Pyar singh Vs Meena Kumari

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2025:HHC:44568

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

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Cr. Appeal No. 458 of 2025 Reserved on:22.11.2025 Date of Decision: 19.12.2025

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Pyar Singh ...Applicant Versus

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Meena Kumari ...Respondent

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Coram Hon’ble Mr Justice Rakesh Kainthla , Judge. Whether approved for reporting?¹ . Yes For the Appellant : Mr Dinesh Sharma, Advocate. For the Respondent : Nemo

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Rakesh Kainthla, Judge

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The appellant has filed the present appeal against the judgment dated 25.10.2024, passed by learned Chief Judicial Magistrate, Bilaspur, H.P. (learned Trial Court), vide which the complaint filed by the appellant (the complainant before the learned Trial Court) was dismissed. (Parties shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for convenience.)

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Briefly stated, the facts giving rise to the present appeal are that the complainant filed a complaint before the

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1 Whether reporters of Local Papers may be allowed to see the judgment? Yes.

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learned Trial Court against the accused for the commission of an offence punishable under Section 138 read with Section 142 of the Negotiable Instruments Act (NI Act). It was asserted that the complainant and the accused were known to each other. The accused borrowed ₹12,00,000/- for the purchase of a house and the land in the year 2014. The accused promised to return the money on or before October, 2015. She issued a cheque in the complainant’s favour in November 2017 to discharge her liability. The complainant presented the cheque, but it was dishonoured with the remarks ‘funds insufficient’. The complainant served a notice upon the accused asking her to repay the amount within 15 days of the receipt of the notice. The accused failed to repay 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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The learned Trial Court found sufficient reasons to summon the accused. When the accused appeared, a notice of accusation was put to her for the commission of an offence punishable under Section 138 of the NI Act, to which she pleaded not guilty and claimed to be tried.

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4 The complainant examined himself (CW-1) to prove

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his case.

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The accused, in her statement recorded under Section 313 of Cr.P.C., denied that she had borrowed ₹12,00,000/- from the complainant. She stated that she had handed over a blank cheque to the complainant. She was not liable to pay the amount mentioned in the cheque. She had taken ₹30-35,000/-, which she had returned to the complainant in the Court. She did not need so much money. She did not produce any evidence in her defence.

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Learned Trial Court held that the accused had a job and she did not require money. The complainant claimed that the accused had asked for the loan to buy a plot. An amount of ₹12,00,000/- could not have been paid in cash in violation of Section 269 SS of the Income Tax Act, 1961. The complainant had a salary of ₹18-19,000/-, and his financial capacity was not proved. He claimed that the money belonged to his father, but he did not examine his father to corroborate his version. The plea taken by the accused that she had handed over the blank cheque to the complainant was highly probable; therefore, the learned

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Trial Court acquitted the accused of the commission of an offence punishable under section 138 of the NI Act.

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Being aggrieved by the judgment passed by the learned Trial Court, the complainanthad filed the present appeal, asserting that the learned Trial Court failed to appreciate the significance of the presumption and erred in dismissing the complaint. Therefore, it was prayed that the present appeal be allowed and the judgment passed by the learned Trial Court be set aside.

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Mr Dinesh Sharma, learned counsel for the appellant, submitted that the accused admitted in her statement recorded under Section 313 of Cr.P.C. that the cheque bears her signature. Therefore, a presumption would arise that the cheque was issued to discharge the liability. The burden would shift upon the accused to prove the non-existence of liability. The accused did not lead any evidence to rebut the presumption. The learned Trial Court erred in dismissing the complaint. Hence, he prayed that the present appeal be allowed and the judgment passed by the learned Trial Court be set aside. He relied upon P. Rasiya vs. Abdul Nazer & anr in Criminal Appeal Nos. 1233-1235 of 2022

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decided on 12^th August, 2022, Bir Singh vs. Mukesh Kumar 2019 (4) SCC 197 , Jagdish Prasad Patal (dead) through legal representative and another vs. Shivnath & others 2019 (6) SCC 82, Tedhi Singh vs. Narayan Dass Mahant 2022 (6) SCC 735, Sumeti Vij vs Paramount Tech Fab Industries 2022 (15) SCC 698, Rajesh Jain vs. Ajay Singh (2023) 10 SCC 148, and K.S. Ranganatha vs. Vittal Shetty 2022(16) SCC 683 in support of his submission.

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I have given considerable thought to his submissions made at bar and have gone through the records carefully.

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The present appeal has been filed against a judgment of acquittal. It was laid down by the Hon’ble Supreme Court in Surendra Singh v. State of Uttarakhand, 2025 SCC OnLine SC 176: (2025) 5 SCC 433 that the Court can interfere with a judgment of acquittal if it is patently perverse, is based on misreading/omission to consider the material evidence and reached at a conclusion which no reasonable person could have reached. It was observed at page 440:

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“12. It could thus be seen that it is a settled legal position that the interference with the finding of acquittal recorded by the learned trial judge would be warranted by the High Court only if the judgment of acquittal suffers from patent perversity; that the same is based on a misreading/omission to consider material evidence on

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record; and that no two reasonable views are possible and only the view consistent with the guilt of the accused is possible from the evidence available on record.”

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This position was reiterated in P. Somaraju v. State of

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A.P., 2025 SCC OnLine SC 2291, wherein it was observed:

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“ 12. To summarise, an Appellate Court undoubtedly has full power to review and reappreciate evidence in an appeal against acquittal under Sections 378 and 386 of the Criminal Procedure Code, 1973. However, due to the reinforced or ‘double’ presumption of innocence after acquittal, interference must be limited. If two reasonable views are possible on the basis of the record, the acquittal should not be disturbed. Judicial intervention is only warranted where the Trial Court's view is perverse, based on misreading or ignoring material evidence, or results in a manifest miscarriage of justice. Moreover, the Appellate Court must address the reasons given by the Trial Court for acquittal before reversing it and assigning its own. A catena of the recent judgments of this Court has more firmly entrenched this position, including, inter alia , Mallappa v. State of Karnataka 2024 INSC 104 , Ballu @ Balram @ Balmukund v. The State of Madhya Pradesh 2024 INSC 258 , Babu Sahebagouda Rudragoudar v. State of Karnataka 2024 INSC 320 , and Constable 907 Surendra Singh v. State of Uttarakhand 2025 INSC 114 .”

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The present appeal has to be decided as per the

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parameters laid down by the Hon’ble Supreme Court.

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The complainant stated in his cross-examination that he was getting a salary of ₹18-19,000/- per month in the year 2014. He had paid ₹12,00,000/- to the accused. He had withdrawn some amount from the bank and borrowed some

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money. He and his father had kept ₹8,00,000/- for constructing a house. He had not prepared any document and handed over ₹1,00,000/-, ₹6,00,000/- and ₹2,00,000/- to the accused. He did not remember the date of advancing the loan. He had borrowed ₹4,00,000/- from Raj Kumar. The accused asked for the money from him to purchase a plot. He admitted that the accused owned land and the house. He denied that the accused had handed over a blank cheque to him and asked him to fill an amount of ₹15,000/-. He denied that he had filled ₹6,00,000/-, taking advantage of the illiteracy of the accused. The accused had shown a plot to him and stated that she had to prepare a loan case for purchasing it. She demanded the loan from him towards the advance.

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The statement of this witness is highly unsatisfactory. He claimed that he was earning a salary of ₹1819,000/- in the year 2014, which means that the amount of ₹12,00,000/- was equivalent to his 5 years’ salary. He claimed that he had withdrawn the money from the bank, but did not explain why the money was not directly transferred to the account of the accused. He claimed that he had borrowed some money from Raj Kumar, but did not examine him to establish

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this fact. Learned Trial Court had rightly held that it is highly unlikely that a person would borrow money to advance it to a third person. He claimed that the loan was advanced to purchase the land, but also admitted that the accused owned the land and the house, which shows that the accused did not have any necessity to purchase the land. All these circumstances made the complainant’s version doubtful, and the learned Trial Court was justified in doubting the complainant’s case.

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It was submitted that the complainant is not required to prove the existence of liability, and the burden is upon the accused to rebut the presumption. This submission will not help the complainant. The cross-examination of the complainant made it doubtful that he had advanced money to the accused, and the learned Trial Court was justified in insisting upon the proof of advancing the loan. It was laid down by the Hon’ble Supreme Court in Tedhi Singh Versus Narayan Dass Mahant (2022) 6 SCC 735 that the accused has a right to demonstrate that the complainant did not have the financial capacity to advance the loan stated to have been advanced by him. It was observed: -

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“9….However, the accused has the right to demonstrate that the complainant in a particular case did not have the

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capacity and therefore, the case of the accused is acceptable, which he can do by producing independent materials, namely, by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, further achieve this result through the cross-examination of the witnesses of the complainant. Ultimately, it becomes the duty of the Courts to consider carefully and appreciate the totality of the evidence and then come to a conclusion whether, in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence.”

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It was held by the Hon’ble Supreme Court in Basalingappa Versus Mudibasappa (2019) 5 SCC 418, that where the financial capacity to pay ₹6,00,000/- was questioned and there was no satisfactory reply, the accused had raised a probable defence. It was observed: -

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“ 30. We are of the view that when evidence was led before the Court to indicate that apart from a loan of Rs. 6 lakhs given to the accused, within 02 years, an amount of Rs. 18 lakhs has been given out by the complainant and his financial capacity being questioned, it was incumbent on the complainant to have explained his financial capacity. The court cannot insist on a person to lead negative evidence. The observation of the High Court that the trial court's finding that the complainant failed to prove his financial capacity for lending money is perverse cannot be supported. We fail to see how the trial court's findings can be termed as perverse by the High Court when it was based on consideration of the evidence, which was led on behalf of the defence.”

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It was laid down by the Hon’ble Supreme Court in Dattatraya v. Sharanappa, (2024) 8 SCC 573: (2024) 3 SCC (Cri) 776: 2024 SCC OnLine SC 1899 that when the financial capacity of the accused is not established, the accused is entitled to acquittal. It was observed:

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“29… .Furthermore, there was no financial capacity or acknowledgement in his income tax returns by the appellant to the effect of having advanced a loan to the respondent. Even further, the appellant has not been able to showcase as to when the said loan was advanced in favour of the respondent, nor has he been able to explain as to how a cheque issued by the respondent, allegedly in favour of Mr Mallikarjun, landed in the hands of the instant holder, that is, the appellant.”

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A similar view was taken in John K. Abraham Versus

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Simon C. Abraham & Another (2014) 2 SCC 236, wherein it was

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held:-

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“9. It has to be stated that in order to draw the presumption under Section 118 read along with 139 of the Negotiable Instruments Act, the burden was heavy upon the complainant to have shown that he had required funds for having advanced the money to the accused; that the issuance of the cheque in support of the said payment advanced was true and that the accused was bound to make the payment as had been agreed while issuing the cheque in favour of the complainant.”

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It was submitted that the evidence of the financial

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capacity was not required to be given because of the

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presumption contained in Sections 118(a) and 139 of the NI Act. There is no dispute with the proposition of law that a presumption arises by the admission of the signature on the cheque under the NI Act that it was issued for consideration in the discharge of the legal liability. However, the presumption is rebuttable, and the moment evidence is led, the presumption would stand rebutted. It was laid down by the Hon’ble Supreme Court in Rajesh Jain v. Ajay Singh, (2023) 10 SCC 148: 2023 SCC OnLine SC 1275 that the presumption applies in the absence of evidence and disappears after the evidence is produced. It was observed:

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“38. John Henry Wigmore [John Henry Wigmore and the Rules of Evidence: The Hidden Origins of Modern Law] on Evidence states as follows:

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“The peculiar effect of the presumption of law is merely to invoke a rule of law compelling the Jury to reach the conclusion in the absence of evidence to the contrary from the opponent but if the opponent does offer evidence to the contrary (sufficient to satisfy the Judge's requirement of some evidence), the presumption ‘disappears as a rule of law and the case is in the Jury's hands free from any rule’.”

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In the present case, the cross-examination of the complainant made his financial capacity doubtful, and the presumption would be displaced.

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The judgments in Rajesh Jain (supra), Sumeti Vij (supra), and K.S. Ranaganathan (supra) deal with the

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presumption attached to the cheque. In the present case, the learned Trial Court had taken note of the presumption and held that the evidence of the accused rebutted the presumption attached to the cheque, and these judgments will not help the complainant.

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The judgment in Jagdish Prasad Patal (supra) deals with the settled preposition of law that an admitted fact need not be proved. In the present case, the learned Trial Court did not doubt the issuance of the cheque but held that the financial capacity of the complainant was not proved; therefore, this judgment will not help the complainant.

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The statement of the complainant shows that he has advanced the loan in the year 2014 in the instalments of ₹4,00,000/-, ₹6,00,000/- and ₹2,00,000/- each. He did not mention the dates of advancing the loan; however, the cheque was issued in November, 2017. In the absence of the details of the advancement of the loan, the cheque was issued beyond the period of limitation and cannot be said to have been issued in

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discharge of her legally enforceable debt. It was laid down by this Court in Social Leasing (India) Ltd. v. Rajan Kumar Kanthwal, 2025 SCC OnLine HP 3131, that a cheque issued for repayment of time-barred debt does not fall within the purview of Section 138 of the NI Act. Thus, the complaint was not maintainable as per the averments made in the complaint and the statement on oath.

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Learned Trial Court held that the loan of ₹10,00,000/- could not have been advanced in violation of Section 269SS of the Income Tax Act, 1961, and this would make the complainant’s case suspect. This finding is contrary to the settled position of law. It was laid down by this Court in Surinder Singh vs. State of H.P. 2018(1) D.C.R. 45 that contravention of Section 269 SS of the Income Tax Act will give rise to a penalty, but will not invalidate the transaction. It was observed: -

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The relevant portion of Section 269 SS of the IT Act reads thus: -

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"(a) the amount of such loan or deposit or the aggregate amount of such loan and deposit' or

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(b) on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid; or

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(c) The amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b), is (twenty) thousand rupees or more. Provided......"

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Section 271D provides for a penalty for failure to comply with the aforesaid provisions, which reads thus:

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"271D. Penalty for failure to comply with the provisions of Section 269-SS - (1) If a person takes or accepts any loan or deposit in contravention of the provisions of Section 269-SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so taken or accepted.

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(2) Any penalty impossible under sub-section (1) shall be imposed by the Joint Commissioner."

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A collective reading of both the aforesaid Sections would go to show that even though contravention of Section 269-SS of the IT Act would be visited with a strict penalty on the person taking the loan or deposit. However, Section 271D does not in any manner suggest or even provide that such a transaction would be null and void. The payer of money in cash, in violation of Section 269 SS of the IT Act, can always have the money recovered.

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The object of introducing Section 269 of the IT Act has been succinctly set out by the Hon'ble Supreme Court in Asstt. Director of Inspection Investigation vs. A.B. Shanthi (2002) 6 SCC 259 , wherein it was observed as under: -

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"8. The object of introducing Section 269-SS is to ensure that a taxpayer is not allowed to give a false explanation for his unaccounted money, or if he has given some false entries in his accounts, he shall not escape by giving false entries in his accounts, he shall not escape by giving a false explanation for the same. During search and seizures, unaccounted money is unearthed, and the taxpayer would usually give the explanation that he had borrowed or received deposits from his relatives or friends, and it is easy for the so-called lender also to manipulate his

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records later to suit the plea of the taxpayer. The main objection of Section 269-SS was to curb this menace."

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In light of the aforesaid observations, it cannot but be said that Section 269-SS only provides for the mode of accepting payment or repayment in certain cases so as to counteract evasion of tax. However, Section 269-SS does not declare all transactions of loans by cash in excess of ₹20,000/- as invalid, illegal or null and void, as the main object of introducing the provision was to curb and unearth black money.

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A similar view was taken by the Hon’ble Supreme

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Court in Sanjabij Tari v. Kishore S. Borcar, 2025 SCC OnLine SC 2069, wherein it was observed:

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“19. Recently, the Kerala High Court in P.C. Hari v. Shine Varghese, 2025 SCC OnLine Ker 5535 has taken the view that a debt created by a cash transaction above ₹20,000/(Rupees Twenty Thousand) in violation of the provisions of Section 269SS of the Income Tax Act, 1961 (for short ‘IT Act, 1961’) is not a ‘legally enforceable debt’ unless there is a valid explanation for the same, meaning thereby that the presumption under Section 139 of the Act will not be attracted in cash transactions above ₹ 20,000/- (Rupees Twenty Thousand).

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20. However, this Court is of the view that any breach of Section 269SS of the IT Act, 1961, is subject to a penalty only under Section 271D of the IT Act, 1961. Further, neither Section 269SS nor 271D of the IT Act, 1961 states that any transaction in breach thereof will be illegal, invalid or statutorily void. Therefore, any violation of Section 269SS would not render the transaction unenforceable under Section 138 of the NI Act or rebut the presumptions under Sections 118 and 139 of the NI Act because such a person, assuming him/her to be the payee/holder in due course, is liable to be visited by a

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penalty only as prescribed. Consequently, the view that any transaction above Rs. 20,000/- (Rupees Twenty Thousand) is illegal and void and therefore does not fall within the definition of ‘legally enforceable debt’ cannot be countenanced. Accordingly, the conclusion of law in P.C. Hari (supra) is set aside.”

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This position was reiterated in Shine Varghese

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Koipurathu v State of Kerala, Crl. A. No. 5385 of 2025 decided on 8^th December 2025 .

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Thus, no adverse inference could have been drawn for failure to comply with the requirement of Section 269SS of the Income Tax Act, 1961.

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No other point was urged.

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In view of the above, the learned Trial Court had taken a reasonable view while acquitting the accused and no interference is required with the judgment passed by it. Hence, the present appeal fails, and it is dismissed.

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The record of the learned Trial Court be returned along with a copy of this judgment.

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( Rakesh Kainthla) Judge

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19^th December,2025. (ravinder)

Pyar singh v. Meena Kumari

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Pyar singh v. Meena Kumari

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