Bindu Rajput Vs Amit Kumar and Another

For the Petitioner : Mr. P.P. Chauhan, Advocate. For the Respondent No.1 : Mr. Vinod Thakur, Advocate. For respondent No.2/State : Mr. Tarun Pathak, Dy. Advocate General.

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Rakesh Kainthla, Judge

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The present revision is directed against the judgment dated 27.09.2024 passed by learned Sessions Judge, Hamirpur, District Mandi, H.P. (learned Appellate Court) vide which, the judgment of conviction dated 20.03.2024 and order of sentence dated 27.03.2024 passed by learned Judicial Magistrate, First Class, Court No. III, Hamirpur, H.P. (learned Trial Court) were

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

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upheld. (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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2. Briefly stated, the facts giving rise to the present revision are that the complainant filed a complaint before the learned Trial Court for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act (in short, NI Act). It was asserted that the accused is known to the complainant. She demanded financial help from the complainant for the construction of her house. The complainant deposited ₹1,00,000/- and ₹ 50,000/- in her account on 26.11.2018 and 28.11.2018, respectively. He also paid ₹80,000/- in cash to her. The accused agreed to repay the money after few months. The complainant demanded money from the accused, and the accused handed over one cheque for ₹2,30,000/- to the complainant. The complainant presented the cheque to Punjab National Bank, from where it was sent to the Bank of the accused for collection. However, the cheque was dishonoured with an endorsement “funds insufficient”. The complainant sent a notice to the accused through registered post, which was duly served upon the accused, and an acknowledgement to this effect was received by the complainant. The accused failed to pay the money despite the

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receipt of the notice of demand; hence, the complaint was filed against before the learned Trial Court to take action as per law.

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3. The learned Trial Court found sufficient reasons to summon the accused. When the accused appeared, notice of acquisition 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 (CW1).

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5. The accused in her statement recorded under Section 313 of Cr.PC stated that Anu Kumari had told her that she would send money through the account of someone, and she was depositing ₹2,00,000/- in her account. The accused handed over a cheque to Anu Kumari at Police Station, Hamirpur. She did not know the complainant. She had no liability towards the complainant. She stated that she wanted to lead defence evidence, however, a statement was made on her behalf subsequently that she did not want to produce any evidence.

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6. Learned Trial Court held that the accused admitted the

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issuance of the cheque. Therefore, a presumption would arise that the cheque was issued for consideration in discharge of the legal

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liability. The burden would shift upon the accused to discharge this burden. She claimed that the cheque was issued to Anu Kumari at Police Station, Hamirpur. However, no evidence was presented to prove this fact. The version of the complainant regarding the deposit was duly proved. The accused failed to show how the cheque came into the possession of the complainant. A cheque issued as a security will also attract the provisions of Section 138 of the NI Act. The cheque was dishonoured with the endorsement “insufficient funds”. The notice was served upon the accused, and she failed to pay the amount despite the receipt of notice of demand. Hence, the learned Trial Court convicted the accused for the commission of an offence punishable under Section 138 of the NI Act and sentenced her to undergo simple imprisonment for two months, pay a fine of ₹2,90,000/-, and in default of payment of fine to further undergo additional 15 days simple imprisonment. It was further ordered that out of the amount of ₹2,90,000/-, an amount of ₹2,85,000/- would be disbursed to the complainant and the remaining amount of ₹5,000/- would be paid to the State.

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7. Being aggrieved by the judgment and order passed by the learned Trial Court, the accused filed an appeal, which was

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decided by the learned Sessions Judge, Hamirpur (learned Appellate Court). Learned Appellate Court concurred with the findings recorded by the learned Trial Court that the issuance of the cheque was not disputed, and a presumption arises that the cheque was issued for consideration in discharge of the legal liability. The accused claimed that she had handed over the cheque to Anu Kumari, but she failed to examine her. The accused failed to rebut the presumption attached to the cheque. The cheque was dishonoured with an endorsement “funds insufficient”. The notice was duly served upon the accused, and the accused failed to pay the amount despite the receipt of the valid notice of demand. Accordingly, the appeal filed by the accused was dismissed.

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8. Being aggrieved by the judgments and order passed by the learned Courts below, the accused has filed the present revision petition, asserting that the learned Courts below misconstrued the provision of law. The evidence was not correctly interpreted, and the defence regarding the issuance of a cheque to Anu Kumari was wrongly ignored. The evidence on record did not establish the liability of the accused. There was no evidence to show the existence of enforceable debt or liability. There were various discrepancies in the statement of the complainant. The

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complainant admitted that he did not know the accused, and the whole version that he had advanced the money to the accused became doubtful. Therefore, it was prayed that the present revision be allowed and the judgments and order passed by the learned Courts below be set aside.

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I have heard Mr. P.P. Chauhan, learned counsel for the petitioner/accused, Mr. Vinod Thakur, learned counsel for respondent No.1-complainant and Mr. Tarun Pathak, learned Deputy Advocate General, for the respondent No.2–State.

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Mr. P.P. Chauhan, learned counsel for the petitioner/accused, submitted that the learned Courts below did not appreciate the material placed on record before them. The complainant admitted in his cross-examination that he did not know the accused. Therefore, the whole story of the complainant that he had advanced ₹2,30,000/- to the accused was doubtful. The plea taken by the accused that she had handed over the cheque to Anu Kumari in Police Station Hamirpur, was highly probable. There was no evidence of advancing ₹80,000/- to the accused. Learned Courts below failed to appreciate that the cheque has to

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be issued in discharge of the legal liability. Therefore, he prayed that the present revision be admitted and listed for final hearing.

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Mr. Vinod Thakur, learned counsel for respondent No.1/complainant, submitted that the learned Courts below had rightly appreciated the material placed before them and there is no infirmity in the judgments and order passed by the learned Courts below. The accused did not dispute her signatures on the cheque, and the learned Courts below had rightly drawn the presumption in favour of the complainant. The accused did not step into the witness box to prove her version. She did not even examine Anu Kumari. The learned Courts below were justified in discarding the version of the accused; therefore, he prayed that the present revision be dismissed.

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Mr. Tarun Pathak, learned Deputy Advocate General for respondent No.2-State, supported the judgments and order passed by the learned Courts below and submitted that no interference is required with them. He prayed that the present revision be dismissed.

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I have given considerable thought to the submissions

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made at the bar and have gone through the records carefully.

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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: -

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“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 which is to be determined on the merits of individual cases. It is also well settled that while considering the same, the Revisional Court does not dwell at length upon the facts and evidence of the case to reverse those findings.

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This position was reiterated in State of Gujarat v.

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

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1294, wherein it was observed at page 695:

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14. The power and jurisdiction of the Higher Court under Section 397CrPC, 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

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object of this provision is to set right a patent defect or an error of jurisdiction or law or the perversity which has crept in such proceedings.

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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)

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

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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 law in a given case, it may be reluctant to interfere in the exercise

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of its revisional jurisdiction unless the case substantially falls within the categories aforestated. Even framing of charge is a much-advanced stage in the proceedings under CrPC.”

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16. This Court in the aforesaid judgment in Amit Kapoor case [ Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460 : (2012) 4 SCC (Civ) 687 : (2013) 1 SCC (Cri) 986 ] has also laid down principles to be considered for exercise of jurisdiction under Section 397 particularly in the context of prayer for quashing of charge framed under Section 228CrPC is sought for as under : ( Amit Kapoor case [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460 : (2012) 4 SCC (Civ) 687 : (2013) 1 SCC (Cri) 986 ], SCC pp. 482-83, para 27)

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“ 27 . Having discussed the scope of jurisdiction under these two provisions, i.e. Section 397 and Section 482 of the Code, and the fine line of jurisdictional distinction, it will now be appropriate for us to enlist the principles with reference to which the courts should exercise such jurisdiction. However, it is not only difficult but inherently impossible to state such principles with precision. At best and upon objective analysis of various judgments of this Court, we are able to cull out some of the principles to be considered for proper exercise of jurisdiction, particularly, with regard to quashing of charge either in exercise of jurisdiction under Section 397 or Section 482 of the Code or together, as the case may be:

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27.1 . Though there are no limits to the powers of the Court under Section 482 of the Code but the more the power, the more due care and caution is to be exercised in invoking these powers. The power of quashing criminal proceedings, particularly, the charge framed in terms of Section 228 of the Code, should be exercised very sparingly and with circumspection and that too in the rarest of rare cases.

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27.2 . The Court should apply the test as to whether the uncontroverted allegations as made from the record of

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the case and the documents submitted therewith prima facie establish the offence or not. If the allegations are so patently absurd and inherently improbable that no prudent person can ever reach such a conclusion, and where the basic ingredients of a criminal offence are not satisfied, then the Court may interfere.

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27.3. The High Court should not unduly interfere. No meticulous examination of the evidence is needed for considering whether the case would end in conviction or not at the stage of framing of charge or quashing of charge.

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27.9. Another very significant caution that the courts have to observe is that it cannot examine the facts, evidence and materials on record to determine whether there is sufficient material on the basis of which the case would end in a conviction; the court is concerned primarily with the allegations taken as a whole whether they will constitute an offence and, if so, is it an abuse of the process of court leading to injustice.

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27.13 . Quashing of a charge is an exception to the rule of continuous prosecution. Where the offence is even broadly satisfied, the Court should be more inclined to permit continuation of prosecution rather than its quashing at that initial stage. The Court is not expected to marshal the records with a view to decide admissibility and reliability of the documents or records, but is an opinion formed prima facie.”

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17. The revisional court cannot sit as an appellate court and start appreciating the evidence by finding out inconsistencies in the statement of witnesses, and it is not legally permissible.

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It was held in Kishan Rao v. Shankargouda , (2018) 8 SCC

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165: (2018) 3 SCC (Cri) 544: (2018) 4 SCC (Civ) 37: 2018 SCC OnLine

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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 on page 169:

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“12. This Court has time and again examined the scope of Sections 397/401 CrPC and the ground for exercising the revisional jurisdiction by the High Court. In State of Kerala v. Puttumana Illath Jathavedan Namboodiri [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)

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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 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 tantamount 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. …”

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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

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Phalke [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)

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“ 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 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.”

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14. In the above case, also conviction of the accused was recorded, and the High Court set aside [ Dattatray Gulabrao Phalke v. Sanjaysinh Ramrao Chavan, 2013 SCC OnLine Bom 1753] the order of conviction by substituting its view. This Court set aside the High Court's order holding that the High Court exceeded its jurisdiction in substituting its views, and that too without any legal basis.

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This position was reiterated in Bir Singh v. Mukesh Kumar , (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ)

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309: 2019 SCC OnLine SC 13, wherein it was observed at page 205:

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“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.

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17. As held by this Court in Southern Sales & Services v. Sauermilch Design and Handels GmbH [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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The present revision has to be decided as per the parameters laid down by the Hon’ble Supreme Court.

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The accused admitted in her statement recorded under Section 313 of Cr.PC that the cheque was issued by her. She claimed that the cheque was handed over to Anu Kumari at Police Station, Hamirpur. It was laid down by this Court in Naresh Verma vs. Narinder Chauhan 2020(1) Shim LC 398 that where the accused had not disputed his signatures on the cheque, the Court has to presume that it was issued in discharge of legal liability and the

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burden would shift upon the accused to rebut the presumption. It was observed: -

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“8. Once signatures on the cheque are not disputed, the plea with regard to the cheque having not been issued towards discharge of lawful liability, rightly came to be rejected by learned Courts below. Reliance is placed upon Hiten P. Dalal v. Bartender Nath Bannerji, 2001 (6) SCC 16 , wherein it has been held as under:

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"The words 'unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when, upon the material before it, the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted......"

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S.139 of the Act provides that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.

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S imilar is the judgment in Basalingappa vs.

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Mudibasappa 2019 (5) SCC 418 wherein it was held:

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“26. Applying the proposition of law as noted above, in the facts of the present case, it is clear that the signature on the cheque, having been admitted, a presumption shall be raised under Section 139 that the cheque was issued in discharge of debt or liability.”

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This position was reiterated 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 wherein it was held at page 289:

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“14. Once the 2nd appellant had admitted his signatures on the cheque and the deed, the trial court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt. The trial court fell in error when it called upon the respondent complainant to explain the circumstances under which the appellants were liable to pay. Such an approach of the trial court was directly in the teeth of the established legal position as discussed above, and amounts to a patent error of law.”

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Similar is the judgment in APS Forex Services (P) Ltd. v.

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Shakti International Fashion Linkers (2020) 12 SCC 724 , wherein it

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was observed: -

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“7.2. What is emerging from the material on record is that the issuance of a cheque by the accused and the signature of the accused on the said cheque are not disputed by the accused. The accused has also not disputed that there were transactions between the parties. Even as per the statement of the accused, which was recorded at the time of the framing of the charge, he has admitted that some amount was due and payable. However, it was the case on behalf of the accused that the cheque was given by way of security, and the same has been misused by the complainant. However, nothing is on record that in the reply to the statutory notice, it was the case on behalf of the accused that the cheque was given by way of security. Be that as it may, however, it is required to be noted that earlier the accused issued cheques which came to be dishonoured on the ground of “insufficient funds” and thereafter a fresh

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consolidated cheque of ₹9,55,574 was given which has been returned unpaid on the ground of “ STOP PAYMENT ”. Therefore, the cheque in question was issued for the second time. Therefore, once the accused has admitted the issuance of a cheque which bears his signature, there is a presumption that there exists a legally enforceable debt or liability under Section 139 of the NI Act. However, such a presumption is rebuttable in nature, and the accused is required to lead evidence to rebut such presumption. The accused was required to lead evidence that the entire amount due and payable to the complainant was paid.

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9. Coming back to the facts in the present case and considering the fact that the accused has admitted the issuance of the cheques and his signature on the cheque and that the cheque in question was issued for the second time after the earlier cheques were dishonoured and that even according to the accused some amount was due and payable, there is a presumption under Section 139 of the NI Act that there exists a legally enforceable debt or liability. Of course, such presumption is rebuttable in nature. 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 as well as 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

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of reverse onus clause and therefore, once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always a presumption in favour of the complainant that there exists legally enforceable debt or liability and thereafter, it is for the accused to rebut such presumption by leading evidence.”

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The presumption under Section 139 of the NI Act was

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explained by the Hon’ble Supreme Court in Triyambak S. Hegde v. Sripad, (2022) 1 SCC 742: (2022) 1 SCC (Civ) 512: 2021 SCC OnLine SC

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788 as under at page 747:

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“12. From the facts arising in this case and the nature of the rival contentions, the record would disclose that the signature on the documents at Exts. P-6 and P-2 are not disputed. Ext. P-2 is the dishonoured cheque based on which the complaint was filed. From the evidence tendered before the JMFC, it is clear that the respondent has not disputed the signature on the cheque. If that be the position, as noted by the courts below, a presumption would arise under Section 139 in favour of the appellant who was the holder of the cheque. Section 139 of the NI Act reads as hereunder:

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“ 139. Presumption in favour of the holder . —It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability.”

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13. Insofar as the payment of the amount by the appellant in the context of the cheque having been signed by the respondent, the presumption for passing of the consideration would arise as provided under Section 118( a ) of the NI Act, which reads as hereunder:

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“ 118. Presumptions as to negotiable instruments . — Until the contrary is proved, the following presumptions shall be made:

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( a ) of consideration : that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration.”

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14. The above-noted provisions are explicit to the effect that such presumption would remain until the contrary is proved. The learned counsel for the appellant in that regard has relied on the decision of this Court in K. Bhaskaran v. Sankaran Vaidhyan Balan [K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510: 1999 SCC (Cri) 1284] wherein it is held as hereunder: (SCC pp. 516-17, para 9)

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“ 9 . As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins the Court to presume that the holder of the cheque received it for the discharge of any debt or liability. The burden was on the accused to rebut the aforesaid presumption. The trial court was not persuaded to rely on the interested testimony of DW 1 to rebut the presumption. The said finding was upheld [ Sankaran Vaidhyan Balan v. K. Bhaskaran, Criminal Appeal No. 234 of 1995, order dated 23-101998 (Ker) ] by the High Court. It is not now open to the accused to contend differently on that aspect.”

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15. The learned counsel for the respondent has, however, referred to the decision of this Court in Basalingappa v. Mudibasappa [Basalingappa v. Mudibasapp a, (2019) 5 SCC 418: (2019) 2 SCC (Cri) 571 ] wherein it is held as hereunder: (SCC pp. 432-33, paras 25-26)

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“ 25 . We having noticed the ratio laid down by this Court in the above cases on Sections 118( a ) and 139,

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we now summarise the principles enumerated by this Court in the following manner:

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25.1 . Once the execution of the cheque is admitted, Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.

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25.2 . The presumption under Section 139 is a rebuttable presumption, and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.

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25.3 . To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.

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25.4 . That it is not necessary for the accused to come into the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.

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25.5 . It is not necessary for the accused to come into the witness box to support his defence.

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26 . Applying the preposition of law as noted above, in the facts of the present case, it is clear that the signature on the cheque, having been admitted, a presumption shall be raised under Section 139 that the cheque was issued in discharge of debt or liability. The question to be looked into is as to whether any probable defence was raised by the accused. In the cross-examination of PW 1, when the specific question was put that a cheque was issued in relation to a loan of Rs 25,000 taken by the accused, PW 1 said that he does not remember. PW 1 in his evidence admitted that he retired in 1997, on which date he

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received a monetary benefit of Rs 8 lakhs, which was encashed by the complainant. It was also brought in evidence that in the year 2010, the complainant entered into a sale agreement for which he paid an amount of Rs 4,50,000 to Balana Gouda towards sale consideration. Payment of Rs 4,50,000 being admitted in the year 2010 and further payment of loan of Rs 50,000 with regard to which Complaint No. 119 of 2012 was filed by the complainant, a copy of which complaint was also filed as Ext. D-2, there was a burden on the complainant to prove his financial capacity. In the years 2010-2011, as per own case of the complainant, he made a payment of Rs 18 lakhs. During his cross-examination, when the financial capacity to pay Rs 6 lakhs to the accused was questioned, there was no satisfactory reply given by the complainant. The evidence on record, thus, is a probable defence on behalf of the accused, which shifted the burden on the complainant to prove his financial capacity and other facts.”

¶127

16. In that light, it is contended that the very materials produced by the appellant and the answers relating to lack of knowledge of property details by PW 1 in his crossexamination would indicate that the transaction is doubtful, and no evidence is tendered to indicate that the amount was paid. In such an event, it was not necessary for the respondent to tender rebuttal evidence, but the case put forth would be sufficient to indicate that the respondent has successfully rebutted the presumption.

¶128

17. On the position of law, the provisions referred to in Sections 118 and 139 of the NI Act, as also the enunciation of law as made by this Court, need no reiteration as there is no ambiguity whatsoever. In Basalingappav. Mudibasappa [Basalingappa v. Mudibasappa, (2019) 5 SCC 418 : (2019) 2 SCC (Cri) 571 ] relied on by the learned counsel for the respondent, though on facts the ultimate conclusion therein was against raising presumption, the facts and circumstances are entirely different as the transaction

¶129

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¶130

between the parties as claimed in the said case is peculiar to the facts of that case where the consideration claimed to have been paid did not find favour with the Court keeping in view the various transactions and extent of amount involved. However, the legal position relating to the presumption arising under Sections 118 and 139 of the NI Act on signature being admitted has been reiterated. Hence, whether there is a rebuttal or not would depend on the facts and circumstances of each case.”

¶131

24. This position was reiterated in Tedhi Singh v. Narayan

¶132

Dass Mahant, (2022) 6 SCC 735: (2022) 2 SCC (Cri) 726: (2022) 3 SCC (Civ) 442: 2022 SCC OnLine SC 302, wherein it was held at page 739:

¶133

“8. It is true that this is a case under Section 138 of the Negotiable Instruments Act. Section 139 of the NI Act provides that the court shall presume that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. This presumption, however, is expressly made subject to the position being proved to the contrary. In other words, it is open to the accused to establish that there is no consideration received. It is in the context of this provision that the theory of “probable defence” has grown. In an earlier judgment, in fact, which has also been adverted to in Basalingappa [Basalingappa v. Mudibasappa, (2019) 5 SCC 418: (2019) 2 SCC (Cri) 571] , this Court notes that Section 139 of the NI Act is an example of reverse onus (see Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010) 11 SCC 441: (2010) 4 SCC (Civ) 477: (2011) 1 SCC (Cri) 184] ). It is also true that this Court has found that the accused is not expected to discharge an unduly high standard of proof. It is accordingly that the principle has developed that all which the accused needs to establish is a probable defence. As to whether a probable defence has been established is a matter to be decided on the facts of each case on the conspectus of evidence and circumstances

¶134

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¶135

that exist...”

¶136

25. Similar is the judgment in P. Rasiya v. Abdul Nazer, 2022

¶137

SCC OnLine SC 1131, wherein it was observed:

¶138

“As per Section 139 of the N.I. Act, it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for discharge, in whole or in part, of any debt or other liability. Therefore, once the initial burden is discharged by the Complainant that the cheque was issued by the accused and the signature and the issuance of the cheque are not disputed by the accused, in that case, the onus will shift upon the accused to prove the contrary that the cheque was not for any debt or other liability. The presumption under Section 139 of the N.I. Act is a statutory presumption and thereafter, once it is presumed that the cheque is issued in whole or in part of any debt or other liability which is in favour of the Complainant/holder of the cheque, in that case, it is for the accused to prove the contrary.”

¶139

26. This position was reiterated in Rajesh Jain v. Ajay Singh,

¶140

(2023) 10 SCC 148: 2023 SCC OnLine SC 1275, wherein it was

¶141

observed at page 161:

¶142

33. The NI Act provides for two presumptions: Section 118 and Section 139. Section 118 of the Act inter alia directs that it shall be presumed until the contrary is proved that every negotiable instrument was made or drawn for consideration. Section 139 of the Act stipulates that “unless the contrary is proved, it shall be presumed that the holder of the cheque received the cheque for the discharge of, whole or part of any debt or liability”. It will be seen that the “ presumed fact ” directly relates to one of the crucial ingredients necessary to sustain a conviction under Section 138. [The rules discussed hereinbelow are common to both the presumptions under Section 139 and Section 118 and are

¶143

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¶144

hence not repeated—reference to one can be taken as reference to another]

¶145

34. Section 139 of the NI Act, which takes the form of a “ shall presume ” clause, is illustrative of a presumption of law. Because Section 139 requires that the Court “ shall presume ” the fact stated therein, it is obligatory for the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. But this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary, as is clear from the use of the phrase “ unless the contrary is proved” .

¶146

35. The Court will necessarily presume that the cheque had been issued towards the discharge of a legally enforceable debt/liability in two circumstances. Firstly , when the drawer of the cheque admits issuance/execution of the cheque and secondly , in the event where the complainant proves that the cheque was issued/executed in his favour by the drawer. The circumstances set out above form the fact(s) which bring about the activation of the presumptive clause. [ Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal [ Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal, (1999) 3 SCC 35 ]]

¶147

36. Recently, this Court has gone to the extent of holding that presumption takes effect even in a situation where the accused contends that a blank cheque leaf was voluntarily signed and handed over by him to the complainant. [ Bir Singh v. Mukesh Kumar [Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Civ) 309: (2019) 2 SCC (Cri) 40] ]. Therefore, the mere admission of the drawer's signature, without admitting the execution of the entire contents in the cheque, is now sufficient to trigger the presumption.

¶148

37. As soon as the complainant discharges the burden to prove that the instrument, say a cheque, was issued by the accused for discharge of debt, the presumptive device under Section 139 of the Act helps shifting the burden on the accused. The effect of the presumption, in that sense, is to

¶149

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¶150

transfer the evidential burden on the accused of proving that the cheque was not received by the Bank towards the discharge of any liability. Until this evidential burden is discharged by the accused, the presumed fact will have to be taken to be true, without expecting the complainant to do anything further.

¶151

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

¶152

“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’.”

¶153

39. The standard of proof to discharge this evidential burden is not as heavy as that usually seen in situations where the prosecution is required to prove the guilt of an accused. The accused is not expected to prove the nonexistence of the presumed fact beyond a reasonable doubt. The accused must meet the standard of “ preponderance of probabilities ”, similar to a defendant in a civil proceeding. [ Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010) 11 SCC 441: (2010) 4 SCC (Civ) 477: (2011) 1 SCC (Cri) 184: AIR 2010 SC 1898] ]

¶154

Therefore, the Court has to start with the presumption

¶155

that the cheque was issued for valuable consideration in discharge of the legal liability, and the burden is upon the accused to rebut the presumption.

¶156

The accused claimed that Anu Kumari told her that she

¶157

was sending money through the account of some person. She

¶158

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¶159

claimed that the cheque was handed over to Anu Kumari in the Police Station. The complainant specifically denied, for want of knowledge, that the accused had a transaction with Anu Kumari, and Anu Kumari had also filed a case against the accused regarding the cheque. It was nowhere suggested to the complainant that Anu Kumari had handed over the cheque to him. Thus, the version of the accused that the cheque was handed over to Anu Kumari in the Police Station is not established by the cross-examination of the complainant.

¶160

The accused did not lead any evidence and relied upon the statement under Section 313 of Cr.P.C. to prove her defence. This was 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 of Cr.PC is not sufficient to rebut the presumption. It was observed at page 700:

¶161

“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 has recorded her statement under Section 313 of the Code but failed to record evidence to disprove or rebut the presumption in support of her defence available under Section 139 of the Act. The statement of the accused recorded under Section 313 of the Code is not substantive evidence of

¶162

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¶163

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)”

¶164

The complainant specifically stated that ₹1,00,000/-

¶165

and ₹ 50,000/- were deposited on 26.11.2018 and 28.11.2018 respectively. This fact was not denied by the accused in her statement recorded under Section 313 of Cr.PC, rather, it was stated that Anu Kumari told her that she was depositing the money through the account of some person. The version of the complainant is duly supported by the deposited receipts (Ext.CW1/G and Ex-CW1/H) showing the deposits of ₹1,50,000/-, respectively. This deposit corroborates the version of the complainant.

¶166

The complainant stated in his cross-examination that he did not know the accused personally; he volunteered to say that the accused used to visit his shop with his (complainant’s) friend’s sister, and he became acquainted with her. The accused visited his shop 10-12 times. He went to the house of the accused once with his family members. He also admitted that he does not advance money to strangers. It was submitted based on this crossexamination that the accused is a stranger, and it is highly

¶167

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¶168

unlikely that the complainant had advanced money to the accused. This submission is not acceptable. The complainant explained that the accused used to visit his shop with his friend’s sister, and therefore, he became acquainted with her. Further, the complainant had deposited ₹1,50,000/- in the account of the accused, which shows that the complainant trusted the accused and that is why he had deposited the money in her account. The accused denied the acquaintance with the complainant and explained that the money was got deposited by Anu Kumari. However, she failed to provide any evidence to prove this fact. Therefore, the admission that the complainant did not know the accused personally will not make his case doubtful.

¶169

It was submitted that there is no proof of payment of ₹80,000/-. No document was brought on record to establish this fact. Learned Courts below erred in relying upon the presumption to conclude this fact. This submission is not acceptable. It was laid down by the Hon’ble Supreme Court in Ashok Kumar Versus State of U.P, 2025 SCC Online SC 706 that the complainant is not to prove the advancement of the loan because it is a matter of presumption. It was observed:

¶170

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¶171

22. The High Court while allowing the criminal revision has primarily proceeded on the presumption that it was obligatory on the part of the complainant to establish his case on the basis of evidence by giving the details of the bank account as well as the date and time of the withdrawal of the said amount which was given to the accused and also the date and time of the payment made to the accused, including the date and time of receiving of the cheque, which has not been done in the present case. Pausing here, such presumption on the complainant, by the High Court, appears to be erroneous. The onus is not on the complainant at the threshold to prove his capacity/financial wherewithal to make the payment in discharge of which the cheque is alleged to have been issued in his favour. Only if an objection is raised that the complainant was not in a financial position to pay the amount so claimed by him to have been given as a loan to the accused, only then the complainant would have to bring before the Court cogent material to indicate that he had the financial capacity and had actually advanced the amount in question by way of loan. In the case at hand, the appellant had categorically stated in his deposition and reiterated in the crossexamination 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 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 crossexamination, 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:

¶172

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¶173

‘ 8. From the order impugned, it is clear that though the contention of the petitioners was that the said amounts were given for producing a film and were not by way of return of any loan taken, which may have been a probable defence for the petitioners in the case, but rightly, the High Court has taken the view that evidence had to be adduced on this point which has not been done by the 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 :

¶174

‘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 is not a civil suit. At the time, when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. To that extent, the courts in our view were right in holding on those lines. However, the accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is

¶175

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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, achieve this result through the crossexamination 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. ’

¶177

(emphasis supplied)’

¶178

(underlining in original; emphasis supplied by us in bold) 33. Therefore, the case of the complainant cannot be

¶179

doubted because no document was prepared at the time of advancing the loan, or no witness was examined to establish this fact.

¶180

Learned Courts below had rightly held that presumption under Section 118(a) and 139 of the N.I. Act would arise in the present case that the cheque was issued for consideration in discharge of the legal liability. The accused failed to rebut this presumption by any satisfactory evidence. Therefore, it was rightly held that the version of the complainant that the cheque was issued in discharge of the legal liability was acceptable.

¶181

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¶182

The complainant stated that the cheque was dishonoured with the endorsement “insufficient funds”. This is duly established by the memo (Ex-CW1/C) wherein the reason for the dishonour has been mentioned as “funds insufficient”. It was laid down by the Hon’ble Supreme Court in Mandvi Cooperative Bank Ltd. v. Nimesh B. Thakore , (2010) 3 SCC 83: (2010) 1 SCC (Civ) 625: (2010) 2 SCC (Cri) 1: 2010 SCC OnLine SC 155 that the memo issued by the Bank is presumed to be correct and the burden is upon the accused to rebut the presumption. It was observed at

¶183

page 95:

¶184

“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.”

¶185

In the present case, no evidence was produced to rebut

¶186

the presumption, and the learned Courts below had rightly held that the cheque was dishonoured with an endorsement ‘insufficient funds’

¶187

The complainant stated that he had issued a notice to the accused, which was duly served upon her. He has proved an acknowledgement (Ex-CW1/F) bearing the signatures of someone.

¶188

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¶189

This corroborates his version that the notice was served upon the accused.

¶190

The accused claimed that she was in Delhi at the time of issuance of the notice. However, she did not provide any evidence of this fact. The cheque was sent to the same address upon which the accused was served. She furnished the same address in her statement recorded under Section 313 of Cr.PC., a personal bond furnished by her and the notice of acquisition put to her. Therefore, the notice was sent to the correct address and is deemed to be served under Section 27 of the Indian Evidence Act. This presumption is supported by the acknowledgement (Ex.CW1/F). Therefore, the learned Courts below rightly held that notice was duly served upon the accused.

¶191

In any case, 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 the advantage of the fact that notice was not received by him. It was observed:

¶192

“It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law,

¶193

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¶194

where there is no stipulation of giving of notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of the complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act . In our view, any other interpretation of the proviso would defeat the very 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 legal consequences of Section 138 of the Act.” (Emphasis supplied)

¶195

Thus, it was duly proved on record that the accused had

¶196

issued a cheque of ₹2,30,000/- to the complainant in discharge of her legal liability, which cheque was dishonoured with an endorsement “funds insufficient”. The notice was served upon the accused, and she failed to pay the amount despite the receipt of the valid notice of demand. Thus, all the ingredients of the commission of an offence punishable under Section 138 of the NI Act were duly satisfied, and the learned Trial Court had rightly

¶197

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¶198

convicted the accused for the commission of an offence punishable under Section 138 of the NI Act.

¶199

Learned Trial Court sentenced the accused to simple imprisonment for a period of two 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 provisions of Section 138 of the NI Act is deterrent in nature. It was observed at page 203:

¶200

“6. The object of Section 138 of the Negotiable Instruments Act is to infuse credibility into negotiable instruments, including cheques, and to encourage and promote the use of negotiable instruments, including cheques, in financial transactions. The penal provision of Section 138 of the Negotiable Instruments Act is intended to be a deterrent to callous issuance of negotiable instruments such as cheques without serious intention to honour the promise implicit in the issuance of the same.”

¶201

Keeping in view the deterrent nature of the sentence,

¶202

the period of two months cannot be said to be excessive.

¶203

Learned Trial Court awarded a compensation of ₹2,85,000/- to the complainant. The compensation was awarded on 27.03.2024. The cheque was issued on 18.07.2019. Thus, the compensation was awarded about five years after the issuance of the cheque. The complainant lost interest on the amount which he

¶204

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¶205

would have gained by depositing the money in his bank. He also paid the fees to the Advocate and bore the litigation expenses; therefore, he was entitled to be compensated for the same. 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: -

¶206

As regards the claim of compensation raised on behalf of the respondent, we are conscious of the settled principles that the object of Chapter XVII of NIA is not only punitive but also compensatory and restitutive. The provisions of NIA envision a single window for criminal liability for the dishonour of a cheque as well as civil liability for the realisation of the cheque amount. It is also well settled that there needs to be a consistent approach towards awarding compensation, and unless there exist special circumstances, the courts should uniformly levy fines up to twice the cheque amount along with simple interest @ 9% p.a. [ R. Vijayan v. Baby, (2012) 1 SCC 260, para 20: (2012) 1 SCC (Civ) 79: (2012) 1 SCC (Cri) 520 ] ”

¶207

Thus, the amount of ₹55,000/- awarded on the

¶208

principal amount of ₹2,30,000/- is inadequate; however, no appeal was preferred by the complainant, and no interference is required with the sentence imposed by the learned Trial Court as affirmed by the learned Appellate Court.

¶209

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¶210

No other point was urged.

¶211

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

¶212

A copy of this judgment, along with the records of the learned Courts below, be sent back forthwith. Pending miscellaneous application(s), if any, also stand(s) disposed of.

¶213

( Rakesh Kainthla) Judge

¶214

14^th July, 2025 ( mamta )

Bindu Rajput v. Amit Kumar and Another

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