Inderjeet Vs Krishan Chand

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2026:HHC:6104

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

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Cr. Revision No. 556 of 2023 Reserved on: 24.02.2026 Date of Decision: 06.03.2026

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Inderjeet ....Petitioner

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Versus

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Kishan Chand .... Respondent

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Coram

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Hon’ble Mr Justice Rakesh Kainthla, Judge. Whether approved for reporting?¹ No

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For the Petitioner	: Mr Maan Singh, Advocate.
For the Respondent	: Mr Surya Chauhan, Advocate.

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Rakesh Kainthla, Judge

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The present revision is directed against the judgment dated 03.10.2023, passed by learned Sessions Judge, Kullu, District Kullu (learned Appellate Court) vide which the judgment of conviction dated 07.12.2022 and order of sentence dated 25.03.2023 passed by learned Chief Judicial Magistrate, L&S at Kullu, H.P (learned Trial Court) were upheld. (Parties shall hereinafter be

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

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referred to in the same manner as they were arrayed before the learned Trial Court for convenience.)

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Briefly stated, the facts giving rise to the present revision are that the complainant filed a complaint before the learned Trial Court against the accused for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act (NI Act). It was asserted that the accused and the complainant were known to each other. The accused borrowed ₹9,00,000/- from the complainant in July, 2011. He agreed to repay the amount in October, 2012. The complainant demanded the money, and the accused issued a cheque of ₹9,00,000/- drawn on Union Bank of India, Bhuntar, in the complainant’s favour. The complainant presented the cheque before the bank for realization but it was dishonoured with an endorsement ‘funds insufficient’. The complainant issued a notice to the accused asking him to repay the money within fifteen days of its receipt, but the accused refused to receive it. Hence, a complaint was filed before the learned Trial Court against the accused for taking action as per the law.

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Learned Trial Court found sufficient reasons to summon the accused. When the accused appeared, a notice of accusation was

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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 (CW-1) and Roshan Lal (CW2) to prove his complaint.

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The accused, in his statement recorded under Section 313 of Cr.P.C., admitted that the cheque book belonged to him and that he had issued a cheque. He stated that the cheque was not signed by him and he did not know how the complainant came into possession of the cheque book. He examined Lal Chand (DW1) to prove his defence.

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Learned Trial Court held that it was suggested to the complainant in his cross-examination that the cheque was handed over to Mr P.D. Bhatia, the Manager of the bank, which shows that the accused had admitted the issuance of the cheque. This suggestion was not proven. The accused did not claim in his statement under Section 313 Cr.P.C. that the cheque was issued to Mr P.D. Bhatia. A presumption arose that the cheque was issued in discharge of the debt/legal liability for consideration. The burden shifted upon the accused to rebut the presumption. The accused

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failed to produce any evidence to rebut the presumption. The cheque was dishonoured with an endorsement ‘insufficient funds’. The accused refused to accept the notice, which is deemed service. All the ingredients of the commission of an offence punishable under Section 138 of the NI Act were duly satisfied. Hence, the learned Trial Court convicted the accused and sentenced him to undergo simple imprisonment for six months and pay a compensation of ₹1,50,000/-.

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Being aggrieved by the judgment and order passed by the learned Trial Court, the accused filed an appeal, which was decided by the learned Sessions Judge, Kullu, District Kullu, H.P. (learned Appellate Court). Learned Appellate Court concurred with the findings recorded by the learned Trial Court that the issuance of the cheque was not specifically disputed, and a presumption arose that the cheque was issued for consideration to discharge the debt/liability. The accused failed to produce any evidence to rebut the presumption. The cheque was dishonoured with an endorsement ‘insufficient funds’, and the accused had refused to accept the notice, which is a deemed service. All the ingredients of the commission of an offence punishable under Section 138 of the Negotiable Instruments Act were duly satisfied. The sentence

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imposed by the learned Trial Court was adequate, 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 failed to appreciate the material on record. The accused denied the complainant’s case in its entirety. He denied his signature on the cheque. Therefore, the complainant was required to prove that the accused had issued the cheque in discharge of his debt/liability. The complainant failed to prove any material to show that he had advanced ₹9,00,000/-. He had not produced any receipt or the Income Tax Return to prove his version. 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 Maan Singh, learned counsel for the petitioner/accused and Mr Surya Chauhan, learned counsel for the respondent/complainant.

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Mr Maan Singh, learned counsel for the petitioner/accused, submitted that the learned Courts below erred in appreciating the material on record. The complaint was

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premature. The accused denied the issuance of the cheque or his signature on the cheque. Therefore, the presumption under Section 118(a) and 139 of the NI Act could not have been drawn. Learned Courts below erred in drawing the presumption. Therefore, he prayed that the present revision be allowed and the judgments and order passed by the learned Courts below be set aside. He relied upon the judgment of this Court in Dyal Negi @ Hardyal vs. Anil Kumar 2025:HHC:36356 and Hon’ble Supreme Court in Indian Bank Association and others vs. Union of India and others (2014) 5 SCC 590 in support of his submission.

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Mr Surya Chauhan, learned counsel for the respondent, submitted that the accused had not taken any plea regarding the complaint being premature before the learned Courts below, and this plea cannot be taken before this Court. The complaint was not premature. The accused had not disputed the issuance of the cheque in the cross-examination of the complainant, and the learned Courts below were justified in convicting the accused. This Court should not interfere with the concurrent findings of fact recorded by the learned Courts below. Therefore, he prayed that 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 which is to be determined on the merits of individual cases. It is also well settled that while considering the same, the Revisional Court does not dwell at length upon the facts and evidence of the case to reverse those findings.

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This position was reiterated in State of Gujarat v.

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

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1294, wherein it was observed at page 695:

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“14. The power and jurisdiction of the Higher Court under Section 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. 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

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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 muchadvanced stage in the proceedings under CrPC.”

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

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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 nonconsideration of any relevant material, the order cannot be set aside merely on the ground that another view is possible. The following has been laid down in para 14: (SCC p. 135)

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“ 14 . … Unless the order passed by the Magistrate is perverse or the view taken by the court is wholly unreasonable or there is non-consideration of any relevant material or there is palpable misreading of records, the Revisional Court is not justified in setting aside the order, merely because another view is possible. The Revisional Court is not meant to act as an appellate court. The whole purpose of the revisional jurisdiction is to preserve the power in the court to do justice in accordance with the principles of criminal jurisprudence. The revisional power of the court under Sections 397 to 401 CrPC is not to be equated with that of an appeal. Unless the finding of the court, whose decision is sought to be revised, is shown to be perverse or untenable in law or is grossly erroneous or glaringly unreasonable or where the decision is based on no material or where the material facts are wholly ignored or where the judicial discretion is exercised arbitrarily or capriciously, the courts may not interfere

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with the decision in exercise of their revisional jurisdiction.”

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

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

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“16. It is well settled that in the exercise of revisional jurisdiction under Section 482 of the Criminal Procedure Code, the High Court does not, in the absence of perversity, upset concurrent factual findings. It is not for the Revisional Court to re-analyse and re-interpret the evidence on record.

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17. As held by this Court in Southern Sales & Services v. Sauermilch Design and Handels GmbH, (2008) 14 SCC 457 , it is a well-established principle of law that the Revisional Court will not interfere even if a wrong order is passed by a court having jurisdiction, in the absence of a jurisdictional error. The answer to the first question is, therefore, in the negative.”

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The present revision has to be decided as per the parameters laid down by the Hon’ble Supreme Court

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The ingredients of an offence punishable under Section 138 of the NI Act were explained by the Hon’ble Supreme Court in

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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

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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 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 asserted in his proof affidavit (Ext.CW-1/A) that the accused had borrowed a sum of ₹9,00,000/in July 2011 and agreed to repay it in October 2012. The accused issued a cheque of ₹9,00,000/- on 25.10.2011 to return the amount. He stated in his cross-examination that he had paid ₹9,00,000/- to the accused on 05.07.2011 in Union Bank of India, Kullu, after withdrawing the money from his account. This statement is corroborated by the complainant’s statement of account (Ext.DW1/A), which shows that an amount of ₹9,00,000/- was withdrawn on 05.07.2011. The copy of the cheque of ₹9,00,000/- is also annexed with the statement of account. Therefore, the complainant’s version that he had withdrawn ₹9,00,000/-and handed them over to the accused was duly established.

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The complainant stated in his cross-examination that

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Mr P.D. Bhatia was the Branch Manager who was known to him (complainant). He denied that the cheque (Ext.CW-1/B) was handed over by Mr P.D. Bhatia, who was having the blank cheques of the accused. He denied that the accused did not have any transaction with him, and a false case was filed against the accused.

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Learned Courts below had rightly held that the suggestion that the blank cheques were lying with Mr P.D. Bhatia, who had handed over the cheque to the complainant, corroborated the complainant’s version that the cheque was issued by the accused, and it bears his signature. 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 be taken into consideration while determining the innocence or guilt of the accused. It was observed at page 383:-

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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 crossexamination, 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

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the concession on the 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 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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42. Therefore, we are of the opinion that suggestions made to the witness by the defence counsel and the reply to such suggestions would definitely form part of the evidence and can be relied upon by the Court along with other evidence on record to determine the guilt of the accused.”

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Thus, the learned Courts below had rightly held that the

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suggestion made to the complainant would show that the accused had issued the cheque which contained his signature. It was laid down by the Hon'ble Supreme Court in APS Forex Services (P) Ltd. v. Shakti International Fashion Linkers (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

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

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It was laid down in N. Vijay Kumar v. Vishwanath Rao N.,

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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 Sanjabij Tari v. Kishore S.

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Borcar, 2025 SCC OnLine SC 2069 , wherein it was 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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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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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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Needless to mention that the presumption contemplated under Section 139 of the NI Act is rebuttable. 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 had rightly held that the

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

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The accused did not step into the witness box to establish the plea taken by him that the cheque did not bear his signature. 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

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his statement under Section 313 of Cr.P.C. is not sufficient to rebut

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the presumption. It was observed at page 700:

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“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)”

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The accused examined Lal Chand to prove the statement

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of account of the complainant (Ext.DW-1/A), which shows the withdrawal of ₹9,00,000/- on 05.07.2011 and corroborates the complainant’s version rather than falsifying it.

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It was submitted that the complainant did not file the Income Tax Return to show that the money was advanced to the accused. This submission will not help the accused. It was laid down by this Court in Surinder Singh vs. State of H.P. 2018(1) D.C.R. 45 that the failure to mention the loan in the income tax return will not entitle the accused to acquittal. It was observed: -

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It would further be noticed that the learned trial Magistrate has acquitted the accused on the ground that the

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loan has not been shown in the Income Tax Return furnished by the complainant, and while recording such finding has placed reliance upon the judgment of the Hon'ble Delhi High Court in Vipul Kumar Gupta vs. Vipin Gupta 2012 (V) AD (CRI) 189 . However, after having perused the said judgment, it would be noticed that the amount in the said case was ₹ 9 lacs, and it is in that background that the Court observed as under: -

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"9. I find myself in agreement with the reasoning given by the learned ACMM that before a person is convicted for having committed an offence under Section 138 of the Act, it must be proved beyond a reasonable doubt that the cheque in question, which has been made as a basis for prosecuting the respondent/accused, must have been issued by him in the discharge of his liability or a legally recoverable debt. In the facts and circumstances of this case, there is every reason to doubt the version given by the appellant that the cheque was issued in the discharge of a liability or a legally recoverable debt. The reasons for this are a number of factors which have been enumerated by the learned ACMM also. Some of them are that non-mentioning by the appellant in his Income Tax Return or the Books of Accounts, the factum of the loan having been given by him because by no measure, an amount of ₹ 9,00,000/- can be said to be a small amount which a person would not reflect in his Books of Accounts or the Income Tax Return, in case the same has been lent to a person. The appellant, neither in the complaint nor in his evidence, has mentioned the date, time or year when the loan was sought or given. The appellant has presented a cheque, which obviously is written with two different inks, as the signature appears in one ink, while the remaining portion, which has been filled in the cheque, is in a different ink. All these factors prove the defence of the respondent to be plausible to the effect that he had issued these cheques by way of security to the

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appellant for getting a loan from the Prime Minister Rojgar Yojana. The respondent/accused has only to create doubt in the version of the appellant, while the appellant has to prove the guilt of the accused beyond a reasonable doubt, in which, in my opinion, he has failed miserably. There is no cogent reason which has been shown by the appellant which will persuade this Court to grant leave to appeal against the impugned order, as there is no infirmity in the impugned order."

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Thus, no advantage can be derived from the fact that the Income Tax Return was not filed before the learned Trial Court.

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It was submitted that no receipt was obtained from the accused, and the version of the complainant that he had advanced ₹9,00,000/- to the accused cannot be accepted. This submission will also not help the accused. Once the presumption under Section 118(a) and 139 of the NI Act is drawn, the complainant is not required to prove the existence of the consideration. It was laid down by the Hon’ble Supreme Court in Uttam Ram v. Devinder Singh Hudan, (2019) 10 SCC 287: 2019 SCC OnLine SC 1361 , that a presumption under Section 139 of the NI Act would obviate the requirement to prove the existence of consideration. It was observed:

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“20. Th̨e trial court and the High Court proceeded as if the appellant was to prove a debt before the civil court, wherein the plaintiff is required to prove his claim on the basis of evidence to be laid in support of his claim for the recovery of

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the amount due. An dishonour of a cheque carries a statutory presumption of consideration. The holder of the cheque in due course is required to prove that the cheque was issued by the accused and that when the same was presented, it was not honoured. Since there is a statutory presumption of consideration, the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability.”

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This position was reiterated in Ashok Singh v. State of

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U.P., 2025 SCC OnLine SC 706, wherein it was observed:

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“22. The High Court while allowing the criminal revision has primarily proceeded on the presumption that it was obligatory on the part of the complainant to establish his case on the basis of evidence by giving the details of the bank account as well as the date and time of the withdrawal of the said amount which was given to the accused and also the date and time of the payment made to the accused, including the date and time of receiving of the cheque, which has not been done in the present case. Pausing here, such presumption on the complainant, by the High Court, appears to be erroneous. The onus is not on the complainant at the threshold to prove his capacity/financial wherewithal to make the payment in discharge of which the cheque is alleged to have been issued in his favour. Only if an objection is raised that the complainant was not in a financial position to pay the amount so claimed by him to have been given as a loan to the accused, only then would the complainant would have to bring before the Court cogent material to indicate that he had the financial capacity and had actually advanced the amount in question by way of loan. In the case at hand, the appellant had categorically stated in his deposition and reiterated in the cross-examination that he had withdrawn the amount from the bank in Faizabad (Typed Copy of his deposition in the paperbook wrongly mentions this as ‘Firozabad’). The Court ought not to have summarily rejected such a stand, more so when respondent no. 2 did not

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make any serious attempt to dispel/negate such a stand/statement of the appellant. Thus, on the one hand, the statement made before the Court, both in examination-inchief and cross-examination, by the appellant with regard to withdrawing the money from the bank for giving it to the accused has been disbelieved, whereas the argument on behalf of the accused that he had not received any payment of any loan amount has been accepted. In our decision in S. S. Production v. Tr. Pavithran Prasanth, 2024 INSC 1059 , we opined:

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‘ 8. From the order impugned, it is clear that though the contention of the petitioners was that the said amounts were given for producing a film and were not by way of return of any loan taken, which may have been a probable defence for the petitioners in the case, but rightly, the High Court has taken the view that evidence had to be adduced on this point which has not been done by the petitioners. Pausing here, the Court would only comment that the reasoning of the High Court, as well as the First Appellate Court and Trial Court, on this issue is sound. Just by taking a counter-stand to raise a probable defence would not shift the onus on the complainant in such a case, for the plea of defence has to be buttressed by evidence, either oral or documentary, which in the present case has not been done. Moreover, even if it is presumed that the complainant had not proved the source of the money given to the petitioners by way of loan by producing statement of accounts and/or Income Tax Returns, the same ipso facto, would not negate such claim for the reason that the cheques having being issued and signed by the petitioners has not been denied, and no evidence has been led to show that the respondent lacked capacity to provide the amount(s) in question. In this regard, we may make profitable reference to the decision in Tedhi Singh v. Narayan Dass Mahant, (2022) 6 SCC 735 :

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‘10. The trial court and the first appellate court have noted that in the case under Section 138 of the NI Act, the complainant need not show in the frst instancei

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that he had the capacity. The proceedings under Section 138 of the NI Act are not a civil suit. At the time, when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the fnancial capacity.i To that extent, the courts in our view were right in holding on those lines. However, the accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable, which he can do by producing independent materials, namely, by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, further achieve this result through the cross-examination of the witnesses of the complainant. Ultimately, it becomes the duty of the courts to consider carefully and appreciate the totality of the evidence and then come to a conclusion whether, in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence. ’(emphasis supplied)’ (underlining in original; emphasis supplied by us in bold).

¶143

A similar view was taken in Sanjay Sanjabij Tari v.

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Kishore S. Borcar, 2025 SCC OnLine SC 2069 , wherein it was observed:

¶145

“21. This Court also takes judicial notice of the fact that some District Courts and some High Courts are not giving ef f ect to the presumptions incorporated in Sections 11 8 and 13 9 of the NI Ac t as and are treating the proceedings under the NI Act another civil recovery proceedings and are directing the

¶146

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complainant to prove the antecedent debt or liability. This Court is of the view that such an approach is not only prolonging the trial but is also contrary to the mandate of Parliament, namely, that the drawer and the bank must honour the cheque; otherwise, trust in cheques would be irreparably damaged.”

¶149

In the present case, the complainant’s version is corroborated by the statement of account produced by the accused. Therefore, the failure to prove the receipt will not make the case of the complainant doubtful.

¶150

There was no other evidence to rebut the presumption attached to the cheque, and the learned Courts below had rightly relied upon it.

¶151

The memo of dishonour (Ext.CW1/C) shows that the cheque was dishonoured with an endorsement ‘funds insufficient’. It was laid down by the Hon’ble Supreme Court in Mandvi Cooperative Bank Ltd. v. Nimesh B. Thakore , (2010) 3 SCC 83: (2010) 1 SCC (Civ) 625: (2010) 2 SCC (Cri) 1: 2010 SCC OnLine SC 155 that the memo issued by the Bank is presumed to be correct and the burden is upon the accused to rebut the presumption. It was observed at page 95:

¶152

24. Section 146, making a major departure from the principles of the Evidence Act, provides that the bank's slip or memo with the official mark showing that the cheque was

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dishonoured would, by itself, give rise to the presumption of dishonour of the cheque, unless and until that fact was disproved. Section 147 makes the offences punishable under the Act compoundable.

¶156

In the present case, no evidence was produced to rebut the presumption, and the learned Courts below had rightly held that the cheque was dishonoured with an endorsement ‘insufficient funds.’

¶157

The complainant issued a notice to the accused, which was returned with the endorsement ‘refused’. It was laid down by the Hon’ble Supreme Court of India in C.C. Allavi Haji vs. Pala Pelly Mohd. 2007(6) SCC 555, that when a notice is returned with an endorsement ‘refused’, it is deemed to be served. It was observed:

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“8. Since in Bhaskaran's case (supra) , the notice issued in terms of Clause (b) had been returned unclaimed and not as refused, the Court, posed the question: "Will there be any significant difference between the two so far as the presumption of service is concerned?" It was observed that though Section 138 of the Act does not require that the notice should be given only by "post", yet in a case where the sender has dispatched the notice by post with the correct address written on it, the principle incorporated in Section 27 of the General Clauses Act, 1897 (for short 'G.C. Act') could profitably be imported in such a case. It was held that in this situation service of notice is deemed to have been effected on the sendee unless he proves that it was not really served and that he was not responsible for such non-service.”

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38. A similar view was taken in Krishna Swaroop Agarwal v.

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Arvind Kumar, 2025 SCC OnLine SC 1458, wherein it was observed:

¶163

“13. Section 27 of the General Clauses Act, 1887, deals with service by post:

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“27. Meaning of Service by post.- Where any [Central Act] or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression “serve” or either of the expressions “give” or “send” or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post”.

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14. The concept of deemed service has been discussed by this Court on various occasions. It shall be useful to refer to some instances:

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14.1 In Madan and Co. v. Wazir Jaivir Chand (1989) 1 SCC 264, which was a case concerned with the payment of arrears of rent under the J&K Houses and Shops Rent Control Act, 1966. The proviso to Section 11, which is titled “Protection of a Tenant against Eviction”, states that unless the landlord serves notice upon the rent becoming due, through the Post Office under a registered cover, no amount shall be deemed to be in arrears. Regarding service of notice by post, it was observed that in order to comply with the proviso, all that is within the landlord's domain to do is to post a pre-paid registered letter containing the correct address and nothing further. It is then presumed to be delivered under Section 27 of the GC Act. Irrespective of whether the addressee accepts or rejects, “ there is

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no difficulty, for the acceptance or refusal can be treated as a service on, and receipt by the addressee.”

¶170

14.2 In the context of Section 138 of the Negotiable Instruments Act, 1881it was held that when the payee dispatches the notice by registered post, the requirement under Clause (b) of the proviso of Section 138 of the NI Act stands complied with and the cause of action to file a complaint arises on the expiry of that period prescribed in Clause (c) thereof. [See: C.C. Alavi Haji v. Palapetty Mouhammed (2007) 6 SCC 555 ]

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14.3 The findings in C.C. Alavi (supra) were followed in Vishwabandhu v. Srikrishna (2021) 19 SCC 549 . In this case, the summons issued by the Registered AD post was received back with endorsement “refusal”. In accordance with Sub-Rule (5) of Order V Rule 9 of CPC, refusal to accept delivery of the summons would be deemed to be due service in accordance with law. To substantiate this view, a reference was made to the judgment referred to supra.

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14.4 A similar position as in C.C. Alavi (supra) stands adopted by this Court in various judgments of this Court in Greater Mohali Area Development Authority v. Manju Jain (2010) 9 SCC 157; Gujarat Electricity Board v. Atmaram Sungomal Posani (1989) 2 SCC 602; CIT v. V. K. Gururaj (1996) 7 SCC 275; Poonam Verma v. DDA (2007) 13 SCC 154; Sarav Investment & Financial Consultancy (P) Ltd. v. Lloyds Register of Shipping Indian Office Staff Provident Fund (2007) 14 SCC 753; Union of India v. S.P. Singh (2008) 5 SCC 438; Municipal Corpn., Ludhiana v. Inderjit Singh (2008) 13 SCC 506 ; and V.N. Bharat v. DDA (2008) 17 SCC 321 . 39. Therefore, the learned Courts below had rightly held

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that notice was deemed to have been served upon the accused.

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It was submitted that, as per the endorsement made on the registered letter (Ext.CW-1/F), the postman had visited the house of the accused on 10.01.2013, 11.01.2013 and 14.01.2013 and made an endorsement of the door locked. The envelope was returned on 14.01.2013 as per the postal mark put on it. Therefore, the notice was deemed to be served on 14.01.2013. The complaint was filed on 28.01.2013, and it is premature. This submission cannot be accepted. Once the endorsement of ‘refused’ was made on the registered letter on 09.01.2013, the postman had no occasion to visit the house of the accused and make an endorsement of the door locked. Such an endorsement will not help the accused. The notice was deemed to be served on 09.01.2013, when the endorsement of refusal was made, and the cause of action arose on 09.01.2013; hence, the complaint filed on 28.01.2013, after 15 days from the date of deemed service of the notice, is not premature.

¶177

It was submitted that the complaint was drafted on 24.01.2013, the affidavit was sworn on 24.01.2013 before the cause of action had arisen, and the learned Trial Court could not have taken cognisance of the same. Reliance was placed upon the judgment of the Hon’ble Supreme Court in the Indian Bank Association (supra) in support of this submission. This submission

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will not help the accused. There is nothing in the judgment of the Hon’ble Supreme Court that the affidavit has to be sworn after the completion of 15 days of the service of the notice. The Court has to see whether the cause of action was complete on the date of filing of the complaint, and the swearing on an affidavit before the expiry of 15 days will not make any difference.

¶181

In Dyal Negi @ Hardyal (supra), the complaint was premature, having been filed within 15 days of the accrual of the cause of action, and the cited judgment will not apply to the present case.

¶182

Therefore, learned Courts below had rightly held that all the ingredients of the commission of an offence punishable under Section 138 of the NI Act were duly satisfied.

¶183

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 provision of Section 138 of NI Act is a deterrent in nature. It was observed at page 203:

¶184

“6. The object of Section 138 of the Negotiable Instruments Act is to infuse credibility into negotiable

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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.”

¶188

Keeping in view the deterrent nature of the sentence to

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be awarded, the sentence of six months of simple imprisonment cannot be said to be excessive, and no interference is required with it.

¶190

Learned Trial Court had awarded a compensation of ₹15 lacs. The cheque was issued for ₹9 lacs, which means that a compensation of ₹6 lacs was awarded. The cheque was issued on 25.10.2012, and the compensation was awarded on 25.03.2023 after the lapse of more than 10 years from the date of issuance of the cheque. The complainant lost money that he would have gained by depositing the cheque amount in the bank or by investing it somewhere else. He had to engage a counsel to prosecute the complaint filed by him. Therefore, 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

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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: -

¶194

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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