07.04.2026 vs Of on 18 May, 2026

Himachal Pradesh High Court

Reserved On: 07.04.2026 vs Of on 18 May, 2026

                                                                                         2026:HHC:17934




        IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA


                                                Cr. Revision No. 71 of 2025




                                                                                      .
                                                Reserved on: 07.04.2026





                                                Decided on:              18 .05.2026





    Rupesh Sharma                                                             ....... Petitioner


                                      Versus




                                                      of
    Murlidhar                                                                 .... Respondent


    Coram
                      rt

    Hon'ble Mr Justice Rakesh Kainthla, Judge.
    Whether approved for reporting?1                       No.



    For the Petitioner                           :        Mr B.L. Soni, Advocate.



    For the Respondent                          :         Mr Varun Chauhan, Advocate




    Rakesh Kainthla, Judge

The present revision is directed against the

judgment dated 09.01.2025, passed by the learned Additional

Sessions Judge, Kullu, District Kullu, H.P. (learned Appellate

Court) vide which judgment of conviction and order of sentence

dated 17.06.2024 passed by the learned Judicial Magistrate, First

Class, Kullu, District Kullu, H.P. (learned Trial Court) were

1
Whether the reporters of the local papers may be allowed to see the Judgment?Yes.

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upheld. (The 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 offence punishable under Section 138 of the Negotiable

of
Instruments Act, 1881 (in short, ‘NI Act‘). It was asserted that

the complainant is the owner in possession of the fruit-bearing
rt
orchard situated at Village Jong Post Office, Katrain, Tehsil and

District Kullu, H.P. The accused purchased the fruit from the

complainant and issued a cheque of ₹3,50,000/- in the

complainant’s favour. The complainant presented the cheque to

his bank on 02.04.2013, but it was dishonoured with an

endorsement ‘account closed’. The complainant served a legal

notice upon the accused asking him to pay the amount within 15

days. The accused received the notice on 03.05.2013, but failed

to pay the amount. Hence, the complaint was filed before the

learned trial Court for taking action against the accused as per

the 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 (CW-1) and R.K

Sharma (CW-2).

of

5. The accused, in his statement recorded under

section 313 of the Code of Criminal Procedure (Cr.P.C.), denied
rt
the complainant’s case in its entirety. He asserted that he had

never carried out the fruit business and had not issued any

cheque in the complainant’s favour. He had handed over the

cheque to Dalveer Thakur because he had money transactions

with him. The accused opted to lead defence evidence but failed

to produce the evidence. Hence, the learned Trial Court closed

the evidence by the order of the Court.

6. Learned trial Court held that the complainant’s

statement that the accused had issued the cheque to him in

discharge of the legal liability was acceptable. The cheque

carries with it a presumption under Section 118(a) and 139 of the

NI Act that it was issued for consideration to discharge

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debt/liability. The accused failed to rebut the presumption. The

cheque was dishonoured with an endorsement account closed,

which also attracted the provisions of Section 138 of the NI Act.

.

The notice was duly served upon the accused, but he failed to

repay the amount to the complainant. All the ingredients of the

commission of an offence punishable under Section 138 of the

NI Act were duly satisfied; therefore, the learned Trial Court

of
convicted the accused of the commission of an offence

punishable under Section 138 of the NI Act and sentenced him to
rt
undergo simple imprisonment for five months and to pay a

compensation of ₹4,75,000/- to the complainant.

7. Being aggrieved by the judgment and order passed

by the learned trial Court, the accused filed an appeal, which

was decided by the learned Additional Sessions Judge, Kullu

District, Kullu, H.P. (learned Appellate Court). The learned

Appellate Court concurred with the findings recorded by the

learned trial Court that the statement of the complainant that

the accused had handed over the cheque to him regarding the

payment of the apple crop was acceptable. A presumption under

Section 118(a) read with 139 of the NI Act would be triggered

that the cheque was issued for consideration to discharge

debt/liability. The accused failed to rebut the presumption. The

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cheque was dishonoured with an endorsement “account

closed’, which also attracted the provisions of Section 138 of the

NI Act. The notice was duly served upon the accused, but the

.

accused failed to repay the amount. He was rightly convicted by

the learned Trial Court. The learned Trial Court had imposed an

adequate sentence, and no interference was required with it;

hence, the appeal was dismissed.

of

8. Being aggrieved by the judgments and order passed

by the learned Courts below, the accused has filed the present
rt
revision asserting that the learned Courts below failed to

appreciate the defence of the accused that there existed no legal

liability. The complainant failed to produce the documents on

record to show that he owned any orchard. Therefore, it was

prayed that the present revision be allowed and the judgments

and order passed by the learned Courts below be set aside.

9. I have heard Mr B.L. Soni, learned counsel for the

petitioner, and Mr Varun Chauhan, learned counsel for the

respondent.

10. Mr. B.L.Soni, learned counsel for the petitioner,

submitted that the learned Courts below erred in appreciating

the evidence on record. They proceeded on the basis that the

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accused had admitted his signature on the cheque, and a

presumption under Section 118(a) and Section 139 of the NI Act

would be attracted to the present case. The accused had

.

specifically denied in his statement recorded under Section 313

of the Cr.P.C. that the cheque bore his signature or that he owed

any liability to the accused. Therefore, the burden was upon the

complainant to prove the existence of legal liability. The

of
complainant did not produce the record of his orchard to

support the version that the accused had purchased the apple
rt
crop from him. The learned courts below did not appreciate this

aspect. 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 Varun Chauhan, learned counsel for the

respondent, submitted that both the learned Courts below have

concurrently held that the accused had issued a cheque and the

presumption under Sections 118(a) and 139 of the NI Act would

be triggered. This is a concurrent finding of fact, and this court

should not reappreciate the evidence while deciding a revision.

Hence, he prayed that the present revision be dismissed.

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12. I have given a 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

of
defect, errors of jurisdiction or the law. It was observed at page

207- rt
“10. Before adverting to the merits of the contentions, at

the outset, it is apt to mention that there are concurrent
findings of conviction arrived at by two courts after a
detailed appreciation of the material and evidence
brought on record. The High Court in criminal revision

against conviction is not supposed to exercise the
jurisdiction like the appellate court, and the scope of
interference in revision is extremely narrow. Section 397
of the Criminal Procedure Code (in short “CrPC“) vests

jurisdiction to satisfy itself or himself as to the
correctness, legality or propriety of any finding, sentence

or order, recorded or passed, and as to the regularity of
any proceedings of such inferior court. The object of the
provision is to set right a patent defect or an error of

jurisdiction or law. There has to be a well-founded error
that 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.

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14. This position was reiterated in State of Gujarat v.

Dilipsinh Kishorsinh Rao, (2023) 17 SCC 688: 2023 SCC OnLine SC

1294, wherein it was observed at page 695:

.

“14. The power and jurisdiction of the Higher Court
under Section 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

of
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.
rt
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 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

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are merely indicative. Each case would have to be
determined on its own merits.

13. Another well-accepted norm is that the
revisional jurisdiction of the higher court is a very
limited one and cannot be exercised in a routine

.

manner. One of the inbuilt restrictions is that it

should not be against an interim or interlocutory
order. The Court has to keep in mind that the
exercise of revisional jurisdiction itself should not

lead to injustice ex facie. Where the Court is
dealing with the question as to whether the charge
has been framed properly and in accordance with

of
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
rt 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)

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

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order. In other words, the jurisdiction is one of
supervisory jurisdiction exercised by the High
Court for correcting a miscarriage of justice. But
the said revisional power cannot be equated with
the power of an appellate court, nor can it be
treated even as a second appellate jurisdiction.

.

Ordinarily, therefore, it would not be appropriate
for the High Court to reappreciate the evidence and
come to its conclusion on the same when the
evidence has already been appreciated by the

Magistrate as well as the Sessions Judge in appeal,
unless any glaring feature is brought to the notice
of the High Court which would otherwise amount

of
to a gross miscarriage of justice. On scrutinising
the impugned judgment of the High Court from the
aforesaid standpoint, we have no hesitation in
rt 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
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

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in the court to do justice in accordance with the
principles of criminal jurisprudence. The revisional
power of the court under Sections 397 to 401 CrPC
is not to be equated with that of an appeal. Unless
the finding of the court, whose decision is sought
to be revised, is shown to be perverse or untenable

.

in law or is grossly erroneous or glaringly
unreasonable or where the decision is based on no
material or where the material facts are wholly
ignored or where the judicial discretion is

exercised arbitrarily or capriciously, the courts
may not interfere with the decision in exercise of
their revisional jurisdiction.”

of

16. This position was reiterated in Bir Singh v. Mukesh

Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ)
rt
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.”

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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/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 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.

19. The accused filed an application under Section 145

of the NI Act for cross-examination of the complainant and the

witnesses, stating that he wanted to cross-examine the

witnesses as the cross-examination was essential for the just

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decision of the complaint. He had not put forward any plea in

this application.

20. The complainant, Murlidhar (CW-1), denied in his

.

cross-examination that the accused had handed over two

signed blank cheques to Dalveer or that a signed blank cheque

was filled by Dalveer Thakur, and the second cheque was

handed over to him.

of

21. The accused also stated in his statement recorded

under Section 313 of Cr.P.C. that he had handed over the cheques
rt
to Dalveer because he had monetary transactions with him. The

accused opted to lead defence evidence but did not produce the

defence. It was held in Sumeti Vij v. Paramount Tech Fab

Industries, (2022) 15 SCC 689: 2021 SCC OnLine SC 201 that the

accused has to lead defence evidence to rebut the presumption

and mere denial in his statement under section 313 of Cr.P.C. is

not sufficient to rebut the presumption. It was observed at page

700:

“20. That apart, when the complainant exhibited all
these documents in support of his complaints and
recorded the statement of three witnesses in support
thereof, the appellant 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

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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)”

.

22. Therefore, the plea taken by the accused that the

cheque was handed over to Dalveer cannot be accepted.

23. The conduct of the accused does not support the plea

of
taken by him. There is no evidence that the accused had made

any complaint to the police or the bank regarding the misuse of

the cheque by Dalveer. He suggested to the complainant that
rt
Dalveer had misused one cheque. Therefore, it was possible for

him to misuse another cheque, and any prudent person would

have informed the bank regarding the possible misuse of the

cheque. The accused had not made any complaint to the police

or the bank regarding the possible misuse of the cheque, and his

plea that he had handed over the cheques to Dalveer, who had

misused them, was not acceptable.

24. The accused suggested in the cross-examination

that a blank signed cheque was handed over to Dalveer, which

shows that the signatures on the cheque are not disputed. It was

laid down by the Hon’ble Supreme Court in Balu Sudam Khalde

v. State of Maharashtra, (2023) 13 SCC 365: 2023 SCC OnLine SC

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355 that the suggestion put to the witness can be taken into

consideration while determining the innocence or guilt of the

accused. It was observed at page 383: –

.

“38. Thus, from the above, it is evident that the
suggestion made by the defence counsel to a witness in
the cross-examination, if found to be incriminating in
nature in any manner, would definitely bind the accused,

and the accused cannot get away on the plea that his
counsel had no implied authority to make suggestions in
the nature of admissions against his client.

of

39. Any concession or admission of a fact by a defence
counsel would definitely be binding on his client, except
for the concession on the point of law. As a legal
rt
proposition, we cannot agree with the submission
canvassed on behalf of the appellants that an answer by a
witness to a suggestion made by the defence counsel in

the cross-examination does not deserve any value or
utility if it incriminates the accused in any manner.

****

42. Therefore, we are of the opinion that suggestions
made to the witness by the defence counsel and the reply
to such suggestions would definitely form part of the

evidence and can be relied upon by the Court along with
other evidence on record to determine the guilt of the

accused.”

25. Therefore, learned Courts below had rightly held

that the signature and the issuance of the cheque were not in

dispute, and the presumption under Section 118(a) and 139 of

the NI Act would be triggered that the cheque was issued for

consideration to discharge the liability. It was laid down by the

Hon’ble Supreme Court in APS Forex Services (P) Ltd. v. Shakti

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International Fashion Linkers (2020) 12 SCC 724, that when the

signature on the cheque is 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

of
even according to the accused some amount was due and
payable, there is a presumption under Section 139 of the
NI Act that there exists a legally enforceable debt or
liability. Of course, such a presumption is rebuttable.
rt
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 there
exists a legally enforceable debt or liability as per Section
139 of the NI Act. It appears that both the learned trial

court and the High Court have committed an error in
shifting the burden upon the complainant to prove the
debt or liability, without appreciating the presumption
under Section 139 of the NI Act. As observed above,
Section 139 of the Act is an example of a 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

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debt or liability and thereafter, it is for the accused to
rebut such presumption by leading evidence.”

26. 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

of
liability. Presumptions under both are rebuttable,
meaning they can be rebutted by the accused by raising a
probable defence.”

27. This position was reiterated in Sanjabij Tari v.

rt
Kishore S. Borcar, 2025 SCC OnLine SC 2069, wherein it was

observed:

“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 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).

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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].

28. Thus, the Court has to start with the presumption

that the cheque was issued in discharge of the liability for

of
consideration, and the burden is upon the accused to rebut this

presumption.

29.
rt
It was submitted that the complainant had not

produced the evidence of the ownership of the orchard, and the

learned Courts below wrongly accepted the complainant’s

version that he is the owner of the orchard and had sold the

apple crop to the accused. 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. Th̨ e trial court and the High Court proceeded as if
the appellant was to prove a debt before the civil court,
wherein the plaintiff is required to prove his claim on the
basis of evidence to be laid in support of his claim for the

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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.”

30. 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
obligatory on the part of the complainant to establish his
case on the basis of evidence by giving the details of the
rt
bank account as well as the date and time of the
withdrawal of the said amount which was given to the
accused and also the date and time of the payment made

to the accused, including the date and time of receiving
of the cheque, which has not been done in the present
case. Pausing here, such presumption on the
complainant, by the High Court, appears to be erroneous.

The onus is not on the complainant at the threshold to
prove his capacity/financial wherewithal to make the
payment in discharge of which the cheque is alleged to

have been issued in his favour. Only if an objection is
raised that the complainant was not in a financial

position to pay the amount so claimed by him to 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 mentions this as
‘Firozabad’). The Court ought not to have summarily
rejected such a stand, more so when respondent no. 2 did

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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

of
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
rt evidence had to be adduced on this point which has
not been done by the petitioners. Pausing here, the
Court would only comment that the reasoning of the

High Court, as well as the First Appellate Court and
Trial Court, on this issue is sound. Just by taking a
counter-stand to raise a probable defence would not
shift the onus on the complainant in such a case, for

the plea of defence has to be buttressed by evidence,
either oral or documentary, which in the present case
has not been done. Moreover, even if it is presumed

that the complainant had not proved the source of the
money given to the petitioners by way of loan by

producing statement of accounts and/or Income Tax
Returns, the same ipso facto, would not negate such
claim for the reason that the cheques having being

issued and signed by the petitioners has not been
denied, and no evidence has been led to show that the
respondent lacked capacity to provide the amount(s)
in question. In this regard, we may make profitable
reference to the decision in Tedhi Singh v. Narayan
Dass Mahant, (2022) 6 SCC 735:

’10. The trial court and the first appellate court
have noted that in the case under Section 138 of
the NI Act, the complainant need not show in

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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 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

of
the capacity and therefore, the case of the
accused is acceptable, which he can do by
producing independent materials, namely, by
rt 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 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).

31. A similar view was taken in Sanjay Sanjabij Tari v.

Kishore S. Borcar, 2025 SCC OnLine SC 2069, wherein it was

observed:

“21. This Court also takes judicial notice of the fact that
some District Courts and some High Courts are not

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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.”

32. Therefore, the case of the complainant cannot be

doubted because the record regarding the

of
ownership/possession of the orchard was not produced.

33.
rt
The plea taken by the accused that he had issued the

cheques as security to Dalveer was not proved by any evidence

on record. Therefore, learned Courts below had rightly held that

the cheque was issued in favour of the complainant to discharge

the debt/liability.

34. The complainant stated that the cheque was

dishonoured with an endorsement account closed. This is duly

corroborated by the dishonoured memo (Ext.CC) in which the

reason for dishonour has been mentioned as ‘account closed’. 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

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and the burden is upon 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.

35. It was laid down by the Hon’ble Supreme Court

of
in NEPC Micon Ltd. v. Magma Leasing Ltd., (1999) 4 SCC 253: 1999

SCC (Cri) 524: 1999 SCC OnLine SC 508, that when a cheque is
rt
dishonoured due to the account being closed, it will attract the

provision of Section 138 of N.I. Act. It was observed at page 258:

7. Further, the offence will be complete only when the
conditions in provisos (a), (b) and (c) are complied with.

Hence, the question is, in a case where a cheque is
returned by the bank unpaid on the ground that the
“account is closed”, would it mean that the cheque is

returned as unpaid on the ground that “the amount of
money standing to the credit of that account is

insufficient to honour the cheque”? In our view, the
answer would obviously be in the affirmative because the
cheque is dishonoured as the amount of money standing

to the credit of “that account” was “nil” at the relevant
time, apart from it being closed. Closure of the account
would be an eventuality after the entire amount in the
account is withdrawn. It means that there was no amount
in the credit of “that account” on the relevant date when
the cheque was presented for honouring the same. The
expression “the amount of money standing to the credit
of that account is insufficient to honour the cheque” is a
genus of which the expression “that account being

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closed” is a species. After issuing the cheque drawn on an
account maintained, a person, if he closes “that
account”, apart from the fact that it may amount to
another offence, it would certainly be an offence under
Section 138, as there were insufficient or no funds to
honour the cheque in “that account”. Further, the cheque

.

is to be drawn by a person for payment of any amount of
money due to him “on an account maintained by him”

with a banker and only on “that account” the cheque
should be drawn. This would be clear by reading the

section along with provisos (a), (b) and (c).

********

of

15. In view of the aforesaid discussion, we are of
the opinion that even though Section 138 is a penal
statute, it is the duty of the court to interpret it
rt consistently with the legislative intent and
purpose so as to suppress the mischief and
advance the remedy. As stated above, Section 138

of the Act has created a contractual breach as an
offence, and the legislative purpose is to promote
the efficacy of banking and ensure that in
commercial or contractual transactions, cheques

are not dishonoured, and credibility in transacting
business through cheques is maintained. The
above interpretation would be in accordance with
the principle of interpretation quoted above

“brush away the cobweb varnish, and shew the
transactions in their true light” (Wilmot, C.J.) or

(by Maxwell) “to carry out effectively the breach of
the statute, it must be so construed as to defeat all
attempts to do, or avoid doing, in an indirect or

circuitous manner that which it has prohibited”.

Hence, when the cheque is returned by a bank with
an endorsement “account closed”, it would
amount to returning the cheque unpaid because
“the amount of money standing to the credit of
that account is insufficient to honour the cheque”

as envisaged in Section 138 of the Act.

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36. This Court also took the same view in Bal Krishan

Sharma v. Tek Ram, 2006 SCC OnLine HP 105: 2006 Cri LJ 1993 and

observed:

.

“9. The provisions contained in this chapter are
primarily designed to provide an additional criminal
remedy, over and above the civil remedies available to
the payee or holder in due course of a cheque. This

chapter protects the interests of a payee or holder in due
course of a dishonoured cheque. The object of the chapter
is to enhance the acceptability of the cheque in the

of
settlement of financial liabilities by making the drawer
liable for penalties. It is noticed that for establishing the
requirements of Section 138, there is no burden on the
part of the complainant to prove before a Court the entire
rt
details of the transactions resulting in the issuance of the
cheque. As observed by the Apex Court in Kusum Ingots

and Alloys Limited v. Pennar Peterson Securities Ltd., II
(2000) SLT 375: I (2000) CCR 260 (SC): I (2000) BC 300:
(2000) 2 SCC 745, the object of bringing Section 138 on
statute is to inculcate faith in the efficacy of banking

operations and credibility in transacting business on
negotiable instruments. Looking at the object of
incorporating Chapter VIII in the Act, the expression “on

account maintained by him” used in Section 138 of the
Act, as noticed above, cannot be interpreted to give it an

artificial or unrealistic meaning. What the provision says
is that the cheque must be drawn on the account that the
accused maintained with the Bank. The status of the

account, when the cheque was drawn, whether it
was live or dead, is irrelevant. What the provision says is
that the accused must have an account that is maintained
or has been maintained with the Bank. The Legislature
has not used the present continuous tense. The
expression used is “on an account maintained by him”

and not “maintained by him”. The cheque, in my view,
should have a reference to an account of the accused,
irrespective of the fact whether such an account
was live or dead on the date of issuance of the cheque. The

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interpretation of the expression “on an account
maintained by him” as given by the learned Trial
Magistrate and contended by the learned Counsel for the
accused is artificial and beyond the legislative intent.
While interpreting the provision, the legislative purpose
and goal have to be kept in mind. We cannot lose sight of

.

the fact that in this era, financial transactions are not
dependent on cash and therefore financial transactions
by other modes, including “cheques”, have to be
attached to credibility.

10. The following observations of the Supreme Court
in NEPC Micon Ltd. v. Magma Leasing Ltd., II (2006) BC 316

of
(SC): IV (1999) SLT 254: III (1999) CCR 4 (SC) : (1999) 4 SCC
253, are apposite:

“10. This Court in the case of Kanwar
rt Singh v. Delhi Admn. While construing Section
418(i) of the Delhi Municipal Corporation Act,
1959, observed–

‘It is the duty of the Court in construing a
statute to give effect to the intention of the
legislature. If, therefore, giving a literal
meaning to a word used by the draftsman,

particularly in a penal statute, would defeat
the object of the Legislature, which is to
suppress mischief, the Court can depart from

the dictionary meaning or even the popular
meaning of the word and instead give it a

meaning which will advance the remedy and
suppress the mischief.

11. Further, while interpreting the statutory

provision rule dealing with penalty under the
Drugs and Cosmetics Act, 1940 and the rules in
the case of Swantraj v. State of Maharashtra, this
Court held that every legislation is a social
document and judicial construction seeks to
decipher the statutory mission, language
permitting, taking the one from the rule
in Heydon’s case of suppressing the evil and
advancing the remedy. The Court held that what

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must tilt the balance is the purpose of the
statute, its potential frustration and judicial
avoidance of the mischief by a construction
whereby the means of licensing meet the ends
of ensuring pure and potent remedies for the
people. The Court observed that this liberty with

.

language is sanctified by great Judges and
textbooks. Maxwell instructs us in these
words–

“There is no doubt that the office of the
Judge is to make such construction as will
suppress the mischief, and advance the

of
remedy, and suppress all evasions for the
continuance of the mischief. To carry out
effectively the object of a statute, it must be
so construed as to defeat all attempts to do,
rt or avoid doing, in an indirect or circuitous
manner that which it has prohibited or
enjoined: ‘quando aliquid prohibetur,

prohibetur et omne pe quod devenitur ad illud.’

11. This manner of construction has two aspects. One is
that the Courts, mindful of the mischief rule, will not be

averse to narrowing the language of a statute so as to
allow persons within its purview to escape its net. The
other is that the statute may be applied to the substance
rather than the mere form of transactions, thus defeating

any shifts and contrivances which parties may have
devised in the hope of thereby falling outside the Act.

When the Courts find an attempt at concealment, they
will, in the words of Wilmot, C.J., ‘brush away the cobweb
varnish, and show the transactions in their true light’.”

12. Their Lordships proceeded to observe:

“15. In view of the aforesaid discussion, we
are of the opinion that even though Section
138 is a penal statute, it is the duty of the
Court to interpret it consistently with the
legislative intent and purpose so as to
suppress the mischief and advance the
remedy. As stated above, Section 138 of the

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Act has created a contractual breach as an
offence, and the legislative purpose is to
promote the efficacy of banking and ensure
that in commercial or contractual
transactions, cheques are not dishonoured,
and credibility in transacting business

.

through cheques is maintained. The above
interpretation would be in accordance with
the principle of interpretation quoted above
“brush away the cobweb varnish, and show

the transactions in their true light” (Wilmot
C.J.) or (by Maxwell) “to carry out effectively
the breach of the statute, it must be so

of
construed as to defeat all attempts to do, or
avoid doing, in an indirect or circuitous
manner that which it has prohibited” Hence
rt when the cheque is returned by a Bank with
an endorsement “account closed”. It would
amount to returning the cheque unpaid

because “the amount of money standing to
the credit of that account is insufficient to
honour the cheque” as envisaged in Section
138 of the Act.

13. If the interpretation as contended by the learned
Counsel for the accused and the Trial Court is to be
accepted, then a person who receives the cheque will have

to ensure that the account is alive. If he does not, he runs
the risk of losing his money and the denial of benefits

under Section 138 of the Act. This certainly cannot be the
legislative intent. Any account holder with the intent to
defeat the provisions of Section 138 of the Act may retain

a cheque leaf after closing his account with the Bank to
defraud any honest payee. Should such a dishonest
account holder be permitted to escape the proceedings
under Section 138 of the Act?

14. Learned Counsel for the accused would contend that
the observations in NEPC Micon Limited were that if a
cheque is dishonoured on the ground that the account is
closed then it would come within the sweep of Section
138 of the Act but if the cheque is issued on a closed

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account, then such an act of a dishonest person would
not fall within the mischief of Section 138 of the Act. It is
true that the NEPC case does not specifically deal with the
cheques issued on accounts closed prior to the date of
issuance of the cheque. Nevertheless, this case does not
indicate that such cases are intended to be taken out of

.

the sweep of Section 138 of the Act. In my opinion, the
expression “on an account maintained by him”

necessarily includes an account which was maintained by
him, i.e., the account which has been closed, as also the

account which is still maintained by him.

15. The Supreme Court in N.A. Issac v. Jeemon P. Abraham,

of
III (2006) BC 422 (SC): VI (2004) SLT 154: IV (2004) CCR 124
(SC): 2005 (1) Civil Court Cases 690 (SC), interpreted
Section 138 of the Act and observed that contention that
this provision will not be applicable when the cheque is
rt
issued from an already closed account cannot be upheld
as such an interpretation would defeat the object of
insertion of the provision in the Act. Their Lordships

observed: “Section 138 does not call for such a narrow
construction”. Their Lordships approved that the
expression used in Section 138 of the Act includes the
cheques issued on a closed account.

16. For the reasons recorded above, the findings recorded
by the Trial Magistrate holding that Section 138 of the Act
is not applicable to a cheque drawn on a closed account,

cannot be upheld.”

37. Thus, the accused would be liable for the

commission of an offence punishable under Section 138 of N.I.

Act when the cheque was dishonoured with an endorsement of

the account closed.

38. The complainant stated that he had issued a notice

to the accused, which was duly served upon him. He denied in

his cross-examination that the accused had not received the

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notice. A denied suggestion does not amount to any proof.

Learned Courts below had rightly held that even if the notice

was not served upon the accused, he had an option of paying the

.

money within 15 days of the receipt of the summons from the

Court. It was laid down in C.C. Allavi Haji vs. Pala Pelly Mohd.

2007(6) SCC 555, that the person who claims that he had not

received the notice has to pay the amount within 15 days from

of
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
rt
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 a 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
the 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

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to avoid receiving the notice by adopting different
strategies and escape from the legal consequences of
Section 138 of the Act.” (Emphasis supplied)

39. The accused did not claim that he had repaid the

.

amount to the complainant; therefore, it was duly proved on

record that the accused had failed to repay the amount despite

the deemed receipt of the notice

40. Therefore, it was duly proved before the learned

of
Trial Court that the accused had issued a cheque to discharge

his legal liability, the cheque was dishonoured with an
rt
endorsement ‘insufficient funds’, and the accused had failed to

pay the money despite the 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.

41. Learned Trial Court sentenced the accused to

undergo simple imprisonment for five 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 138 that the penal provision of section 138 is

a deterrent in nature. It was observed at page 203:

“6. The object of Section 138 of the Negotiable

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Instruments Act is to infuse credibility into negotiable
instruments, including cheques, and to encourage and
promote the use of negotiable instruments, including
cheques, in financial transactions. The penal provision of
Section 138 of the Negotiable Instruments Act is intended
to be a deterrent to callous issuance of negotiable

.

instruments such as cheques without serious intention to
honour the promise implicit in the issuance of the same.”

42. Keeping in view the deterrent nature of the sentence

to be awarded, the sentence of six months of simple

imprisonment cannot be said to be excessive, and no

of
interference is required with it.

43. The learned Trial Court had directed the accused to
rt
pay a fine, in the form of compensation of ₹4,75,000/-. The

cheque was issued on 25.03.2013, and the sentence was imposed

by the learned Trial Court on 17.06.2024. 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

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well settled that there needs to be a consistent approach
towards awarding compensation, and unless there exist
special circumstances, the courts should uniformly levy
fines up to twice the cheque amount along with simple
interest @ 9% p.a. [R. Vijayan v. Baby, (2012) 1 SCC 260,
para 20: (2012) 1 SCC (Civ) 79: (2012) 1 SCC (Cri) 520]”

.

44. In the present case, the cheque was issued for an

amount of ₹3,50,000/- and the interest accrued @ 9% per

annum for 11 years is ₹3,46,500/-Learned Trial Court only

awarded a compensation of ₹4,75,000/-, which included the

of
cheque amount of ₹3,50,000/-. Therefore, a compensation of

₹1,25,000/- was awarded, which cannot be said to be
rt
excessive, and no interference is required with the sentence

awarded by the learned Trial Court.

45. No other point was urged

46. In view of the above, the present revision fails and is

dismissed, so also pending miscellaneous application(s), if any

47. The records of the learned Courts below be returned

along with a copy of this judgment.

(Rakesh Kainthla)
Judge
18th May, 202
(ravinder)

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