Sohan Lal Sharma Vs Suresh Kumar Gupta

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2025:HHC:44493

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

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Cr. Revision No. 95 of 2016 Reserved on: 24.11.2025 Date of Decision: 19.12.2025

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Sohan Lal Sharma ...Petitioner Versus Suresh Kumar Gupta and another ...Respondents

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Coram

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Hon’ble Mr Justice Rakesh Kainthla , Judge. Whether approved for reporting?¹ No For the Petitioner : Mr G.R. Palsra, Advocate. : For the Respondent Mr H.S. Rangra, Advocate.

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Rakesh Kainthla, Judge

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The present revision is directed against the judgment dated 18.03.2016, passed by learned Sessions Judge, Mandi, H.P. (learned Appellate Court) vide which the judgment of conviction dated 02.11.2015 and order of sentence dated 07.11.2015, passed by learned Chief Judicial Magistrate, Mandi, H.P. (learned Trial Court) were upheld. (Parties shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for

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convenience.)

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

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Briefly stated, the facts giving rise to the present revision are that the complainant filed a complaint against the accused 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 issued a cheque of ₹2,65,000/- drawn on IDBI Bank in favour of the complainant to discharge his liabilities. The complainant presented the cheque to his bank, but it was dishonoured with an endorsement ‘funds insufficient’. The complainant served a legal notice upon the accused on 11.01.2013. The accused sent a reply to the notice but did not pay any amount. Hence, the complaint was filed against the accused for taking action 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 him for the commission of an offence punishable under Section 138 of the NI Act, to which he pleaded not guilty and claimed to be tried.

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The complainant examined himself (CW1) and Nitin Verma (CW2) to prove his complaint.

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The accused, in his statement recorded under Section 313 of the CrPC, denied the case of the complainant. He stated that he had not issued any cheque to the complainant. He had no liability towards the complainant. He had lost the cheque and lodged the FIR at the Police Station. He examined Veer Singh (DW1) and HHC Chet Ram (DW2) to prove his defence.

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The learned Trial Court held that the testimony of the complainant was acceptable. The plea taken by the accused that he had lost the cheque was not believable. He never informed the bank about the loss of the cheque. The accused had failed to rebut the presumption attached to the cheque. Hence, the learned Trial Court convicted the accused of the commission of an offence punishable under Section 138 of the NI Act and sentenced him to undergo simple imprisonment for six months and pay a compensation of ₹2,80,000/- to the complainant.

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Being aggrieved by the judgment and order passed by the learned Trial Court, the accused preferred an appeal which was decided by the learned Sessions Judge, Mandi (learned Appellate Court). Learned Appellate Court concurred with the findings recorded by the learned Trial Court that the evidence of the complainant was satisfactory and the accused had failed to rebut

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the presumption attached to the cheque. The accused did not inform the bank about the loss of the cheque, and his plea that he had misplaced the cheque was not believable. The cheque was dishonoured with an endorsement ‘funds insufficient’. The accused failed to repay the money despite the receipt of the notice. All the ingredients of the commission of an offence punishable under Section 138 of the NI Act were duly satisfied. Learned Trial Court had imposed an adequate sentence, and no interference was required with it. Hence, the appeal was dismissed.

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Being aggrieved by the judgments and order passed by the learned Courts below, the accused has filed the present revision asserting that the learned Courts below erred in ignoring the defence set up by the accused. The accused had lodged a report on 13.09.2012 regarding the missing cheque. The complainant stated that cheque was issued on 21.09.2012, much after the lodging of the report. Beer Singh (DW1) specifically stated that the signatures on the cheque did not tally with the specimen signatures. His testimony also corroborates that the cheque was lost and was misused by the complainant. The complainant had established his plea on the preponderance of probability, and he was not required to prove the defence beyond a reasonable doubt.

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Hence, 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 G.R. Palsra, learned counsel for the petitioner/accused, and Mr H.S. Rangra, learned counsel for the respondent/complainant.

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Mr G.R. Palsra, learned counsel for the petitioner/accused, submitted that the evidence of the accused successfully rebutted the presumption attached to the cheque. The accused had reported the loss of the cheque to the police much before the date of issuance of the cheque. Learned Courts below erred in discarding the evidence of the accused without any justification. Therefore, he 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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Mr H.S. Rangra, learned counsel for the respondent/complainant, submitted that the learned Courts below have concurrently accepted the testimony of the complainant and discarded the defence version. These are pure findings of fact, and this Court should not interfere with the concurrent finding of fact

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while exercising revisional jurisdiction. Therefore, he prayed that

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the present revision be dismissed.

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

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This position was reiterated in State of Gujarat v. Dilipsinh Kishorsinh Rao, (2023) 17 SCC 688: 2023 SCC OnLine SC 1294, wherein it was observed at page 695:

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“14. The power and jurisdiction of the Higher Court under Section 397 CrPC, which vests the court with the power to call for and examine records of an inferior court, is for the purposes of satisfying itself as to the legality and regularities of any proceeding or order made in a case. The object of this provision is to set right a patent defect or an error of jurisdiction or law or the 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.

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

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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 SC 651 that it is impermissible for the High Court to reappreciate the evidence and come to its conclusions in the absence of any perversity. It was observed at page 169:

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“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)

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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

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a miscarriage of justice. But the said revisional power cannot be equated with the power of an appellate court, nor can it be treated even as a second appellate jurisdiction. Ordinarily, therefore, it would not be appropriate for the High Court to reappreciate the evidence and come to its conclusion on the same when the evidence has already been appreciated by the Magistrate as well as the Sessions Judge in appeal, unless any glaring feature is brought to the notice of the High Court which would otherwise amount 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 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

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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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This position was reiterated in Bir Singh v. Mukesh

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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, (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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A similar view was taken in Sanjabij Tari v. Kishore S.

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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

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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.

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28. Consequently, this Court is of the view that in the 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.

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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 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 OnLine SC 2019 as under:-

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“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 writing to the drawer of the cheque within 15 days of the receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of

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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.”

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The complainant reaffirmed the contents of the complaint in his proof affidavit (Ext.CA). He stated in his crossexamination that he knew the accused because the accused used to visit his home for 2-3 years before the date of deposition. The accused was residing at Basa. He was not aware whether the notice was sent to Basa. He did not know about the business of the accused. The transaction of the shop was worth ₹ 80-90 thousand. The cheque was given to him by the accused after receiving the money. He denied that no notice was served upon the accused or that his complaint was time-barred.

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There is nothing in the cross-examination of the complainant to show that he was making a false statement, and the learned Courts below had rightly accepted his testimony.

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Once the testimony of the complainant is accepted, the cheque would attract the presumption under Section 118(a) and 139 of the NI Act that it was issued for consideration to discharge the debt/liability. It was laid down by the Hon'ble Supreme Court in APS Forex Services (P) Ltd. v. Shakti International Fashion Linkers

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(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: -

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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 a presumption is rebuttable. However, to rebut the presumption, the accused was required to lead evidence that the full amount due and payable to the complainant had been paid. In the present case, no such evidence has been led by the accused. The story put forward by the accused that the cheques were given by way of security is not believable in the absence of further evidence to rebut the presumption, and more particularly, the cheque in question was issued for the second time after the earlier cheques were dishonoured. Therefore, both the courts below have materially erred in not properly appreciating and considering the presumption in favour of the complainant that 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 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

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

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A similar view was taken in N. Vijay Kumar v. Vishwanath Rao N., 2025 SCC OnLine SC 873, wherein it was held as under:

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“6. Section 118 (a) assumes that every negotiable instrument is made or drawn for consideration, while Section 139 creates a presumption that the holder of a cheque has received the cheque in discharge of a debt or liability. Presumptions under both are rebuttable, meaning they can be rebutted by the accused by raising a probable defence.”

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A similar view was taken in Sanjay Sanjabij Tari v. Kishore S. Borcar, 2025 SCC OnLine SC 2069, wherein it was

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observed:

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“ONCE EXECUTION OF A CHEQUE IS ADMITTED, PRESUMPTIONS UNDER SECTIONS 118 AND 139 OF THE NI ACT ARISE

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15. In the present case, the cheque in question has admittedly been signed by the Respondent No. 1-Accused. This Court is of the view that once the execution of the cheque is admitted, the presumption under Section 118 of the NI Act that the cheque in question was drawn for consideration and the presumption under Section 139 of the NI Act that the holder of the cheque received the said cheque in discharge of a legally enforceable debt or liability arises against the accused. It is pertinent to mention that observations to the contrary by a two-Judge Bench in Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54, have been set aside by a three-Judge Bench in Rangappa (supra).

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16. This Court is further of the view that by creating this presumption, the law reinforces the reliability of cheques as a mode of payment in commercial transactions.

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17. Needless to mention that the presumption contemplated under Section 139 of the NI Act is a rebuttable presumption. However, the initial onus of proving that the cheque is not in discharge of any debt or other liability is on the accused/drawer of the cheque [See: Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197 ].

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Thus, the learned Courts below were justified in raising

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the presumption that the cheque was issued in discharge of the liability for consideration and shifting the burden to the accused to rebut the presumption.

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The accused claimed that he had lost the cheque and reported the matter to the police. HHC Chet Ram (DW2) stated that the accused had filed an affidavit regarding the loss of the cheque on 13.09.2012. He proved the entry (Ext.DB). This affidavit is in the nature of an admission made by the accused in his favour that he had lost the cheque. Section 21 of the Indian Evidence Act reads that the admission may be proved against the person who makes them or his representatives-in-interest, but they cannot be proved by or on behalf of the person who makes them or by his representatives-in-interest, except in the cases mentioned in the Section. The case of the accused does not fall within the exception,

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and no advantage can be derived from the affidavit executed by the accused.

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It was suggested to the complainant in his crossexamination that he had purchased the cheque from Bal Krishan. This suggestion falsifies the version of the accused that the cheque was misplaced. Had the cheque been misplaced, the accused would not have known that the complainant had purchased the cheque from Bal Krishan. It was laid down by the Hon’ble Supreme Court in Balu Sudam Khalde v. State of Maharashtra, (2023) 13 SCC 365: 2023 SCC OnLine SC 355 that the suggestion put to the witness can

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be taken into consideration while determining the innocence or guilt of the accused. It was observed at page 382:-

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“34. According to the learned counsel, such suggestions could be a part of the defence strategy to impeach the credibility of the witness. The proof of guilt required of the prosecution does not depend on the satisfaction made to a witness.

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35. In Tarun Bora v. State of Assam [Tarun Bora v. State of Assam, (2002) 7 SCC 39: 2002 SCC (Cri) 1568] , a three-judge Bench of this Court was dealing with an appeal against the order passed by the Designated Court, Guwahati, in TADA Sessions case wherein the appellant was convicted under Section 365IPC read with Sections 3(1) and 3(5) of the Terrorist and Disruptive Activities (Prevention) Act, 1987.

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36. In Tarun Bora case [Tarun Bora v. State of Assam, (2002) 7 SCC 39: 2002 SCC (Cri) 1568] , this Court, while considering the evidence on record, took note of a suggestion which was put to one of the witnesses and considering the reply given by the witness to the suggestion put by the accused,

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concluded that the presence of the accused was admitted. We quote with profit the following observations made by this Court in paras 15, 16 and 17, respectively, as under: ( Tarun Bora case [Tarun Bora v. State of Assam, (2002) 7 SCC 39: 2002 SCC (Cri) 1568 ], SCC pp. 43-44)

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“ 15 . The witness further stated that during the assault, the assailant accused him of giving information to the army about the United Liberation Front of Assam (ULFA). He further stated that on the third night, he was carried away blindfolded on a bicycle to a different place, and when his eyes were opened, he could see his younger brother Kumud Kakati (PW 2) and his wife Smt Prema Kakati (PW 3). The place was Duliapather, which is about 6-7 km away from his Village, Sakrahi. The witness identified the appellant, Tarun Bora, and stated that it was he who took him in an Ambassador car from the residence of Nandeswar Bora on the date of the incident.

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16 . In cross-examination, the witness stated as follows: ‘Accused Tarun Bora did not blind my eyes, nor did he assault me.’

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17 . This part of the cross-examination is suggestive of the presence of the accused, Tarun Bora, in the whole episode. This will suggest the presence of the accused, Tarun Bora, as admitted. The only denial is that the accused did not participate in blindfolding the eyes of the witness, nor assaulted him.”

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37. In Rakesh Kumar v. State of Haryana [Rakesh Kumar v. State of Haryana, (1987) 2 SCC 34: 1987 SCC (Cri) 256] , this Court was dealing with an appeal against the judgment of the High Court affirming the order of the Sessions Judge whereby the appellant and three other persons were convicted under Section 302 read with Section 34IPC. While reappreciating the evidence on record, this Court noticed that in the cross-examination of PW 4 Sube Singh, a suggestion was made with regard to the colour of the shirt worn by one of the accused persons at the time of the incident. This Court, taking into

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consideration the nature of the suggestion put by the defence and the reply, arrived at the conclusion that the presence of the accused, namely, Dharam Vir, was established on the spot at the time of the occurrence. We quote the following observations made by this Court in paras 8 and 9, respectively, as under (SCC p. 36)

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“ 8 . PW 3, Bhagat Singh, stated in his examination-inchief that he had identified the accused at the time of the occurrence. But curiously enough, he was not crossexamined as to how and in what manner he could identify the accused, as pointed out by the learned Sessions Judge. No suggestion was also given to him that the place was dark and that it was not possible to identify the assailants of the deceased.

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9 . In his cross-examination, PW 4 Sube Singh stated that the accused, Dharam Vir, was wearing a white shirt. It was suggested to him on behalf of the accused that Dharam Vir was wearing a cream-coloured shirt. In answer to that suggestion, PW 4 said it is not correct that Dharam Vir, the accused, was wearing a shirt of a cream colour and not a white colour at that time.’ The learned Sessions Judge has rightly observed that the above suggestion at least proves the presence of the accused Dharam Vir on the spot at the time of occurrence.”

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38. Thus, from the above, it is evident that the suggestion made by the defence counsel to a witness in the cross-examination, if found to be incriminating in nature in any manner, would definitely bind the accused, and the accused cannot get away on the plea that his counsel had no implied authority to make suggestions in the nature of admissions against his client.

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39. Any concession or admission of a fact by a defence counsel would definitely be binding on his client, except for the concession on a 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

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made by the defence counsel in the cross-examination does not deserve any value or utility if it incriminates the accused in any manner.”

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Therefore, the suggestion made to the complainant can

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be taken into consideration while evaluating the evidence, and the suggestion in the present case would falsify the defence version regarding the loss of the cheque.

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Veer Singh (DW1) stated that he had brought the specimen signatures, and the specimen signatures did not tally with the signatures from the cheque. The testimony of this witness will not help the accused. The cheque was dishonoured with an endorsement ‘funds insufficient’ and not with an endorsement that ‘drawer's signature differs’. Even if the cheque is dishonoured with an endorsement that differs in signature, it would attract the provision and the liability under Section 138 of the NI Act. It was laid down by the Hon’ble Supreme Court in Laxmi Dyechem v. State of Gujarat, (2012) 13 SCC 375: (2012) 4 SCC (Cri) 283: 2012 SCC OnLine SC 970 , that the dishonour of a cheque with an endorsement of signature mismatch attracts the provisions of Section 138 of N.I. Act. It was observed at page 388: -

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16. The above line of decisions leaves no room for holding that the two contingencies envisaged under Section 138 of the Act must be interpreted strictly or literally. We find

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ourselves in respectful agreement with the decision in the Magma case [(1999) 4 SCC 253: 1999 SCC (Cri) 524 ] that the expression “amount of money … is insufficient” appearing in Section 138 of the Act is a genus and dishonour for reasons such “as account closed”, “payment stopped”, “referred to the drawer” are only species of that genus. Just as dishonour of a cheque on the ground that the account has been closed is a dishonour falling in the first contingency referred to in Section 138, so also dishonour on the ground that the “signatures do not match” or that the “image is not found”, which too implies that the specimen signatures do not match the signatures on the cheque would constitute a dishonour within the meaning of Section 138 of the Act .” (Emphasis supplied)

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Karnataka High Court held in Peeranbi v. Hajimalang, 2013 SCC OnLine Kar 10420: (2013) 2 Kant LJ 569 that the dishonour of the cheque due to signature mismatch will attract penal liability under Section 138 of the NI Act. It was observed:

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“9. In the facts and circumstances, as rightly contended by the learned Counsel for the appellant, the cheque, having been drawn on the account of the respondent, is not in dispute. However, it is the defence set up that there was a business relationship between the appellant and the respondent, and the appellant could have accessed a cheque leaf belonging to the respondent, which is sought to be misused. In this regard, there is no positive evidence put forward by the respondent. In other words, in terms of Section 139, the presumption is in favour of the holder of the cheque of the same having been issued by the account holder in discharge of a legal liability. It is for the person issuing the cheque to prove otherwise. This, the Apex Court has held in the case of Rangappa v. Sri Mohan. [AIR 2010 SC 1898 : (2010) 11 SCC 441 : (2011) 1 SCC (Cri) 184: 2010 Cri. L.J. 2871 (SC)] That, not only is it possible for the accused to establish this by leading positive evidence, but he could also

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place reliance on the evidence tendered by the complainant himself to discharge that burden. Hence, if it was the contention of the respondent that there were cheque leaves misplaced by him and which were sought to be misused by the appellant, it was for the respondent to have tendered evidence of the approximate date when there was a dissolution of the partnership business between the appellant and the respondent, and the respondent having operated his Bank Account thereafter using other cheque leaves and that the cheque leaves which were left behind upon such dissolution having fallen into disuse over a period of time, sought to be forged and fabricated at a later date by the appellant, was clearly on the respondent. There is no such evidence forthcoming except the self-serving evidence of the respondent. Further, in the event that any such cheque leaves were misused, a duty was cast on the respondent to inform his banker to stop payment, against such cheques which were lost or misplaced. There is no such evidence forthcoming. Nor is it the case of the respondent that the cheques being misplaced, he had reported to the nearest Police Station of such loss. There was no demand made on the appellant to return the cheque leaves left behind. Therefore, the evidence of the respondent was clearly self-serving, and it was a burden cast on the respondent to establish the fact that there were cheque leaves which were left behind, and it was possible for the appellant to misuse the same. If once it is apparent that the cheque had been issued on the account held by the respondent, the presumption under Section 139 is clearly in favour of the appellant to establish that it was forged by the accused. The burden is clearly on the respondent, and it is not for the appellant to establish that the respondent had deliberately changed his signature in order that it would be dishonoured by his Bank. This may indeed have been the intention in changing his signature at the time of issuing the cheque. As already stated, the burden to establish that it was lost and that it has been misused by the appellant was clearly on the respondent. The Court below has also committed an error in holding that the liability in respect of

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which the cheque had been issued was required to be proved by the appellant. The proceedings were not in the nature of a suit for recovery of money but for prosecution of an offence punishable under Section 138 of the NI Act. The limited scope of those proceedings is whether there was dishonour of the cheque issued by the accused. That aspect of the matter has been established on the face of it. Therefore, the Court below has clearly committed an error in addressing the case of the complainant and in dismissing the complaint. Consequently, the appeal is allowed. The complainant has established his case beyond a reasonable doubt. The respondent, therefore, is liable for punishment. Accordingly, he shall pay a fine of Rs. 3,50,000/- in default of which, the respondent shall suffer simple imprisonment for a period of six months. The fine amount shall be paid forthwith, in any event, within a period of 15 days. Out of the fine amount, a sum of Rs. 3,40,000/- shall be paid as compensation to the appellant.”

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Madras High Court also held in R. Manimehalai v.

¶142

Banumathi, 2018 SCC OnLine Mad 13802, that the dishonour of a cheque due to signature mismatch attracts the provision of Section 138 of the NI Act. It was observed:

¶143

“10… . It is true that the impugned cheque was returned on two grounds, namely, (a) insufcient funds, and (b) the fi signature of the drawer dif f ers. On receipt of the statutory notice, dated 31.12.2013, [EX-P3] from the complainant, the accused has sent a belated reply notice, dated 17.3.2014, [EX-P5], in which the accused did not take the plea that her signature had been forged on the cheque. She has taken a plea that the impugned cheque was issued by her for a dif f erent debt. The accused took pains to examine Ganeshamoorthy, Senior Manager of Syndicate Bank, in which the accused has an account, to say that the signature in the cheque dif f ered from the specimen signature with the Bank. This only shows that the accused had deliberately put

¶144

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her signature dif f erently in the impugned cheque with the intention of cheating the complainant. However, a charge of cheating has not been framed against the accused. This conduct of the accused in giving the cheque by af fi xing her signature dif f erently is relevant under Section 8 of the Indian Evidence Act, 1872. The presumption under. Section 139 of the Negotiable Instruments Act, 1881, comes into force once the cheque has been issued by the accused for the debt in question. Of course, this is a rebuttable presumption and the same can be dislodged by the accused by preponderance of probabilities and not by proof beyond reasonable doubt, as held by the Supreme Court in Rangappa v. Sri Mohan, (2010) 2 BC 693 (SC): II (2010) CCR 433 (SC) : (2010) 4 SLT 56 : (2010) 2 DLT (Cri) 699 (SC) : (2010) 11 SCC 441 . In this case, the accused has failed to discharge her burden even by a preponderance of probabilities. She was trying to take advantage of the dif f erence in signature to wriggle out of the prosecution…”

¶147

Thus, no advantage can be derived from the statement of Veer Singh (DW1).

¶148

Nitin Verma (CW2) specifically stated in his crossexamination that no intimation was received by the bank regarding the dishonour of the cheque. Learned Courts below had rightly held that failure to intimate the bank about the loss of the cheque would make the version of the accused suspect that the cheque was misplaced. Making an affidavit and filing it before the police would not have helped the accused, but reporting the matter to the bank would have stopped the payment, and any person coming to know of the loss of the cheque would have reported this

¶149

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fact to the bank and not to the police. Therefore, the conduct of the accused in not informing the Bank about the loss of the cheque would make it difficult to rely upon his version that the cheque was lost.

¶152

The accused did not step into the witness box to prove the plea taken by him that his cheque was misplaced. He relied upon his statement recorded under Section 313 of the CrPC to establish this fact. It was held in Sumeti Vij v. Paramount Tech Fab Industries, (2022) 15 SCC 689: 2021 SCC OnLine SC 201 that the accused has to lead defence evidence to rebut the presumption and mere denial in his statement under Section 313 of Cr.P.C is not sufficient. It was observed at page 700:

¶153

“20. That apart, when the complainant exhibited all these documents in support of his complaints and recorded the statement of three witnesses in support thereof, the appellant recorded her statement under Section 313 of the Code but failed to record evidence to disprove or rebut the presumption in support of her defence available under Section 139 of the Act. The statement of the accused recorded under Section 313 of the 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)”

¶154

The accused also did not examine Bal Krishan, who is

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stated to have sold the cheque to the complainant. Therefore,

¶156

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learned Courts below were justified in rejecting the plea taken by the accused.

¶159

The complainant stated that the cheque was dishonoured with an endorsement ‘insufficient funds’. It is duly corroborated by the statement of Nitin Verma (CW2), who proved that the cheque was received by the bank for realisation and was dishonoured on 07.12.2012. It was not suggested to him in the cross-examination that the accused had sufficient balance in his account to honour the cheque. Thus, his testimony that the cheque was dishonoured because of insufficiency of funds is to be accepted as correct.

¶160

The complainant stated that he had issued a notice (Ext.CW-1/E) to the accused. The accused admitted in his statement recorded under Section 313 of Cr.P.C. that he had received a notice and had sent a reply to it. Thus, the receipt of the notice is not in dispute. The accused did not prove that he had paid the amount to the complainant. Thus, learned Courts below had rightly held that the accused had failed to repay the amount despite the receipt of a valid notice of demand.

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Therefore, it was duly proved before the learned Trial Court that the cheque was issued in discharge of legal liability, which was dishonoured with an endorsement ‘funds insufficient’, and the accused failed to repay the money despite the receipt of the notice. Hence, all the ingredients of the commission of an offence punishable under Section 138 of the NI Act were duly satisfied. Learned Trial Court had rightly convicted the accused for the commission of an offence punishable under Section 138 of the NI Act.

¶164

Learned Trial Court sentenced the accused to undergo simple imprisonment for six 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:

¶165

“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.”

¶166

Therefore, the sentence of six months is not excessive.

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Learned Trial Court ordered the accused to pay a compensation of ₹2,80,000/-. The cheque was issued on 21.09.2012. The compensation was awarded on 07.11.2015 after the lapse of more than three years. The complainant lost interest in the amount which he would have gained by investing it. He had to engage counsel to prosecute the complaint filed by him, and he was entitled to be compensated for his loss. 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: -

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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 ] ”

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