Himachal Pradesh High Court
Ravinder Kumar vs Sushil Junk Scrap Dealer & Ors on 1 July, 2025
Neutral Citation No. ( 2025:HHC:20629 ) IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA .
Cr. Revision No. 682 of 2023 Reserved on: 20.06.2025 Date of Decision: 01.07.2025 Ravinder Kumar ....Petitioner Versus Sushil Junk Scrap Dealer & ors.
....Respondents Coram Hon'ble Mr Justice Rakesh Kainthla, Judge. Whether approved for reporting? No For the petitioner : Mr. Vijender Katoch, Advocate.
For the Respondents no. 1 Ex parte vide order dated
&2 03.05.2024
For the Respondent/State : Mr. Ajit Sharma, Deputy
Advocate General.
Rakesh Kainthla, Judge.
The petitioner has filed the present petition against the judgment dated 24.11.2023 passed by learned Additional Sessions Judge-II, Kangra at Dharamshala (learned Appellate Court), vide which the judgment of ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 2 Neutral Citation No. ( 2025:HHC:20629 ) conviction dated 24.01.2019 and order of sentence dated 28.01.2019 passed by learned Judicial Magistrate First Class, .
Court No. I, Dharamshala, were upheld. (Parties shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for convenience.)
2. Briefly stated, the facts giving rise to the present petition are that the complainant filed a complaint against the accused before the learned Trial Court for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act (in short, the "NI Act"). It was asserted that the complainant No.2 is the sole proprietor of the complainant No.1 and is engaged in the business of trading in junk. The accused is running a business of the sale of Kariyana Products, daily confectionery items, etc. He used to sell scrap to the complainant, and the complainant used to pay the amount in advance. The complainant was maintaining an open and running account in the name of the accused, and as per the Books of Account, a sum of ₹28,400/- was payable by the accused to the complainant. The complainant contacted the ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 3 Neutral Citation No. ( 2025:HHC:20629 ) accused in September 2007 and asked him to pay the amount. The accused issued a cheque for ₹ 15,000/- drawn .
on Kangra Central Cooperative Bank in discharge of his legal liability. The complainant presented the cheque before his Bank, but it was dishonoured with an endorsement 'payment stopped by the drawer'. The complainant contacted the accused and requested him to pay the amount.
The accused requested the complainant to present the cheque again. The complainant presented the cheque, and it was dishonoured with the remark 'insufficient funds'. The complainant served a notice upon the accused asking him to pay the amount of ₹ 15,000/- within 15 days from the date of the receipt of the notice. The notice was duly served upon the accused, but the accused failed to pay the amount;
hence, the complaint was filed for taking action as per the law.
3. The learned Trial Court found sufficient reasons to summon the accused. When the accused appeared, notice of accusation was put to him for the commission of an ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 4 Neutral Citation No. ( 2025:HHC:20629 ) offence punishable under Section 138 of the NI Act, to which he pleaded not guilty and claimed to be tried.
.
4. The complainant examined himself (CW1) to prove his case.
5. The accused, in his statement recorded under Section 313 of Cr.P.C., admitted that he was doing business with the complainant and the complainant had opened a running account in his name. He admitted that the cheque was presented, and it was dishonoured. He admitted that notice was issued by the complainant. He stated that he had sent a reply to the notice. He claimed that he was innocent and was falsely implicated.
6. Learned Trial Court held that the issuance of the cheque was not disputed by the accused. Therefore, a presumption under Section 118(a) and Section 139 of the NI Act would arise that the cheque was issued in discharge of the legal liability for consideration. The burden is upon the accused to rebut the presumption. The accused failed to rebut the presumption by leading any evidence. The cheque was dishonoured with the endorsements 'payment stopped ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 5 Neutral Citation No. ( 2025:HHC:20629 ) by the drawer' and 'funds insufficient'. The notice was duly served upon the accused and accused failed to pay the .
amount despite the receipt of the valid notice of demand;
hence, all the ingredients of the commission of offence punishable under Section 138 of NI Act were duly fulfilled.
Consequently, the accused was convicted of the commission of offence punishable under Section 138 of NI Act and was sentenced to undergo simple imprisonment for six months, pay a compensation of ₹30,000/- and in default of payment of the compensation to undergo further simple imprisonment for one month for the commission of the aforesaid offence.
7. Being aggrieved by the judgment and order passed by the learned Trial Court, the accused filed an appeal, which was decided by the learned Additional Sessions Judge-II, Kangra at Dharamshala (learned Appellate Court). Learned Appellate Court concurred with the findings recorded by the learned Trial Court that the cheque was issued in discharge of the legal liability. The burden would shift upon the accused to rebut the ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 6 Neutral Citation No. ( 2025:HHC:20629 ) presumption contained in Section 118 (a) and Section 139 of the NI Act. The accused did not lead any evidence to rebut .
the presumption. The cheque was dishonoured with the endorsement 'insufficient funds'. The notice was served upon the accused, and the accused failed to repay the amount despite the receipt of a valid notice of demand;
hence, he was rightly convicted. The sentence imposed by the learned Trial Court was not excessive, and no interference was required with the order of sentence passed by the learned Trial Court; hence, the appeal was dismissed.
8. Being aggrieved by the judgments and order passed by the learned Courts below, the accused has filed the present revision, asserting that the learned Courts below erred in appreciating the material placed before them. The learned Courts below wrongly concluded that the cheque was dishonoured with the remarks 'insufficient funds' when the cheque was dishonoured with the remarks 'stopped payment'. The complainant had failed to issue notice within 30 days from the date of the receipt of the first information regarding the dishonour. The cause of action once arisen ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 7 Neutral Citation No. ( 2025:HHC:20629 ) would not be stopped or revived by the subsequent presentation of the cheque and issuance of the notice.
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Learned Courts below failed to consider this aspect; hence, it was prayed that the present revision be allowed and the judgments and order passed by learned Courts below be set aside.
9. I have heard Mr. Vijender Katoch, learned counsel for the petitioner and Mr. Ajit Sharma, learned Deputy Advocate General, for the respondent/State.
10. Mr. Vijender Katoch, learned counsel for the petitioner, submitted that the learned Courts below erred in appreciating the material on record. It was a specific case of the complainant that the cheque was dishonoured on its presentation with an endorsement 'payment stopped by the drawer'. The complainant also issued a legal notice to the accused; hence, the cause of action was complete, and it could not have been revived by subsequent presentation and issuance of another notice to the accused. The complaint was barred by limitation, and the learned Trial Court erred in taking its cognisance. The sentence imposed by the ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 8 Neutral Citation No. ( 2025:HHC:20629 ) learned Trial Court is excessive as only an amount of ₹ 15,000/-was involved. Therefore, it was prayed that the .
present revision be allowed and the judgments and order passed by learned Courts below be set aside.
11. Mr. Ajit Sharma, learned Deputy Advocate General, for respondent No.3, supported the judgments and order passed by the learned Courts below and submitted that no interference is required with them.
12. I have given considerable thought to the submissions made at the bar and have gone through the records carefully.
13. It was laid down by the Hon'ble Supreme Court in Malkeet Singh Gill v. State of Chhattisgarh, (2022) 8 SCC 204:
(2022) 3 SCC (Cri) 348: 2022 SCC OnLine SC 786 that the revisional court is not an appellate court and it can only rectify the patent defect, errors of jurisdiction or the law. It was observed at page 207: -
"10. Before adverting to the merits of the contentions, at the outset, it is apt to mention that there are concurrent findings of conviction arrived at by two courts after a detailed appreciation of the material and evidence brought on record. The High ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 9 Neutral Citation No. ( 2025:HHC:20629 ) 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 SCC OnLine SC 1294, wherein it was observed:
"13. The power and jurisdiction of the Higher Court under Section 397 Cr. P.C., which vests the court with the power to call for and examine records of an inferior court, is for the purposes of satisfying itself as to the legality and regularity of any proceeding or order made in a case. The object of this provision is to set right a patent defect or an error of jurisdiction or law or the perversity which has crept into such proceedings. It would be apposite to refer to the judgment of this court in Amit Kapoor v. Ramesh Chandra, (2012) 9 SCC 460, where the scope of Section 397 has been considered and succinctly explained as under:
"12. Section 397 of the Code vests the court with the power to call for and examine the records of an inferior court for the purposes of ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 10 Neutral Citation No. ( 2025:HHC:20629 ) 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 r judicial discretion is exercised arbitrarily or perversely. These are not exhaustive classes but are merely indicative. Each case would have to be determined on its own merits.
13. Another well-accepted norm is that the revisional jurisdiction of the higher court is a very limited one and cannot be exercised in a routine manner. One of the inbuilt restrictions is that it should not be against an interim or interlocutory order. The Court has to keep in mind that the exercise of revisional jurisdiction itself should not lead to injustice ex facie. Where the Court is dealing with the question as to whether the charge has been framed properly and in accordance with law in a given case, it may be reluctant to interfere in the exercise of its revisional jurisdiction unless the case substantially falls within the categories aforestated. Even framing of charge is a much-advanced stage in the proceedings under the CrPC."
15. It was held in Kishan Rao v. Shankargouda, (2018) 8 SCC 165: (2018) 3 SCC (Cri) 544: (2018) 4 SCC (Civ) 37: 2018 ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 11 Neutral Citation No. ( 2025:HHC:20629 ) SCC OnLine SC 651 that it is impermissible for the High Court to reappreciate the evidence and come to its conclusions in .
the absence of any perversity. It was observed on page 169:
"12. This Court has time and again examined the scope of 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 for the purpose of satisfying itself as to the correctness, legality or propriety of any finding, sentence or order. In other words, the jurisdiction is one of 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 own 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 coming to the conclusion that the High Court exceeded its jurisdiction in interfering with the ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 12 Neutral Citation No. ( 2025:HHC:20629 ) conviction of the respondent by reappreciating the oral evidence. ..."
13. Another judgment which has also been referred to .
and relied on by the High Court is the judgment of this Court in Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao Phalke [Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao Phalke, (2015) 3 SCC 123:
(2015) 2 SCC (Cri) 19]. This Court held that the High Court, in the exercise of revisional jurisdiction, shall not interfere with the order of the Magistrate unless it is perverse or wholly unreasonable or there is non-
consideration of any relevant material, the order cannot be set aside merely on the ground that another view is possible. The following has been laid down in para 14: (SCC p. 135) "14. ... Unless the order passed by the Magistrate is perverse or the view taken by the court is wholly unreasonable or there is non-consideration of any relevant material or there is palpable misreading of records, the Revisional Court is not justified in setting aside the order, merely because another view is possible. The Revisional Court is not meant to act as an appellate court. The whole purpose of the revisional jurisdiction is to preserve the power 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."
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14. In the above case, also conviction of the accused was recorded, and the High Court set aside [Dattatray Gulabrao Phalke v. Sanjaysinh Ramrao Chavan, 2013 .
SCC OnLine Bom 1753] the order of conviction by substituting its own view. This Court set aside the High Court's order holding that the High Court exceeded its jurisdiction in substituting its views, and that too without any legal basis.
16. This position was reiterated in Bir Singh v.
Mukesh Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) observed at page 205:
r to 2 SCC (Civ) 309: 2019 SCC OnLine SC 13, wherein it was "16. It is well settled that in exercise of revisional jurisdiction under Section 482 of the Criminal Procedure Code, the High Court does not, in the absence of perversity, upset concurrent factual findings. It is not for the Revisional Court to re- analyse and re-interpret the evidence on record.
17. As held by this Court in Southern Sales & Services v. Sauermilch Design and Handels GmbH [Southern Sales & Services v. Sauermilch Design and Handels GmbH, (2008) 14 SCC 457], it is a well- established principle of law that the Revisional Court will not interfere even if a wrong order is passed by a court having jurisdiction, in the absence of a jurisdictional error. The answer to the first question is therefore, in the negative."
17. The present revision has to be decided as per the parameters laid down by the Hon'ble Supreme Court.
::: Downloaded on - 01/07/2025 21:22:55 :::CIS 14Neutral Citation No. ( 2025:HHC:20629 )
18. It was submitted that the complainant had presented the cheque and it was dishonoured with the .
endorsement 'payment stopped by the drawer'. A notice (Ext.CW1/D) was issued by the complainant. The cause of action was complete on the first dishonour and issuance of the notice and could not be revived by subsequent presentation. This submission is not acceptable. It was laid down by the Hon'ble Supreme Court in MSR Leathers v. S. Palaniappan (2013) 1 SCC 177 that there is nothing in the NI Act to prevent the repeated presentation of the cheque or issuance of successive notices. It was observed:
"33. Applying the above rule of interpretation and the provisions of Section 138, we have no hesitation in holding that a prosecution based on a second or successive default in payment of the cheque amount should not be impermissible simply because no prosecution based on the first default, which was followed by a statutory notice and a failure to pay had not been launched. If the entire purpose underlying Section 138 of the Negotiable Instruments Act is to compel the drawers to honour their commitments made in the course of their business or other affairs, there is no reason why a person who has issued a cheque which is dishonoured and who fails to make payment despite statutory notice served upon him should be immune to prosecution simply because the holder of the cheque has not rushed to the court with a complaint based on such default or simply because ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 15 Neutral Citation No. ( 2025:HHC:20629 ) the drawer has made the holder defer prosecution promising to make arrangements for funds or any other similar reason. There is, in our opinion, no real .
or qualitative difference between a case where default is committed, and prosecution immediately launched and another where the prosecution is deferred till the cheque presented again gets dishonoured for the second or successive time.
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35. In the result, we overrule the decision in the Sadanandan case [(1998) 6 SCC 514: 1998 SCC (Cri) 1471] and hold that the prosecution based upon second or successive dishonour of the cheque is also permissible so long as the same satisfies the requirements stipulated in the proviso to Section 138 of the Negotiable Instruments Act. The reference is answered accordingly. The appeals shall now be listed before the regular Bench for hearing and disposal in light of the observations made above."
19. This position was reiterated in Kamlesh Kumar v.
State of Bihar (2014) 2 SCC 424, and it was held that the complainant could present the cheque repeatedly and issue the notices successively. It was observed:
"8. In the present case, the complainant had not filed the complaint on the dishonour of the cheque in the first instance but presented the said cheque again for encashment. This right of the complainant in presenting the same very cheque for the second time is available to him under the aforesaid provision."
20. This position was reiterated in Bir Singh v.
Mukesh Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 16 Neutral Citation No. ( 2025:HHC:20629 ) 2 SCC (Civ) 309: 2019 SCC OnLine SC 138, wherein it was observed at page 203:
.
"7. Having regard to the object of Section 138 of the Negotiable Instruments Act, a prosecution based on a second or successive default in payment of the cheque amount is not impermissible simply because no statutory notice had been issued after the first default and no proceeding for prosecution had been initiated. As held by this Court in MSR Leathers v. S. Palaniappan [MSR Leathers v. S. Palaniappan, (2013) 1 SCC 177: (2013) 1 SCC (Civ) 424 : (2013) 2 SCC (Cri) 458], there is no real or qualitative difference between a case where default is committed and prosecution immediately launched and another where the prosecution is deferred till the cheque presented again gets dishonoured for the second time or successive times."
21. Therefore, there is no bar in the successive presentation of the cheque and issuance of the notice.
22. It was suggested to the complainant that he had taken the cheque as security, and he had filled in the amount himself. This suggestion shows that the accused has not disputed the issuance of the cheque, and 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 ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 17 Neutral Citation No. ( 2025:HHC:20629 ) liability and the burden would shift upon the accused to rebut the presumption. It was observed: -
.
"8. Once signatures on the cheque are not disputed, the plea with regard to the cheque having not been issued towards discharge of lawful liability, rightly came to be rejected by learned Courts below. Reliance is placed upon Hiten P. Dalal v. Bartender Nath Bannerji, 2001 (6) SCC 16, wherein it has been held as under:
"The words 'unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when, upon the material before it, the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted......"
9. S.139 of the Act provides that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
23. 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 ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 18 Neutral Citation No. ( 2025:HHC:20629 ) the cheque was issued in discharge of debt or liability."
24. 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 into 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."
25. 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.::: Downloaded on - 01/07/2025 21:22:55 :::CIS 19
Neutral Citation No. ( 2025:HHC:20629 ) 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.
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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 more particularly, the cheque in question was issued for the second time after the ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 20 Neutral Citation No. ( 2025:HHC:20629 ) 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."
26. 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:::: Downloaded on - 01/07/2025 21:22:55 :::CIS 21
Neutral Citation No. ( 2025:HHC:20629 ) "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 r presumptions shall be made:
(a) of consideration: that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration."
14. The above-noted provisions are explicit to the effect that such presumption would remain until the contrary is proved. The learned counsel for the appellant in that regard has relied on the decision of this Court in K. Bhaskaran v. Sankaran Vaidhyan Balan [K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510: 1999 SCC (Cri) 1284] wherein it is held as hereunder: (SCC pp. 516-17, para 9) "9. As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins the Court to presume that the holder of the cheque ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 22 Neutral Citation No. ( 2025:HHC:20629 ) 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. Mudi basappa, (2019) 5 SCC 418: (2019) 2 SCC (Cri) 571] wherein it is held as hereunder: (SCC pp. 432-33, paras 25-26) "25. We having noticed the ratio laid down by this Court in the above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in the following manner:
25.1. Once the execution of the cheque is admitted, Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
25.2. The presumption under Section 139 is a rebuttable presumption, and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 23 Neutral Citation No. ( 2025:HHC:20629 ) of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon .
which they rely.
25.4. That it is not necessary for the accused to come into the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
25.5. It is not necessary for the accused to come into the witness box to support his defence.
26. Applying the preposition of law as noted above, in the facts of the present case, it is clear that the signature on the cheque, having been admitted, a presumption shall be raised under Section 139 that the cheque was issued in discharge of debt or liability. The question to be looked into is as to whether any probable defence was raised by the accused. In the cross-examination of PW 1, when the specific question was put that a cheque was issued in relation to a loan of Rs 25,000 taken by the accused, PW 1 said that he does not remember.
PW 1 in his evidence admitted that he retired in 1997, on which date he received a monetary benefit of Rs 8 lakhs, which was encashed by the complainant. It was also brought in evidence that in the year 2010, the complainant entered into a sale agreement for which he paid an amount of Rs 4,50,000 to Balana Gouda towards sale consideration. Payment of Rs 4,50,000 being admitted in the year 2010 and further payment of loan of Rs 50,000 with regard to which Complaint No. 119 of 2012 was filed by the complainant, a copy of which complaint was also filed as Ext. D-2, there was a burden on the complainant to prove his financial capacity. In the years 2010-2011, as ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 24 Neutral Citation No. ( 2025:HHC:20629 ) 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 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 ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 25 Neutral Citation No. ( 2025:HHC:20629 ) reiterated. Hence, whether there is a rebuttal or not would depend on the facts and circumstances of each case."
.
27. 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..."::: Downloaded on - 01/07/2025 21:22:55 :::CIS 26
Neutral Citation No. ( 2025:HHC:20629 )
28. 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."
29. 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 ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 27 Neutral Citation No. ( 2025:HHC:20629 ) Section 138. [The rules discussed hereinbelow are common to both the presumptions under Section 139 and Section 118 and are hence not repeated--
.
reference to one can be taken as reference to another]
34. Section 139 of the NI Act, which takes the form of a "shall presume" clause, is illustrative of a presumption of law. Because Section 139 requires that the Court "shall presume" the fact stated therein, it is obligatory for the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. But this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary, as is clear from the use of the phrase "unless the contrary is proved".
35. The Court will necessarily presume that the cheque had been issued towards the discharge of a legally enforceable debt/liability in two circumstances. Firstly, when the drawer of the cheque admits issuance/execution of the cheque and secondly, in the event where the complainant proves that the cheque was issued/executed in his favour by the drawer. The circumstances set out above form the fact(s) which bring about the activation of the presumptive clause. [Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal [Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal, (1999) 3 SCC 35]]
36. Recently, this Court has gone to the extent of holding that presumption takes effect even in a situation where the accused contends that a blank cheque leaf was voluntarily signed and handed over by him to the complainant. [Bir Singh v. Mukesh Kumar [Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197:
(2019) 2 SCC (Civ) 309: (2019) 2 SCC (Cri) 40] ].
Therefore, the mere admission of the drawer's signature, without admitting the execution of the ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 28 Neutral Citation No. ( 2025:HHC:20629 ) entire contents in the cheque, is now sufficient to trigger the presumption.
37. As soon as the complainant discharges the burden .
to prove that the instrument, say a cheque, was issued by the accused for discharge of debt, the presumptive device under Section 139 of the Act helps shifting the burden on the accused. The effect of the presumption, in that sense, is to transfer the evidential burden on the accused of proving that the cheque was not received by the Bank towards the discharge of any liability. Until this evidential burden is discharged by the accused, the presumed fact will have to be taken to be true, without expecting the complainant to do anything further.
38. John Henry Wigmore [John Henry Wigmore and the Rules of Evidence: The Hidden Origins of Modern Law] on Evidence states as follows:
"The peculiar effect of the presumption of law is merely to invoke a rule of law compelling the Jury to reach the conclusion in the absence of evidence to the contrary from the opponent but if the opponent does offer evidence to the contrary (sufficient to satisfy the Judge's requirement of some evidence), the presumption 'disappears as a rule of law and the case is in the Jury's hands free from any rule'."
39. The standard of proof to discharge this evidential burden is not as heavy as that usually seen in situations where the prosecution is required to prove the guilt of an accused. The accused is not expected to prove the non-existence of the presumed fact beyond a reasonable doubt. The accused must meet the standard of "preponderance of probabilities", similar to a defendant in a civil proceeding. [Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010) 11 SCC 441:
::: Downloaded on - 01/07/2025 21:22:55 :::CIS 29Neutral Citation No. ( 2025:HHC:20629 ) (2010) 4 SCC (Civ) 477: (2011) 1 SCC (Cri) 184: AIR 2010 SC 1898]]
30. In the present case, the accused has not provided .
any explanation in his statement recorded under Section 313 of CrPC. regarding the issuance of the cheque to the complainant. He did not step into the witness box to prove his version that the cheque was issued by him as security to the complainant. It was held in Sumeti Vij v. Paramount Tech Fab Industries, (2022) 15 SCC 689: 2021 SCC OnLine SC 201 that the accused has to lead defence evidence to rebut the presumption and mere denial in his statement under Section 313 of Cr.P.C. is not sufficient to rebut the presumption. It was observed at page 700:
"20. That apart, when the complainant exhibited all these documents in support of his complaints and recorded the statement of three witnesses in support thereof, the appellant has recorded her statement under Section 313 of the Code but failed to record evidence to disprove or rebut the presumption in support of her defence available under Section 139 of the Act. The statement of the accused recorded under Section 313 of the Code is not substantive evidence of defence, but only an opportunity for the accused to explain the incriminating circumstances appearing in the prosecution's case against the accused. Therefore, there is no evidence to rebut the presumption that the cheques were issued for consideration." (Emphasis supplied)"::: Downloaded on - 01/07/2025 21:22:55 :::CIS 30
Neutral Citation No. ( 2025:HHC:20629 )
31. Therefore, the statement of the accused under Section 313 of Cr.P.C. was not sufficient to prove the plea .
taken by him that the cheque was issued as a security.
32. The complainant admitted that his name and amount are filled in the cheque in different inks. It was submitted that this made the version of the accused highly probable that the cheque was issued as a security, and the complainant filled the same as per his convenience. This submission will not help the accused. It was laid down by the Hon'ble Supreme Court in Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ) 309: 2019 SCC OnLine SC 138, that a person is liable for the commission of an offence punishable under Section 138 of the NI Act even if the cheque is filled by some other person. It was observed:
"33. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer if ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 31 Neutral Citation No. ( 2025:HHC:20629 ) the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted.
.
34. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.
35. It is not the case that the respondent accused him of either signing the cheque or parted with it under any threat or coercion. Nor is it the case that the respondent accused that the unfilled signed cheque had been stolen. The existence of a fiduciary relationship between the payee of a cheque and its drawer would not disentitle the payee to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, in the absence of evidence of exercise of undue influence or coercion.
The second question is also answered in the negative.
36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."
33. This position was reiterated in Oriental Bank of Commerce v. Prabodh Kumar Tewari, 2022 SCC OnLine SC 1089, wherein it was observed:
"12. The submission, which has been urged on behalf of the appellant, is that even assuming, as the first respondent submits, that the details in the cheque were not filled in by the drawer, this would not make any difference to the liability of the drawer.::: Downloaded on - 01/07/2025 21:22:55 :::CIS 32
Neutral Citation No. ( 2025:HHC:20629 ) xxxxxx
32. A drawer who signs a cheque and hands it over to the payee is presumed to be liable unless the .
drawer adduces evidence to rebut the presumption that the cheque has been issued towards payment of a debt or in the discharge of a liability. The presumption arises under Section 139.
34. Therefore, the cheque is not bad even if it is not filled by the drawer.
35. The plea taken by the accused that the cheque was issued as a security is not proved by any material on record. In any case, it was laid down by this Court in Hamid Mohammad Versus Jaimal Dass 2016 (1) HLJ 456, that even if the cheque was issued towards the security, the accused will be liable. It was observed:
"9. Submission of learned Advocate appearing on behalf of the revisionist that the cheque in question was issued to the complainant as security and on this ground, criminal revision petition be accepted is rejected as being devoid of any force for the reasons hereinafter mentioned. As per Section 138 of the Negotiable Instruments Act 1881, if any cheque is issued on account of other liability, then the provisions of Section 138 of the Negotiable Instruments Act 1881 would be attracted. The court has perused the original cheque, Ext. C-1 dated 30.10.2008, placed on record. There is no recital in the cheque Ext. C-1, that cheque was issued as a security cheque. It is well-settled law that a cheque issued as security would also come under the ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 33 Neutral Citation No. ( 2025:HHC:20629 ) provision of Section 138 of the Negotiable Instruments Act 1881. See 2016 (3) SCC page 1 titled Don Ayengia v. State of Assam & another. It is well-
.
settled law that where there is a conflict between former law and subsequent law, then subsequent law always prevails."
36. It was laid down by the Hon'ble Supreme Court in Sampelly Satyanarayana Rao vs. Indian Renewable Energy Development Agency Limited 2016(10) SCC 458 that issuing a cheque toward security will also attract the liability for the commission of an offence punishable under Section 138 of the NI Act. It was observed: -
"10. We have given due consideration to the submission advanced on behalf of the appellant as well as the observations of this Court in Indus Airways Private Limited versus Magnum Aviation Private Limited (2014) 12 SCC 53 with reference to the explanation to Section 138 of the Act and the expression "for the discharge of any debt or other liability" occurring in Section 138 of the Act. We are of the view that the question of whether a post-dated cheque is for "discharge of debt or liability" depends on the nature of the transaction. If on the date of the cheque, liability or debt exists or the amount has become legally recoverable, the Section is attracted and not otherwise.
11. Reference to the facts of the present case clearly shows that though the word "security" is used in clause 3.1(iii) of the agreement, the said expression refers to the cheques being towards repayment of instalments. The repayment becomes due under the agreement, the moment the loan is advanced and the ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 34 Neutral Citation No. ( 2025:HHC:20629 ) instalment falls due. It is undisputed that the loan was duly disbursed on 28th February 2002, which was prior to the date of the cheques. Once the loan .
was disbursed and instalments had fallen due on the date of the cheque as per the agreement, the dishonour of such cheques would fall under Section 138 of the Act. The cheques undoubtedly represent the outstanding liability.
12. Judgment in Indus Airways (supra) is clearly distinguishable. As already noted, it was held therein that liability arising out of a claim for breach of contract under Section 138, which arises on account of dishonour of a cheque issued, was not by itself at par with a criminal liability towards discharge of acknowledged and admitted debt under a loan transaction. Dishonour of a cheque issued for discharge of a later liability is clearly covered by the statute in question. Admittedly, on the date of the cheque, there was a debt/liability in praesenti in terms of the loan agreement, as against the case of Indus Airways (supra), where the purchase order had been cancelled and a cheque issued towards advance payment for the purchase order was dishonoured. In that case, it was found that the cheque had not been issued for discharge of liability but as an advance for the purchase order, which was cancelled. Keeping in mind this fine, but the real distinction, the said judgment cannot be applied to a case of the present nature where the cheque was for repayment of a loan instalment which had fallen due, though such deposit of cheques towards repayment of instalments was also described as "security" in the loan agreement. In applying the judgment in Indus Airways (supra), one cannot lose sight of the difference between a transaction of the purchase order which is cancelled and that of a loan transaction where the loan has actually been advanced and its repayment is due on the date of the cheque.::: Downloaded on - 01/07/2025 21:22:55 :::CIS 35
Neutral Citation No. ( 2025:HHC:20629 )
13. The crucial question to determine the applicability of Section 138 of the Act is whether the cheque represents the discharge of existing enforceable debt .
or liability, or whether it represents an advance payment without there being a subsisting debt or liability. While approving the views of different High Courts noted earlier, this is the underlying principle as can be discerned from the discussion of the said cases in the judgment of this Court." (Emphasis supplied)
37. This position was reiterated in Sripati Singh v.
State of Jharkhand, 2021 SCC OnLine SC 1002: AIR 2021 SC 5732, and it was held that a cheque issued as security is not waste paper and a complaint under Section 138 of the N.I. Act can be filed on its dishonour. It was observed:
"17. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance.
'Security' in its true sense is the state of being safe, and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of the amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 36 Neutral Citation No. ( 2025:HHC:20629 ) the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of N.I. Act would flow.
.
18. When a cheque is issued and is treated as 'security' towards repayment of an amount with a time period being stipulated for repayment, all that it ensures is that such cheque which is issued as 'security cannot be presented prior to the loan or the instalment maturing for repayment towards which such cheque is issued as security. Further, the borrower would have the option of repaying the loan amount or such financial liability in any other form, and in that manner, if the amount of the loan due and payable has been discharged within the agreed period, the cheque issued as security cannot thereafter be presented. Therefore, the prior discharge of the loan or there being an altered situation due to which there would be an understanding between the parties is a sine qua non to not present the cheque which was issued as security. These are only the defences that would be available to the drawer of the cheque in proceedings initiated under Section 138 of the N.I. Act. Therefore, there cannot be a hard and fast rule that a cheque, which is issued as security, can never be presented by the drawee of the cheque. If such is the understanding, a cheque would also be reduced to an 'on-demand promissory note' and in all circumstances, it would only be civil litigation to recover the amount, which is not the intention of the statute. When a cheque is issued even though as 'security' the consequence flowing therefrom is also known to the drawer of the cheque and in the circumstance stated above if the cheque is presented and dishonoured, the holder of the cheque/drawee would have the option of initiating the civil proceedings for recovery or the criminal proceedings for punishment in the fact situation, but in any event, ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 37 Neutral Citation No. ( 2025:HHC:20629 ) it is not for the drawer of the cheque to dictate terms with regard to the nature of litigation."
38. The complainant admitted in his cross-
.
examination that he had not produced the record regarding the payment of an amount to the accused. It was submitted that in the absence of the record, learned Courts below erred in holding that the existence of legal liability was proved on record. This submission is not acceptable. It was laid down by the Hon'ble Supreme Court in Ashok Kumar Versus State of U.P, 2025 SCC Online SC 706 that the complainant is not to prove the advancement of the loan because it is a matter of presumption. It was observed:
22. The High Court while allowing the criminal revision has primarily proceeded on the presumption that it was obligatory on the part of the complainant to establish his case on the basis of evidence by giving the details of the bank account as well as the date and time of the withdrawal of the said amount which was given to the accused and also the date and time of the payment made to the accused, including the date and time of receiving of the cheque, which has not been done in the present case. Pausing here, such presumption on the complainant, by the High Court, appears to be erroneous. The onus is not on the complainant at the threshold to prove his capacity/financial wherewithal to make the payment in discharge of which the cheque is alleged to have been issued in his favour. Only if an objection is raised that the complainant was not in a financial ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 38 Neutral Citation No. ( 2025:HHC:20629 ) position to pay the amount so claimed by him to have been given as a loan to the accused, only then the complainant would have to bring before the Court .
cogent material to indicate that he had the financial capacity and had actually advanced the amount in question by way of loan. In the case at hand, the appellant had categorically stated in his deposition and reiterated in the cross-examination that he had withdrawn the amount from the bank in Faizabad (Typed Copy of his deposition in the paperbook wrongly mentions this as 'Firozabad'). The Court ought not to have summarily rejected such a stand, more so when respondent no. 2 did not make any serious attempt to dispel/negate such a stand/statement of the appellant. Thus, on the one hand, the statement made before the Court, both in examination-in-chief and cross-examination, by the appellant with regard to withdrawing the money from the bank for giving it to the accused has been disbelieved whereas the argument on behalf of the accused that he had not received any payment of any loan amount has been accepted. In our decision in S. S. Production v. Tr. Pavithran Prasanth, 2024 INSC 1059, we opined:
'8. From the order impugned, it is clear that though the contention of the petitioners was that the said amounts were given for producing a film and were not by way of return of any loan taken, which may have been a probable defence for the petitioners in the case, but rightly, the High Court has taken the view that evidence had to be adduced on this point which has not been done by the petitioners. Pausing here, the Court would only comment that the reasoning of the High Court, as well as the First Appellate Court and Trial Court, on this issue is sound. Just by taking a counter-stand to raise a probable defence would not shift the onus on the complainant in such a case, for the plea of defence ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 39 Neutral Citation No. ( 2025:HHC:20629 ) has to be buttressed by evidence, either oral or documentary, which in the present case has not been done. Moreover, even if it is presumed that the .
complainant had not proved the source of the money given to the petitioners by way of loan by producing statement of accounts and/or Income Tax Returns, the same ipso facto, would not negate such claim for the reason that the cheques having being issued and signed by the petitioners has not been denied, and no evidence has been led to show that the respondent lacked capacity to provide the amount(s) in question. In this regard, we may make profitable reference to the decision in Tedhi Singh v. Narayan Dass Mahant, (2022) 6 SCC 735:
'10. The trial court and the first appellate court have noted that in the case under Section 138 of the NI Act, the complainant need not show in the first instance that he had the capacity. The proceedings under Section 138 of the NI Act is not a civil suit. At the time, when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. To that extent, the courts in our view were right in holding on those lines. However, the accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable, which he can do by producing independent materials, namely, by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, achieve this result through the cross-
examination of the witnesses of the ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 40 Neutral Citation No. ( 2025:HHC:20629 ) complainant. Ultimately, it becomes the duty of the courts to consider carefully and appreciate the totality of the evidence and then come to a .
conclusion whether, in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence.' (emphasis supplied)' (underlining in original; emphasis supplied by us in bold)
39. Therefore, there was no requirement to produce the record regarding the payment of money to the accused, and the complainant's case cannot be faulted because such a record was not produced before the Court.
40. The complainant stated that the cheque was dishonoured with an endorsement 'payment stopped by the drawer' and thereafter 'funds insufficient'. It was submitted that the Bank could not have dishonoured the cheque on subsequent presentation with an endorsement 'insufficient funds', and the cheque was to be dishonoured with an endorsement 'payment stopped by the drawer'. This submission will not help the accused. The complainant specifically stated that he contacted the accused after the dishonour of the cheque, and the accused asked him to repay the cheque, which means that the accused had talked to the ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 41 Neutral Citation No. ( 2025:HHC:20629 ) Bank, and therefore, the dishonour on the ground of 'insufficient funds' is not bad. Even if the payment was .
stopped by the drawer, it will attract the provisions of Section 138 of the NI Act. It was laid down by the Hon'ble Supreme Court in Laxmi Dyechem v. State of Gujarat, (2012) 13 SCC 375: (2012) 4 SCC (Cri) 283: 2012 SCC OnLine SC 970 that the dishonour of cheque on the ground that the payment was stopped by the drawer will attract the provisions of Section 138 of NI Act. It was observed at page 388:
12. In Modi Cements Ltd. [(1998) 3 SCC 249: 1999 SCC (Cri) 252], a similar question had arisen for the consideration of this Court. The question was whether dishonour of a cheque on the ground that the drawer had stopped payment was a dishonour punishable under Section 138 of the Act. Relying upon two earlier decisions of this Court in Electronics Trade & Technology Development Corpn. Ltd. v. Indian Technologists and Engineers (Electronics) (P) Ltd. [(1996) 2 SCC 739: 1996 SCC (Cri) 454] and K.K. Sidharthan v. T.P. Praveena Chandran [(1996) 6 SCC 369: 1996 SCC (Cri) 1340], it was contended by the drawer of the cheque that if the payment was stopped by the drawer, the dishonour of the cheque could not constitute an offence under Section 138 of the Act.
That contention was specifically rejected by this Court. Not only that, the decision in Electronics Trade & Technology Development Corpn. Ltd. [(1996) 2 SCC 739: 1996 SCC (Cri) 454] to the extent the same held that dishonour of the cheque by the bank after the drawer had issued a notice to the holder not to ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 42 Neutral Citation No. ( 2025:HHC:20629 ) present the same would not constitute an offence, was overruled. This Court observed: (Modi Cements Ltd. case [(1998) 3 SCC 249: 1999 SCC (Cri) 252], SCC .
pp. 257-58, paras 18 & 20) "18. The aforesaid propositions in both these reported judgments, in our considered view, with great respect, are contrary to the spirit and object of Sections 138 and 139 of the Act. If we are to accept this proposition, it will make Section 138 a dead letter, for, by giving instructions to the bank to stop payment immediately after issuing a cheque against a debt or liability, the drawer can easily get rid of the penal consequences notwithstanding the fact that a deemed offence was committed. Further, the following observations in para 6 in Electronics Trade & Technology Development Corpn. Ltd. [(1996) 2 SCC 739: 1996 SCC (Cri) 454] (SCC p. 742) Section 138 is intended to prevent dishonesty on the part of the drawer of a negotiable instrument to draw a cheque without sufficient funds in his account maintained by him in a bank and induce the payee or holder in due course to act upon it. Section 138 draws the presumption that one commits the offence if one issues the cheque dishonestly.
In our opinion, do not also lay down the law correctly.
***
20. On a careful reading of Section 138 of the Act, we are unable to subscribe to the view that Section 138 of the Act draws a presumption of dishonesty against the drawer of the cheque if he without sufficient funds to his credit in his bank account to honour the cheque issues the same and, therefore, this amounts to an offence under Section 138 of the Act. For the reasons stated hereinabove, we ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 43 Neutral Citation No. ( 2025:HHC:20629 ) are unable to share the views expressed by this Court in the above two cases and we respectfully differ with the same regarding interpretation of .
Section 138 of the Act to the limited extent as indicated above." (emphasis in original)
13. We may also, at this stage, refer to the decisions of this Court in M.M.T.C. Ltd. v. Medchl Chemicals and Pharma (P) Ltd. [(2002) 1 SCC 234: 2002 SCC (Cri) 121], where to this Court considering an analogous question held that even in cases where the dishonour was on account of "stop-payment" instructions of the drawer, a presumption regarding the cheque being for consideration would arise under Section 139 of the Act. The Court observed: (SCC p. 240, para 19) "19. Just such a contention has been negatived by this Court in Modi Cements Ltd. v. Kuchil Kumar Nandi [(1998) 3 SCC 249: 1999 SCC (Cri) 252]. It has been held that even though the cheque is dishonoured by reason of a 'stop-payment' instruction, an offence under Section 138 could still be made out. It is held that the presumption under Section 139 is also attracted in such a case also. The authority shows that even when the cheque is dishonoured by reason of 'stop-
payment' instructions by virtue of Section 139, the court has to presume that the cheque was received by the holder for the discharge, in whole or in part, of any debt or liability. Of course, this is a rebuttable presumption. The accused can thus show that the 'stop-payment' instructions were not issued because of insufficiency or paucity of funds. If the accused shows that in his account there were sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop-payment notice had been issued because of other valid reasons, including that there was no existing debt or liability at the time ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 44 Neutral Citation No. ( 2025:HHC:20629 ) of presentation of a cheque for encashment, then offence under Section 138 would not be made out. The important thing is that the burden of so .
proving would be on the accused. Thus, a court cannot quash a complaint on this ground."
14. To the same effect is the decision of this Court in Goaplast (P) Ltd. v. Chico Ursula D'Souza [(2003) 3 SCC 232: 2003 SCC (Cri) 603: 2003 Cri LJ 1723] where this Court held that "stop-payment instructions"
and consequent dishonour of a post-dated cheque attract the provision of Section 138. This Court observed: (SCC pp. 232g-233c) "Chapter XVII, containing Sections 138 to 142, was introduced in the Act by Act 66 of 1988 with the object of inculcating faith in the efficacy of banking operations and giving credibility to negotiable instruments in business transactions. The said provisions were intended to discourage people from not honouring their commitments by way of payment through cheques. The court should lean in favour of an interpretation which serves the object of the statute. A post-dated cheque will lose its credibility and acceptability if its payment can be stopped routinely. The purpose of a post-dated cheque is to provide some accommodation to the drawer of the cheque. Therefore, it is all the more necessary that the drawer of the cheque should not be allowed to abuse the accommodation given to him by a creditor by way of acceptance of a post-dated cheque.
In view of Section 139, it has to be presumed that a cheque is issued in the discharge of any debt or other liability. The presumption can be rebutted by adducing evidence, and the burden of proof is on the person who wants to rebut the presumption. This presumption, coupled with the object of Chapter XVII of the Act, leads to the ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 45 Neutral Citation No. ( 2025:HHC:20629 ) conclusion that by countermanding payment of a post-dated cheque, a party should not be allowed to get away from the penal provision of Section 138 of .
the Act. A contrary view would render Section 138 a dead letter and will provide a handle to persons trying to avoid payment under legal obligations undertaken by them through their own acts, which in other words can be said to be taking advantage of one's own wrong." (emphasis supplied)
41. Therefore, the accused cannot escape from the liability that the cheque was dishonoured with the endorsement 'payment stopped by the drawer'.
42 The accused did not dispute the receipt of the notice in his statement recorded under Section 313 of Cr.P.C.
He stated that he had sent a reply to the notice, therefore, it was duly proved on record that the notice was issued.
43. Thus, it was duly proved that the cheque was issued in the discharge of the legal liability, it was dishonoured with an endorsement 'payment stopped by the drawer', and the accused failed to pay the amount despite the receipt of a valid notice of demand. Hence, the complainant had proved his case beyond a reasonable doubt, and the learned Trial Court had rightly convicted the accused ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 46 Neutral Citation No. ( 2025:HHC:20629 ) for the commission of an offence punishable under Section 138 of the NI Act.
.
44. Learned Trial Court had sentenced the accused to undergo simple imprisonment for six months. The legislature had introduced the offence of dishonour of cheques to instil confidence in the public about the transactions carried out with cheques. It was laid down by the Hon'ble Supreme Court in Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ) 309:
2019 SCC OnLine SC 138 that the penal provision of Section 138 of the NI Act 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."
45. It was submitted that the sentence of six months is excessive because the amount of the cheque was only ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 47 Neutral Citation No. ( 2025:HHC:20629 ) ₹15,000/-. The Legislature had enacted the offence to instil confidence in the cheque transactions, and the amount of .
the cheque is immaterial to impose the sentence. The sentence cannot be reduced, dependent upon the amount, and the learned Trial Court had already taken a lenient view while imposing the sentence of six months upon the accused. No further interference is required with the sentence imposed by the learned Trial Court.
46. Learned Trial Court ordered the payment of compensation of ₹30,000/- to the accused. The cheque was issued on 16.09.2007, and the sentence was imposed on 28.01.2019 after a lapse of 12 years. The complainant lost interest on the amount which he would have obtained by depositing the money in the bank, and he had to pay the litigation expenses for filing the complaint. He was entitled to be compensated for the same. It was laid down by the Hon'ble Supreme Court in Kalamani Tex v. P. Balasubramanian, (2021) 5 SCC 283: (2021) 3 SCC (Civ) 25:
(2021) 2 SCC (Cri) 555: 2021 SCC OnLine SC 75 that the Courts should uniformly levy a fine up to twice the cheque amount ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 48 Neutral Citation No. ( 2025:HHC:20629 ) 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]"
47. In the present case, the learned Trial Court had awarded an amount of ₹15,000/- as compensation on the amount of ₹15,000/- and the same is not excessive, keeping in view the time elapsed between the issuance of the cheque and the date of dishonour.
48. It was submitted that the learned Trial Court erred in imposing the sentence in default of the payment of compensation. This submission is not acceptable. It was laid down by the Hon'ble Supreme Court in K.A. Abbas v. Sabu Joseph, (2010) 6 SCC 230: (2010) 3 SCC (Civ) 744: (2010) 3 SCC ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 49 Neutral Citation No. ( 2025:HHC:20629 ) (Cri) 127: 2010 SCC OnLine SC 612, that the Courts can impose a sentence of imprisonment in default of payment of .
compensation. It was observed at page 237:
"20. Moving over to the question, whether a default sentence can be imposed on default of payment of compensation, this Court in Hari Singh v. Sukhbir Singh [(1988) 4 SCC 551: 1988 SCC (Cri) 984: AIR 1988 SC 2127] and in Balraj v. State of U.P. [(1994) 4 SCC 29:
1994 SCC (Cri) 823: AIR 1995 SC 1935], has held that it was open to all the courts in India to impose a sentence on default of payment of compensation under sub-section (3) of Section 357. In Hari Singh v. Sukhbir Singh [(1988) 4 SCC 551: 1988 SCC (Cri) 984: AIR 1988 SC 2127], this Court has noticed certain factors which are required to be taken into consideration while passing an order under the section: (SCC p. 558, para 11) "11. The payment by way of compensation must, however, be reasonable. What is reasonable may depend upon the facts and circumstances of each case. The quantum of compensation may be determined by taking into account the nature of the crime, the justness of the claim by the victim and the ability of the accused to pay. If there is more than one accused, they may be asked to pay on equal terms unless their capacity to pay varies considerably. The payment may also vary depending on the acts of each accused. A reasonable period for payment of compensation, if necessary, by instalments, may also be given. The court may enforce the order by imposing a sentence in default."
21. This position also finds support in R. v. Oliver John Huish [(1985) 7 Cri App R (S) 272]. The Lord Justice ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 50 Neutral Citation No. ( 2025:HHC:20629 ) Croom Johnson, speaking for the Bench, has observed:
"When compensation orders may be made, the .
most careful examination is required.
Documents should be obtained, and evidence, either on affidavit or orally, should be given. The proceedings should, if necessary, be adjourned to arrive at the true state of the defendant's affairs.
Very often, a compensation order is made and a very light sentence of imprisonment is imposed, because the court recognises that if the defendant is to have an opportunity of paying the compensation, he must be enabled r to earn the money with which to do so. The result is therefore an extremely light sentence of imprisonment. If the compensation order turns out to be virtually worthless, the defendant has got off with a very light sentence of imprisonment as well as no order of compensation. In other words, generally speaking, he has got off with everything."
22. The law laid down in Hari Singh v. Sukhbir Singh [(1988) 4 SCC 551: 1988 SCC (Cri) 984: AIR 1988 SC 2127] was reiterated by this Court in Suganthi Suresh Kumar v. Jagdeeshan [(2002) 2 SCC 420: 2002 SCC (Cri) 344]. The Court observed: (SCC pp. 424-25, paras 5 & 10) "5. In the said decision, this Court reminded all concerned that it is well to remember the emphasis laid on the need for making liberal use of Section 357(3) of the Code. This was observed by reference to a decision of this Court in Hari Singh v. Sukhbir Singh [(1988) 4 SCC 551: 1988 SCC (Cri) 984: AIR 1988 SC 2127]. In the said decision, this Court held as follows:
(SCC p. 558, para 11) ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 51 Neutral Citation No. ( 2025:HHC:20629 ) '11. ... The quantum of compensation may be determined by taking into account the nature of the crime, the justness of the claim by the .
victim and the ability of the accused to pay. If there is more than one accused, they may be asked to pay on equal terms unless their capacity to pay varies considerably. The payment may also vary depending on the acts of each accused. A reasonable period for payment of compensation, if necessary, by instalments, may also be given. The court may enforce the order by imposing a sentence in default.' (emphasis in original) r ***
10. That apart, Section 431 of the Code has only prescribed that any money (other than fine) payable by an order made under the Code shall be recoverable 'as if it were a fine'. Two modes of recovery of the fine have been indicated in Section 421(1) of the Code. The proviso to the sub-section says that if the sentence directs that in default of payment of the fine, the offender shall be imprisoned, and if such offender has undergone the whole of such imprisonment in default, no court shall issue such warrant for the levy of the amount."
The Court further held: (Jagdeeshan case [(2002) 2 SCC 420: 2002 SCC (Cri) 344], SCC p. 425, para 11) "11. When this Court pronounced in Hari Singh v. Sukhbir Singh [(1988) 4 SCC 551: 1988 SCC (Cri) 984: AIR 1988 SC 2127] that a court may enforce an order to pay compensation 'by imposing a sentence in default' it is open to all courts in India to follow the said course. The said legal position would continue to hold good until it is overruled by a larger Bench of this ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 52 Neutral Citation No. ( 2025:HHC:20629 ) Court. Hence learned Single Judge of the High Court of Kerala has committed an impropriety by expressing that the said legal direction of .
this Court should not be followed by the subordinate courts in Kerala. We express our disapproval of the course adopted by the said Judge in Rajendran v. Jose [(2001) 3 KLT 431]. It is unfortunate that when the Sessions Judge has correctly done a course in accordance with the discipline, the Single Judge of the High Court has incorrectly reversed it."
23. In order to set at rest the divergent opinion expressed in Ahammedkutty case [(2009) 6 SCC 660 :
(2009) 3 SCC (Cri) 302], this Court in Vijayan v. Sadanandan K. [(2009) 6 SCC 652 : (2009) 3 SCC (Cri) 296], after noticing the provision of Sections 421 and 431 CrPC, which dealt with mode of recovery of fine and Section 64 IPC, which empowered the courts to provide for a sentence of imprisonment on default of payment of fine, the Court stated: (Vijayan case [(2009) 6 SCC 652 : (2009) 3 SCC (Cri) 296], SCC p. 658, para 24) "24. We have carefully considered the submissions made on behalf of the respective parties. Since a decision on the question raised in this petition is still in a nebulous state, there appear to be two views as to whether a default sentence of imprisonment can be imposed in cases where compensation is awarded to the complainant under Section 357(3) CrPC. As pointed out by Mr Basant in Dilip S. Dahanukar case [(2007) 6 SCC 528 : (2007) 3 SCC (Cri) 209], the distinction between a fine and compensation as understood under Section 357(1)(b) and Section 357(3) CrPC had been explained, but the question as to whether a default sentence clause could be made in respect of compensation payable under Section ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 53 Neutral Citation No. ( 2025:HHC:20629 ) 357(3) CrPC, which is central to the decision in this case, had not been considered." The Court further held: (Vijayan case [(2009) 6 SCC .
652: (2009) 3 SCC (Cri) 296], SCC p. 659, paras 31-32) "31. The provisions of Sections 357(3) and 431 CrPC, when read with Section 64 IPC, empower the court, while making an order for payment of compensation, to also include a default sentence in case of non-payment of the same.
32. The observations made by this Court in Hari Singh case [(1988) 4 SCC 551: 1988 SCC (Cri) 984:
AIR 1988 SC 2127] are as important today as they were when they were made and if, as submitted by Dr. Pillay, recourse can only be r had to Section 421 CrPC for enforcing the same, the very object of sub-section (3) of Section 357 would be frustrated and the relief contemplated therein would be rendered somewhat illusory."
24. In Shantilal v. State of M.P. [(2007) 11 SCC 243:
(2008) 1 SCC (Cri) 1], it is stated that the sentence of imprisonment for default in payment of a fine or compensation is different from a normal sentence of imprisonment. The Court also delved into the factors to be taken into consideration while passing an order under Section 357(3) CrPC. This Court stated: (SCC pp. 255-56, para 31) "31. ... The term of imprisonment in default of payment of a fine is not a sentence. It is a penalty which a person incurs on account of non-payment of a fine. The sentence is something which an offender must undergo unless it is set aside or remitted in part or in whole, either in appeal or in revision or other appropriate judicial proceedings, or 'otherwise'. A term of imprisonment ordered in default of payment of a fine stands on a ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 54 Neutral Citation No. ( 2025:HHC:20629 ) different footing. A person is required to undergo imprisonment either because he is unable to pay the amount of fine or refuse to .
pay such amount. He, therefore, can always avoid undergoing imprisonment in default of payment of the fine by paying such amount. It is, therefore, not only the power but the duty of the court to keep in view the nature of the offence, circumstances under which it was committed, the position of the offender and other relevant considerations before ordering the offender to suffer imprisonment in default of payment of a fine." (emphasis in original)
25. In Kuldip Kaur v. Surinder Singh [(1989) 1 SCC 405:
1989 SCC (Cri) 171: AIR 1989 SC 232], in the context of Section 125 CrPC observed that sentencing a person to jail is sometimes a mode of enforcement. In this regard, the Court stated: (SCC p. 409, para 6) "6. A distinction has to be drawn between a mode of enforcing recovery on the one hand and effecting actual recovery of the amount of monthly allowance which has fallen in arrears on the other. Sentencing a person to jail is a 'mode of enforcement'. It is not a 'mode of satisfaction' of the liability. The liability can be satisfied only by making actual payment of the arrears. The whole purpose of sending to jail is to oblige a person liable to pay the monthly allowance who refuses to comply with the order without sufficient cause, to obey the order and to make the payment. The purpose of sending him to jail is not to wipe out the liability which he has refused to discharge. It should also be realised that a person ordered to pay a monthly allowance can be sent to jail only if he fails to pay the monthly allowance 'without sufficient cause' to comply with the order. It would indeed be strange to hold that a ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 55 Neutral Citation No. ( 2025:HHC:20629 ) person who, without reasonable cause, refuses to comply with the order of the court to maintain his neglected wife or child would be .
absolved of his liability merely because he prefers to go to jail. A sentence of jail is no substitute for the recovery of the amount of monthly allowance which has fallen in arrears."
26. From the above line of cases, it becomes very clear that a sentence of imprisonment can be granted for default in payment of compensation awarded under Section 357(3) CrPC. The whole purpose of the provision is to accommodate the interests of the victims in the criminal justice system. Sometimes the situation becomes such that there is no purpose served by keeping a person behind bars. Instead, directing the accused to pay an amount of compensation to the victim or affected party can ensure the delivery of total justice. Therefore, this grant of compensation is sometimes in lieu of sending a person behind bars or in addition to a very light sentence of imprisonment. Hence, in default of payment of this compensation, there must be a just recourse. Not imposing a sentence of imprisonment would mean allowing the accused to get away without paying the compensation, and imposing another fine would be impractical, as it would mean imposing a fine upon another fine and therefore would not ensure proper enforcement of the order of compensation. While passing an order under Section 357(3), it is imperative for the courts to look at the ability and the capacity of the accused to pay the same amount as has been laid down by the cases above; otherwise, the very purpose of granting an order of compensation would stand defeated.
49. This position was reiterated in R. Mohan v. A.K. Vijaya Kumar, (2012) 8 SCC 721: (2012) 4 SCC (Civ) 585: (2012) ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 56 Neutral Citation No. ( 2025:HHC:20629 ) 3 SCC (Cri) 1013: 2012 SCC OnLine SC 486 wherein it was observed at page 729:
.
29. The idea behind directing the accused to pay compensation to the complainant is to give him immediate relief so as to alleviate his grievance. In terms of Section 357(3), compensation is awarded for the loss or injury suffered by the person due to the act of the accused for which he is sentenced. If merely an order directing compensation is passed, it would be totally ineffective. It could be an order without any deterrence or apprehension of immediate adverse consequences in case of its non-observance. The whole purpose of giving relief to the complainant under Section 357(3) of the Code would be frustrated if he is driven to take recourse to Section 421 of the Code. An order under Section 357(3) must have the potential to secure its observance. Deterrence can only be infused into the order by providing for a default sentence. If Section 421 of the Code puts compensation ordered to be paid by the court on a par with the fine so far as the mode of recovery is concerned, then there is no reason why the court cannot impose a sentence in default of payment of compensation as it can be done in case of default in payment of fine under Section 64 IPC. It is obvious that in view of this, in Vijayan [(2009) 6 SCC 652:
(2009) 3 SCC (Cri) 296], this Court stated that the abovementioned provisions enabled the court to impose a sentence in default of payment of compensation and rejected the submission that the recourse can only be had to Section 421 of the Code for enforcing the order of compensation. Pertinently, it was made clear that observations made by this Court in Hari Singh [(1988) 4 SCC 551: 1988 SCC (Cri) 984] are as important today as they were when they were made. The conclusion, therefore, is that the ::: Downloaded on - 01/07/2025 21:22:55 :::CIS 57 Neutral Citation No. ( 2025:HHC:20629 ) order to pay compensation may be enforced by awarding a sentence in default.
30. In view of the above, we find no illegality in the .
order passed by the learned Magistrate and confirmed by the Sessions Court in awarding a sentence in default of payment of compensation. The High Court was in error in setting aside the sentence imposed in default of payment of compensation.
50. Thus, there is no infirmity in imposing a sentence of imprisonment in case of default in the payment of compensation.
51.
r to No other point was urged.
52. In view of the above, the present revision fails, and the same is dismissed.
53. Records of the learned Courts below be sent back forthwith, along with a copy of this judgment.
(Rakesh Kainthla) Judge 1st July,2025 (saurav pathania) ::: Downloaded on - 01/07/2025 21:22:55 :::CIS