaid on the ground of
“STOP PAYMENT”. Therefore, the cheque in question was
issued for the second time. Therefore, once the accused
has admitted the issuance of a cheque 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
P a g e | 23
Neutral Citation No. ( 2025:HHC:10019 )
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 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.
30. The presumption under Section 139 of the NI Act was
explained by the Hon’ble Supreme Court in Triyambak S. Hegde v.
Sripad, (2022) 1 SCC 742: (2022) 1 SCC (Civ) 512: 2021 SCC OnLine
SC 788 as under at page 747:
“12. From the facts arising in this case and the nature of
the rival contentions, the record would disclose that the
signature on the documents at Exts. P-6 and P-2 are not
disputed. Ext. P-2 is the dishonoured cheque based on
which the complaint was filed. From the evidence tendered
before the JMFC, it is clear that the respondent has not
disputed the signature on the cheque. If that be the
position, as noted by the courts below, a presumption
would arise under Section 139 in favour of the appellant
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
P a g e | 24
Neutral Citation No. ( 2025:HHC:10019 )
consideration would arise as provided under Section 118(a)
of the NI Act, which reads as hereunder:
“118. Presumptions as to negotiable instruments. —
Until the contrary is proved, the following
presumptions shall be made:
(a) of consideration: that every negotiable
instrument was made or drawn for consideration,
and that every such instrument, when it has been
accepted, indorsed, negotiated or transferred, was
accepted, indorsed, negotiated or transferred for
consideration.”
14. The above-noted provisions are explicit to the effect
that such presumption would remain until the contrary is
proved. The learned counsel for the appellant in that
regard has relied on the decision of this Court in K.
Bhaskaran v. Sankaran Vaidhyan Balan [K.
Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510:
1999 SCC (Cri) 1284] wherein it is held as hereunder: (SCC
pp. 516-17, para 9)
“9. As the signature in the cheque is admitted to be
that of the accused, the presumption envisaged in
Section 118 of the Act can legally be inferred that the
cheque was made or drawn for consideration on the
date which the cheque bears. Section 139 of the Act
enjoins the Court to presume that the holder of the
cheque received it for the discharge of any debt or
liability. The burden was on the accused to rebut 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. Mudibasa
P a g e | 25
Neutral Citation No. ( 2025:HHC:10019 )
ppa, (2019) 5 SCC 418: (2019) 2 SCC (Cri) 571] wherein it is
held as hereunder: (SCC pp. 432-33, paras 25-26)
“25. We having noticed the ratio laid down by this
Court in the above cases on Sections 118(a) and 139,
we now summarise the principles enumerated by
this Court in the following manner:
25.1. Once the execution of the cheque is admitted,
Section 139 of the Act mandates a presumption that
the cheque was for the discharge of any debt or
other liability.
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
P a g e | 26
Neutral Citation No. ( 2025:HHC:10019 )
accused. In the cross-examination of PW 1, when the
specific question was put that a cheque was issued in
relation to a loan of Rs 25,000 taken by the accused,
PW 1 said that he does not remember. PW 1 in his
evidence admitted that he retired in 1997, on which
date he received a monetary benefit of Rs 8 lakhs,
which was encashed by the complainant. It was also
brought in evidence that in the year 2010, the
complainant entered into a sale agreement for
which he paid an amount of Rs 4,50,000 to Balana
Gouda towards sale consideration. Payment of Rs
4,50,000 being admitted in the year 2010 and
further payment of loan of Rs 50,000 with regard to
which Complaint No. 119 of 2012 was filed by the
complainant, a copy of which complaint was also
filed as Ext. D-2, there was a burden on the
complainant to prove his financial capacity. In the
years 2010-2011, as per own case of the
complainant, he made a payment of Rs 18 lakhs.
During his cross-examination, when the financial
capacity to pay Rs 6 lakhs to the accused was
questioned, there was no satisfactory reply given by
the complainant. The evidence on record, thus, is a
probable defence on behalf of the accused, which
shifted the burden on the complainant to prove his
financial capacity and other facts.”
16. In that light, it is contended that the very materials
produced by the appellant and the answers relating to lack
of knowledge of property details by PW 1 in his cross-
examination would indicate that the transaction is
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
P a g e | 27
Neutral Citation No. ( 2025:HHC:10019 )
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.”
31. This position was reiterated in Tedhi Singh v. Narayan
Dass Mahant, (2022) 6 SCC 735: (2022) 2 SCC (Cri) 726: (2022) 3
SCC (Civ) 442: 2022 SCC OnLine SC 302 wherein it was held at page
739:
“8. It is true that this is a case under Section 138 of the
Negotiable Instruments Act. Section 139 of the NI Act
provides that the court shall presume that the holder of a
cheque received the cheque of the nature referred to in
Section 138 for the discharge, in whole or in part, of any
debt or other liability. This presumption, however, is
expressly made subject to the position being proved to the
contrary. In other words, it is open to the accused to
establish that there is no consideration received. It is in
the context of this provision that the theory of “probable
defence” has grown. In an earlier judgment, in fact, which
has also been adverted to in Basalingappa [Basalingappa v.
Mudibasappa, (2019) 5 SCC 418: (2019) 2 SCC (Cri) 571], this
Court notes that Section 139 of the NI Act is an example of
reverse onus (see Rangappa v. Sri Mohan [Rangappa v. Sri
Mohan, (2010) 11 SCC 441: (2010) 4 SCC (Civ) 477: (2011) 1
P a g e | 28
Neutral Citation No. ( 2025:HHC:10019 )SCC (Cri) 184]). It is also true that this Court has found that
the accused is not expected to discharge an unduly high
standard of proof. It is accordingly that the principle has
developed that all which the accused needs to establish is
a probable defence. As to whether a probable defence has
been established is a matter to be decided on the facts of
each case on the conspectus of evidence and
circumstances that exist…”
32. Similar is the judgment in P. Rasiya v. Abdul Nazer,
2022 SCC OnLine SC 1131, wherein it was observed:
“As per Section 139 of the N.I. Act, it shall be presumed,
unless the contrary is proved, that the holder of a cheque
received the cheque of the nature referred to in Section 138
for discharge, in whole or in part, of any debt or other
liability. Therefore, once the initial burden is discharged
by the Complainant that the cheque was issued by the
accused and the signature and the issuance of the cheque
are not disputed by the accused, in that case, the onus will
shift upon the accused to prove the contrary that the
cheque was not for any debt or other liability. The
presumption under Section 139 of the N.I. Act is a statutory
presumption and thereafter, once it is presumed that the
cheque is issued in whole or in part of any debt or other
liability which is in favour of the Complainant/holder of
the cheque, in that case, it is for the accused to prove the
contrary.”
33. 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
P a g e | 29
Neutral Citation No. ( 2025:HHC:10019 )consideration. Section 139 of the Act stipulates that
“unless the contrary is proved, it shall be presumed that
the holder of the cheque received the cheque for the
discharge of, whole or part of any debt or liability”. It will
be seen that the “presumed fact” directly relates to one of
the crucial ingredients necessary to sustain a conviction
under Section 138. [The rules discussed hereinbelow are
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,
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Neutral Citation No. ( 2025:HHC:10019 )
without admitting the execution of the entire contents in
the cheque, is now sufficient to trigger the presumption.
37. As soon as the complainant discharges the burden to
prove that the instrument, say a cheque, was issued by the
accused for discharge of debt, the presumptive device
under Section 139 of the Act helps shifting the burden on
the accused. The effect of the presumption, in that sense,
is to transfer the evidential burden on the accused of
proving that the cheque was not received by the Bank
towards the discharge of any liability. Until this evidential
burden is discharged by the accused, the presumed fact
will have to be taken to be true, without expecting the
complainant to do anything further.
38. John Henry Wigmore [John Henry Wigmore and the Rules of
Evidence: The Hidden Origins of Modern Law] on Evidence states as
follows:
“The peculiar effect of the presumption of law is
merely to invoke a rule of law compelling the Jury to
reach the conclusion in the absence of evidence to
the contrary from the opponent but if the opponent
does offer evidence to the contrary (sufficient to
satisfy the Judge’s requirement of some evidence),
the presumption ‘disappears as a 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]]
34. The complainant denied in his cross-examination
that he had told the accused to start a garment business. He
P a g e | 31
Neutral Citation No. ( 2025:HHC:10019 )
denied that he had agreed to invest ₹15,00,000/- in the business,
and the remaining amount was to be invested by the accused. He
denied that the transaction had taken place in the presence of
Maheshwar and Anu. He denied that he had refused to pay the
remaining amount, and the business could not be started due to
his refusal. He denied that the accused had wound up his business
and could not start a fresh business due to his refusal. He denied
that he was taking advantage of his mistake, and the accused had
suffered a loss in the business.
35. The suggestions made to the complainant regarding
the commencement of the business and the investment made by
the complainant were denied by him in his cross-examination.
Denied suggestions do not amount to any proof, and these are
not sufficient to rebut the presumption.
36. The accused stated in his statement recorded under
Section 313 of Cr.P.C. that he wanted to start a business with the
accused and he had handed over the cheque regarding the
business, however, he did not step into the witness box to
establish this version. It was held in Sumeti Vij v. Paramount Tech
Fab Industries, (2022) 15 SCC 689: 2021 SCC OnLine SC 201 that the
P a g e | 32
Neutral Citation No. ( 2025:HHC:10019 )
accused has to lead defence evidence to rebut the presumption
and mere denial in his statement under Section 313 is not
sufficient to rebut the presumption. It was observed at page 700:
“20. That apart, when the complainant exhibited all these
documents in support of his complaints and recorded the
statement of three witnesses in support thereof, the
appellant has recorded her statement under Section 313 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 is no evidence to
rebut the presumption that the cheques were issued for
consideration.” (Emphasis supplied)”
37. In the present case also, the accused did not appear in
the witness box to establish his plea, nor did he examine any
witness to prove the plea taken by him, therefore, the learned
Courts below had rightly held that the accused had failed to rebut
the presumption.
38. The complainant stated that the cheque was
dishonoured with an endorsement ‘funds insufficient’. He filed
the memo issued by the bank showing that the cheque was
dishonoured with an endorsement of funds insufficient. The
memo issued by the bank carries a presumption of correctness
P a g e | 33
Neutral Citation No. ( 2025:HHC:10019 )
under Section 146 of the Indian Evidence Act. No evidence was led
to rebut this presumption; hence, the learned Trial Court had
rightly held that the second ingredient that the cheque was
dishonoured due to insufficient funds was also established.
39. The notice was sent to the accused but was returned
with an endorsement that the house was locked. The addressee
could not be found despite repeated visits. The registered A.D.
cover bears the same address, which was furnished by him in the
notice of accusation and the statement recorded under Section
313 of Cr. P.C.; hence, the notice was sent to the correct address.
It was laid down by the Hon’ble Supreme Court of India in C.C.
Allavi Haji vs. Pala Pelly Mohd. 2007(6) SCC 555, that when a notice
is returned unclaimed, it is deemed to be served. It was observed:
“8. Since in Bhaskaran‘s case (supra), the notice issued in
terms of Clause (b) had been returned unclaimed and not
as refused, the Court, posed the question: “Will there be
any significant difference between the two so far as the
presumption of service is concerned?” It was observed that
though Section 138 of the Act does not require that the
notice should be given only by “post”, yet in a case where
the sender has dispatched the notice by post with the
correct address written on it, the principle incorporated in
Section 27 of the General Clauses Act, 1897 (for short ‘G.C.
Act‘) could profitably be imported in such a case. It was
held that in this situation service of notice is deemed to
have been effected on the sendee unless he proves that it
P a g e | 34
Neutral Citation No. ( 2025:HHC:10019 )was not really served and that he was not responsible for
such non-service.”
40. This position was reiterated in Priyanka Kumari vs.
Shailendra Kumar (13.10.2023- SC Order): MANU/ SCOR/ 133284/
2023 wherein it was observed:
“As it was held by the Hon’ble Supreme Court in K.
Bhaskaran Vs. Sankaran Vaidhyan Balan and Another, (1999)
7 Supreme Court Cases 510, that when notice is returned as
‘unclaimed’, it shall be deemed to be duly served upon the
addressee, and it is a proper service of notice. In the case of
Ajeet Seeds Limited Vs. K. Gopala Krishnaiah (2014) 12 SCC
685 (2014), the Hon’ble Court, while interpreting Section
27 of the General Clauses Act 1897 and also Section 114 of
the Evidence Act 1872, held as under: –
“Section 114 of the Evidence Act, 1872 enables the
court to presume that in the common course of
natural events, the communication sent by post
would have been delivered at the address of the
addressee. Further, Section 27 of the General Clauses
Act, 1897 gives rise to a presumption that service of
notice has been effected when it is sent to the correct
address by registered post. It is not necessary to aver
in the complaint that in spite of the return of the
notice unserved, it is deemed to have been served or
that the addressee is deemed to have knowledge of
the notice. Unless and until the contrary is proved by
the addressee, service of notice is deemed to have
been effected at the time at which the letter would
have been delivered in the ordinary course of
business.”
41. In the present case, the accused has not proved that he
was not responsible for non-service; therefore, the learned
P a g e | 35
Neutral Citation No. ( 2025:HHC:10019 )
Courts below had rightly held that the notice was duly served
upon the accused.
42. It was laid down in C.C. Allavi Haji vs. Pala Pelly Mohd.
2007(6) SCC 555 that the person who claims that he had not
received the notice has to pay the amount within 15 days from the
date of the receipt of the summons from the Court and in case of
failure to do so, he cannot take the advantage of the fact that
notice was not received by him. It was observed:
“It is also to be borne in mind that the requirement of
giving of notice is a clear departure from the rule of
Criminal Law, where there is no stipulation of giving of
notice before filing a complaint. Any drawer who claims that
he did not receive the notice sent by post, can, within 15 days of
receipt of summons from the court in respect of the complaint
under Section 138 of the Act, make payment of the cheque
amount and submit to the Court that he had made payment
within 15 days of receipt of summons (by receiving a copy of
the complaint with the summons) and, therefore, the
complaint is liable to be rejected. A person who does not pay
within 15 days of receipt of the summons from the Court along
with the copy of the complaint under Section 138 of the Act,
cannot obviously contend that there was no proper service of
notice as required under Section 138, by ignoring statutory
presumption to the contrary under Section 27 of the G.C. Act
and Section 114 of the Evidence Act. In our view, any 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
P a g e | 36
Neutral Citation No. ( 2025:HHC:10019 )legal consequences of Section 138 of the Act.” (Emphasis
supplied)
43. The accused has not paid any money to the
complainant; hence, it was duly proved that the accused had
failed to pay the money despite the deemed receipt of the notice.
44. Therefore, it was duly proved before the learned Trial
Court that the cheque was issued in discharge of legal liability. It
was dishonoured with an endorsement ‘funds insufficient’ and
the accused had failed to pay the amount despite the deemed
receipt of the notice of demand. Hence, the complainant had
proved his case beyond a reasonable doubt, and the learned Trial
Court had rightly convicted him of the commission of an offence
punishable under Section 138 of the NI Act.
45. The learned Trial Court sentenced the accused to
undergo simple imprisonment for two months. It was laid down
by the Hon’ble Supreme Court in Bir Singh v. Mukesh Kumar,
(2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ) 309: 2019
SCC OnLine SC 138 that the penal provisions of Section 138 is a
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
P a g e | 37
Neutral Citation No. ( 2025:HHC:10019 )of negotiable instruments, including cheques, in financial
transactions. The penal provision of Section 138 of the
Negotiable Instruments Act is intended to be a deterrent to
callous issuance of negotiable instruments such as cheques
without serious intention to honour the promise implicit
in the issuance of the same.”
46. Keeping in view the deterrent nature of the sentence
to be awarded, the sentence of two months’ simple
imprisonment cannot be said to be excessive, and no interference
is required with it.
47. Learned Trial Court had ordered the accused to pay a
compensation of ₹8,00,000/-. The cheque was issued on
14.09.2014, whereas the sentence was imposed on 1.12.2022 after
a lapse of nearly eight years. The complainant lost interest on the
amount, and he had to pay the litigation expenses for filing the
complaint. He was entitled to be compensated for the same. It
was laid down by the Hon’ble Supreme Court in Kalamani Tex v. P.
Balasubramanian, (2021) 5 SCC 283: (2021) 3 SCC (Civ) 25: (2021) 2
SCC (Cri) 555: 2021 SCC OnLine SC 75 that the Courts should
uniformly levy a fine up to 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
P a g e | 38
Neutral Citation No. ( 2025:HHC:10019 )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]”
48. Therefore, the amount of ₹1,50,000/- awarded as a
compensation on the cheque amount of ₹6,50,000/- is not
excessive.
49. No other point was urged.
50. In view of the above, the present revision fails and the
same is dismissed.
51. Records of the learned Courts below be sent back
forthwith, along with a copy of this judgment.
(Rakesh Kainthla)
Judge
10th April, 2025
(saurav pathania)
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