Himachal Pradesh High Court
Reserved On: 04.07.2025 vs Karan Bahadur on 28 July, 2025
2025:HHC:24427 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Cr. Revision No. 154 of 2025 Reserved on: 04.07.2025 Date of Decision: 28.07.2025 .
Yadvinder Singh ...Petitioner
Versus
Karan Bahadur ...Respondent
Coram
Hon'ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 No. For the Petitioner : Mr. H.S. Rangra. Advocate. For the Respondent : Mr. Reeta Hingmang, Advocate.
Rakesh Kainthla, Judge The petitioner has filed the present petition against the judgment dated 27.02.2025 passed by learned Additional Sessions Judge, Kullu, District Kullu, H.P. (learned Appellate Court), vide which the judgment of conviction and order of sentence dated 29.07.2024 passed by learned Chief Judicial Magistrate, Kullu, District Kullu, H.P. (learned Trial Court) were upheld. (Parties shall 1 Whether reporters of Local Papers may be allowed to see the judgment? Yes.
::: Downloaded on - 28/07/2025 21:24:29 :::CISPage |2 2025:HHC:24427 hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for convenience.) .
2. Briefly stated, the facts giving rise to the present petition are that the complainant filed a complaint 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 accused is a forest contractor-cum-
labour supply mate of Forest Corporation, Kullu, District Kullu, H.P. He had taken work for cutting and transportation of the timber. He hired the services of the complainant for felling the timbers, converting them into sleepers, fuel wood and pulp wood, etc. An agreement to this effect was executed between the parties.
The complainant completed the work, and the accused issued a cheque of ₹3,19,525/- to discharge his liability. The complainant presented the cheque to the State Bank of Patiala, Kullu, Branch through his banker; however, the cheque was dishonoured with an endorsement 'Insufficient funds'. The complainant served a notice upon the accused asking him to repay the money within fifteen days from the receipt of the notice, but he failed to repay the money. Hence, a complaint was filed to take action against the accused as per the law.
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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 NI Act, to which he pleaded not guilty and claimed to be tried.
4. The complainant examined Davinder Singh Rana (CW-1), Harsh Thakur (CW-2), himself (CW-3) and Pritpal Singh (PW-4) to prove his case.
5. to The accused, in his statement recorded under Section 313 of Cr.P.C., admitted that he was awarded work of conversion and transportation of the timber. He admitted that he had entered into an agreement with the complainant for felling and converting the timber. He denied that he had issued a cheque of ₹3,19,525/-
to discharge his legal liability. He admitted that the cheque was dishonoured with an endorsement 'insufficient funds', and he had received a notice. He claimed that he was not liable to pay any money; therefore, he did not pay anything to the complainant. He stated that a false case was made against him, and the witnesses deposed against him falsely. He and Jog Dhian were working for M/s Y.J. Timber. He had allotted the work to the complainant. He ::: Downloaded on - 28/07/2025 21:24:29 :::CIS Page |4 2025:HHC:24427 had not issued any cheque, and the cheque might have been issued by Jog Dhian. He had filed a complaint with the police regarding .
the loss of the cheque. He examined Constable Amar Singh (DW-1), Budh Ram (DW-2) and Sahil Rana (DW-3) to prove his defence.
6. Learned Trial Court held that the issuance of the cheque was not disputed. The defence of the accused that the cheque was issued by Jog Dhian was not probable. Statement of Budh Ram (DW-2) to this effect was not satisfactory. The complainant proved the agreement (Ext.CW-1/A), which was admitted by the accused. The agreement shows that the accused had entered into the contract with the complainant in his individual capacity. Budh Ram (DW-2) admitted in his cross-
examination that the accused had given the work of converting the timber to the complainant. The cheque was dishonoured with an endorsement 'Insufficient funds', and the accused admitted the receipt of the notice. He did not pay any money to the complainant.
All the ingredients of commission of offence punishable under Section under Section 138 of N.I.Act were satisfied. Hence, the accused was convicted for the commission of an offence punishable under Section 138 of the NI Act and was sentenced to ::: Downloaded on - 28/07/2025 21:24:29 :::CIS Page |5 2025:HHC:24427 undergo simple imprisonment of two years and pay a compensation of ₹6,39,050/- to the complainant.
.
7. Being aggrieved from the judgment and roder passed by the learned Trial Court, the accused preferred an appeal. The learned Appellate Court concurred with the findings recorded by the learned Trial Court that the issuance of the cheque was not disputed. The plea taken by the accused that the cheque was handed over by Jog Dhian was not probable. Ghanshyam, who is stated to have filled the cheque, was not examined in defence.
Budh Ram (DW-2) admitted in his cross-examination that the accused had executed an agreement with the complainant for the transportation of the timber. The cheque was dishonoured with an endorsement 'insufficient funds'. The accused admitted the receipt of the notice. Hence, all the ingredients of the commission of an offence punishable under Section 138 of the NI Act were duly satisfied. There was no infirmity in the sentence imposed by the learned Trial Court. Hence, the appeal was dismissed.
8. Being aggrieved and dissatisfied with the judgments and order passed by the learned Courts below, the petitioner/accused has filed the present petition, asserting that the ::: Downloaded on - 28/07/2025 21:24:29 :::CIS Page |6 2025:HHC:24427 learned Courts below did not appreciate the facts and law in their proper perspective. Material omissions, contradictions, and .
improvements in the statement of the complainant were brushed aside. The complainant admitted that the accused was a partner of M/s Y.J. Timber with Jog Dhian. He also admitted that the firm has an office in the Sobhla Hotel. The complainant was not engaged by the accused, and he had no liability to discharge. The cheque was issued by Ghanshyam, and the statement of Budh Ram (DW-2) to this effect was ignored. The evidence on record showed that there was no legal liability to discharge, and the learned Courts below failed to hold otherwise. Therefore, it was prayed that the present revision be allowed and the judgments and order passed by learned Courts below be set aside.
9. I have heard Mr. H.S. Rangra, learned counsel for the petitioner and Ms. Reeta Hingmang, learned counsel for the respondent.
10. Mr. H.S. Rangra, learned counsel for the petitioner/accused, submitted that the learned Courts below erred in appreciating the material placed before them. The defence version was duly proved by the testimony of Budh Ram (DW-2).
::: Downloaded on - 28/07/2025 21:24:29 :::CISPage |7 2025:HHC:24427 The complainant admitted in his cross-examination that the accused is a partner of M/s Y.J. Timber. This probablized the .
version of the accused that the cheque was issued on behalf of the firm and the accused had no personal liability. The learned Trial Court had erred in imposing the sentence of two years, which is the maximum sentence and awarding huge compensation. Therefore, he prayed that the present petition be allowed and the judgments
11. Ms. r Reeta to and orders passed by the learned Courts below be set aside.
Hingmang, learned counsel for the respondent, supported the judgments and order passed by the learned Courts below and submitted that no interference is required with them. Hence, she 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 a revisional court is not an appellate court and it can only rectify the patent defect, errors of jurisdiction or the law. It was observed at page 207: -
::: Downloaded on - 28/07/2025 21:24:29 :::CISPage |8 2025:HHC:24427 "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 patent defect or an error of jurisdiction or law. There has to be a well-founded error which is to be determined on the merits of individual cases. It is also well settled that while considering the same, the Revisional Court does not dwell at length upon the facts and evidence of the case to reverse those findings.
14. This position was reiterated in State of Gujarat v.
Dilipsinh Kishorsinh Rao, (2023) 17 SCC 688: 2023 SCC OnLine SC 1294, wherein it was observed at page 695:
14. The power and jurisdiction of the Higher Court under Section 397CrPC, which vests the court with the power to call for and examine records of an inferior court, is for the purposes of satisfying itself as to the legality and regularities of any proceeding or order made in a case. The object of this provision is to set right a patent defect or an error of jurisdiction or law or the perversity which has crept in such proceedings.
15. It would be apposite to refer to the judgment of this Court in Amit Kapoor v. Ramesh Chander [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460: (2012) 4 SCC (Civ) 687: (2013) 1 SCC (Cri) 986], where scope of Section 397 has been considered and succinctly explained as under: (SCC p. 475, paras 12-13) ::: Downloaded on - 28/07/2025 21:24:29 :::CIS Page |9 2025:HHC:24427 "12. Section 397 of the Code vests the court with the power to call for and examine the records of an inferior court for the purposes of satisfying itself as to the legality and regularity of any proceedings or order made in a case.
.
The object of this provision is to set right a patent defect or an error of jurisdiction or law. There has to be a well- founded error, and it may not be appropriate for the court to scrutinise the orders, which, upon the face of it, bear a token of careful consideration and appear to be in accordance with law. If one looks into the various judgments of this Court, it emerges that the revisional jurisdiction can be invoked where the decisions under challenge are grossly erroneous, there is no compliance with the provisions of law, the finding recorded is based on no evidence, material evidence is ignored, or judicial discretion is exercised arbitrarily or perversely. These are not exhaustive classes, but are merely indicative. Each case would have to be determined on its own merits.
13. Another well-accepted norm is that the revisional jurisdiction of the higher court is a very limited one and cannot be exercised in a routine manner. One of the inbuilt restrictions is that it should not be against an interim or interlocutory order. The Court has to keep in mind that the exercise of revisional jurisdiction itself should not lead to injustice ex facie. Where the Court is dealing with the question as to whether the charge has been framed properly and in accordance with law in a given case, it may be reluctant to interfere in the exercise of its revisional jurisdiction unless the case substantially falls within the categories aforestated. Even framing of charge is a much-advanced stage in the proceedings under CrPC."
16. This Court in the aforesaid judgment in Amit Kapoor case [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460 :
(2012) 4 SCC (Civ) 687 : (2013) 1 SCC (Cri) 986] has also laid down principles to be considered for exercise of jurisdiction under Section 397 particularly in the context of prayer for quashing of charge framed under Section 228CrPC is sought ::: Downloaded on - 28/07/2025 21:24:29 :::CIS P a g e | 10 2025:HHC:24427 for as under : (Amit Kapoor case [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460 : (2012) 4 SCC (Civ) 687 : (2013) 1 SCC (Cri) 986], SCC pp. 482-83, para 27) "27. Having discussed the scope of jurisdiction under .
these two provisions, i.e. Section 397 and Section 482 of the Code, and the fine line of jurisdictional distinction, it will now be appropriate for us to enlist the principles with reference to which the courts should exercise such jurisdiction. However, it is not only difficult but inherently impossible to state such principles with precision. At best and upon objective analysis of various judgments of this Court, we are able to cull out some of the principles to be considered for proper exercise of jurisdiction, particularly, with regard to quashing of charge either in exercise of jurisdiction under Section 397 or Section 482 of the Code or together, as the case may be:
27.1. Though there are no limits to the powers of the Court under Section 482 of the Code but the more the power, the more due care and caution is to be exercised in invoking these powers. The power of quashing criminal proceedings, particularly, the charge framed in terms of Section 228 of the Code, should be exercised very sparingly and with circumspection and that too in the rarest of rare cases.
27.2. The Court should apply the test as to whether the uncontroverted allegations as made from the record of the case and the documents submitted therewith prima facie establish the offence or not. If the allegations are so patently absurd and inherently improbable that no prudent person can ever reach such a conclusion, and where the basic ingredients of a criminal offence are not satisfied, then the Court may interfere. 27.3. The High Court should not unduly interfere. No meticulous examination of the evidence is needed for considering whether the case would end in conviction or ::: Downloaded on - 28/07/2025 21:24:29 :::CIS P a g e | 11 2025:HHC:24427 not at the stage of framing of charge or quashing of charge.
*** .
27.9. Another very significant caution that the courts have to observe is that it cannot examine the facts, evidence and materials on record to determine whether there is sufficient material on the basis of which the case would end in a conviction; the court is concerned primarily with the allegations taken as a whole whether they will constitute an offence and, if so, is it an abuse of the process of court leading to injustice.
*** 27.13. Quashing of a charge is an exception to the rule of continuous prosecution. Where the offence is even broadly satisfied, the Court should be more inclined to permit continuation of prosecution rather than its quashing at that initial stage. The Court is not expected to marshal the records with a view to decide admissibility and reliability of the documents or records, but is an opinion formed prima facie."
17. The revisional court cannot sit as an appellate court and start appreciating the evidence by finding out inconsistencies in the statement of witnesses, and it is not legally permissible. The High Courts ought to be cognizant of the fact that the trial court was dealing with an application for discharge.
15. It was held in Kishan Rao v. Shankargouda, (2018) 8 SCC 165: (2018) 3 SCC (Cri) 544: (2018) 4 SCC (Civ) 37: 2018 SCC OnLine SC 651 that it is impermissible for the High Court to reappreciate the evidence and come to its conclusions in the absence of any perversity. It was observed at page 169:
::: Downloaded on - 28/07/2025 21:24:29 :::CISP a g e | 12 2025:HHC:24427 "12. This Court has time and again examined the scope of Sections 397/401 CrPC and the ground for exercising the revisional jurisdiction by the High Court. In State of Kerala v. Puttumana Illath Jathavedan Namboodiri [State of .
Kerala v. Puttumana Illath Jathavedan Namboodiri, (1999) 2 SCC 452: 1999 SCC (Cri) 275], while considering the scope of the revisional jurisdiction of the High Court, this Court has laid down the following: (SCC pp. 454-55, para 5) "5. ... In its revisional jurisdiction, the High Court can call for and examine the record of any proceedings to satisfy itself as to the correctness, legality or propriety of any finding, sentence or order. In other words, the jurisdiction is one of supervisory jurisdiction exercised by the High Court for correcting a miscarriage of justice. But the said revisional power cannot be equated with the power of an appellate court, nor can it be treated even as a second appellate jurisdiction. Ordinarily, therefore, it would not be appropriate for the High Court to reappreciate the evidence and come to its conclusion on the same when the evidence has already been appreciated by the Magistrate as well as the Sessions Judge in appeal unless any glaring feature is brought to the notice of the High Court which would otherwise tantamount to a gross miscarriage of justice. On scrutinising the impugned judgment of the High Court from the aforesaid standpoint, we have no hesitation in concluding that the High Court exceeded its jurisdiction in interfering with the conviction of the respondent by reappreciating the oral evidence. ..."
13. Another judgment which has also been referred to and relied on by the High Court is the judgment of this Court in Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao Phalke [Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao Phalke, (2015) 3 SCC 123: (2015) 2 SCC (Cri) 19]. This Court held that the High Court, in the exercise of revisional jurisdiction, shall not interfere with the order of the Magistrate unless it is perverse or wholly unreasonable or there is non-consideration of any relevant material, the ::: Downloaded on - 28/07/2025 21:24:29 :::CIS P a g e | 13 2025:HHC:24427 order cannot be set aside merely on the ground that another view is possible. The following has been laid down in para 14: (SCC p. 135) "14. ... Unless the order passed by the Magistrate is .
perverse or the view taken by the court is wholly unreasonable or there is non-consideration of any relevant material or there is palpable misreading of records, the Revisional Court is not justified in setting aside the order, merely because another view is possible. The Revisional Court is not meant to act as an appellate court. The whole purpose of the revisional jurisdiction is to preserve the power in the court to do justice in accordance with the principles of criminal jurisprudence. The revisional power of the court under Sections 397 to 401 CrPC is not to be equated with that of an appeal. Unless the finding of the court, whose decision is sought to be revised, is shown to be perverse or untenable in law or is grossly erroneous or glaringly unreasonable or where the decision is based on no material or where the material facts are wholly ignored or where the judicial discretion is exercised arbitrarily or capriciously, the courts may not interfere with the decision in exercise of their revisional jurisdiction."
14. In the above case, also conviction of the accused was recorded, and the High Court set aside [Dattatray Gulabrao Phalke v. Sanjaysinh Ramrao Chavan, 2013 SCC OnLine Bom 1753] the order of conviction by substituting its view. This Court set aside the High Court's order holding that the High Court exceeded its jurisdiction in substituting its views, and that too without any legal basis.
16. This position was reiterated in Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ) 309: 2019 SCC OnLine SC 13, wherein it was observed at page 205:
"16. It is well settled that in the exercise of revisional jurisdiction under Section 482 of the Criminal Procedure ::: Downloaded on - 28/07/2025 21:24:29 :::CIS P a g e | 14 2025:HHC:24427 Code, the High Court does not, in the absence of perversity, upset concurrent factual findings. It is not for the Revisional Court to re-analyse and re-interpret the evidence on record.
17. As held by this Court in Southern Sales & .
Services v. Sauermilch Design and Handels GmbH [Southern Sales & Services v. Sauermilch Design and Handels GmbH, (2008) 14 SCC 457], it is a well-established principle of law that the Revisional Court will not interfere even if a wrong order is passed by a court having jurisdiction, in the absence of a jurisdictional error. The answer to the first question is, therefore, in the negative."
17. The present revision has to be decided as per the
18. to parameters laid down by the Hon'ble Supreme Court.
The accused did not dispute his signature on the cheque.
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 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 ::: Downloaded on - 28/07/2025 21:24:29 :::CIS P a g e | 15 2025:HHC:24427 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.
19. 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."
20. 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 75wherein it was held at page 289:
"13. Adverting to the case in hand, we find on a plain reading of its judgment that the trial court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA. The statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these "reverse onus" clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has been crystallised by this Court in Rohitbhai Jivanlal Patel v. State of Gujarat [Rohitbhai Jivanlal Patel v. State of Gujarat, (2019) 18 SCC 106, para 18: (2020) 3 ::: Downloaded on - 28/07/2025 21:24:29 :::CIS P a g e | 16 2025:HHC:24427 SCC (Civ) 800: (2020) 3 SCC (Cri) 575] in the following words :
(SCC pp. 120-21, para 18) "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 r complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant-accused."
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."
21. 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 ::: Downloaded on - 28/07/2025 21:24:29 :::CIS P a g e | 17 2025:HHC:24427 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 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 ::: Downloaded on - 28/07/2025 21:24:29 :::CIS P a g e | 18 2025:HHC:24427 more particularly, the cheque in question was issued for the second time after the earlier cheques were dishonoured. Therefore, both the courts below have materially erred in not properly appreciating and considering the presumption .
in favour of the complainant that there exists a legally enforceable debt or liability as per Section 139 of the NI Act. It appears that both the learned trial court as well as the High Court have committed an error in shifting the burden upon the complainant to prove the debt or liability, without 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.
22. Learned Courts below had rightly held that there is a presumption under Section 139 of the NI Act that the cheque was issued in the discharge of the legal liability. This presumption was explained by the Hon'ble Supreme Court in Triyambak S. Hegde v.
Sripad, (2022) 1 SCC 742: (2022) 1 SCC (Civ) 512: 2021 SCC OnLine SC 788 at page 747:
"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:::: Downloaded on - 28/07/2025 21:24:29 :::CIS
P a g e | 19 2025:HHC:24427 "139. Presumption in favour of the holder. --It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or .
in part, of any debt or other liability."
13. Insofar as the payment of the amount by the appellant in the context of the cheque having been signed by the respondent, the presumption for passing of the consideration would arise as provided under Section 118(a) of the NI Act, which reads as hereunder:
"118. Presumptions as to negotiable instruments. --Until the contrary is proved, the following presumptions shall be made:
(a) of consideration: that every negotiable instrument was made or drawn for r 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 ::: Downloaded on - 28/07/2025 21:24:29 :::CIS P a g e | 20 2025:HHC:24427 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. Mudibasapp a, (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 r 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.::: Downloaded on - 28/07/2025 21:24:29 :::CIS
P a g e | 21 2025:HHC:24427 25.5. It is not necessary for the accused to come into the witness box to support his defence.
26. Applying the preposition of law as noted above, in the facts of the present case, it is clear that the .
signature on the cheque, having been admitted, a presumption shall be raised under Section 139 that the cheque was issued in discharge of debt or liability. The question to be looked into is as to whether any probable defence was raised by the accused. In the cross-examination of PW 1, when the specific question was put that a cheque was issued in relation to a loan of Rs 25,000 taken by the accused, PW 1 said that he does not remember. PW 1 in his evidence admitted that he retired in 1997, on which date he received a monetary benefit of Rs 8 lakhs, which was encashed by the complainant. It was also brought in evidence that r 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, ::: Downloaded on - 28/07/2025 21:24:29 :::CIS P a g e | 22 2025:HHC:24427 and no evidence is tendered to indicate that the amount was paid. In such an event, it was not necessary for the respondent to tender rebuttal evidence, but the case put forth would be sufficient to indicate that the respondent has .
successfully rebutted the presumption.
17. On the position of law, the provisions referred to in Sections 118 and 139 of the NI Act, as also the enunciation of law as made by this Court, need no reiteration as there is no ambiguity whatsoever. In Basalingappav. Mudibasappa [Basalingappa v. Mudibasappa, (2019) 5 SCC 418 : (2019) 2 SCC (Cri) 571] relied on by the learned counsel for the respondent, though on facts the ultimate conclusion therein was against raising presumption, the facts and circumstances are entirely different as the transaction between the parties as claimed in the said case is peculiar to the facts of that case where the consideration claimed to have been paid did not find favour with the Court keeping in view the various transactions and extent of amount involved. However, the legal position relating to the presumption arising under Sections 118 and 139 of the NI Act on signature being admitted has been reiterated. Hence, whether there is a rebuttal or not would depend on the facts and circumstances of each case."
23. 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 ::: Downloaded on - 28/07/2025 21:24:29 :::CIS P a g e | 23 2025:HHC:24427 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..."
24. 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."
25. 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:
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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 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] ] ::: Downloaded on - 28/07/2025 21:24:29 :::CIS P a g e | 25 2025:HHC:24427
36. Recently, this Court has gone to the extent of holding that presumption takes effect even in a situation where the accused contends that a blank cheque leaf was voluntarily signed and handed over by him to the .
complainant. [Bir Singh v. Mukesh Kumar [Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Civ) 309: (2019) 2 SCC (Cri) 40]]. Therefore, the mere admission of the drawer's signature, without admitting the execution of the entire contents in the cheque, is now sufficient to trigger the presumption.
37. As soon as the complainant discharges the burden to prove that the instrument, say a cheque, was issued by the accused for discharge of debt, the presumptive device under Section 139 of the Act helps shifting the burden on the accused. The effect of the presumption, in that sense, is to transfer the evidential burden on the accused of proving that the cheque was not received by the Bank towards the discharge of any liability. Until this evidential burden is discharged by the accused, the presumed fact will have to be taken to be true, without expecting the complainant to do anything further.
38. John Henry Wigmore [John Henry Wigmore and the Rules of Evidence: The Hidden Origins of Modern Law] on Evidence states as follows:
"The peculiar effect of the presumption of law is merely to invoke a rule of law compelling the Jury to reach the conclusion in the absence of evidence to the contrary from the opponent but if the opponent does offer evidence to the contrary (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-
::: Downloaded on - 28/07/2025 21:24:29 :::CISP a g e | 26 2025:HHC:24427 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]]
26. Therefore, the Court has to start with the presumption that the cheque was issued in discharge of legal liability, and the burden is upon the accused to prove the contrary.
27. The accused, in his statement recorded under Section 313 of Cr.P.C. r sthated that he had entered into an agreement (Ext.CW-1/A) with the complainant. A perusal of the agreement (Ex.CW-1/A) shows that this agreement was executed between the accused and the complainant regarding the work of the conversion of the timber. This agreement falsifies the plea taken by the accused that work was allotted to M/s Y.J. Timber, and he had no concern with it.
28. Budh Ram (DW-2) stated that he looked after the business of M/s Y.J. Timber. Yadvinder Singh had allotted the work to the complainant through Jog Dhian as his power of attorney.
Ghanshyam was looking after the work of the firm. Ghanshyam distributed the cheque in the presence of Jog Dhian from his office on 31.01.2012. One cheque was handed over to the complainant.
::: Downloaded on - 28/07/2025 21:24:29 :::CISP a g e | 27 2025:HHC:24427 The amount and figures were written by Ghanshyam. Cheque (Mark-A) was handed to Saju Ram, and one cheque was issued in .
the name of Ghanshyam.
29. Sahil Rana (DW-3) stated that cheques (Ext.DW-3/C1 to Ext.DW-3/C5) were issued to various persons by M/s Y.J. Timber.
30. The cheques mentioned by the defence witnesses bear different dates. The cheque (Mark-A) mentioned by Budh Ram (DW-1) and subsequently exhibited as Ext.DW-3/C3 was issued in favour of Saju Ram on 18.06.2009. It is signed by the petitioner and Jog Dhian and bears the stamp of M/s Y.J. Timbers and Ropeways Company. All the cheques exhibited by Sahil Rana contain the signatures of two persons and the stamp of M/s Y.J. Timbers and Ropeways Company. None of the cheque was issued on 31.01.2012 as claimed by Budh Ram (DW-1). The cheques were issued in the years 2006-2009. These cheques falsify the statement of Budh Ram (DW-1). Firstly, these cheques were not issued in the year 2012 and were issued much earlier. Secondly, the cheques were issued with the stamp of M/s Y.J. Timbers and Ropeways Company. If so many cheques were issued with the stamp of M/s Y.J. Timber and Ropeways Company, there was no ::: Downloaded on - 28/07/2025 21:24:29 :::CIS P a g e | 28 2025:HHC:24427 reason why the cheque (Ext. CW-3/B) should have been issued with the signature of one person and without bearing the stamp of a .
firm. Therefore, the learned Courts below had rightly rejected the testimony of Budh Ram (DW-1) that all the cheques, including the cheque (Ex. CW-3/B), were issued on one day.
31. It was submitted that the cheque (DW-3/C5) was issued in the name of the complainant, which probablizes the version of the accused that the firm had allotted the work to the complainant;
otherwise, the firm had no reason to issue the cheque in the name of the complainant. This submission cannot be accepted. The cheque (Ext.DW-3/C5) was issued on 19.09.2008. The agreement in the present case was executed on 07.10.2011, therefore, the cheque (Ex. DW-3/C5) was issued before the execution of the agreement between the complainant and the accused. The complainant admitted that he is a labourer. Therefore, his supplying labour to the firm is not unusual, and his case cannot be doubted simply because he had received a cheque from the firm in the year 2008.
32. A heavy reliance was placed upon the entry in the daily diary (Ext.DW-1/A) to submit that the chequebook was misplaced.
Learned Appellate Court had rightly pointed out that this entry was ::: Downloaded on - 28/07/2025 21:24:29 :::CIS P a g e | 29 2025:HHC:24427 recorded on 29.05.2012. The cheque was dishonoured on 30.04.2012. The accused admitted the receipt of the notice .
dispatched on 14.05.2012 vide receipt (Ext.CW-3/G); therefore, he could make a complaint regarding the loss of the cheque on 29.05.2012 after receiving the notice.
33. It was mentioned in the daily diary that the cheque book containing blank signed cheques bearing Nos. 025501 to 025562 were lying in the custody of Ghanshayam Lal. The cheques were missing and could be misused by someone.
34. There is no evidence that the payment of cheque Nos.
025501 to 025562 was stopped by the accused by issuing instructions to the bank. Sahil Rana (DW-2) was called with the record, but the record of these cheques was not requisitioned from him. Hence, the version of the accused that he had lost the cheque book bearing his signatures was not supported by the contemporaneous record and was rightly rejected by the learned Courts below; henceand it was rightly held that the accused had failed to rebut the presumption attached to the cheque.
35. The accused admitted in his statement recorded under Section 313 of Cr.P.C. that the cheque was dishonoured with the ::: Downloaded on - 28/07/2025 21:24:29 :::CIS P a g e | 30 2025:HHC:24427 endorsement 'insufficient funds'. The memo of dishonour (Ext.CW-3/C) also shows that the cheque was dishonoured with an .
endorsement, insufficient funds; therefore, the learned Courts below had rightly held that the cheque was dishonoured because of 'insufficient funds'.
36. The complainant stated that he had issued a notice (Ext.CW-3/F) to the accused. The accused admitted in his statement recorded under Section 313 of Cr.P.C. that notice was served upon him; therefore, the issuance and the receipt of notice are not in dispute.
37. Thus, it was duly proved on record that the accused had issued the cheque in discharge of his legal liability, which was dishonoured with an endorsement 'insufficient funds'. The notice was duly served upon the accused, and the accused failed to pay the amount despite receipt of the valid notice of demand. Hence, all the ingredients of the commission of an offence punishable under Section 138 of the NI Act were duly satisfied. Learned Trial Court had rightly convicted the accused for the commission of an offence punishable under Section 138 of N.I.Act.
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38. The learned Trial Court sentenced the accused to undergo simple imprisonment for 2 years. This was the maximum .
sentence that could be awarded under Section 138 of the NI Act. A sentence has to be proportionate. Learned Trial Court noticed that the offence punishable under Section 138 of the NI Act was socio-
economic, but that was hardly any consideration for imposing the maximum sentence. The legislature had already taken care of this consideration while providing for a punishment up to two years.
The learned Trial Court was required to modulate the sentence, keeping in view the gravity of the offence by balancing the mitigating and aggravating circumstances. The learned Trial Court failed to carry out this exercise and imposed a sentence of two years without justification. Hence, the sentence of two years imposed by the learned Trial Court cannot be sustained.
39. No aggravating circumstances were brought to record.
The accused has been facing the agony of trial since 2015. Keeping in view this consideration, the sentence of nine months would be adequate. Hence, the sentence imposed by the learned Trial Court is ordered to be reduced to a period of nine months.
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40. Learned Trial Court sentenced the accused to pay a compensation of ₹6,39,050/-, which was double the cheque .
amount. The cheque was issued on 31.01.2012, and sentence was imposed by the learned Trial Court on 29.07.2024 after the lapse of more than 12 years. The complainant lost interest that it would have gained by advancing the loan to various persons. The complainant had to engage an Advocate and incur the expenses for the litigation. 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 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 ::: Downloaded on - 28/07/2025 21:24:29 :::CIS P a g e | 33 2025:HHC:24427 SCC (Cri) 520]"
41. The interest on ₹3,19,525/- for twelve years at the rate .
of 9 % per annum is ₹3,45,087/-, therefore, the double the amount of the cheque was justified in the present case.
42. No other point was urged.
43. In view of the above, the present revision petition is partly allowed, and the sentence imposed by the learned Trial Court is ordered to be reduced to nine months from a period of two years imposed by the learned Trial Court. The amount of compensation awarded by the learned Trial Court does not require any modification, and no interference is required with it.
44. Records of the learned Courts below be sent back forthwith, along with a copy of this judgment.
(Rakesh Kainthla) Judge 28th July, 2025 (ravinder) ::: Downloaded on - 28/07/2025 21:24:29 :::CIS