Himachal Pradesh High Court
Pyare Lal vs Baldev on 24 July, 2026
1
2026:HHC:30603
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No. 417 of 2026
Reserved on: 17.07.2026
Date of Decision: 24.07.2026
.
Pyare Lal ...Petitioner
Versus
Baldev ...Respondent
of
Coram
Hon'ble Mr Justice Rakesh Kainthla, Judge.
rt
Whether approved for reporting?1 No.
For the Petitioner : Mr Pritam Singh Chandel, Advocate.
For the Respondent : None.
Rakesh Kainthla, Judge
The present revision is directed against the judgment
dated 12.05.2026 passed by the learned Additional Sessions Judge,
Rohru, HP (learned Appellate Court) vide which the judgment of
conviction dated 10.12.2025 and order of sentence dated 17.02.2026
passed by the learned Additional Chief Judicial Magistrate Court
No.1, Rohru, District Shimla (learned Trial Court) were upheld. (The
parties shall hereinafter be referred to in the same manner as they were
arrayed before the learned Trial Court for convenience).
1
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
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2. Briefly stated, the facts giving rise to the present
revision are that the complainant filed a complaint against the
accused for the commission of an offence punishable under Section
.
138 of the Negotiable Instruments Act (NI Act). It was asserted that
the complainant is an agriculturist having his fruit-bearing apple
orchard at village Diunchi and Larot. The accused purchased the
of
complainant’s apple crop for ₹10,00,000/-. He promised to pay the
money after selling the apple crop. The complainant permitted the
rt
accused to pluck the apple crop. The accused failed to pay the
money, and when the complainant demanded the money from the
accused, he issued a cheque of ₹10,00,000/- to the complainant.
The complainant presented the cheque at his bank, but it was
dishonoured with the endorsement, ‘funds insufficient’. The
complainant issued a legal notice to the accused asking him to pay
the money within 15 days of the receipt of the notice. The notice
was duly served upon the accused, but the accused failed to repay
the money. Hence, a complaint was filed before the learned Trial
Court for taking action against the accused as per the law.
3. The learned Trial Court found sufficient reasons to
summon the accused. When the accused appeared, a notice of
accusation was put to him for the commission of an offence
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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).
.
5. The accused, in his statement recorded under Section
313 of the Criminal Procedure Code (Cr.P.C.), asserted that his son’s
mother-in-law had borrowed some money from the complainant.
of
He had handed over a blank cheque to the complainant as security
for the repayment of the loan. He did not produce any evidence in
rt
his defence.
6. Learned Trial Court held that the issuance of the cheque
was not disputed. Therefore, a presumption would arise that the
cheque was issued for consideration to discharge the debt/liability.
The accused had taken contradictory pleas. He denied that he had
taken the complainant’s apple crop. Thereafter, he claimed that he
had made full payment to the complainant. He asserted in his
statement recorded under Section 313 Cr.P.C that he had issued a
cheque to the complainant for the loan taken by his son’s mother-
in-law. These pleas contradicted the stand taken by the accused,
and he had failed to rebut the presumption. The cheque was
dishonoured with the endorsement, ‘insufficient funds’, and the
notice was duly served upon the accused. He failed to pay the
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money. 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 1 year
and pay a fine of ₹10,05,000/- which would be disbursed to the
of
complainant as compensation and, in default of payment of fine, to
undergo simple imprisonment for 3 months.
7.
rt
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, Rohru (learned
Appellate Court). The learned Appellate Court concurred with the
findings recorded by the learned Trial Court that the accused had
admitted the issuance of the cheque, and a presumption would
arise that the cheque was issued for consideration to discharge the
debt/liability. The plea taken by the accused that he had repaid the
money to the complainant was denied by him, and the accused
failed to produce any evidence to establish this plea. He did not
examine his son’s mother-in-law to establish the plea taken by
him that she had taken the loan from the complainant and the
accused had issued a cheque in that transaction. The accused had
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failed to rebut the presumption attached to the cheque. The cheque
was dishonoured with an endorsement of insufficient funds, and
the accused had failed to pay the money despite the receipt of a
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valid notice of demand. The sentence imposed by the learned Trial
Court was adequate. No interference was required with the
judgment and order passed by the learned Trial Court. Hence, the
of
appeal was dismissed.
8. Being aggrieved by the judgments and order passed by
rt
the learned Courts below, the accused has filed the present revision
asserting that the complainant had failed to prove that the accused
had taken his apple orchard for ₹10,00,000/-. No independent
witness was examined, and no contemporaneous document was
filed to establish this fact. Learned Courts below erred in relying
upon the complainant’s testimony to convict the accused. The plea
taken by the accused that he had issued a blank signed security
cheque because his son had borrowed certain money constituted a
probable defence. Therefore, it was prayed that the present
revision be allowed and the judgments and order passed by learned
Courts below be set aside.
9. Mr Pritam Singh Chandel, learned counsel for the
petitioner, submitted that the complainant had not produced any
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evidence to support his plea that the accused had taken the
complainant’s apple crop. No goods receipt was filed, and no
witness was examined to establish this fact. Learned Courts below
.
relied upon the presumption of consideration, which is not
sufficient to convict the accused. The plea taken by the accused
that the cheque was issued as a security was highly probable and
of
learned Courts below erred in rejecting this plea. Therefore, it was
prayed that the present revision be allowed and the judgments and
rt
order passed by learned Courts below be set aside.
10. I have given considerable thought to the submissions
made at the bar and have gone through the records carefully.
11. It was laid down by the Hon’ble Supreme Court in
Malkeet Singh Gill v. State of Chhattisgarh, (2022) 8 SCC 204: (2022) 3
SCC (Cri) 348: 2022 SCC OnLine SC 786 that a revisional court is not
an appellate court and it can only rectify the patent defect, errors of
jurisdiction or the law. It was observed at page 207-
“10. Before adverting to the merits of the contentions, at the
outset, it is apt to mention that there are concurrent findings
of conviction arrived at by two courts after a detailed
appreciation of the material and evidence brought on record.
The High Court in a 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::: Downloaded on – 24/07/2026 20:41:32 :::CIS
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2026:HHC:30603correctness, 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.
12. This position was reiterated in State of Gujarat v.
of
Dilipsinh Kishorsinh Rao, (2023) 17 SCC 688: 2023 SCC OnLine SC
1294, wherein it was observed at page 695:
rt
“14. The power and jurisdiction of the Higher Court under
Section 397 CrPC, which vests the court with the power tocall 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 ofjurisdiction or law or the perversity which has crept in such
proceedings.
15. It would be apposite to refer to the judgment of this Court
in Amit Kapoor v. Ramesh Chander [Amit Kapoor v. Ramesh
Chander, (2012) 9 SCC 460: (2012) 4 SCC (Civ) 687: (2013) 1 SCC(Cri) 986], where scope of Section 397 has been considered
and succinctly explained as under: (SCC p. 475, paras 12-13)“12. Section 397 of the Code vests the court with the
power to call for and examine the records of an inferior
court for the purposes of satisfying itself as to the
legality and regularity of any proceedings or order
made in a case. The object of this provision is to set
right a patent defect or an error of jurisdiction or law.
There has to be a well-founded error, and it may not be
appropriate for the court to scrutinise the orders,
which, upon the face of it, bear a token of careful
consideration and appear to be in accordance with law.
If one looks into the various judgments of this Court, it
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emerges that the revisional jurisdiction can be invoked
where the decisions under challenge are grossly
erroneous, there is no compliance with the provisions
of law, the finding recorded is based on no evidence,
material evidence is ignored, or judicial discretion is
.
exercised arbitrarily or perversely. These are not
exhaustive classes, but are merely indicative. Each case
would have to be determined on its own merits.
13. Another well-accepted norm is that the revisional
jurisdiction of the higher court is a very limited one and
cannot be exercised in a routine manner. One of the inbuilt
of
restrictions is that it should not be against an interim or
interlocutory order. The Court has to keep in mind that the
exercise of revisional jurisdiction itself should not lead to
injustice ex facie. Where the Court is dealing with the
rt
question as to whether the charge has been framed properly
and in accordance with law in a given case, it may be
reluctant to interfere in the exercise of its revisional
jurisdiction unless the case substantially falls within the
categories aforesaid. Even the framing of the charge is a
much-advanced stage in the proceedings under CrPC.”
13. 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 re-appreciate the
evidence and come to its conclusions in the absence of any
perversity. It was observed at page 169:
“12. This Court has time and again examined the scope of
Sections 397/401 CrPC and the grounds for exercising the
revisional jurisdiction by the High Court. In State of Kerala v.
Puttumana Illath Jathavedan Namboodiri, (1999) 2 SCC 452:
1999 SCC (Cri) 275], while considering the scope of the
revisional jurisdiction of the High Court, this Court has laid
down the following: (SCC pp. 454-55, para 5)::: Downloaded on – 24/07/2026 20:41:32 :::CIS
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5. … In its revisional jurisdiction, the High Court can
call for and examine the record of any proceedings to
satisfy itself as to the correctness, legality or propriety
of any finding, sentence or order. In other words, the
jurisdiction is one of supervisory jurisdiction exercised.
by the High Court for correcting a miscarriage of
justice. But the said revisional power cannot be
equated with the power of an appellate court, nor can it
be treated even as a second appellate jurisdiction.
Ordinarily, therefore, it would not be appropriate for
the High Court to re-appreciate the evidence and come
to its conclusion on the same when the evidence has
of
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
rt
which would otherwise amount to a gross miscarriage
of justice. On scrutinising the impugned judgment of
the High Court from the aforesaid standpoint, we have
no hesitation in concluding that the High Court
exceeded its jurisdiction in interfering with the
conviction of the respondent by reappreciating the oral
evidence. …”
13. Another judgment which has also been referred to
and relied on by the High Court is the judgment of this
Court in Sanjaysinh Ramrao Chavan v. Dattatray
Gulabrao Phalke, (2015) 3 SCC 123: (2015) 2 SCC (Cri) 19].
This Court held that the High Court, in the exercise of
revisional jurisdiction, shall not interfere with the
order of the Magistrate unless it is perverse or wholly
unreasonable or there is non-consideration of any
relevant material; the order cannot be set aside merely
on the ground that another view is possible. The
following has been laid down in para 14: (SCC p. 135)
“14. … Unless the order passed by the Magistrate is
perverse or the view taken by the court is wholly
unreasonable or there is non-consideration of any
relevant material or there is palpable misreading
of records, the Revisional Court is not justified in
setting aside the order, merely because another
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view is possible. The Revisional Court is not meant
to act as an appellate court. The whole purpose of
the revisional jurisdiction is to preserve the power
in the court to do justice in accordance with the
principles of criminal jurisprudence. The
.
revisional power of the court under Sections 397 to
401 CrPC is not to be equated with that of an
appeal. Unless the finding of the court, whose
decision is sought to be revised, is shown to be
perverse or untenable in law or is grossly
erroneous or glaringly unreasonable or where the
decision is based on no material or where the
of
material facts are wholly ignored or where the
judicial discretion is exercised arbitrarily or
rt capriciously, the courts may not interfere with the
decision in exercise of their revisional
jurisdiction.”
14. This position was reiterated in Bir Singh v. Mukesh
Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ)
309: 2019 SCC OnLine SC 13, wherein it was observed at page 205:
“16. It is well settled that in the exercise of revisional
jurisdiction under Section 482 of the Criminal Procedure
Code, the High Court does not, in the absence of perversity,upset concurrent factual findings. It is not for the Revisional
Court to re-analyse and re-interpret the evidence on record.
17. As held by this Court in Southern Sales & Services v.
Sauermilch Design and Handels GmbH, (2008) 14 SCC 457, it is
a well-established principle of law that the Revisional Court
will not interfere even if a wrong order is passed by a court
having jurisdiction, in the absence of a jurisdictional error.
The answer to the first question is, therefore, in the
negative.”
15. 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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“27. It is well settled that in exercise of revisional
jurisdiction, the High Court does not, in the absence of
perversity, upset concurrent factual findings [See: Bir
Singh(supra)]. This Court is of the view that it is not for the
Revisional Court to re-analyse and re-interpret the evidence.
on record. As held by this Court in Southern Sales & Services v.
Sauermilch Design and Handels GMBH, (2008) 14 SCC 457, it is
a well-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.
28. Consequently, this Court is of the view that in the
of
absence of perversity, it was not open to the High Court in
the present case, in revisional jurisdiction, to upset the
concurrent findings of the Trial Court and the Sessions
Court.
rt
16. The present revision has to be decided as per the
parameters laid down by the Hon’ble Supreme Court.
17. The ingredients of the offence punishable under Section
138 of the NI Act were explained by the Hon’ble Supreme Court in
Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul, 2025 SCC On-
Line SC 2019 as under: –
“5.1.1. In K.R. Indira v. Dr. G. Adinarayana (2003) 8 SCC 300,
this Court enlisted the components, aspects and the acts, the
concatenation of which would make the offence under
Section 138 of the Act complete, to be these (i) drawing of the
cheque by a person on an account maintained by him with a
banker, for payment to another person from out of that
account for discharge in whole/in part of any debt or
liability, (ii) presentation of the cheque by the payee or the
holder in due course to the bank, (iii) returning the cheque
unpaid by the drawee bank for want of sufficient funds to the
credit of the drawer or any arrangement with the banker to
pay the sum covered by the cheque, (iv) giving notice in::: Downloaded on – 24/07/2026 20:41:32 :::CIS
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2026:HHC:30603writing 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.”
18. The accused has not disputed the issuance of the
cheque. He had claimed in his statement recorded under Section
of
313 of the Cr.P.C that his son’s mother-in-law had taken the loan
from the complainant and he had issued the cheque as a security. It
rt
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 theissuance of the cheques and his signature on the cheque and
that the cheque in question was issued for the second timeafter the earlier cheques were dishonoured and that even
according to the accused some amount was due and payable,
there is a presumption under Section 139 of the NI Act that
there exists a legally enforceable debt or liability. Of course,
such 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::: Downloaded on – 24/07/2026 20:41:32 :::CIS
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2026:HHC:30603more particularly, the cheque in question was issued for the
second time after the earlier cheques were dishonoured.
Therefore, both the courts below have materially erred in
not properly appreciating and considering the presumption
in favour of the complainant that there exists a legally.
enforceable debt or liability as per Section 139 of the NI Act.
It appears that both the learned trial court as well as the
High Court have committed an error in shifting the burden
upon the complainant to prove the debt or liability, withoutappreciating 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 ofof
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
rt
enforceable debt or liability and thereafter, it is for the
accused to rebut such presumption by leading evidence.”
19. This position was reiterated 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 hasreceived 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.”
20. A similar view was taken in Sanjabij Tari v. 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::: Downloaded on – 24/07/2026 20:41:32 :::CIS
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2026:HHC:30603cheque 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).
16. This Court is further of the view that by creating this
of
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
rt
initial onus of proving that the cheque is not in discharge of
any debt or other liability is on the accused/drawer of thecheque [See: Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197].
21. 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.
22. It was submitted that the complainant had failed to
prove the plea taken by him that the accused had purchased the
apple crop of his orchard. No document was filed to establish that
the complainant had an orchard. No witness was examined to show
that the accused had plucked the apple from the complainant’s
orchard. No goods receipt was filed to establish the transportation
of the apple to the market. This submission will not help the
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accused. In Uttam Ram v. Devinder Singh Hudan, (2019) 10 SCC 287:
(2020) 1 SCC (Cri) 154: (2020) 1 SCC (Civ) 126: 2019 SCC OnLine SC
1361, the Trial Court had dismissed the complaint after holding that
.
the complainant’s evidence regarding sale of apple crop was
doubtful because of discrepancies in the number of cartons. This
judgment was upheld by this Court. The Hon’ble Supreme Court set
of
aside the judgments of this Court and the Trial Court after holding
that the complainant is not required to produce any evidence
rt
regarding the sale of the apple crop because of the presumption
contained in Section 139 of the NI Act and his case could not have
been doubted because of discrepancies. It was observed at page
293:
“20. The trial court and the High Court proceeded as if the
appellant is to prove a debt before a civil court wherein the
plaintiff is required to prove his claim on the basis ofevidence to be laid in support of his claim for the recovery of
the amount due. A dishonour of a cheque carries a statutory
presumption of consideration. The holder of a cheque in duecourse 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.
xxxxx
28. The accused has failed to lead any evidence to rebut the
statutory presumption, a finding returned by both the trial
court and the High Court. Both courts not only erred in law
but also committed perversity when the due amount is said::: Downloaded on – 24/07/2026 20:41:32 :::CIS
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2026:HHC:30603to be disputed only on account of discrepancy in the cartons,
packing material or the rate to determine the total liability as
if the appellant was proving his debt before the civil court.
Therefore, it is presumed that the cheques in question were
drawn for consideration and the holder of the cheques, i.e..
the appellant, received the same in discharge of an existing
debt. The onus, thereafter, shifts on the appellant-accused
to establish a probable defence so as to rebut such a
presumption, which onus has not been discharged by therespondent.”
23. This position was reiterated in Ashok Singh v. State of
of
U.P., 2025 SCC OnLine SC 706, wherein it was observed:
“22. The High Court while allowing the criminal revision has
rt
primarily proceeded on the presumption that it was
obligatory on the part of the complainant to establish hiscase on the basis of evidence by giving the details of the bank
account as well as the date and time of the withdrawal of the
said amount which was given to the accused and also the
date and time of the payment made to the accused, includingthe 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, appearsto be erroneous. The onus is not on the complainant at the
threshold to prove his capacity/financial wherewithal tomake the payment in discharge of which the cheque is
alleged to have been issued in his favour. Only if an objectionis 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 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 a loan. In the case at hand, the
appellant had categorically stated in his deposition and
reiterated in the cross-examination that he had withdrawn
the amount from the bank in Faizabad (Typed Copy of his
deposition in the paperbook wrongly mentions this as
‘Firozabad’). The Court ought not to have summarily
rejected such a stand, more so when respondent no. 2 did not::: Downloaded on – 24/07/2026 20:41:32 :::CIS
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2026:HHC:30603make 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, weopined:
‘8. From the order impugned, it is clear that though the
of
contention of the petitioners was that the said amounts were
given for producing a film and were not by way of return of any
loan taken, which may have been a probable defence for the
petitioners in the case, but rightly, the High Court has taken the
rt
view that evidence had to be adduced on this point which has
not been done by the petitioners. Pausing here, the Court wouldonly comment that the reasoning of the High Court, as well as
the First Appellate Court and Trial Court, on this issue is sound.
Just taking a counter-stand to raise a probable defence would
not shift the onus on the complainant in such a case, for the pleaof 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 notproved the source of the money given to the petitioners by way
of loan by producing statement of accounts and/or Income TaxReturns, 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 beenled to show that the respondent lacked capacity to provide the
amount(s) in question. In this regard, we may make profitable
reference to the decision in Tedhi Singh v. Narayan Dass
Mahant, (2022) 6 SCC 735:
’10. The trial court and the first appellate court have noted
that in the case under Section 138 of the NI Act, the
complainant need not show in the first instance that he had
the capacity. The proceedings under Section 138 of the NI Act
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::: Downloaded on – 24/07/2026 20:41:32 :::CIS
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2026:HHC:30603statutory notice sent, that the complainant did not have the
wherewithal, it cannot be expected of the complainant to
initially lead evidence to show that he had the financial
capacity. To that extent, the courts, in our view, were right in
holding on those lines. However, the accused has the right to.
demonstrate that the complainant in a particular case did
not have the capacity and therefore, the case of the accused
is acceptable, which he can do by producing independent
materials, namely, by examining his witnesses andproducing 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,of
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
rt
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 theaccused has established a probable defence.'(emphasis
supplied)’ (underlining in original; emphasis supplied by
us in bold).
24. 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 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.”
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25. Therefore, the complainant’s version cannot be
discarded because he had not produced any document or a witness
to prove the sale of the apple crop.
.
26. The complainant suggested to the accused that he had
paid the money for the apple crop. This suggestion shows that the
taking of the apple orchard was not disputed. It was laid down by
of
the Hon’ble Supreme Court in Balu Sudam Khalde v. State of
Maharashtra, (2023) 13 SCC 365: 2023 SCC OnLine SC 355 that the
rt
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 anymanner, would definitely bind the accused, and the accused
cannot get away on the plea that his counsel had no impliedauthority to make suggestions in the nature of admissions
against his client.
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 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::: Downloaded on – 24/07/2026 20:41:32 :::CIS
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2026:HHC:30603suggestions 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.”
27. Therefore, the suggestion made to the complainant in
.
the cross-examination can be used to appreciate the material on
record, and the suggestion in the present case will strengthen the
complainant’s case that he had sold the apple crop to the accused.
of
28. The accused asserted in his statement recorded under
Section 313 of the Cr.P.C. that the cheque was issued as a security
rt
towards the loan taken by his son’s mother-in-law. Learned
Courts below had rightly held that no evidence was produced to
establish this fact. The complainant did not examine his son’s
mother-in-law to prove that any loan was taken by her and the
accused had issued a blank cheque as a security. He simply relied
upon his statement recorded under Section 313 of the Cr.P.C., which
is not sufficient. 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 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::: Downloaded on – 24/07/2026 20:41:32 :::CIS
21
2026:HHC:30603Code but failed to record evidence to disprove or rebut the
presumption in support of her defence available under
Section 139 of the Act. The statement of the accused recorded
under Section 313 of the Code is not substantive evidence of
defence, but only an opportunity for the accused to explain the.
incriminating circumstances appearing in the prosecution’s case
against the accused. Therefore, there is no evidence to rebut the
presumption that the cheques were issued for consideration.”
(Emphasis supplied)”
29. Even if the plea taken by the accused is accepted to be
of
correct that the cheque was issued as a security, there is no
evidence that the loan was repaid by the mother-in-law of the
rt
complainant’s son. Hence, the issue of the cheque would entitle the
complainant to fill up the amount and present the cheque before
the bank. It was laid down by this Court in Hamid Mohammad
Versus Jaimal Dass 2016 (1) HLJ 456, that the accused is liable for the
dishonour of the cheque even if the cheque is issued towards the
security. It was observed:
“9. Submission of learned Advocate appearing on behalf of
the revisionist that the cheque in question was issued to thecomplainant as security, and on this ground, the criminal
revision petition is rejected as being devoid of any force for
the reasons hereinafter mentioned. As per Section 138 of the
Negotiable Instruments Act, 1881, if any cheque is issued on
account of other liability, then the provisions of Section 138
of the Negotiable Instruments Act, 1881 would be attracted.
The court has perused the original cheque, Ext. C-1 dated
30.10.2008, placed on record. There is no recital in the
cheque Ext. C-1 that the cheque was issued as a security
cheque. It is well-settled law that a cheque issued as security
would also come under the provisions of Section 138 of the
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Negotiable Instruments Act, 1881. See 2016 (3) SCC page 1
titled Don Ayengia v. State of Assam & another. It is well-
settled law that where there is a conflict between former law
and subsequent law, then subsequent law always prevails.”
.
30. It was laid down by the Hon’ble Supreme Court in
Sampelly Satyanarayana Rao vs. Indian Renewable Energy
Development Agency Limited, 2016(10) SCC 458 that issuing a cheque
toward security will also attract the liability for the commission of
of
an offence punishable under Section 138 of the NI Act. It was
observed: –
rt
“10. We have given due consideration to the submission
advanced on behalf of the appellant as well as theobservations of this Court in Indus Airways Private Limited
versus Magnum Aviation Private Limited (2014) 12 SCC 53 with
reference to the explanation to Section 138 of the Act and theexpression “for the discharge of any debt or other liability”
occurring in Section 138 of the Act. We are of the view that
the question of whether a post-dated cheque is for“discharge of debt or liability” depends on the nature of the
transaction. If on the date of the cheque, liability or debt existsor the amount has become legally recoverable, the Section is
attracted and not otherwise.
11. Reference to the facts of the present case clearly shows
that though the word “security” is used in clause 3.1(iii) of
the agreement, the said expression refers to the cheques
being towards repayment of instalments. The repayment
becomes due under the agreement the moment the loan is
advanced, and the instalment falls due. It is undisputed that
the loan was duly disbursed on 28th February 2002, which
was prior to the date of the cheques. Once the loan was
disbursed and instalments had fallen due on the date of the
cheque as per the agreement, the dishonour of such cheques
would fall under Section 138 of the Act. The cheques
undoubtedly represent the outstanding liability.
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12. Judgment in Indus Airways (supra) is clearly
distinguishable. As already noted, it was held therein that
liability arising out of a claim for breach of contract under
Section 138, which arises on account of dishonour of a
cheque issued, was not by itself at par with a criminal.
liability towards discharge of acknowledged and admitted
debt under a loan transaction. Dishonour of a cheque issued
for the discharge of a later liability is clearly covered by the
statute in question. Admittedly, on the date of the cheque,there was a debt/liability in praesenti in terms of the loan
agreement, as against the case of Indus Airways (supra),
where the purchase order had been cancelled, and a chequeof
issued towards advance payment for the purchase order was
dishonoured. In that case, it was found that the cheque had
not been issued for the discharge of liability but as an
rt
advance for the purchase order, which was cancelled.
Keeping in mind this fine, but the real distinction, the said
judgment cannot be applied to a case of the present nature,where the cheque was for repayment of a loan instalment
which had fallen due, though such a deposit of cheques
towards repayment of instalments was also described as“security” in the loan agreement. In applying the judgment
in Indus Airways (supra), one cannot lose sight of the
difference between a transaction of the purchase orderwhich is cancelled and that of a loan transaction where the
loan has actually been advanced, and its repayment is due onthe date of the cheque.
13. The crucial question to determine the applicability of
Section 138 of the Act is whether the cheque represents thedischarge of existing enforceable debt or liability, or
whether it represents an advance payment without there
being a subsisting debt or liability. While approving the
views of different High Courts noted earlier, this is the
underlying principle as can be discerned from the discussion
of the said cases in the judgment of this Court.” (Emphasis
supplied)
31. This position was reiterated in Sripati Singh v. State of
Jharkhand, 2021 SCC OnLine SC 1002: AIR 2021 SC 5732, and it was
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held that a cheque issued as security is not waste paper and a
complaint under section 138 of the NI Act can be filed on its
dishonour. It was observed:
.
“17. A cheque issued as security pursuant to a financial
transaction cannot be considered a worthless piece of paper
under every circumstance. ‘Security’ in its true sense is thestate of being safe, and the security given for a loan is
something given as a pledge of payment. It is given,
deposited or pledged to make certain the fulfilment of anof
obligation to which the parties to the transaction are bound.
If in a transaction, a loan is advanced and the borrower
agrees to repay the amount in a specified timeframe and
rt
issues a cheque as security to secure such repayment; if the
loan amount is not repaid in any other form before the due
date or if there is no other understanding or agreementbetween the parties to defer the payment of the amount, the
cheque which is issued as security would mature for
presentation and the drawee of the cheque would be entitledto present the same. On such a presentation, if the same is
dishonoured, the consequences contemplated under Section
138 and the other provisions of the NI Act would flow.
18. When a cheque is issued and is treated as ‘security’
towards repayment of an amount with a time period beingstipulated for repayment, all that it ensures is that such a
cheque, which is issued as ‘security ‘, cannot be presented
prior to the loan or the instalment maturing for repaymenttowards which such cheque is issued as security. Further, the
borrower would have the option of repaying the loan amount
or such financial liability in any other form, and in that
manner, if the amount of the loan due and payable has been
discharged within the agreed period, the cheque issued as
security cannot thereafter be presented. Therefore, the prior
discharge of the loan or there being an altered situation due
to which there would be an understanding between the
parties is a sine qua non to not present the cheque which was
issued as security. These are only the defences that would be
available to the drawer of the cheque in proceedings initiated::: Downloaded on – 24/07/2026 20:41:32 :::CIS
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2026:HHC:30603under Section 138 of the NI Act. Therefore, there cannot be a
hard and fast rule that a cheque, which is issued as security,
can never be presented by the drawee of the cheque. If such is
the understanding, a cheque would also be reduced to an
‘on-demand promissory note’, and in all circumstances, it.
would only be civil litigation to recover the amount, which is
not the intention of the statute. When a cheque is issued even
though as ‘security’ the consequence flowing therefrom is
also known to the drawer of the cheque and in thecircumstance stated above if the cheque is presented and
dishonoured, the holder of the cheque/drawee would have
the option of initiating the civil proceedings for recovery orof
the criminal proceedings for punishment in the fact
situation, but in any event, it is not for the drawer of the
cheque to dictate terms with regard to the nature of
rt
litigation.”
32. Therefore, the accused cannot escape from the liability
by taking a plea that he had issued the cheque as security.
33. There is no other evidence to rebut the presumption
attached to the cheque and learned Courts below had rightly held
that the accused had failed to rebut the presumption attached to
the cheque.
34. The complainant asserted that the cheque was
dishonoured with an endorsement of insufficient funds. This was
duly proved by the dishonour memo (Ext.C3/CW1). 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
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Bank is presumed to be correct 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 ofdishonour of the cheque, unless and until that fact was
disproved. Section 147 makes the offences punishable under
the Act compoundable.”
of
35. In the present case, no evidence was produced to rebut
the presumption, and the learned Courts below had rightly held
that the
rt
cheque was dishonoured with an endorsement
‘insufficient funds.’
36. The complainant asserted that he had issued a notice
(Ext.C5/CW1) to the accused asking him to repay the amount and
the notice was duly served upon the accused. This is duly
corroborated by the track consignment report (Ext.C6/CW1). 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 the date of the receipt of the
summons from the Court and in case of failure to do so, he cannot
take 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,::: Downloaded on – 24/07/2026 20:41:32 :::CIS
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2026:HHC:30603where 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 thesummons from the Court, along with the copy of the complaint
under Section 138 of the Act, cannot obviously contend that there
was no proper service of notice as required under Section 138, byof
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
rt
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 theAct.” (Emphasis supplied)
37. 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 receipt
of the demand notice.
38. Thus, 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 had failed to pay the money despite the
receipt of a notice of demand. Hence, all the ingredients of the
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offence punishable under Section 138 of the NI Act were duly
satisfied, and the learned Trial Court had rightly convicted the
accused of the commission of an offence punishable under Section
.
138 of the NI Act.
39. The learned Trial Court had sentenced the accused to
undergo simple imprisonment for 1 year, pay a fine of
of
₹10,05,000/- and, in default of the payment of fine to undergo
simple imprisonment for 3 months. It was laid down by the
rt
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:
“6. The object of Section 138 of the Negotiable Instruments
Act is to infuse credibility into negotiable instruments,
including cheques, and to encourage and promote the use ofnegotiable instruments, including cheques, in financial
transactions. The penal provision of Section 138 of the
Negotiable Instruments Act is intended to be a deterrent tocallous issuance of negotiable instruments such as cheques
without serious intention to honour the promise implicit in
the issuance of the same.”
40. Keeping in view the deterrent nature of the punishment,
a sentence of one year cannot be said to be excessive.
41. The accused had issued a cheque of ₹10,00,000/-. The
learned Trial Court awarded a compensation of ₹10,05,000/-
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which means that a compensation of ₹5,000 was awarded on an
amount of ₹10,00,000/-. 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
of
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
rt
that the object of Chapter XVII of NIA is not only punitive but
also compensatory and restitutive. The provisions of NIAenvision a single window for criminal liability for the
dishonour of a cheque as well as civil liability for the
realisation of the cheque amount. It is also well settled that
there needs to be a consistent approach towards awardingcompensation, 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]”
42. The complainant had to engage a counsel to prosecute
the complaint. He was deprived of the money that he would have
gained by investing the money and was entitled to be compensated.
Therefore, the compensation of ₹5,000/- on an amount of
₹10,00,000/- was highly inadequate. However, the complainant
has not filed any appeal for the enhancement of the sentence, and
no interference is required with it.
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43. No other point was urged.
44. In view of the above, there is no infirmity in the
judgments and order passed by the learned courts below. Hence,
.
the present revision fails and is dismissed.
45. The present revision stands disposed of, and so are the
pending miscellaneous application(s), if any.
of
46. The record of the learned Courts below be returned with
a copy of the judgment.
rt
(Rakesh Kainthla)
Judge
24th July, 2026
(Chander)
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