Conviction for cheque dishonour under Section 138 of the Negotiable Instruments Act was challenged in revision. The accused claimed the cheque was issued as security but failed to probabilise this defence or rebut statutory presumptions. Concurrent findings upheld; revision dismissed.
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.
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No. 396 of 2018 Date of Decision: 22.07.2026
__________________________________________________________________________ Sh. Ram Chand ……...Petitioner Versus Shri Rajan Chopra and Another …....Respondent Coram Hon’ble Mr. Justice Sandeep Sharma, Judge. Whether approved for reporting? _____________________________________________________________________________ For the Petitioner: Ms. Suhani Gautam, Advocate. For the Respondent: Mr. Ashok Kumar, Advocate, for respondent No.1. Mr. Rajan Kahol & Mr. Vishal Panwar, Additional Advocates General, with Mr. Ravi Chauhan and Mr. Anish Banshtu, Deputy Advocates General, for State. ________________________ __________________________________________________
Sandeep Sharma, J. (Oral)
Instant criminal revision petition filed under Section 397 read with Section 401 and 482 of CrPC, lays challenge to judgment dated 24.07.2015, passed by the learned Additional Sessions Judge, Kullu, Himachal Pradesh, in Criminal Appeal No.19 of 2015, titled as Ram Chand Vs. Rajan Chopra, affirming judgment of conviction and order of sentence dated 25.02.2015, passed by the learned Special Judicial Magistrate, Kullu, in criminal case No.449-I of 2013, whereby the learned trial Court while holding the petitioner-accused (for short, ‘accused’) guilty of having committed offence punishable under Section 138 of the Negotiable Instruments Act (for short ‘ the Act’) , convicted and sentenced him to
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undergo simple imprisonment for a period of one year and pay compensation to the tune of ₹2,40,000/- to the respondent-complainant.
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the Act and accordingly, convicted and sentenced him, as per the description given hereinabove.
that he is not aware about any transaction between the parties prior to and after October 2012. He further stated in his cross-examination that no document was scribed about aforesaid payment of ₹75,000/-, as transaction did not accrue in his presence. If the statement made by aforesaid defence witness as well as statement of accused recorded under Section 313 Cr.P.C., if read in their entirety, it can be safely concluded that accused virtually admitted factum of his having multiple transactions with the complainant, but accused failed to probabilise that Cheque issued in some other transaction has been misused by complainant to file the present complaint. Accused failed to disclose other liability in which he had issued the cheque in question. Since accused himself admitted service of statutory demand notice sent by the complainant after dishonour of Cheque, coupled with the fact that despite his having received notice, he failed to pay the Cheque amount, as detailed in demand notice, no illegality can be said to have been committed by both Courts below while holding the accused guilty of his having committed offence punishable under Section 138 of the Act. Since, from the discussion made hereinabove, factum of issuance of cheque and signatures thereupon stand duly established by complainant by leading cogent and convincing evidence, coupled with the fact that accused failed to lead evidence to rebut the presumption in favour of holder of cheque with regard to issuance of cheque towards discharge of lawful liability, no illegality can be said to have been committed by the learned 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 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.
9. 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 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 play. It would be profitable to reproduce relevant paras No.23 to 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 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.
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 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.”
“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, 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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“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.”
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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(Sandeep Sharma), Judge
July 22, 2026 (Rajeev Raturi)
3 issues framed by the court
Whether the accused rebutted the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act that the cheque was issued towards discharge of a lawful liability.
Whether a cheque issued as security can attract offence under Section 138 of the Negotiable Instruments Act.
Whether revisional jurisdiction under Section 397 CrPC permits re-appreciation of evidence against concurrent findings of the courts below.
Colour shows how this judgement treated each authority
M/s Laxmi Dyechem V. State of GujaratRelied on¶9
M/s Laxmi Dyechem V. State of Gujarat, 2013(1) RCR(Criminal)
Sripati Singh v. State of JharkhandRelied on¶10
Sripati Singh v. State of Jharkhand, Criminal Appeal No. 1269-1270 of 2021
State of Kerala Vs. Puttumana Illath Jathavedan NamboodiriRelied on¶14
State of Kerala Vs. Puttumana Illath Jathavedan Namboodiri (1999) 2 Supreme Court Cases 452
Krishnan and another Versus Krishnaveni and anotherDistinguished¶16
Krishnan and another Versus Krishnaveni and another, (1997) 4 Supreme Court Case 241
6 provisions across 2 enactments
Ram Chand
Rajan Chopra
State of Himachal Pradesh
Sandeep Sharma
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
