Himachal Pradesh High Court
Reserved On: 12.03.2025 vs Salochna Devi on 24 March, 2025
2025:HHC:7449 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Cr. Revision No. 55 of 2024 Reserved on: 12.03.2025 Date of Decision: 24.03.2025 Narinder Kumar ...Petitioner Versus Salochna Devi ...Respondent Coram Hon'ble Mr Justice Rakesh Kainthla, Judge. Whether approved for reporting?1 No For the Petitioner : Mr. Divya Raj Singh, Advocate. For the Respondent : Mr. Dheeraj K. Vashisht, Advocate Rakesh Kainthla, Judge The petitioner has filed the present revision petition against the judgment dated 28.09.2023 passed by learned Additional Sessions Judge-I, District Una, H.P. (learned Appellate Court) vide which the judgment and order dated 16.07.2022, passed by learned Judicial Magistrate First, Class, Court No. II, Amb, District Una, H.P. (learned Trial Court) were upheld. (The parties shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for convenience).
1 Whether reporters of Local Papers may be allowed to see the judgment? Yes. 2
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2. Briefly stated, the facts giving rise to the present revision 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 (for short N.I.Act). It was asserted in the complaint that the accused is engaged in the business of sale/purchase of land. He came to know that the complainant intended to purchase land at Amb. He contacted the complainant and told her that he had a plot in the heart of the Amb. The accused showed the plot to the complainant on 02.04.2025 and told her that he was the owner of the plot. The sale consideration is settled as ₹25,00,000/-. The accused called the complainant on 05.04.2015 and told her that he required ₹10,00,000/- as part-payment of the sale consideration. The complainant paid ₹10,00,000/- and the accused assured to execute the sale deed on 10.4.2015. The complainant visited Amb on 10.04.2015 but the sale deed could not be executed as the accused was not found to be the owner of the land. The complainant demanded ₹10,00,000/- paid by her to the accused. The accused issued a cheque of ₹10,00,000/- on 10.04.2015 and asked her to present it after 25.04.2015. The 3 2025:HHC:7449 complainant presented the cheque on 27.04.2015 but it was dishonoured with the remarks 'insufficient funds'. The complainant issued a notice asking the accused to pay ₹10,00,000/- within 15 days of the receipt of the legal notice. The notice was duly served upon the accused but the accused failed to pay the amount. Hence, the complainant filed a complaint before the learned Trial Court for taking action against the accused.
3. The learned Trial Court found sufficient reasons to summon the accused. When the accused appeared, a notice of accusation was put to him for the commission of an offence punishable under Section 138 of the N.I.Act, to which he pleaded not guilty and claimed to be tried.
4. The complainant examined Abhishek Bhardwaj (CW-1) and herself (CW-2) to prove her case. 5, The accused in his statement recorded under Section 313 of Cr.P.C. denied the complainant's case in its entirety. He stated that he had handed over a cheque as a guarantee. He had not received any legal notice. A blank cheque was issued because of a land dispute with the complainant for her satisfaction. He 4 2025:HHC:7449 examined Surjeet Singh Dadwal (DW-1), Sawraj Pal Sharma (DW-2) and Kamal Kumar (DW-3) in his defence.
6. The learned Trial Court held that the cheque carried with it a presumption of consideration and the burden shifted upon the accused to disprove the presumption. His plea that the cheque was issued by him as a guarantee regarding some earlier transaction of the land was not sufficient to rebut the presumption. The cheque was dishonoured with the remarks 'insufficient funds' and notice was duly served upon the accused. The accused failed to pay the amount, hence, the accused was convicted of the commission of an offence punishable under Section 138 of the N.I.Act and sentenced to undergo simple imprisonment for two years, pay a compensation of ₹17,00,000/- and in default of the payment of the fine to undergo further simple imprisonment for six months.
7. Being aggrieved from the judgment and order passed by the learned Trial Court, the accused filed an appeal, which was decided by the learned Appellate Court. Learned Appellate Court concurred with the findings recorded by the learned Trial 5 2025:HHC:7449 Court that the cheque carried with it a presumption of consideration and the burden was upon the accused to rebut the presumption. The plea taken by the accused in the cross- examination of the complainant and in the statements of witnesses that the cheque was issued regarding some other transaction was not taken by him in his statement recorded under Section 313 of Cr.P.C. This plea was also not established on the balance of probability. The cheque was dishonoured due to insufficient funds and the accused failed to pay the amount despite the receipt of the valid notice of demand. The cheque was issued in the year 2015 and the order was pronounced in the year 2022. Hence, the amount of ₹17,00,000/- awarded as compensation is not excessive. Consequently, the appeal was dismissed.
8. Feeling aggrieved and dissatisfied with the judgments and order passed by the learned Courts below, the accused has filed the present petition asserting that the learned Trial Court erred in convicting and sentencing the accused. The learned Courts below failed to appreciate that the cheque was not issued for discharging of any legal liability, rather it was issued as a guarantee to the complainant in some land dispute. 6
2025:HHC:7449 The complainant misused the cheque. The probable defence of the accused was rejected without any justification, therefore, it was prayed that the present appeal be allowed and the judgments and order passed by the learned Courts below be set aside.
9. I have heard Mr Divya Raj Singh, learned Counsel for the petitioner/accused, and Mr Dheeraj K. Vashisht, learned counsel for respondent/complainant.
10. Mr Divya Raj Singh, learned counsel for the petitioner submitted that the learned Trial Court erred in convicting and sentencing the accused. The version of the complainant was highly improbable. She had failed to prove her source of income. No independent witness was examined in whose presence the cheque was handed over to the accused. The version that the accused came to her for the sale of land and she handed over an amount of ₹10,00,000/- without even verifying the title of the accused in the land cannot be believed. The version of the accused that he had handed over the cheque to the complainant regarding an earlier land deal was highly probable. Learned Courts below erred in rejecting this version. Therefore, 7 2025:HHC:7449 he prayed that the present revision be allowed and the judgments and order passed by the learned Courts below be set aside.
11. Mr. Dheeraj K. Vashisht, learned counsel for the respondent supported the judgments and order passed by the learned Courts below. He submitted that the learned Courts below had rightly held that the cheque carried with it a presumption of consideration and the accused had failed to rebut this presumption. The complainant was not supposed to prove her source of income because of the presumption. The plea taken by the accused in the cross-examination of the complainant was not asserted by him in his statement recorded under Section 313 of Cr.P.C. This plea was rightly rejected by the learned Trial Court. Therefore, he prayed that the present petition be dismissed.
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 8 2025:HHC:7449 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 to 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 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 regularities of any proceeding or order made in a case. The object of this provision is to set right a patent defect 9 2025:HHC:7449 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 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."10
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15. The present revision has to be decided as per the parameters laid down by the Hon'ble Supreme Court.
16. The accused initially stated in his statement recorded under Section 313 of Cr.P.C. that he had not handed over any cheque. Subsequently, he stated that he handed over a cheque as a guarantee. He explained that a blank cheque was issued for the satisfaction of the complainant because of a land dispute. The cheque was not issued towards the legal liability. Therefore, it is apparent that the issuance of the cheque is not disputed by the accused. Learned Courts below had rightly held that once the signatures on the cheque were not disputed, the presumption under Sections 118 and 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 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 NathBannerji, 2001 (6) SCC 16, wherein it has been held as under:11
2025:HHC:7449 "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.
17. Similar is the judgment in Basalingappa vs. Mudibasappa 2019 (5) SCC 418 wherein it was held:
"26. Applying the proposition of law as noted above, in the facts of the present case, it is clear that the signature on the cheque having been admitted, a presumption shall be raised under Section 139 that the cheque was issued in discharge of debt or liability."
18. This position was reiterated in Kalamani Tex v. P. Balasubramanian, (2021) 5 SCC 283: (2021) 3 SCC (Civ) 25: (2021) 2 SCC (Cri) 555: 2021 SCC OnLine SC 75 wherein it was held at page 289:
"14. Once the 2nd appellant had admitted his signatures on the cheque and the deed, the trial court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt. The trial court fell in error 12 2025:HHC:7449 when it called upon the respondent complainant to explain the circumstances under which the appellants were liable to pay. Such approach of the trial court was directly in the teeth of the established legal position as discussed above, and amounts to a patent error of law.."
19. Similar is the judgment in APS Forex Services (P) Ltd. v. Shakti International Fashion Linkers (2020) 12 SCC 724, wherein it was observed: -
7.2. What is emerging from the material on record is that the issuance of a cheque by the accused and the signature of the accused on the said cheque are not disputed by the accused. The accused has also not disputed that there were transactions between the parties. Even as per the statement of the accused, which was recorded at the time of the framing of the charge, he has admitted that some amount was due and payable. However, it was the case on behalf of the accused that the cheque was given by way of security and the same has been misused by the complainant. However, nothing is on record that in the reply to the statutory notice it was the case on behalf of the accused that the cheque was given by way of security.
Be that as it may, however, it is required to be noted that earlier the 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 the evidence to rebut such presumption. The accused was required to lead 13 2025:HHC:7449 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 the 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 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 clause and therefore, once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always a presumption in favour of the complainant that there exists legally enforceable debt or liability and thereafter, it is for the accused to rebut such presumption by leading evidence.
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20. The presumption under Section 139 of the NI Act was explained by the Hon'ble Supreme Court in Triyambak S. Hegde v. Sripad, (2022) 1 SCC 742: (2022) 1 SCC (Civ) 512: 2021 SCC OnLine SC 788 as under at page 747:
"12. From the facts arising in this case and the nature of the rival contentions, the record would disclose that the signature on the documents at Exts. P-6 and P-2 are 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 holder. --It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability."
13. Insofar as the payment of the amount by the appellant in the context of the cheque having been signed by the respondent, the presumption for passing of the consideration would arise as provided under Section 118(a) of the NI Act which reads as hereunder:
"118. Presumptions as to negotiable instruments. -- Until the contrary is proved, the following presumptions shall be made:
(a) of consideration: that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration."15
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14. The above-noted provisions are explicit to the effect that such presumption would remain until the contrary is proved. The learned counsel for the appellant in that regard has relied on the decision of this Court in K. Bhaskaran v. Sankaran Vaidhyan Balan [K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510:
1999 SCC (Cri) 1284] wherein it is held as hereunder: (SCC pp. 516-17, para 9) "9. As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred 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 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.16
2025:HHC:7449 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 in 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 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 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 17 2025:HHC:7449 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, copy of which complaint was also filed as Ext. D-2, there was a burden on the complainant to prove his financial capacity. In the years 2010-2011, as per own case of the complainant, he made a payment of Rs 18 lakhs. During his cross-examination, when the financial capacity to pay Rs 6 lakhs to the accused was questioned, there was no satisfactory reply given by the complainant. The evidence on record, thus, is a probable defence on behalf of the accused, which shifted the burden on the complainant to prove his financial capacity and other facts."
16. In that light, it is contended that the very materials produced by the appellant and the answers relating to lack of knowledge of property details by PW 1 in his cross- examination would indicate that the transaction is doubtful and no evidence is tendered to indicate that the amount was paid. In such an event, it was not necessary for the respondent to tender rebuttal evidence but the case put forth would be sufficient to indicate that the respondent has successfully rebutted the presumption.
17. On the position of law, the provisions referred to in Sections 118 and 139 of the NI Act as also the enunciation of law as made by this Court need no reiteration as there is no ambiguity whatsoever. In, Basalingappav. Mudibasappa [Basalingappa v. Mudibasappa, (2019) 5 SCC 418 : (2019) 2 SCC (Cri) 571] relied on by the learned counsel for the respondent, though on facts the ultimate conclusion therein was against raising presumption, the facts and circumstances are entirely different as the transaction between the parties as claimed in the said case is peculiar to the facts of that case where the consideration claimed to have been paid did not find favour with the Court keeping in view the various 18 2025:HHC:7449 transactions and extent of amount involved. However, the legal position relating to the presumption arising under Sections 118 and 139 of the NI Act on signature being admitted has been reiterated. Hence, whether there is a rebuttal or not would depend on the facts and circumstances of each case."
21. This position was reiterated in Tedhi Singh v. Narayan Dass Mahant, (2022) 6 SCC 735: (2022) 2 SCC (Cri) 726: (2022) 3 SCC (Civ) 442: 2022 SCC OnLine SC 302 wherein it was held at page 739:
"8. It is true that this is a case under Section 138 of the Negotiable Instruments Act. Section 139 of the NI Act provides that the court shall presume that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. This presumption, however, is expressly made subject to the position being proved to the contrary. In other words, it is open to the accused to establish that there is no consideration received. It is in the context of this provision that the theory of "probable defence" has grown. In an earlier judgment, in fact, which has also been adverted to in Basalingappa [Basalingappa v. Mudibasappa, (2019) 5 SCC 418: (2019) 2 SCC (Cri) 571], this Court notes that Section 139 of the NI Act is an example of reverse onus (see Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010) 11 SCC 441: (2010) 4 SCC (Civ) 477: (2011) 1 SCC (Cri) 184]). It is also true that this Court has found that the accused is not expected to discharge an unduly high standard of proof. It is accordingly that the principle has developed that all which the accused needs to establish is a probable defence. As to whether a probable defence has been established is a matter to be decided on the facts of each case on the conspectus of evidence and circumstances that exist..."19
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22. Similar is the judgment in P. Rasiya v. Abdul Nazer, 2022 SCC OnLine SC 1131 wherein it was observed:
"As per Section 139 of the N.I. Act, it shall be presumed, unless the contrary is proved, that the holder of a 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."
23. This position was reiterated in Rajesh Jain v. Ajay Singh, (2023) 10 SCC 148: 2023 SCC OnLine SC 1275 wherein it was observed at page 161:
33. The NI Act provides for two presumptions: Section 118 and Section 139. Section 118 of the Act inter alia directs that it shall be presumed until the contrary is proved, that every negotiable instrument was made or drawn for consideration. Section 139 of the Act stipulates that "unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque, for the discharge of, whole or part of any debt or liability". It will be seen that the "presumed fact" directly relates to one of the crucial ingredients necessary to sustain a conviction under Section 138. [The rules discussed hereinbelow are common to both the presumptions under Section 139 and 20 2025:HHC:7449 Section 118 and are hence, not repeated--reference to one can be taken as reference to another]
34. Section 139 of the NI Act, which takes the form of a "shall presume" clause is illustrative of a presumption of law. Because Section 139 requires that the Court "shall presume" the fact stated therein, it is obligatory for the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. But this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary as is clear from the use of the phrase "unless the contrary is proved".
35. The Court will necessarily presume that the cheque had been issued towards the discharge of a legally enforceable debt/liability in two circumstances. Firstly, when the drawer of the cheque admits issuance/execution of the cheque and secondly, in the event where the complainant proves that the cheque was issued/executed in his favour by the drawer. The circumstances set out above form the fact(s) which bring about the activation of the presumptive clause. [Bharat Barrel & Drum Mfg.
Co. v. Amin Chand Payrelal [Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal, (1999) 3 SCC 35]]
36. Recently, this Court has gone to the extent of holding that presumption takes effect even in a situation where the accused contends that a blank cheque leaf was voluntarily signed and handed over by him to the complainant. [Bir Singh v. Mukesh Kumar [Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Civ) 309: (2019) 2 SCC (Cri) 40] ]. Therefore, the mere admission of the drawer's signature, without admitting the execution of the entire contents in the cheque, is now sufficient to trigger the presumption.
37. As soon as the complainant discharges the burden to prove that the instrument, say a cheque, was issued by the accused for discharge of debt, the presumptive device under Section 139 of the Act helps shifting the burden on 21 2025:HHC:7449 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 reasonable doubt. The accused must meet the standard of "preponderance of probabilities", similar to a defendant in a civil proceeding. [Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010) 11 SCC 441: (2010) 4 SCC (Civ) 477: (2011) 1 SCC (Cri) 184: AIR 2010 SC 1898]]
24. The accused has not explained the nature of the dispute between him and the complainant in his statement recorded under Section 313 of Cr.P.C. He did not examine himself to explain the dispute. It was suggested to the complainant that she had purchased the land in the year 2012 and an electricity 22 2025:HHC:7449 line was passing over this land. She obtained a blank cheque from the accused by saying that she would return the cheque after the sale of the land. The complainant denied all the suggestions. Denied suggestions do not amount to proof and the cross-examination of the complainant does not establish the version of the accused.
25. Kamal Kumar (DW-3) stated that he had entered into an agreement with Krishan Dev to purchase the land. He met the complainant in the year 2012. He agreed to sell the land to the complainant for ₹10,00,000/- at the instance of the accused. An agreement was executed between the parties at Amb, which was attested by the Notary Public. ₹1.5 lakh was paid on the date of the agreement and the remaining amount was to be paid at the time of execution of the sale deed. The sale deed was executed by Krishan Dev directly in favour of the complainant. He and the accused person were present on the date of execution of the sale deed. Electricity lines were passing over the land. The complainant stated that this was not the land, which was shown to her. The accused handed over a blank cheque and told her to sell it or the accused would sell the land. The land is in the possession of the complainant. She has erected a boundary wall 23 2025:HHC:7449 around the land. The complainant filled ₹10,00,000/- and presented the cheque before the bank. He admitted in his cross- examination that the Sale deed does not bear his signature or the signatures of the accused. He admitted that the sale deed was executed by Krishan Dev in favour of the complainant.
26. Learned Courts below had rightly held that the statement of this witness was not acceptable. Sale Deed (Ext. D-2) shows that it was executed by Krishan Devi in favour of the complainant. The sale deed mentions that ₹10,00,000/- were received by the vendor before the execution of the sale deed. It nowhere mentions that ₹1.5 lakhs was paid by the complainant to Kamal Kumar (DW-3). The sale deed also does not mention the names of Kamal Kumar or the accused. It does not bear the signatures of the accused. Thus, the sale deed does not support the version of Kamal Kumar (DW-3) that he had entered into an agreement with the complainant to sell the land.
27. Kamal Kumar (DW-3) admitted that he had only entered into an agreement with Krishan Dev to purchase the land. Thus he had no authority to sell the land to the complainant. He had not even produced a copy of the agreement 24 2025:HHC:7449 executed between him and Krishan Dev to support his version. He has not explained what happened to ₹1.5 Lakh received by him from the complainant, whether he had paid this amount to Krishan Dev or the complainant. Therefore, learned Courts below had rightly rejected his version.
28. Surjit Singh Dadwal (DW-1) stated that as per the Register brought by him he had attested the agreement regarding the sale of the land measuring 00-03-80 bearing Khasra No. 2876/261 situated at Village Amb Khas for ₹10,00,000/-. The complainant had paid ₹1.5 Lakh and the balance of ₹8.5 lakhs was to be paid on or before 04.12.2012. Rajinder Singh Lamberdar had identified the parties.
29. He admitted in his cross-examination that no copy of the agreement was shown to him. The learned Trial Court had rightly held that the primary evidence of the agreement was the agreement itself and no other evidence could have been led without seeking permission to lead the secondary evidence. Further, Rajinder Singh Lamberdar was also not examined to establish that Salochna Devi mentioned in the Register is the same person, who is the complainant in the present case. 25
2025:HHC:7449 Therefore, no advantage can be derived from the statement of this witness.
30. Even otherwise, the agreement was executed in the year 2012, whereas, the cheque was issued in the year 2015. As per Kamal Kumar (DW-3), it was agreed that the land would be sold by the complainant or by the accused, however, there is nothing on record to show that any attempt was made to sell the land by the complainant or the accused. Witness Kamal Kumar (DW-3), specifically stated that the land was in possession of the complainant who had constructed the boundary wall. This falsifies the version of Kamal Kumar (DW-3) that the complainant was not happy with the land and she wanted to get rid of it.
31. Swaraj Pal (DW-2) proved the sale deed, however, this sale deed does not help the accused because the name of the accused or his signatures are nowhere appearing on the sale deed. Therefore, that learned Courts below had rightly held that the accused had failed to rebut the presumption of consideration attached to the cheque. This was a reasonable view which could 26 2025:HHC:7449 have been taken based on the evidence led before the learned Trial Court and there is no perversity in such conclusion.
32. It was submitted that the complainant's version is inherently improbable. She had advanced ₹10,00,000/- without verifying the title of the accused in the land. This submission is not acceptable. It was not disputed that the accused is dealing in business of sale and purchase of land. The accused himself led the evidence to establish this fact. Hence, the complainant cannot be faulted for relying upon the accused to sell her land. The accused demanded money towards the part payment and the complainant cannot be faulted for advancing money to the accused.
33. It was submitted that the complainant had not produced any statement of account to show that she was in possession of ₹10,00,000/-. She stated in her cross- examination that ₹10,00,000/- was paid in the presence of Pyare Lal, however, Pyare Lal was not examined. These circumstances make the complainant's version highly suspicious. This submission would have been material but for the presumption attached to the cheque. It was laid down by the 27 2025:HHC:7449 Hon'ble Supreme Court in Rohitbhai Jivanlal Patel v. State of Gujarat (2019) 18 SCC 106, para 18 : (2020) 3 SCC (Civ) 800 : (2020) 3 SCC (Cri) 575 that the complainant is not required to prove the source of the income because of the presumption contained in Section 139 of NIAct. It was observed at page 120:
"18. In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the trial court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the trial court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant-accused."
34. Therefore, the complainant is not required to prove the source of income or the payment of the amount to the accused because of the presumption and no advantage can be derived from the fact that the complainant had failed to prove the source of income or examine Pyare Lal.
35. Therefore, both the learned Courts below had rightly held that the accused had issued a cheque in favour of the 28 2025:HHC:7449 complainant, which is presumed to be issued in discharging of his legal liability and the accused had failed to rebut this presumption of consideration.
36. The complainant stated that the cheque was dishonoured with the remarks 'insufficient funds'. This is duly established by the memo (Ext.PW-1/B) in which the reason for dishonour has been mentioned as 'insufficient funds'. There is a presumption under Section 146 of the N.I.Act regarding the correctness of the memo of dishonour. The accused did not lead any evidence to rebut this presumption. Hence, the learned Trial Courts had rightly held that the cheque was dishonoured due to insufficient funds.
37. The complainant stated that she had issued a notice (Ext.CW-1/D) to the accused asking him to pay the amount of ₹10,00,000/-. She has also relied upon acknowledgement (Ext. CW-1/G), which bears the signatures of the accused. The accused stated in his statement recorded under Section 313 of Cr.P.C. that he had not received any notice but did not examine any witness to establish this fact. Notice was issued at the same address on which the accused was served and which was 29 2025:HHC:7449 furnished by him in his statement recorded under Section 313 of Cr.P.C. Notice was sent to him to the correct address and is deemed to be served. Therefore, the learned Trial Court had rightly held that notice was duly served upon the accused.
38. 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 a 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 30 2025:HHC:7449 (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)
39. The accused has not paid any money to the complainant; hence, it was duly proved that the accused had failed to pay the money despite the receipt of the notice.
40. Thus, it was duly proved that the cheque was issued in the discharge of the legal liability, it was dishonoured with an endorsement 'insufficient funds' and the accused failed to pay the amount despite the receipt of a valid notice of demand, Hence, the complainant had proved her case beyond reasonable doubt and learned Trial Court had rightly convicted the accused for the commission of an offence punishable under Section 138 of the N.I.Act.
41. The learned Trial Court had sentenced the accused to undergo simple imprisonment for two years. The legislature had introduced the offence of dishonour of cheques to instil confidence in the public about the transactions carried with the cheque. 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: 31
2025:HHC:7449 (2019) 2 SCC (Civ) 309: 2019 SCC OnLine SC 138 that the penal provision 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 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."
42. The offence under Section 138 of the N.I.Act is punishable with maximum imprisonment of two years. The learned Trial Court has not given any reason for imposing the maximum sentence, hence, the maximum sentence awarded by the learned Trial Court is to be modified keeping in view the circumstances and the fact that the matter has been pending since 2015, the sentence is reduced to one year.
43. The learned Trial Court had ordered the accused to pay a compensation of ₹17,00,000/-. The cheque was issued on 10.04.2015. Learned Trial Court passed the order on 16.07.2022 after the lapse of seven years. The complainant lost interest on the amount and she had to pay the litigation expenses for filing 32 2025:HHC:7449 the complaint. She 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 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]"
44. Therefore, the amount of ₹7,00,000/- awarded as a compensation on the cheque amount of ₹10,00,000/- is not excessive.
45. No other point was urged.
46. In view of the above, the present appeal is partly allowed and the sentence of simple imprisonment of two years 33 2025:HHC:7449 imposed by the learned Trial Court upon the accused is reduced to one year of simple imprisonment. Subject to this modification, the rest of the judgment and order passed by the learned Trial Court as upheld by the learend Appellate Court is affirmed.
47. The present revision petition is disposed of in aforesaid terms, so also pending application(s), if any.
48. Records of the learned Courts below be sent back forthwith along with a copy of this judgment.
(Rakesh Kainthla) 24 March, 2025 th Judge (ravinder)