Himachal Pradesh High Court
Reserved On: 02.04.2026 vs Rakesh Kumar on 24 April, 2026
2026:HHC:13277
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No. 432 of 2025
Reserved on: 02.04.2026.
.
Decided on: 24.04.2026
Hoshiar Singh ....... Petitioner
Versus
Rakesh Kumar .... Respondent
of
Coram
Hon'ble Mr Justice Rakesh Kainthla, Judge.
rt
Whether approved for reporting?1 No.
For the Petitioner : Mr G R Palsra, Advocate
For the Respondent : Mr Vinod Chauhan, Advocate
Rakesh Kainthla, Judge
The present revision is directed against the
judgment dated 20.06.2025 passed by the learned Sessions
Judge, Mandi, District Mandi, H.P. (learned Appellate Court)
vide which judgment of conviction and order of sentence dated
24.12.2025 passed by the learned Additional Chief Judicial
Magistrate, Mandi, District Mandi, H.P. (learned Trial Court)
were upheld. (Parties shall hereinafter be referred to in the same
1
Whether the reporters of the local papers may be allowed to see the Judgment?Yes.
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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 offence punishable under Section 138 of the Negotiable
Instruments Act, 1881 (in short, ‘NI Act‘). It was asserted that
of
the parties were known to each other. The accused asked for
₹5,50,000 from
rt the complainant, and the complainant
advanced the amount to the accused. The accused issued a
cheque of ₹5,50,000 drawn on State Bank of India, Degree
College Mandi, District Mandi, to discharge his liability. The
complainant deposited the cheque in his bank, and it was
dishonoured with an endorsement “insufficient funds’. The
complainant issued a demand notice to the accused asking him
to pay the amount within 15 days. Notice was returned with an
endorsement of unclaimed, which is a deemed service. The
accused failed to pay the money despite the deemed service of
the notice. Hence, a complaint was filed before the learned Trial
Court against the accused for taking action as per law.
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3. Learned Trial Court found sufficient reasons to
summon the accused. When the accused appeared, a notice of
accusation was put to him for the commission of an offence
.
punishable under Section 138 of the NI Act, to which he pleaded
not guilty and claimed to be tried.
4. The complainant examined himself (CW1) to prove
his complaint.
of
5. The accused, in his statement recorded under
section 313 Cr. P.C. denied the complainant’s case in its entirety.
rt
He stated that he had taken a loan from Kashmir Singh and had
issued a security cheque to him. Kashmir Singh did not return
the cheque, and the complainant misused the cheque. He
examined Bhavdev (DW1) and himself (DW2) to prove his
defence.
6. Learned Trial Court held that the cheque carries with
it a presumption that it was issued for consideration to
discharge debt/liability. The accused failed to rebut the
presumption. The plea taken by him that the cheque was
handed over to Kashmir Singh, as security was not proved by
producing any satisfactory evidence. The accused failed to show
any relationship between the complainant and Kashmir Singh.
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The cheque was dishonoured with endorsement “insufficient
funds”, and the notice was served upon the accused. All the
ingredients of the commission of an offence punishable under
.
Section 138 of the NI Act were duly satisfied. 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 six months,
of
pay a compensation of ₹11,00,000/- and in default of the
payment of compensation to undergo further simple
rt
imprisonment for 5 months.
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, Mandi (learned
Appellate Court). The learned Appellate Court concurred with
the findings recorded by the learned Trial Court that a cheque
carries with it a presumption that it was issued for
consideration to discharge the debt/liability. The plea taken by
the accused that he had issued the cheque as security to
Kashmir Singh was not proved. Even if the cheque was issued as
a security, it would attract the provisions of section 138 of the
NI Act. The cheque was dishonoured with the endorsement
“insufficient funds”. Notice of demand was served upon the
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accused, and he failed to repay the amount despite receipt of a
valid notice of demand. The learned Trial Court had rightly
convicted the accused. The sentence imposed by the learned
.
Trial Court was adequate, and no inference was required with it.
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
of
revision asserting that the learned Courts below erred in
appreciating the material placed before them. The complainant
rt
failed to prove the existence of a legally enforceable
debt/liability. The returning memo was issued on 28/02/2018,
and a legal notice was issued on 19/03/2018. The complaint was
filed on 07/07/2018, which is beyond the period of limitation.
The complainant admitted in his cross-examination that
Kashmir Singh was known to him, the accused had borrowed
the money from Kashmir Singh, and Kashmir Singh had taken
two security cheques from the accused. These admissions
probablised the defence taken by the accused. The complainant
claimed that he had given money to the accused in the presence
of Dr Sanjeev, but Dr Sanjeev was not examined by the
complainant, and an adverse inference should have been drawn
against the complainant. Therefore, it was prayed that the
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present revision be allowed and the judgments and order passed
by the learned Courts below be set aside.
9. I have heard Mr G. R. Palsara, learned counsel for the
.
petitioner/accused and Mr Vinod Chauhan, learned counsel for
the respondent/complainant.
10. Mr G. R. Palsara, learned counsel for the
petitioner/accused, submitted that the learned Courts below
of
erred in appreciating the material placed before them. The
complaint was barred by limitation. The plea taken by the
rt
accused that the cheque was handed over to Kashmir Singh as
security was made probable by the cross-examination of the
complainant and the defence evidence produced by the accused.
The learned courts below erred in convicting the accused.
Hence, he prayed that the present revision be allowed and the
judgments and order passed by the learned Courts below be set
aside.
11. Mr Vinod Chauhan, Ld. counsel for the
respondent/complainant, submitted that the complaint was
filed within the period of limitation. The accused admitted his
signature on the cheque, and a presumption that the cheque
was issued in discharge of the debt/liability would be attracted.
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The accused had failed to rebut the presumption. Both the
learned Courts below had rightly convicted and sentenced the
accused, and this Court should not interfere with the concurrent
.
findings of facts recorded by the learned Courts below. Hence,
he prayed that the present revision be dismissed.
12. I have given a considerable thought to the
submissions made at the bar and have gone through the records
of
carefully.
13. It was laid down by the Hon’ble Supreme Court in
rt
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 evidencebrought on record. The High Court in criminal revision
against conviction is not supposed to exercise the
jurisdiction like the appellate court, and the scope of
interference in revision is extremely narrow. Section 397
of the Criminal Procedure Code (in short “CrPC“) vests
jurisdiction to satisfy itself or himself as to the
correctness, legality or propriety of any finding, sentence
or order, recorded or passed, and as to the regularity of
any proceedings of such inferior court. The object of the::: Downloaded on – 25/04/2026 10:06:15 :::CIS
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2026:HHC:13277provision is to set right a patent defect or an error of
jurisdiction or law. There has to be a well-founded error
which is to be determined on the merits of individual
cases. It is also well settled that while considering the
same, the Revisional Court does not dwell at length upon
the facts and evidence of the case to reverse those.
findings.
14. This position was reiterated in State of Gujarat v.
Dilipsinh Kishorsinh Rao, (2023) 17 SCC 688: 2023 SCC OnLine SC
1294, wherein it was observed at page 695:
of
“14. The power and jurisdiction of the Higher Court
under Section 397 CrPC, which vests the court with the
power to call for and examine records of an inferior
rt
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 apatent 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: (SCCp. 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 itselfas 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
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invoked where the decisions under challenge are
grossly erroneous, there is no compliance with the
provisions of law, the finding recorded is based on
no evidence, material evidence is ignored, or
judicial discretion is exercised arbitrarily or
perversely. These are not exhaustive classes, but
.
are merely indicative. Each case would have to be
determined on its own merits.
13. Another well-accepted norm is that the
revisional jurisdiction of the higher court is a very
limited one and cannot be exercised in a routine
manner. One of the inbuilt restrictions is that it
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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
rt 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 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::: Downloaded on – 25/04/2026 10:06:15 :::CIS
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2026:HHC:13277Court has laid down the following: (SCC pp. 454-55, para
5)
5. … In its revisional jurisdiction, the High Court
can call for and examine the record of any
proceedings to satisfy itself as to the correctness,.
legality or propriety of any finding, sentence or
order. In other words, the jurisdiction is one of
supervisory jurisdiction exercised by the High
Court for correcting a miscarriage of justice. But
the said revisional power cannot be equated with
the power of an appellate court, nor can it be
treated even as a second appellate jurisdiction.
of
Ordinarily, therefore, it would not be appropriate
for the High Court to reappreciate the evidence and
come to its conclusion on the same when the
evidence has already been appreciated by the
rt 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 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
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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
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
rt exercised arbitrarily 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 ofperversity, 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.”
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17. The present revision has to be decided as per the
parameters laid down by the Hon’ble Supreme Court.
18. The ingredients of an 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,
of
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
rt
maintained by him with a banker, for payment to another
person from out of that account for discharge in whole/inpart 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 thedrawer or any arrangement with the banker to pay the
sum covered by the cheque, (iv) giving notice in writing
to the drawer of the cheque within 15 days of the receiptof information by the payee from the bank regarding the
return of the cheque as unpaid demanding payment ofthe 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 15days of the receipt of the notice.
19. It was asserted in the memorandum of revision that
the complaint is barred by limitation because the returning
memo was issued on 28/02/2018, legal notice was served on
19/03/2018, but the complaint was filed on 07/07/2018. It was
rightly submitted on behalf of the accused that this is a positive
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mis-statement because the complaint was filed on 26/04/2018
and not on 07/07/2018. Therefore, the very basis of the
submission that the complaint was filed on 07/07/2018 is
.
factually incorrect, and it cannot be said that the complaint as
barred by limitation
20. The accused claimed that he had issued the cheque
in favour of Kashmir Singh. This shows that the issuance of the
of
cheque and the signature of the accused are not disputed. The
learned Courts below had rightly held that once the signatures
rt
on the cheque and issuance of the cheque are not disputed, a
presumption would be triggered that the cheque was issued in
discharge of the debt/liability. 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::: Downloaded on – 25/04/2026 10:06:15 :::CIS
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2026:HHC:13277liability. Of course, 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 properly appreciating and considering the
presumption in favour of the complainant that thereof
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
rt
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 ofthe complainant that there exists legally enforceable debt
or liability and thereafter, it is for the accused to rebut
such presumption by leading evidence.”
21. It was laid down 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 Sanjabij Tari v. Kishore S.
Borcar, 2025 SCC OnLine SC 2069, wherein it was observed:
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“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 legally enforceable debt or
liability arises against the accused. It is pertinent to
of
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 three-
Judge Bench in Rangappa (supra).
rt
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
rebuttable. 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 Court has to start with the presumption
that the cheque was issued in discharge of the liability for
consideration, and the burden is upon the accused to rebut this
presumption.
24. The accused, Hoshiar Singh (DW2), stated that he
had taken the loan of ₹ 2 Lacs from Kashmir Singh to start his
business and handed over 4 cheques to him. He stated in his
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cross-examination that he had not made any complaint to the
police regarding the non-return of the cheque.
25. Bhavdev (DW1) stated that the accused had taken a
.
loan of ₹ 2 Lacs from Kashmir Singh and handed over 4 cheques
to him, out of which two were in the name of Hoshiar Singh,
and two were in the name of Rohit. The accused had returned
the amount within 20-25 days, but Kashmir Singh had not
of
returned the cheques. He stated in his cross-examination that
he was not aware of any transaction that took place between the
rt
parties in the year 2018. He was not aware of any cheque issued
by the accused in favour of the complainant.
26. The learned Courts below had rightly rejected the
defence taken by the accused. The accused had not reported the
fact to any person that his cheques were not returned by
Kashmir Singh. He had not even made any complaint to the
bank asking it to stop the payment to secure his interest. The
accused has not explained why the name of Kashmir Singh did
not appear on the cheques if they were handed over to Kashmir
Singh. Statement of the Bhavdev (DW1) is highly vague, and he
could not deny the transaction between the complainant and
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the accused. Hence, the learned Courts below were justified in
rejecting the defence version.
27. The complainant denied in his cross-examination
.
that the accused had taken the loan from Kashmir Singh. He
volunteered to say that the accused had taken the loan from him
(the complainant). He admitted that Kashmir Singh had taken
two security cheques from the accused. However, this
of
admission will not help the accused because the cheque in the
present case was not connected to the cheque handed over as
rt
security to Kashmir Singh. Therefore, the cross-examination of
the complainant does not help the case of the accused.
28. The complainant stated in his cross-
examination that the money was advanced in the presence of Dr
Sanjeev. It was submitted that Dr Sanjeev was not examined,
and the complainant’s case was not proved. This submission
will 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: 2019 SCC OnLine SC 1361, that a presumption under
Section 139 of the NI Act would obviate the requirement to
prove the existence of consideration. It was observed:
“20. Th
̨ e trial court and the High Court proceeded as if
the appellant was to prove a debt before the civil court,::: Downloaded on – 25/04/2026 10:06:15 :::CIS
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2026:HHC:13277wherein 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.”
29. This position was reiterated in Ashok Singh v. State of
U.P., 2025 SCC OnLine SC 706, wherein it was observed:
of
“22. The High Court while allowing the criminal revision
has primarily proceeded on the presumption that it was
rt
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 thewithdrawal 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 presentcase. Pausing here, such presumption on the
complainant, by the High Court, appears to be
erroneous. The onus is not on the complainant at thethreshold to prove his capacity/financial wherewithal to
make the payment in discharge of which the cheque isalleged 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 himto have been given as a loan to the accused, only then
would 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::: Downloaded on – 25/04/2026 10:06:15 :::CIS
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2026:HHC:13277mentions 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:
of
‘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
rt 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 thatevidence 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 andTrial 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, forthe plea of defence has to be buttressed by evidence,
either oral or documentary, which in the present casehas 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 byproducing 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:
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’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 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 initiallylead 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, theof
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
rt acceptable, which he can do by producing
independent materials, namely, by examining his
witnesses and producing documents. It is alsoopen 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 throughthe cross-examination of the witnesses of the
complainant. Ultimately, it becomes the duty of
the courts to consider carefully and appreciate thetotality of the evidence and then come to a
conclusion whether, in the given case, the accusedhas shown that the case of the complainant is in
peril for the reason that the accused has
established a probable defence.'(emphasissupplied)’ (underlining in original; emphasis
supplied by us in bold).
30. A similar view was taken in Sanjay Sanjabij Tari v.
Kishore S. Borcar, 2025 SCC OnLine SC 2069, wherein it was
observed:
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2026:HHC:13277
“21. This Court also takes judicial notice of the fact that
some 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 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.”
of
31. Therefore, the complainant’s case cannot be
doubted because Dr Sanjeev was not examined.
32.
rt
There is no other evidence to rebut the presumption
attached to the cheque, and the learned Courts below had
rightly held that the accused had failed to rebut the
presumption attached to the cheque.
33. The complainant stated that the cheque had been
dishonoured with the endorsement “insufficient funds”. This
was duly proved by memo (Ex.CW-1/C) wherein the reason of
dishonour was mentioned as “insufficient funds.” It was laid
down by the Hon’ble 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
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22
2026:HHC:13277upon the accused to rebut the presumption. It was observed at
page 95:
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 dishonour of the cheque, unless and until
that fact was disproved. Section 147 makes the offences
punishable under the Act compoundable.
34. In the present case, no evidence was produced to
of
rebut the presumption, and the learned Courts below had
rightly held that the cheque was dishonoured with an
rt
endorsement ‘insufficient funds.’
35. The complainant stated in his proof affidavit (Ex.
CW1/A) that the registered letter containing the notice was
returned with an endorsement ‘unclaimed’. His statement is
corroborated by the envelope (Ex. CW-1/F) in which an
endorsement was made that ‘the addressee was not available
despite repeated visits.’ This envelope was sent to the address at
which the service of the accused was effected. The accused also
furnished the same address in his statement recorded under
Section 313 Cr.P.C. and the notice of accusation. Therefore, the
notice was sent to the correct address. It was laid down by the
Hon’ble Supreme Court in D. Vinod Shivappa v. Nanda Belliappa,
(2006) 6 SCC 456: (2006) 3 SCC (Cri) 114: 2006 SCC OnLine SC 629,
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2026:HHC:13277
that a notice returned with an endorsement “house locked”
would lead to a presumption that the notice was validly served
and the burden would be upon the accused to show that the
.
report is incorrect. It was observed at page 462:
“14. If a notice is issued and served upon the drawer of
the cheque, no controversy arises. Similarly, if the noticeis refused by the addressee, it may be presumed to have
been served. This is also not disputed. This leaves us with
the third situation where the notice could not be servedof
on the addressee for one or the other reason, such as his
non-availability at the time of delivery, or premises
remaining locked on account of his having gone
elsewhere, etc. etc. If in each such case the law is
rt
understood to mean that there has been no service of
notice, it would completely defeat the very purpose of theAct. It would then be very easy for an unscrupulous and
dishonest drawer of a cheque to make himself scarce for
some time after issuing the cheque so that the requisite
statutory notice can never be served upon him, andconsequently, he can never be prosecuted. There is good
authority to support the proposition that once the
complainant, the payee of the cheque, issues notice tothe drawer of the cheque, the cause of action to file a
complaint arises on the expiry of the period prescribedfor payment by the drawer of the cheque. If he does not
file a complaint within one month of the date on which
the cause of action arises under clause (c) of the provisoto Section 138 of the Act, his complaint gets barred by
time. Thus, a person who can dodge the postman for
about a month or two, or a person who can get a fake
endorsement made regarding his non-availability, can
successfully avoid his prosecution because the payee is
bound to issue notice to him within a period of 30 days
from the date of receipt of information from the bank
regarding the return of the cheque as unpaid. He is,
therefore, bound to issue the legal notice, which may be::: Downloaded on – 25/04/2026 10:06:15 :::CIS
24
2026:HHC:13277returned with an endorsement that the addressee is not
available at the given address.
xxxxx
18. This Court noticed the position well settled in law that
the notice refused to be accepted by the drawer can be.
presumed to have been served on him. In that case, the
notice was returned as “unclaimed” and not as refused.
The Court posed the question, “Will there be any
significant difference between the two so far as thepresumption of service is concerned?” Their Lordships
referred to Section 27 of the General Clauses Act and
observed that the principle incorporated therein couldof
profitably be imported in a case where the sender had
dispatched the notice by post with the correct address
written on it. Then it can be deemed to have been served
on the sendee, unless he proves that it was not really
rt
served and that he was not responsible for such non-
service. This Court dismissed the appeal preferred by thedrawer, holding that where the notice is returned by the
addressee as unclaimed, such date of return to the sender
would be the commencing date in reckoning the period of
15 days contemplated in clause (c) of the proviso toSection 138 of the Act. This would be without prejudice to
the right of the drawer of the cheque to show that he had
no knowledge that the notice was brought to his address.
Since the appellant did not attempt to discharge theburden to rebut the aforesaid presumption, the appeal
was dismissed by this Court. The aforesaid decision issignificant for two reasons. Firstly, it was held that the
principle incorporated in Section 27 of the General
Clauses Act would apply in a case where the senderdispatched the notice by post with the correct address
written on it, but that would be without prejudice to the
right of the drawer of the cheque to show that he had no
knowledge that the notice was brought to his address.”
36. It was laid down by the Hon’ble Supreme Court of
India in C.C. Allavi Haji vs. Pala Pelly Mohd. 2007(6) SCC 555, that
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when a notice is returned unclaimed, it is deemed to be served.
It was observed:
“8. Since in Bhaskaran’s case (supra), the notice issued in
.
terms of Clause (b) had been returned unclaimed and not
as refused, the Court, posed the question: “Will there be
any significant difference between the two so far as the
presumption of service is concerned?” It was observedthat though Section 138 of the Act does not require that
the notice should be given only by “post”, yet in a case
where the sender has dispatched the notice by post with
the correct address written on it, the principleof
incorporated in Section 27 of the General Clauses Act,
1897 (for short ‘G.C. Act‘) could profitably be imported in
such a case. It was held that in this situation service of
notice is deemed to have been effected on the sendee
rt
unless he proves that it was not really served and that he
was not responsible for such non-service.”
37. This position was reiterated in Priyanka Kumari vs.
Shailendra Kumar (13.10.2023- SC Order): MANU/ SCOR/ 133284/
2023, wherein it was observed:
“As it was held by the Hon’ble Supreme Court in K.
Bhaskaran Vs. Sankaran Vaidhyan Balan and Another,
(1999) 7 Supreme Court Cases 510, that when notice isreturned as ‘unclaimed’, it shall be deemed to be duly
served upon the addressee, and it is a proper service of
notice. In the case of Ajeet Seeds Limited Vs. K. GopalaKrishnaiah (2014) 12 SCC 685 (2014), the Hon’ble Court,
while interpreting Section 27 of the General Clauses Act
1897 and also Section 114 of the Evidence Act 1872, held
as under: –
“Section 114 of the Evidence Act, 1872, enables the
court to presume that in the common course of
natural events, the communication sent by post
would have been delivered at the address of the
addressee. Further, Section 27 of the General::: Downloaded on – 25/04/2026 10:06:15 :::CIS
26
2026:HHC:13277Clauses Act, 1897 gives rise to a presumption that
service of notice has been effected when it is sent to
the correct address by registered post. It is not
necessary to aver in the complaint that, despite the
return of the notice unserved, it is deemed to have
been served or that the addressee is deemed to have.
knowledge of the notice. Unless and until the
contrary is proved by the addressee, service of notice
is deemed to have been effected at the time at which
the letter would have been delivered in the ordinarycourse of business.”
38. A similar view was taken in Krishna Swaroop Agarwal
of
v. Arvind Kumar, 2025 SCC OnLine SC 1458, wherein it was
observed:
rt
“13. Section 27 of the General Clauses Act, 1887, deals
with service by post:
“27. Meaning of Service by post.-Where any
[Central Act] or Regulation made after the
commencement of this Act authorizes or requiresany document to be served by post, whether the
expression “serve” or either of the expressions
“give” or “send” or any other expression is used,
then, unless a different intention appears, theservice shall be deemed to be effected by properly
addressing, pre-paying and posting by registeredpost, a letter containing the document, and, unless
the contrary is proved, to have been effected at the
time at which the letter would be delivered in theordinary course of post”.
14. The concept of deemed service has been discussed by
this Court on various occasions. It shall be useful to refer
to some instances:
14.1 In Madan and Co. v. Wazir Jaivir Chand (1989) 1
SCC 264, which was a case concerned with the
payment of arrears of rent under the J&K Houses
and Shops Rent Control Act, 1966. The proviso to::: Downloaded on – 25/04/2026 10:06:15 :::CIS
27
2026:HHC:13277Section 11, which is titled “Protection of a Tenant
against Eviction”, states that unless the landlord
serves notice upon the rent becoming due, through
the Post Office under a registered cover, no amount
shall be deemed to be in arrears. Regarding service
of notice by post, it was observed that in order to.
comply with the proviso, all that is within the
landlord’s domain to do is to post a pre-paid
registered letter containing the correct address and
nothing further. It is then presumed to be delivered
under Section 27 of the GC Act. Irrespective of
whether the addressee accepts or rejects, “there is no
difficulty, for the acceptance or refusal can be treated as
of
a service on, and receipt by the addressee.”
14.2 In the context of Section 138 of the Negotiable
Instruments Act, 1881 it was held that when the
rt
payee dispatches the notice by registered post, the
requirement under Clause (b) of the proviso of
Section 138 of the NI Act stands complied with and
the cause of action to file a complaint arises on the
expiry of that period prescribed in Clause (c) thereof.
[See: C.C. Alavi Haji v. Palapetty Mouhammed (2007)
6 SCC 555]
14.3 The findings in C.C. Alavi (supra) were followed
in Vishwabandhu v. Srikrishna (2021) 19 SCC 549. In
this case, the summons issued by the Registered AD
post was received back with endorsement “refusal”.
In accordance with Sub-Rule (5) of Order V Rule 9 of
CPC, refusal to accept delivery of the summons
would be deemed to be due service in accordance
with law. To substantiate this view, a reference was
made to the judgment referred to supra.
14.4 A similar position as in C.C. Alavi (supra) stands
adopted by this Court in various judgments of this
Court in Greater Mohali Area Development Authority v.
Manju Jain (2010) 9 SCC 157; Gujarat Electricity Board
v. Atmaram Sungomal Posani (1989) 2 SCC 602; CIT v.
V. K. Gururaj (1996) 7 SCC 275; Poonam Verma v. DDA
(2007) 13 SCC 154; Sarav Investment & Financial
Consultancy (P) Ltd. v. Lloyds Register of Shipping
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2026:HHC:13277
Indian Office Staff Provident Fund (2007) 14 SCC 753;
Union of India v. S.P. Singh (2008) 5 SCC 438;
Municipal Corpn., Ludhiana v. Inderjit Singh (2008) 13
SCC 506; and V.N. Bharat v. DDA (2008) 17 SCC 321.
39. In the present case, the accused has not proved that
.
he was not responsible for non-service; therefore, the learned
Courts below had rightly held that the notice was deemed to be
served upon the accused.
40. In any case, it was laid down in C.C. Allavi Haji vs.
of
Pala Pelly Mohd. 2007(6) SCC 555, that the person who claims
that he had not received the notice has to pay the amount
rt
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 givingnotice before filing a complaint. Any drawer who claims
that he did not receive the notice sent by post, can, within 15days 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::: Downloaded on – 25/04/2026 10:06:15 :::CIS
29
2026:HHC:13277138, by ignoring statutory presumption to the contrary
under Section 27 of the G.C. Act and Section 114 of the
Evidence Act. In our view, any other interpretation of the
proviso would defeat the very object of the legislation.
As observed in Bhaskaran‘s case (supra), if the giving of
notice in the context of Clause (b) of the proviso was the.
same as the receipt of notice, a trickster cheque drawer
would get the premium to avoid receiving the notice by
adopting different strategies and escape from the legal
consequences of Section 138 of the Act.” (Emphasissupplied)
41. The accused did not claim that he had repaid the
of
amount to the complainant; therefore, it was duly proved on
record that the accused had failed to repay the amount despite
rt
the receipt of the notice.
42. Therefore, it was duly proved before the learned
Trial Court that the accused had issued a cheque to discharge
his legal liability, the cheque was dishonoured with an
endorsement ‘insufficient funds’, and the accused failed to pay
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 the offence punishable under Section 138 of the
NI Act.
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43. Learned Trial Court sentenced the accused to
undergo simple imprisonment for six months and pay
compensation of ₹11,00,000/- to the complainant. 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 is deterrent in nature. It was observed at page 203:
of
“6. The object of Section 138 of the Negotiable
Instruments Act is to infuse credibility into negotiable
instruments, including cheques, and to encourage and
rt
promote the use of negotiable instruments, including
cheques, in financial transactions. The penal provision of
Section 138 of the Negotiable Instruments Act is intendedto 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.”
44. Keeping in view the deterrent nature of the
punishment, the sentence of six months cannot be said to be
excessive.
45. The learned Trial Court awarded the compensation
of ₹ 11,00,000/- on 24.12.2024. The cheque was issued on
15.02.2018. Thus, the compensation was imposed after more
than six years. 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
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31
2026:HHC:13277the 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. Theprovisions 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 isof
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
rt
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]”
46. The interest on ₹ 5,50,000/- for 2504 days @ 9 %
p.a. would be ₹ 3,39,584/- Learned Trial Court awarded a
compensation of ₹5,50,000/- which is excessive and is reduced
to ₹ 3, 50,000/-. Thus, the accused is liable to pay ₹9,00,000/-
(₹5,50,000+₹3,50,000/-) as compensation.
47. It was submitted that the learned Trial Court could
not have awarded the sentence of imprisonment in case of
default in 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 SCC OnLine SC
612, the Courts can impose a sentence of imprisonment in
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32
2026:HHC:13277default of payment of compensation. It was observed at page
237:
“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 thecriminal 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 affectedof
party can ensure the delivery of total justice. Therefore,
this grant of compensation is sometimes in lieu of
sending a person to bars or in addition to a very light
sentence of imprisonment. Hence, in default of payment
rt
of this compensation, there must be a just recourse. Not
imposing a sentence of imprisonment would meanallowing 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 properenforcement 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 theaccused to pay the same amount as has been laid down by
the cases above; otherwise, the very purpose of grantingan order of compensation would stand defeated.”
48. This position was reiterated in R. Mohan v. A.K.
Vijaya Kumar, (2012) 8 SCC 721: 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::: Downloaded on – 25/04/2026 10:06:15 :::CIS
33
2026:HHC:13277accused 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 byproviding 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 isof
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 a fine under Section 64 IPC. It is obvious that
rt
in view of this, in Vijayan [(2009) 6 SCC 652: (2009) 3 SCC
(Cri) 296], this Court stated that the abovementionedprovisions 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 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.
49. Thus, there is no infirmity in imposing a sentence of
imprisonment in case of default in the payment of
compensation.
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50. No other point was urged.
51. In view of the above, the present revision is partly
allowed, and the amount of compensation awarded by the
.
learned Trial Court, as affirmed by the learned Appellate Court,
is reduced to ₹9, 00,000/-. Subject to this modification, the rest
of the judgment and order are upheld.
52. The present petition stands disposed of, and so are
of
the pending applications, if any.
53. A copy of the judgment, along with records of the
rt
learned Courts below, be sent back forthwith.
(Rakesh Kainthla)
Judge
24th April 2026.
(ravinder)
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