Mukand Lal Vs Hp State Co-Operative Agriculture and Rural Development Bank Chirgaon

THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

Cr. Revision No.24 of 2026 Date of Decision: 10.07.2026

____________ ___________________________________________ Mukand Lal …….Petitioner Versus H.P. State Co-operative Agriculture and Rural Development Bank … Respondent _______________________________________________________ Coram: Hon’ble Mr. Justice Sandeep Sharma, Judge. Whether approved for reporting?¹

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For the Petitioner : Mr. D.S. Nainta, Advocate.
For the Respondent: Mr. Narender Singh Thakur, Advocate.
_______________________________________________________ Sandeep Sharma, Judge (oral):

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Instant Criminal Revision petition filed under Section 438(1) of Bharatiya Nagarik Suraksha Sanhita, lays challenge to judgment dated 20.11.2025 passed by learned Additional Sessions Judge, Rohru, District Shimla, Himachal Pradesh, in Case No.59-R/10 of 2024, affirming judgment of conviction and order of sentence dated 06.07.2024/11.07.2024, passed by learned Additional Chief Judicial Magistrate, Court No.1, Rohru, District Shimla, Himachal Pradesh, in Criminal case No.194-3 of 2022, titled H.P. State Agriculture and

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Rural Development Bank, whereby learned trial Court, while holding petitioner-accused (hereinafter referred to as the ‘accused’) guilty

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1 Whether the reporters of the local papers may be allowed to see the judgment?

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of his having committed an offence punishable under Section 138 of

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the Negotiable Instruments Act ( for short ‘Act’), convicted and sentenced him to undergo simple imprisonment for a period of four months and pay compensation to the tune of Rs. 1,60,000/- to the respondent-complainant (hereinafter referred to as the ‘complainant’).

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Precisely, the facts of the case, as emerge from the pleadings as well as other documents adduced on record by the respective parties, are that the respondent-complainant instituted a complaint under Section 138 of the Act in the competent Court of law, alleging therein that in the year 2019-20, accused approached it for sanctioning the loan and after completion of all codal formalities, loan to the tune of Rs. 3,00,000/- was advanced to him under the Tank Irrigation Scheme for a period of five years on half yearly installments of ₹ 40,000/-, with interest @ 10.50%. Since accused failed to make the payment of installments as agreed by him, sum of ₹ 1, 60,000/became outstanding against him. To discharge his aforesaid liability, accused issued cheque bearing No. 887233 dated 14.01.2022 amount to ₹ 1,60,000/- of H.P. State Co Operative Bank, branch at Jangla of his account No.41210107104, but fact remains that aforesaid cheque on its presentation to the bank concerned was dishonoured on account of insufficient funds in the bank account of

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the accused. Immediately, after receipt of aforesaid return memo, respondent-complainant served accused with legal notice dated 08.03.2022, calling upon him to make the payment good within stipulated time, but still needful was not done within stipulated time, complainant had no option, but to institute proceedings under Section 138 of the Act in the competent Court of law, which subsequently, on the basis of evidence adduced on record by the respective parties, held accused guilty of his having committed offence punishable under S. 138 of the Act and accordingly, convicted and sentenced him as per description given herein above.

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Being aggrieved and dissatisfied with aforesaid judgment of conviction and order of sentence recorded by learned trial Court, present petitioner-accused preferred an appeal in the Court of learned Additional Sessions Judge, Rohru, Shimla, District Shimla, Himachal Pradesh, but same also came to be dismissed vide judgment dated 20.11.2025. In the aforesaid background, petitioneraccused has approached this Court in the instant proceedings, praying therein for his acquittal after quashing and setting aside the impugned judgment of conviction and order of sentence recorded by Courts below.

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Vide order dated 08.01.2026, this Court suspended the substantive sentence imposed by Court below, subject to petitioner-

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accused furnishing personal bond and depositing 30% of the compensation amount within a period of eight weeks.Though, aforesaid order was complied with, but thereafter request was made for time to deposit the remaining amount, but in vain. Learned counsel representing the petitioner fairly states that this Court may proceed to decide the matter on its own merit.

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Having heard learned counsel representing the parties and perused material available on record vis-à-vis reasoning assigned in the impugned judgment passed by learned Additional Sessions Judge, Rohru District Shimla, Himachal Pradesh, affirming judgment of conviction and order of sentence recorded by learned trial Court, this Court is not persuaded to agree with learned counsel for the petitioner that both the Courts below have failed to appreciate the evidence in its right perspective, rather this Court is convinced and satisfied 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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Though, in his statement recorded under Section 313 Cr.P.C, accused attempted to deny the case of the complainant in toto, but pattern of cross-examination conducted upon the accused reveals that he attempted to set up a case that at the time of his

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having availed loan from the complainant-bank, complainant-bank had obtained his signatures on the simple papers, content whereof are not read over to him. While stating that in lieu of loan, blank cheque signed was obtained from him, he further attempted to set up a case that though he had paid the whole outstanding amount to the complainant-bank, but same was not adjusted and cheques were misused.

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Since factum with regard to issuance of cheque as well as signatures thereupon never came to be disputed, rather stands admitted, no illegality can be said to have been committed by the Courts below while, invoking Sections 118 and 139 of the Act, which speak about presumption in favour of the holder of the cheque that cheque was issued towards discharge of 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.

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In the case at hand, complainant-bank has examined Sh. Archit Kuthiala, Manager of complainant bank as CW-1, who tendered his evidence by way of affidavit Ex.C-1/CW1, reiterating therein the contents of the complaint. He also tendered in evidence Ex.C-2/CW1, bank memo Ex.C-3/CW1, legal notice Ex.C-4/CW1, postal receipt as

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Ex.C-5/CW1, acknowledgment card Ex.C-6/CW1 and authorization letter as Ex.C-7/CW1. Cross-examination conducted upon afore witness nowhere suggests that accused was able to extract anything contrary to what this witness stated in his examination-in-chief. In his cross-examination, afore witness admitted that loan documentation was not done in his presence and the loan pertains to irrigation tank. He stated that the accused person was to pay half yearly installments of Rs. 40,000/-. While feigning ignorance to the number of installments deposited by the accused with the bank, he deposed that statement of account of accused is not annexed with the complaint, he clarified that installments of last four years are pending for payment. He further denied suggestion put to him that bank had taken blank cheque from the accused, while sanctioning loan to him. As per him, bank has not taken any cheque from the accused.

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With a view to probablize aforesaid defence, accused examined himself as DW-1 and deposed that he had availed loan from the bank and his signature were obtained on simple papers. He also stated that in lieu of loan, blank cheque book was got signed from him. He stated that he had paid the whole outstanding amount to the complainant, but the same was not adjusted by the complainantbank. He deposed that false case has been filed against him. In his cross-examination, he deposed that he had availed a loan of

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₹ 3,00,000/- from the complainant, but denied if he has given a cheque of Rs.1,60,000/- to the complainant bank.

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It is clearly evident from the statement made by DW-1 that loan to the tune of Rs. 3, 00,000/- was availed by him. Though, he attempted to set up a case that at the time of grant of loan, blank cheques were obtained, but such defence never came to be probablized. Interestingly, afore witness neither put suggestion to the complainant with regard to blank cheque, if any, taken by the complainant nor he stated in his statement, rather he attempted to set up a case that entire amount was paid, but same was not adjusted. No evidence, worth credence, ever came to be led on record qua payment of loan amount, if any.

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The Hon’ble Apex Cour t 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 is 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 offence comes into

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play. It would be profitable to reproduce relevant paras No.23 to 25 of

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the judgment herein:-

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“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 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.

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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 not rebutted with regard to the materials submitted by the complainant.

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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 offence, hence punishable. But 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

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where there has been instruction to stop payment despite sufficiency of funds and whether the same would be a sufficient ground to proceed in the matter, would be extremely heavy.

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12. Reliance in this regard is placed upon judgment passed

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by the Hon’ble Apex Court in Bir Singh Vs. Mukesh Kumar, (2019) 4 SCC 197 , wherein it was observed as under:

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“ 37. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted. 38. answered in the negative.

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Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.

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The fact that the appellant-complainant might have been an Income Tax practitioner conversant with knowledge of law does not make any difference to the law relating to the dishonour of a cheque. The fact that the loan may not have been advanced by a cheque or demand draft or a receipt might not have been obtained would make no difference. In this context, it would, perhaps, not be out of context to note that the fact that the respondent-accused should have given or signed blank cheque to the appellant- complainant, as claimed by the respondent-accused, shows that initially there was mutual trust and faith between them.

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In the absence of any finding that the cheque in question was not signed by the respondent-accused or not voluntarily made over to the payee and in the absence of any evidence with regard to the circumstances in which a blank signed cheque had been given to the appellantcomplainant, it may reasonably be presumed that the

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cheque was filled in by the appellant-complainant being the payee in the presence of the respondent-accused being the drawer, at his request and/or with his acquiescence. The subsequent filling in of an unfilled signed cheque is not an alteration. There was no change in the amount of the cheque, its date or the name of the payee. The High Court ought not to have acquitted the respondent-accused of the charge under Section 138 of the Negotiable Instruments Act.

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By now it is well settled that dishonour of cheque issued as “security” can also attract offence under Section 138 of the Negotiable Instruments Act. Hon’ble Apex Court in case titl ed Sripati

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Singh v. State of Jharkhand , Criminal Appeal No. 1269-1270 of

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2021, decided on 28.10.2021, has held as under:

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“16. A cheque issued as security pursuant to a financial 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 fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount,

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the cheque which is issued as security would mature for presentation and the 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 flow.

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Needless to say, expression “security cheque” is not a

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statutorily defined expression in the Negotiable Instruments Act, rather same is to be inferred from the pleadings as well as evidence, if any, led on record with regard to issuance of security cheque. The

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Negotiable Instruments Act does not per se carve out an exception in respect of a “security cheque” to say that a complaint in respect of such a cheque would not be maintainable as there is a debt existing in respect whereof the cheque in question is issued, same would attract provision of Section 138 of the Act in case of its dishonour.

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Having scanned the entire evidence adduced on record by the respective parties, this Court finds that all the basic ingredients of Section 138 of the Act are met in the case at hand. Similarly, factum with regard to signatures and issuance of cheque by the accused towards discharge of lawful liability stands duly established on record.

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Moreover, this Court has a very limited jurisdiction under Section 397 of the Cr.P.C, to re-appreciate the evidence, especially, in view of the concurrent findings of fact and law recorded by the courts below. In this regard, reliance is placed upon the judgment passed by Hon’ble Apex Court in case “State of Kerala Vs. Puttumana Illath Jathavedan Namboodiri” ( 1999) 2 Supreme Court Cases 452, wherein it has been held as under:-

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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

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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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Since after having carefully examined the evidence in the present case, this Court is unable to find any error of law as well as fact, if any, committed by the courts below, while passing impugned judgments, there is no occasion, whatsoever, to exercise the revisional power.

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True it is that the Hon’ble Apex Court in Krishnan and another Versus Krishnaveni and another, (1997) 4 Supreme Court Case 241 ; has held that in case Court notices that there is a failure of justice or misuse of judicial mechanism or procedure, sentence or order is not correct, it is salutary duty of the High Court to prevent the abuse of 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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Consequently, in view of the discussion made herein

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above as well as law laid down by the Hon’ble Apex Court, this Court sees no valid reason to interfere with the well reasoned judgments recorded by the Courts below, which otherwise, appear to be based upon proper appreciation of evidence available on record and as such, same are upheld.

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Accordingly, the present criminal revision petition is dismissed being devoid of any merit. The petitioner is directed to surrender himself before the learned trial Court within a period of two months to serve the sentence as awarded by the learned trial Court, if not already served. Bail bonds of the petitioner are cancelled. Interim direction, if any, stands vacated. Pending applications, if any, also stand disposed of.

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The amount lying deposited with the learned trial Court is ordered to be released in favour of the respondent-complainant, by remitting the same in its saving bank account, details whereof, shall be furnished by learned counsel for the respondent-complainant within a period of two weeks.

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July 10,2026 (shankar)

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(Sandeep Sharma), Judge

Mukand Lal v. Hp State Co-Operative Agriculture and Rural Development Bank Chirgaon

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Mukand Lal v. Hp State Co-Operative Agriculture and Rural Development Bank Chirgaon

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