Himachal Pradesh High Court
Reserved On: 13.10.2025 vs Of on 20 November, 2025
2025:HHC:39126
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No. 61 of 2024
Reserved on: 13.10.2025
.
Date of Decision: 20.11.2025
Dheeraj Kumar ....Petitioner
Versus
of
Sanjeev Kumar .... Respondent
Coram
rt
Hon'ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 No
For the Petitioner : Mr Nishant Khidta, Legal Aid
Counsel.
For the Respondent/ : Ms Raditya Katoch, Advocate, vice
State Mr Vipul Sharda, Advocate,
Advocate.
Rakesh Kainthla, Judge
The present revision is directed against the judgment passed by learned Sessions Judge, Una, District Una, H.P. (learned Appellate Court) vide which the judgment of conviction and order of sentence dated 19.07.2023 passed by learned Chief Judicial Magistrate, Una, District Una, (learned Trial Court) were upheld.
1. Whether reporters of the local papers may be allowed to see the judgment? Yes ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 2 2025:HHC:39126 (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 revision are that the complainant filed a complaint before the learned Trial Court against the accused for the commission of an of offence punishable under Section 138 of the Negotiable Instruments Act (NI Act). It was asserted that the complainant is an agriculturist rt who cultivates potatoes. The accused No.1 purchased potatoes from the complainant in November 2021, worth ₹6,00,000/- by paying cash and potatoes worth ₹7,05,000/- on credit. The accused assured to pay ₹7,00,000/- after a few days. The complainant approached the accused for the payment of the amount. The accused issued a cheque of ₹3,50,000/- drawn on Yes Bank, signed by accused No.1. The complainant presented the cheque to his bank, but it was returned unpaid with an endorsement 'drawer's signatures differs'. The complainant told the accused about the dishonour of the cheque. The accused issued another cheque of ₹3,55,000/- dated 03.02.2022 drawn on Yes Bank. The complainant presented the cheque to the bank, but it was dishonoured with an endorsement 'drawers' signatures differ'. The complainant served a legal notice upon the accused, asking them to pay the amount.
::: Downloaded on - 05/12/2025 22:40:32 :::CIS 32025:HHC:39126 The notice was duly served upon the accused, but they failed to repay the amount. Hence, a complaint was filed before the learned .
Trial Court.
3. Learned Trial Court found sufficient reasons to summon the accused. When the accused Dheeraj Kumar appeared, a notice of 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 rt guilty and claimed to be tried.
4. The complainant examined himself (CW-1) to prove his complaint.
5. The accused, in his statement recorded under Section 313 of Cr.P.C., denied the complainant's case in its entirety. He stated that he had not purchased anything on credit and had transferred the whole amount to the complainant's account. He had handed over a blank signed security cheque to the complainant and told him to present the cheque in case of failure to repay the amount. However, he had paid the whole amount to the complainant. He stated that he wanted to lead the defence evidence.
However, a statement was made on his behalf subsequently that no evidence was to be led.
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6. Learned Trial Court held that the accused admitted the issuance of the cheque. The plea taken by him that he had issued a .
blank, signed security cheque was not proved by any evidence on record. There is a presumption that the cheque was issued for consideration in discharge of the debt/liability. The burden is upon the accused to rebut the presumption. However, the accused failed of to rebut the presumption. The dishonour of the cheque on the ground of 'drawer's signatures differs' also attracts the liability rt under Section 138 of the NI Act. The notice was duly served upon the accused, who had failed to repay the amount. Hence, the learned Trial Court convicted the accused of the commission of an offence punishable under Section 138 of the NI Act and sentenced him to undergo simple imprisonment for three months and pay a fine of ₹7,20,000/-. The learned Trial Court also ordered that the amount of fine, if realised, be paid to the complainant as compensation.
7. Being aggrieved by the judgment and order passed by the learned Trial Court, the accused filed an appeal, which was decided by the learned Sessions Judge, Una (learned Appellate Court). Learned Appellate Court concurred with the findings recorded by the learned Trial Court that the issuance of the cheque was not disputed, and a presumption would arise that the cheque ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 5 2025:HHC:39126 was issued for consideration to discharge the debt/liability. The burden shifted upon the accused to rebut the presumption. The plea .
taken by the accused that he had issued a blank, signed cheque as security was not proved. The accused did not produce any evidence regarding the deposit of money in the complainant's account.
Dishonour of the cheque with an endorsement 'drawers' signatures of differs' also attracts the liability under Section 138 of the NI Act.
The notice was duly served upon the accused, and the accused failed rt to repay the amount. Learned Trial Court had imposed an adequate sentence, and no interference was required with the judgment and order 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 filed the present petition, asserting that the learned Courts below erred in appreciating the evidence on record. The complainant admitted that the ink on the cheque differed at different places, which made the defence of the accused probable that the cheque was issued as a security. Learned Courts below erred in rejecting this defence; therefore, it was prayed that the present revision be allowed and the judgments and order passed by learned Courts below be set aside.
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9. I have heard Mr Nishant Khidta, learned Legal Aid Counsel for the petitioner/accused and Ms Raditya Katoch, .
Advocate, vice Mr Vipul Sharda, Advocate, for the respondent/complainant.
10. Mr Nishant Khidta, learned Legal Aid Counsel for the of petitioner/accused, submitted that the learned Courts below erred in appreciating the material placed before them. The body of the rt complaint and the signatures on the cheque were in different ink, which corroborated the version of the accused that he had issued a blank, signed security cheque, which was misused by the complainant. The complainant had not proved the actual sale of the potatoes to the accused. Learned Courts below had imposed an excessive fine; therefore, he prayed that the present revision be allowed and the judgment and order passed by the learned Trial Court be set aside.
11. Ms Raditya Katoch, learned vice counsel representing the respondent/complainant, submitted that the accused admitted the issuance of the cheque and his signatures on it. Learned Courts below had rightly held that a presumption under Section 118(a) and 139 of the NI Act would arise that the cheque was issued for ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 7 2025:HHC:39126 consideration to discharge the debt/liability. The burden was upon the accused to rebut this presumption. However, he did not produce .
any evidence to rebut the presumption. The learned Courts below had rightly convicted and sentenced the accused. This Court should not interfere with the concurrent findings of fact recorded by the learned Courts below. Therefore, she prayed that the present of petition be dismissed.
12. rt 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-
"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 ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 8 2025:HHC:39126 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 of 1294, wherein it was observed at page 695:
"14. The power and jurisdiction of the Higher Court under rt Section 397 CrPC, which vests the court with the power to call for and examine records of an inferior court, is for the purposes of satisfying itself as to the legality and regularities of any proceeding or order made in a case. The object of this provision is to set right a patent defect or an error of jurisdiction or law or the perversity which has crept in such proceedings.
15. It would be apposite to refer to the judgment of this Court in Amit Kapoor v. Ramesh Chander [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460: (2012) 4 SCC (Civ) 687: (2013) 1 SCC (Cri) 986], where scope of Section 397 has been considered and succinctly explained as under: (SCC p. 475, paras 12-13) "12. Section 397 of the Code vests the court with the power to call for and examine the records of an inferior court for the purposes of satisfying itself as to the legality and regularity of any proceedings or order made in a case. The object of this provision is to set right a patent defect or an error of jurisdiction or law.
There has to be a well-founded error, and it may not be appropriate for the court to scrutinise the orders, which, upon the face of it, bear a token 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 ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 9 2025:HHC:39126 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 of 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 rt question as to whether the charge has been framed properly and in accordance with law in a given case, it may be reluctant to interfere in the exercise of its revisional jurisdiction unless the case substantially falls within the categories aforestated. Even the framing of the charge is a much-advanced stage in the proceedings under 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 SCC OnLine SC 651 that it is impermissible for the High Court to reappreciate the evidence and come to its conclusions in the absence of any perversity. It was observed at page 169:
"12. This Court has time and again examined the scope of Sections 397/401 CrPC and the grounds for exercising the revisional jurisdiction by the High Court. In State 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) ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 10 2025:HHC:39126
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 of 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 rt is brought to the notice of the High Court which would otherwise amount 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, (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 ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 11 2025:HHC:39126 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 of 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 rtarbitrarily or capriciously, the courts may not interfere with the decision in exercise of their revisional jurisdiction."
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 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, (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. A similar view was taken in Sanjabij Tari v. Kishore S. Borcar, 2025 SCC OnLine SC 2069, wherein it was observed:
::: Downloaded on - 05/12/2025 22:40:32 :::CIS 122025:HHC:39126 "27. It is well settled that in exercise of revisional jurisdic-
tion, the High Court does not, in the absence of perversity, upset concurrent factual findings [See: Bir Singh (supra)].
.
This Court is of the view that it is not for the Revisional Court to re-analyse and re-interpret the evidence on record. As held by this Court in Southern Sales & Services v. Sauermilch Design and Handels GMBH, (2008) 14 SCC 457, it is a well-es-
tablished 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.
of
28. Consequently, this Court is of the view that in the absence of perversity, it was not open to the High Court in the present case, in revisional jurisdiction, to upset the concurrent find- ings of the Trial Court and the Sessions Court.
rt
18. The present revision has to be decided as per the parameters laid down by the Hon'ble Supreme Court.
19. The ingredients of the offence punishable under Section 138 of the NI Act were explained by the Hon'ble Supreme Court in Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul, 2025 SCC OnLine SC 2019 as under:-
"5.1.1. In K.R. Indira v. Dr. G. Adinarayana(2003) 8 SCC 300, this Court enlisted the components, aspects and the acts, the concatenation of which would make the offence under Section 138 of the Act complete, to be these (i) drawing of the cheque by a person on an account maintained by him with a banker, for payment to another person from out of that account for discharge in whole/in part of any debt or liability,
(ii) presentation of the cheque by the payee or the holder in due course to the bank, (iii) returning the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque, (iv) giving notice in writing to ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 13 2025:HHC:39126 the drawer of the cheque within 15 days of the receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of the cheque .
amount, and (v) failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the cheque within 15 days of the receipt of the notice."
20. The accused admitted in his statement recorded under Section 313 of Cr.PC that the cheque bears his signature. He stated of that he had handed over a blank signed cheque as security to the complainant, which was to be presented in case the accused was rt unable to pay the amount. Thus, learned Courts below had rightly held that the issuance of the cheque and signatures on the cheque were not in dispute. It was laid down by the Hon'ble Supreme Court in APS Forex Services (P) Ltd. v. Shakti International Fashion Linkers (2020) 12 SCC 724, that when the issuance of a cheque and signature on the cheque are not disputed, a presumption would arise that the cheque was issued in discharge of the legal liability. It was observed: -
"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, ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 14 2025:HHC:39126 such a presumption is rebuttable. However, to rebut the presumption, the accused was required to lead evidence that the full amount due and payable to the complainant had been .
paid. In the present case, no such evidence has been led by the accused. The story put forward by the accused that the cheques were given by way of security is not believable in the absence of further evidence to rebut the presumption, and more particularly, the cheque in question was issued for the second time after the earlier cheques were dishonoured. Therefore, both the courts below have materially erred in not of 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 rt 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."
21. A similar view was taken in N. Vijay Kumar v. Vishwanath Rao N., 2025 SCC OnLine SC 873 wherein it was held as under:
"6. Section 118 (a) assumes that every negotiable instrument is made or drawn for consideration, while Section 139 creates a presumption that the holder of a cheque has received the cheque in discharge of a debt or liability. Presumptions under both are rebuttable, meaning they can be rebutted by the accused by raising a probable defence."
22. A similar view was taken in Sanjay Sanjabij Tari v.
Kishore S. Borcar, 2025 SCC OnLine SC 2069, wherein it was observed:
::: Downloaded on - 05/12/2025 22:40:32 :::CIS 152025:HHC:39126 "ONCE EXECUTION OF A CHEQUE IS ADMITTED, PRESUMPTIONS UNDER SECTIONS 118 AND 139 OF THE NI ACT ARISE .
15. In the present case, the cheque in question has admittedly been signed by the Respondent No. 1-Accused. This Court is of the view that once the execution of the cheque is admitted, the presumption under Section 118 of the NI Act that the cheque in question was drawn for consideration and the presumption under Section 139 of the NI Act that the holder of the cheque received the said cheque in discharge of a of legally enforceable debt or liability arises against the accused. It is pertinent to mention that observations to the contrary by a two-Judge Bench in Krishna Janardhan Bhat v.
Dattatraya G. Hegde, (2008) 4 SCC 54, have been set aside by a rt three-Judge Bench in Rangappa (supra).
16. This Court is further of the view that by creating this presumption, the law reinforces the reliability of cheques as a mode of payment in commercial transactions.
17. Needless to mention that the presumption contemplated under Section 139 of the NI Act is a rebuttable presumption. However, the initial onus of proving that the cheque is not in discharge of any debt or other liability is on the accused/drawer of the cheque [See: Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197].
23. Thus, the learned Courts below were justified in raising the presumption that the cheque was issued in discharge of the liability for consideration.
24. The accused claimed that he had issued a blank cheque, which was misused by the complainant. However, it was not suggested to the complainant that a blank signed cheque was handed over to him by the accused, which was misused by him.
::: Downloaded on - 05/12/2025 22:40:32 :::CIS 162025:HHC:39126 Therefore, the plea of the accused that he had handed over a blank signed security cheque was not proved by the cross-examination of .
the complainant.
25. The accused did not lead any evidence to prove that he had issued a blank, signed security cheque at the time of taking the of loan. He relied upon the statement recorded under Section 313 of Cr.P.C. to prove his defence. It was held in Sumeti Vij v. Paramount rt Tech Fab Industries, (2022) 15 SCC 689: 2021 SCC OnLine SC 201 that the accused has to lead defence evidence to rebut the presumption and mere denial in his statement under Section 313 of Cr.P.C is not sufficient. It was observed at page 700:
"20. That apart, when the complainant exhibited all these documents in support of his complaints and recorded the statement of three witnesses in support thereof, the appellant recorded her statement under Section 313 of the Code but failed to record evidence to disprove or rebut the presumption in support of her defence available under Section 139 of the Act. The statement of the accused recorded under Section 313 of the Code is not substantive evidence of defence, but only an opportunity for the accused to explain the incriminating circumstances appearing in the prosecution's case against the accused. Therefore, there is no evidence to rebut the presumption that the cheques were issued for consideration."
(Emphasis supplied)"
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26. Therefore, the statement of the accused recorded under Section 313 of Cr.P.C. was not a legally admissible statement, and .
the accused cannot derive any advantage from it.
27. The accused admitted in his statement recorded under Section 313 of Cr.P.C. that he had purchased potatoes from the of accused. He claimed that he had deposited the money in the complainant's account. However, he has not produced any evidence rt to prove this fact. Since the accused has admitted the purchase of the potatoes from the complainant and he has failed to prove the payment of the money, therefore, the accused had a liability to pay the money to the complainant, and the complainant had sufficient authority to present the cheque (even if issued as a security) to the bank. It was laid down by this Court in Hamid Mohammad Versus Jaimal Dass 2016 (1) HLJ 456, that even if the cheque is issued towards the security, the accused is 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, the criminal revision petition 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 ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 18 2025:HHC:39126 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 provisions 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."
28. It was laid down by the Hon'ble Supreme Court in Sampelly Satyanarayana Rao vs. Indian Renewable Energy of Development Agency Limited 2016(10) SCC 458 that issuing a cheque toward security will also attract the liability for the commission of rt 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 instalment falls due. It is undisputed that the loan was duly disbursed on 28th February 2002, which ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 19 2025:HHC:39126 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 distinguish- able. As already noted, it was held therein that liability aris-
ing 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 of acknowledged and admitted debt under a loan transaction. Dishonour of a cheque issued for the discharge of a later lia- bility is clearly covered by the statute in question. Admit- tedly, on the date of the cheque, there was a debt/liability in rt 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 the discharge of liability but as an advance for the purchase order, which was cancelled. Keeping in mind this fine, but the real distinc- tion, 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 a deposit of cheques towards repayment of instalments was also de-
scribed 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.
13. The crucial question to determine the applicability of Sec- tion 138 of the Act is whether the cheque represents the dis- charge of existing enforceable debt or liability, or whether it represents an advance payment without there being a sub- sisting debt or liability. While approving the views of differ- ent High Courts noted earlier, this is the underlying principle ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 20 2025:HHC:39126 as can be discerned from the discussion of the said cases in the judgment of this Court." (Emphasis supplied)
29. 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 NI Act can be filed on its of dishonour. It was observed:
"17. A cheque issued as security pursuant to a financial transaction cannot be considered a worthless piece of paper rt 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 a presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of the NI 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 a 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 ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 21 2025:HHC:39126 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, of 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 rt 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, it is not for the drawer of the cheque to dictate terms with regard to the nature of litigation."
30. Therefore, the learned Courts below had rightly held that the accused cannot escape from the liability on the ground that he had issued blank signed cheques as security in favour of the complainant.
31. It was submitted that the complainant had not produced the land record to show the extent of the land or any document evidencing the sale of the potato. Thus, the complainant had failed to prove the existence of the consideration. This submission will ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 22 2025:HHC:39126 not help the accused. It was laid down by the Hon'ble Supreme Court in Uttam Ram v. Devinder Singh Hudan, (2019) 10 SCC 287:
.
(2020) 1 SCC (Cri) 154: (2020) 1 SCC (Civ) 126: 2019 SCC OnLine SC 1361, that a presumption under Section 139 of NI Act would obviate the requirement to prove the existence of consideration. It was observed:
of "20. Th̨ e trial court and the High Court proceeded as if the appellant was to prove a debt before the civil court, wherein rt the plaintiff is required to prove his claim on the basis of evidence to be laid in support of his claim for the recovery of the amount due. An dishonour of a cheque carries a statutory presumption of consideration. The holder of the cheque in due course is required to prove that the cheque was issued by the accused and that when the same was presented, it was not honoured. Since there is a statutory presumption of consideration, the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability."
32. This position was reiterated in Ashok Singh v. State of U.P., 2025 SCC OnLine SC 706, wherein it was observed:
"22. The High Court while allowing the criminal revision has primarily proceeded on the presumption that it was obligatory on the part of the complainant to establish 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 ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 23 2025:HHC:39126 his capacity/financial wherewithal to make the payment in discharge of which the cheque is alleged to have been issued in his favour. Only if an objection is raised that the .
complainant was not in a financial position to pay the amount so claimed by him to have been given as a loan to the accused, only then the complainant would have to bring before the Court cogent material to indicate that he had the financial capacity and had actually advanced the amount in question by way of loan. In the case at hand, the appellant had categorically stated in his deposition and reiterated in of 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, rt 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 petitione₹ 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 has to be buttressed by evidence, either oral or documentary, which in the present case has not ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 24 2025:HHC:39126 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.
of 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 rt instance that he had the capacity. The proceedings under Section 138 of the NI Act are 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, further achieve this result through the cross-examination of the witnesses of the complainant. Ultimately, it becomes the duty of the courts to consider carefully and appreciate the totality of the evidence and then come to a conclusion whether, in the given case, the accused ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 25 2025:HHC:39126 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).
33. A similar view was taken in Sanjabij Tari (supra), wherein it was observed:
"21. This Court also takes judicial notice of the fact that some of District Courts and some High Courts are not giving effect to the presumptions incorporated in Sections 118 and 139 of the NI Act and are treating the proceedings under the NI Act as rt another civil recovery proceedings and are directing the complainant to prove the antecedent debt or liability. This Court is of the view that such an approach is not only prolonging the trial but is also contrary to the mandate of Parliament, namely, that the drawer and the bank must honour the cheque; otherwise, trust in cheques would be irreparably damaged."
34. Therefore, no advantage can be derived from the fact that the record of the land or sale of potatoes was not produced before the Court.
35. It was submitted that the ink in the body of the complaint and the signatures are different, which supports the version of the accused that he had handed over a blank security cheque to the complainant, who had filled it and presented it before the Court. This submission will also not help the accused. The learned Courts below had rightly held that a blank signed cheque ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 26 2025:HHC:39126 handed over to another would give sufficient authority to fill and present the cheque. It was laid down by the Hon'ble Supreme Court .
in Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40:
(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 Negotiable Instruments Act even if the cheque is filled by some of other person. It was observed:
rt "33. A meaningful reading of the provisions of the Negotiable Instruments Act, including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted.
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 parting 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 ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 27 2025:HHC:39126 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."
36. This position was reiterated in Oriental Bank of Commerce v. Prabodh Kumar Tewari, 2022 SCC OnLine SC 1089, of wherein it was observed:
"12. The submission, which has been urged on behalf of the rt 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.
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.
37. Therefore, the cheque is not bad even if it is not filled by the drawer.
38. The complainant stated that the cheque was dishonoured with an endorsement 'drawers' signatures differs).
This is duly corroborated by the cheque returning memos (Ext.C3 and C4) in which the reason for dishonour of the cheques was given as 'drawer's signatures differ'. It was laid down by the Hon'ble ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 28 2025:HHC:39126 Supreme Court in Mandvi Cooperative Bank Ltd. v. Nimesh B. Thakore, (2010) 3 SCC 83: (2010) 1 SCC (Civ) 625: (2010) 2 SCC (Cri) 1:
.
2010 SCC OnLine SC 155 that the memo issued by the Bank is presumed to be correct and the burden is upon the accused to rebut the presumption. It was observed at page 95:
of "24. Section 146, making a major departure from the principles of the Evidence Act, provides that the bank's slip or memo with the official mark showing that the cheque was dishonoured would, by itself, give rise to the presumption of rt dishonour of the cheque, unless and until that fact was disproved. Section 147 makes the offences punishable under the Act compoundable."
39. In the present case, no evidence was produced to rebut the presumption, and the learned Courts below had rightly held that the cheque was dishonoured with an endorsement 'drawer's signature differs'.
40. It was submitted that the dishonour of a cheque on the ground of a difference in the signature does not attract the provisions of Section 138 of the NI Act. This submission cannot be accepted. 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 a cheque with an endorsement of signature mismatch attracts the provisions of section 138 of N.I. Act. It was observed at page 388: -::: Downloaded on - 05/12/2025 22:40:32 :::CIS 29
2025:HHC:39126
16. The above line of decisions leaves no room for holding that the two contingencies envisaged under Section 138 of the Act must be interpreted strictly or literally. We find ourselves .
in respectful agreement with the decision in the Magma case [(1999) 4 SCC 253: 1999 SCC (Cri) 524] that the expression "amount of money ... is insufficient" appearing in Section 138 of the Act is a genus and dishonour for reasons such "as account closed", "payment stopped", "referred to the drawer" are only species of that genus. Just as dishonour of a cheque on the ground that the account has been closed is a of dishonour falling in the first contingency referred to in Section 138, so also dishonour on the ground that the "signatures do not match" or that the "image is not found", which too implies that the specimen signatures do not match the signatures on the rt cheque would constitute a dishonour within the meaning of Section 138 of the Act." (Emphasis supplied)
41. Karnataka High Court held in Peeranbi v. Hajimalang, 2013 SCC OnLine Kar 10420: (2013) 2 Kant LJ 569 : (2013) 3 KCCR 2223 : (2014) 1 AIR Kant R 405 : (2013) 3 BC 532 : (2014) 5 RCR (Cri) 757 that the dishonour of the cheque due to signature mismatch will attract penal liability under Section 138 of the NI Act. It was observed:
"9. In the facts and circumstances, as rightly contended by the learned Counsel for the appellant, the cheque, having been drawn on the account of the respondent, is not in dispute. However, it is the defence set up that there was a business relationship between the appellant and the respondent, and the appellant could have accessed a cheque leaf belonging to the respondent, which is sought to be misused. In this regard, there is no positive evidence put forward by the respondent. In other words, in terms of Section 139, the presumption is in favour of the holder of the cheque of the same having been issued by the account holder ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 30 2025:HHC:39126 in discharge of a legal liability. It is for the person issuing the cheque to prove otherwise. This, the Apex Court has held in the case of Rangappa v. Sri Mohan. [AIR 2010 SC 1898 : (2010) .
11 SCC 441 : (2011) 1 SCC (Cri) 184: 2010 Cri. L.J. 2871 (SC)] That, not only is it possible for the accused to establish this by leading positive evidence, but he could also place reliance on the evidence tendered by the complainant himself to discharge that burden. Hence, if it was the contention of the respondent that there were cheque leaves misplaced by him and which were sought to be misused by the appellant, it was of for the respondent to have tendered evidence of the approximate date when there was a dissolution of the partnership business between the appellant and the respondent, and the respondent having operated his Bank rt Account thereafter using other cheque leaves and that the cheque leaves which were left behind upon such dissolution having fallen into disuse over a period of time, sought to be forged and fabricated at a later date by the appellant, was clearly on the respondent. There is no such evidence forthcoming except the self-serving evidence of the respondent. Further, in the event that any such cheque leaves were misused, a duty was cast on the respondent to inform his banker to stop payment, against such cheques which were lost or misplaced. There is no such evidence forthcoming. Nor is it the case of the respondent that the cheques being misplaced, he had reported to the nearest Police Station of such loss. There was no demand made on the appellant to return such cheque leaves left behind. Therefore, the evidence of the respondent was clearly self-serving, and it was a burden cast on the respondent to establish the fact that there were cheque leaves which were left behind, and it was possible for the appellant to misuse the same. If once it is apparent that the cheque had been issued on the account held by the respondent, the presumption under Section 139 is clearly in favour of the appellant to establish that it was forged by the accused. The burden is clearly on the respondent, and it is not for the appellant to establish that the respondent had deliberately changed his signature in order that it would be dishonoured by his Bank. This may ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 31 2025:HHC:39126 indeed have been the intention in changing his signature at the time of issuing the cheque. As already stated, the burden to establish that it was lost and that it has been misused by .
the appellant was clearly on the respondent. The Court below has also committed an error in holding that the liability in respect of which the cheque had been issued was required to be proved by the appellant. The proceedings were not in the nature of a suit for recovery of money but for prosecution of an offence punishable under Section 138 of the NI Act. The limited scope of those proceedings is whether there was of dishonour of the cheque issued by the accused. That aspect of the matter has been established on the face of it. Therefore, the Court below has clearly committed an error in addressing the case of the complainant and in dismissing the complaint.
rt Consequently, the appeal is allowed. The complainant has established his case beyond a reasonable doubt. The respondent, therefore, is liable for punishment. Accordingly, he shall pay a fine of Rs. 3,50,000/- in default of which, the respondent shall suffer simple imprisonment for a period of six months. The fine amount shall be paid forthwith, in any event, within a period of 15 days. Out of the fine amount, a sum of Rs. 3,40,000/- shall be paid as compensation to the appellant."
42. Madras High Court also held in R. Manimehalai v.
Banumathi, 2018 SCC OnLine Mad 13802, that the dishonour of a cheque due to signature mismatch attracts the provision of Section 138 of the NI Act. It was observed:
"10.... It is true that the impugned cheque was returned on two grounds, namely, (a) insufficient funds, and (b) the signature of the drawer differs. On receipt of the statutory notice, dated 31.12.2013, [EX-P3] from the complainant, the accused has sent a belated reply notice, dated 17.3.2014, [EX- P5], in which the accused did not take the plea that her signature had been forged on the cheque. She has taken a plea that the impugned cheque was issued by her for a different ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 32 2025:HHC:39126 debt. The accused took pains to examine Ganeshamoorthy, Senior Manager of Syndicate Bank, in which the accused has an account, to say that the signature in the cheque differed .
from the specimen signature with the Bank. This only shows that the accused had deliberately put her signature differently in the impugned cheque with the intention of cheating the complainant. However, a charge of cheating has not been framed against the accused. This conduct of the accused in giving the cheque by affixing her signature differently is relevant under Section 8 of the Indian Evidence of Act, 1872. The presumption under. Section 139 of the Negotiable Instruments Act, 1881, comes into force once the cheque has been issued by the accused for the debt in question. Of course, this is a rebuttable presumption and the rt same can be dislodged by the accused by preponderance of probabilities and not by proof beyond reasonable doubt, as held by the Supreme Court in Rangappa v. Sri Mohan, (2010) 2 BC 693 (SC): II (2010) CCR 433 (SC) : (2010) 4 SLT 56 : (2010) 2 DLT (Cri) 699 (SC) : (2010) 11 SCC 441. In this case, the accused has failed to discharge her burden even by a preponderance of probabilities. She was trying to take advantage of the difference in signature to wriggle out of the prosecution..."
43. Thus, even if the cheque is dishonoured with the endorsement signature differs, it will attract the provisions of Section 138 of the Negotiable Instruments Act, and not much advantage can be derived from the submission that the signatures on the cheque and the specimen kept in the bank did not match.
44. The complainant stated that he had issued a notice (Ext.C5) to the accused. This was sent to the address mentioned by the accused in his statement recorded under Section 313 of Cr.PC, application filed under Section 145(2) of the NI Act and the personal ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 33 2025:HHC:39126 bond furnished before the learned Trial Court; therefore, it was sent to the correct address and is deemed to be served under Section 27 .
of the General Clauses Act. No evidence was led to rebut the presumption, and the learned Courts below had rightly held that the notice was deemed to be served upon the accused.
of
45. It was laid down in C.C. Allavi Haji vs. Pala Pelly Mohd.
2007(6) SCC 555, that the person who claims that he had not rt received the notice has to pay the amount within 15 days from the date of the receipt of the summons from the Court and in case of failure to do so, he cannot take the advantage of the fact that notice was not received by him. It was observed:
"It is also to be borne in mind that the requirement of giving notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of the complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 34 2025:HHC:39126 object of the legislation. As observed in Bhaskaran's case (supra), if the giving of notice in the context of Clause (b) of the proviso was the same as the receipt of notice, a trickster .
cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from the legal consequences of Section 138 of the Act." (Emphasis supplied)
46. The accused did not claim that he had repaid the amount to the complainant; therefore, it was duly proved on record that the of accused had failed to repay the amount despite the deemed receipt of the notice. rt
47. Therefore, it was duly proved before the learned Trial Court that the cheque was issued in discharge of the legal liability, which was dishonoured with an endorsement 'drawer's signatures differ, and the accused failed to repay the money despite the deemed receipt of a notice of demand. Hence, all the ingredients of the offence punishable under Section 138 of the NI Act were duly satisfied, and the learned Trial Court had rightly convicted the accused for the commission of an offence punishable under Section 138 of the NI Act.
48. Learned Trial Court sentenced the accused to undergo simple imprisonment for three months. It was laid down by the Hon'ble Supreme Court in Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ) 309: 2019 SCC OnLine SC ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 35 2025:HHC:39126 138 that the penal provision of Section 138 of the NI Act is 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 of callous issuance of negotiable instruments such as cheques without serious intention to honour the promise implicit in the issuance of the same."
49. Therefore, the sentence of three months is not rt excessive.
50. Learned Trial Court ordered the accused to pay a fine of ₹7,20,000/- because one cheque of ₹3,50,000/- and another cheque of ₹3,55,000/- were issued by the accused. The complainant had specifically asserted in the complaint that the accused issued a cheque of ₹3,50,000/-, which was dishonoured with an endorsement 'drawers' signatures differ'. When the complainant told the accused about it, the accused issued another cheque of ₹3,55,000/- to the complainant. Thus, the second cheque was in lieu of the first cheque and not in addition to the first cheque.
Therefore, the amount mentioned in the two cheques could not have been combined, and a fine of ₹7,00,000/- could not have been ::: Downloaded on - 05/12/2025 22:40:32 :::CIS 36 2025:HHC:39126 imposed on the premise that the cheques of ₹7,05,000/- were issued.
.
51. The cheque was issued on 11.12.2021. The sentence was imposed on 19.07.2023 after the lapse of 1½ years. The complainant lost the interest that he would have gained by investing the money.
of He had incurred the legal expenses for prosecuting the complaint before the learned Trial Court, learned Appellate Court and this rt Court. It was laid down by the Hon'ble Supreme Court in Kalamani Tex v. P. Balasubramanian, (2021) 5 SCC 283: (2021) 3 SCC (Civ) 25:
(2021) 2 SCC (Cri) 555: 2021 SCC OnLine SC 75 that the Courts should uniformly levy a fine up to twice the cheque amount along with simple interest at the rate of 9% per annum. It was observed at page 291: -
19. As regards the claim of compensation raised on behalf of the respondent, we are conscious of the settled principles that the object of Chapter XVII of NIA is not only punitive but also compensatory and restitutive. The provisions of NIA envision a single window for criminal liability for the dishonour of a cheque as well as civil liability for the realisation of the cheque amount. It is also well settled that there needs to be a consistent approach towards awarding compensation, and unless there exist special circumstances, the courts should uniformly levy fines up to twice the cheque amount along with simple interest @ 9% p.a. [R. Vijayan v.
Baby, (2012) 1 SCC 260, para 20: (2012) 1 SCC (Civ) 79: (2012) 1 SCC (Cri) 520]"
::: Downloaded on - 05/12/2025 22:40:32 :::CIS 372025:HHC:39126
52. Interest on the amount of ₹3,55,000/- for a period of 18 months is ₹47,925/-; therefore, the fine awarded by the learned .
Trial Court is reduced to ₹4,50,000/- to compensate the complainant for loss of interest and cost of litigation.
53. No other point was urged.
of
54. In view of the above, the present revision is partly allowed and the amount of fine awarded by the learned Trial Court rt is ordered to be reduced to ₹4,50,000/-. Subject to this modification, the rest of the judgment and order passed by the learned Trial Court is upheld.
55. The present revision petition stands disposed of along with pending miscellaneous application(s), if any.
(Rakesh Kainthla) Judge 20th November, 2025 (Nikita) ::: Downloaded on - 05/12/2025 22:40:32 :::CIS