Conviction under Section 138 NI Act for dishonour of a ₹4 lakh cheque was challenged in revision. The High Court held the statutory presumptions were not rebutted and declined to re-appreciate evidence against concurrent findings, upholding both courts below.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
2026:HHC:11480
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No.182 of 2025
Date of Decision: 09.04.2026
__________________________________________________________________________ Arun Chauhan ……...Petitioner Versus Vikrant Sharma …....Respondent
Coram
Hon’ble Mr. Justice Sandeep Sharma, Judge.
Whether approved for reporting?
_____________________________________________________________________________ For the Petitioner: Mr. Sanket Sankhyan, Advocate. For the Respondent: Mr. Naresh K. Sharma, Advocate. __________________________________________________________________________ Sandeep Sharma, J. (Oral)
Instant criminal revision petition filed under Section 438 read with Section 442 of the Bharatiya Nagrik Suraksha Sanhita, 2023, lays challenge to judgment dated 23.05.2024, passed by the learned Additional Sessions Judge, Ghumarwin, District Bilaspur, Himachal Pradesh, in Criminal Appeal No.32-10 of 2016, titled Arun Chauhan Vs. Vikrant Sharma, affirming judgment of conviction and order of sentence dated 22.07.2016, passed by the learned Judicial Magistrate First Class, Court No.II, Ghumarwin, Bilaspur, Himachal Pradesh, in criminal case No.8-2 of 2013, whereby the learned trial Court while holding the petitioner-accused (hereinafter, “ accused” ) guilty of having committed offence punishable under Section 138 of the Negotiable Instruments Act (in short the “Act"), convicted and sentenced him to undergo simple imprisonment for a period
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of six months and pay fine to the tune of Rs.8,00,000/- to the respondentcomplainant.
the Act and accordingly, convicted and sentenced him, as per the description given hereinabove.
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in grave error while appreciating the evidence, rather this Court finds that both the Courts below have meticulously dealt with each and every aspect of the matter and there is no scope left for interference.
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while admitting that he works as a priest, submitted that he was having a shop of readymade clothes and he did such business from 2008 to 2014 in the name of Honey Fasion Point. He deposed that he was having a loan of ₹20,00,000/- and same was returned. He admitted that he studies with accused. He denied that through accused, he had given blank Cheque No.638177 and Cheque No.638179, as security Cheques to Joginder Pal. He denied that accused paid the amount of Joginder Pal, but he retained the Cheques. He admitted that he still have three blank Cheques of accused. He admitted that he also filed case against the accused with respect to Cheque amounting to ₹4,60,000/-.
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towards discharge of a lawful liability. No doubt, aforesaid presumption is rebuttable, but to rebut such presumption, accused either can refer to the documents and evidence led on record by the complainant or presumption can be rebutted by leading positive evidence, if any. However, in the case at hand, accused was unable to point out from the documents as well as evidence adduced on record by the complainant that Cheque issued by him was not issued towards discharge of lawful liability.
11. The Hon’ble Apex Court in M/s Laxmi Dyechem V. State of Gujarat , 2013(1) RCR(Criminal), has categorically held that if the accused is able to establish a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail. To raise probable defence, accused can rely on the materials submitted by the complainant. Needless to say, if the accused/drawer of the Cheque in question neither raises a probable defence nor able to contest existence of a legally enforceable debt or liability, statutory presumption under Section 139 of the Negotiable Instruments Act, regarding commission of the ofence f comes into play. It would be proftable to reproduce relevant paras No.23 to i 25 of the judgment herein:-
“23. Further, a three judge Bench of this Court in the matter of Rangappa vs. Sri Mohan [3] held that Section 139 is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While
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Section 138 of the Act specifies the strong criminal remedy in relation to the dishonour of the cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. The Court however, further observed that it must be remembered that the offence made punishable by Section 138can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose money is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant accused cannot be expected to discharge an unduly high standard of proof”. The Court further observed that it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is all preponderance of probabilities.
24. Therefore, if the accused is able to establish a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is inconceivable that in some cases the accused may not need to adduce the evidence of his/her own. If however, the accused/drawer of a cheque in question neither raises a probable defence nor able to contest existence of a legally enforceable debt or liability, obviously statutory presumption under Section 139 of the NI Act regarding commission of the offence comes into play if the same is
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not rebutted with regard to the materials submitted by the complainant.
25. It is no doubt true that the dishonour of cheques in order to qualify for prosecution under Section 138 of the NI Act precedes a statutory notice where the drawer is called upon by allowing him to avail the opportunity to arrange the payment of the amount covered by the cheque and it is only when the drawer despite the receipt of such a notice and despite the opportunity to make the payment within the time stipulated under the statute does not pay the amount, that the said default would be considered a dishonour constituting an ofence, hence punishable. But f even in such cases, the question whether or not there was lawfully recoverable debt or liability for discharge whereof the cheque was issued, would be a matter that the trial court will have to examine having regard to the evidence adduced before it keeping in view the statutory presumption that unless rebutted, the cheque is presumed to have been issued for a valid consideration. In view of this the responsibility of the trial judge while issuing summons to conduct the trial in matters where there has been instruction to stop payment despite suf fi ciency of funds and whether the same would be a suf fi cient ground to proceed in the matter, would be extremely heavy.”
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liability. Since no evidence worth credence ever came to be led on record to rebut the presumption, no illegality can be said to have been committed by the Courts below while holding petitioner/accused guilty for the commission of offence punishable under Section 138 of the Act. Though, defence came to be taken at the behest of the petitioner/accused that Cheque in question was issued as a security, but the same may not be of any help to the accused, for the reason that by now, it is well-settled that Cheque, even if issued as a ‘security’ can also be presented for encashment, if amount taken or promised to be repaid is not paid.
“16. A cheque issued as security pursuant to a fnancial i transaction cannot be considered as a worthless piece of paper under every circumstance. ‘Security’ in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulflment of an obligation to i which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specifed timeframe and issues a i cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the
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drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of N.I. Act would f l ow.”
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“In its revisional jurisdiction, the High Court can call for and examine the record of any proceedings for the purpose of satisfying 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 miscarriage of justice. But the said revisional power cannot be equated with the power of an appellate court nor can it be treated even as a second appellate jurisdiction. Ordinarily, therefore, it would not be appropriate for the High Court to re-appreciate the evidence and come to its own conclusion on the same when the evidence has already been appreciated by the Magistrate as well as Sessions Judge in appeal, unless any glaring feature is brought to the notice of the High Court which would otherwise tantamount to gross miscarriage of justice.”
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the process or miscarriage of justice or to correct irregularities/incorrectness committed by inferior criminal court in its judicial process or illegality of sentence or order, but learned counsel representing the accused has failed to point out any material irregularity committed by the Courts below while appreciating the evidence and as such, this Court sees no reason to interfere with the well reasoned judgments passed by the Courts below.
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any, are cancelled. Interim order dated 25.03.2025 stands vacated. Pending
applications, if any, also stand disposed of.
(Sandeep Sharma), Judge
April 09, 2026 (Rajeev Raturi)
2 issues framed by the court
Whether the presumption under Sections 118 and 139 NI Act stood rebutted by the accused's defence that the cheque was a security cheque misused by the complainant.
Whether the High Court in revision could interfere with the concurrent findings of conviction under Section 138 NI Act.
Colour shows how this judgement treated each authority
Laxmi Dyechem v. State of GujaratRelied on¶11
M/s Laxmi Dyechem V. State of Gujarat, 2013(1) RCR(Criminal)
Rangappa v. Sri MohanReferred
Rangappa vs. Sri Mohan [3]
Sripati Singh v. State of JharkhandRelied on¶13
Sripati Singh v. State of Jharkhand, Criminal Appeal No. 1269-1270 of 2021
State of Kerala Vs. Puttumana Illath Jathavedan NamboodiriRelied on¶16
(1999) 2 Supreme Court Cases 452
Krishnan and another Versus Krishnaveni and anotherDistinguished¶18
(1997) 4 Supreme Court Case 241
4 provisions across 2 enactments
Arun Chauhan
Vikrant Sharma
Sandeep Sharma
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
