Dismissed

Sanjiv Baloria v. Narendra and Company and Another

Himachal Pradesh HC10 Jul 2026CR.R/675/2024

Case brief

AI extract

What is this about?

The High Court dismissed a criminal revision challenging conviction for cheque dishonour under Section 138 of the NI Act. The Court held that revisional jurisdiction is narrow and does not permit re-appreciation of evidence. It affirmed that signatures mismatching drawer's specimen attracts Section 138 and that a notice returned 'house locked' amounts to deemed service. Sentence was upheld.

What the court decided

AI extract

Sanjiv Baloria Vs Narendra and Company and Another — Cheque Dishonour | Himachal Pradesh HC (2026)

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

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Cr. Revision No. 675 of 2024 Reserved on: 23.06.2026 Date of Decision: 10.07.2026

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Sanjiv Baloria (Ex-Pradhan) ...Petitioner

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Versus

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Narendra & Co. and Anr. ...Respondent

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Coram

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Hon’ble Mr Justice Rakesh Kainthla , Judge.

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Whether approved for reporting?¹ No

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For the Petitioner : Ms Tanu Sharma, Legal Aid Counsel. For Respondent No.2 : Mr Lokender Kutlehria, Additional Advocate General.

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None for respondent No.1.

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Rakesh Kainthla, Judge

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The present revision is directed against the judgment dated 02.09.2024 passed by the learned Sessions Judge, Kangra at Dharamshala (learned Appellate Court) vide which the judgment of conviction dated 27.07.2023 and order of sentence dated

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31.07.2023 passed by the learned Chief Judicial Magistrate, Kangra

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

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at Dharamshala (learned Trial Court) were upheld. (The parties shall hereinafter be 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 complainant is running a petrol pump. The accused used to fill diesel in his vehicle from the complainant's petrol pump and pay the money through cash or a cheque. The accused had taken a diesel of ₹3,90,000/- in April, May and June 2013. But he failed to pay the money. The complainant demanded the money from the accused, and the accused issued a cheque of ₹3,90,000/- to repay the money. The complainant presented the cheque to the bank, but it was dishonoured with the endorsement “drawer signatures differ and exceeds arrangements”. The complainant served a legal notice upon the accused asking him to pay the money within 15 days from the date of the receipt of the notice. The notice was returned with a report, ‘house locked’, and the accused failed to

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repay the money. 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 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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4. The complainant examined Ranjan Kumar (CW1), K.C. Thakur (CW2) and herself (CW3).

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The accused, in his statement recorded under Section 313 of the Code of Criminal Procedure (Cr.P.C.), admitted that he was a customer of the complainant’s petrol pump. He admitted that he had issued a signed cheque. He denied the rest of the complainant's case. He stated that the witnesses deposed against him falsely and that he was innocent. He examined Vipan Kumar (DW1).

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Learned Trial Court held that the accused admitted his signature on the cheque and a presumption arose that the cheque was issued for consideration to discharge the debt/liability. The accused also admitted that he was a customer of the

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complainant’s petrol pump, which strengthened the presumption. The evidence led by the accused failed to rebut the presumption. The statement of Vipan Kumar (DW1) did not disprove the complainant’s case, but strengthened it. The mere fact that the cheque was issued from the old cheque book was not sufficient to doubt the complainant's case. The cheque was dishonoured with the endorsement “exceeds arrangements and drawers' signatures differ,” which attracted the provisions of Section 138 of the NI Act. The notice was sent by registered post and was returned with an endorsement house locked, which amounted to 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 of the commission of an offence punishable under Section 138 of the NI Act and sentenced him to undergo simple imprisonment for 6 months, pay an amount of ₹7,32,225/- and in default of payment of fine, to undergo a sentence of imprisonment for 6 months.

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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, Kangra at Dharamshala

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(learned Appellate Court). The Appellate Court concurred with the findings recorded by the learned Trial Court that the cheque was issued for consideration to discharge the debt/liability. The accused failed to rebut the presumption attached to the cheque. The cheque was dishonoured with an endorsement “exceeds arrangement and drawers' signatures differ”, which also attracted the provisions of Section 138 of the NI Act. The notice was returned with an endorsement of the house locked and is deemed to be served upon the accused. The learned Trial Court had imposed an adequate sentence, and no interference was required with the judgment and order passed by the learned Trial Court. Hence, the appeal was dismissed.

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Being aggrieved by the judgment and order passed by the learned Courts below, the accused has filed the present revision asserting that the learned Courts below erred in appreciating the material on record. The complainant failed to examine SP Sharma, the Manager of the complainant, to prove the transaction between her and the accused. The reason for dishonour was “drawer’s signature differs”, which probabilised the defence taken by the accused. Therefore, it was prayed that the

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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 Ms Tanu Sharma, learned Legal Aid Counsel for the petitioner and Mr Lokender Kutlehria, learned Additional Advocate General for respondent No.2/State. None appeared on behalf of respondent no.1/complainant and none could be heard.

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Ms Tanu Sharma, learned Legal Aid Counsel for the petitioner/accused, submitted that the learned Courts below erred in appreciating the material on record. The defence evidence clearly proved that the new cheque books were issued to the accused before the issuance of the present cheque. It is highly unlikely that the accused would issue an old cheque when he had new cheque books. This made the complainant’s version highly doubtful. The complainant had not examined the manager to prove that the accused had taken the diesel from the complainant. The complainant had also not produced any bills to prove her version that the accused was the customer of her petrol pump. Therefore, she prayed that the present revision be allowed and the

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judgments and order passed by the learned Courts below be set aside.

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Mr Lokender Kutlehria, learned Additional Advocate General for respondent No.2/State, submitted that the dispute is between private persons and the State has no submissions to make.

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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

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error of jurisdiction or law. There has to be a well-founded error that is to be determined on the merits of individual cases. It is also well settled that while considering the same, the Revisional Court does not dwell at length upon the facts and evidence of the case to reverse those findings.

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

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

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15. It would be apposite to refer to the judgment of this Court in Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460: (2012) 4 SCC (Civ) 687: (2013) 1 SCC (Cri) 986 , where the 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

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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 itself should not lead to injustice ex facie. Where the Court is dealing with the question as to whether the charge has been framed properly and in accordance with law in a given case, it may be reluctant to interfere in the exercise of its revisional jurisdiction unless the case substantially falls within the categories aforestated. Even the framing of the charge is a much-advanced stage in the proceedings under CrPC.”

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

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165: (2018) 3 SCC (Cri) 544: (2018) 4 SCC (Civ) 37: 2018 SCC OnLine SC 651 that it is impermissible for the High Court to re-appreciate the evidence and draw 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 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

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

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

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

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

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

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“27. It is well settled that in exercise of revisional jurisdiction, the High Court does not, in the absence of perversity, upset concurrent factual findings [See: Bir Singh (supra)]. This Court is of the view that it is not for the Revisional Court to re-analyse and re-interpret the evidence on record. As held by this Court in Southern Sales & Services v. Sauermilch Design and Handels GMBH, (2008) 14 SCC 457 , it is a well-established principle of law that the Revisional Court will not interfere, even if a wrong order is passed by a Court having jurisdiction, in the absence of a jurisdictional error.

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28. Consequently, this Court is of the view that in the absence of perversity, it was not open to the High Court in the present case, in revisional jurisdiction, to upset the concurrent findings of the Trial Court and the Sessions Court.”

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

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The ingredients of an offence punishable under Section 138 of the NI Act were explained by the Hon’ble Supreme Court in Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul, 2025 SCC OnLine SC 2019 as under: -

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5.1.1. In K.R. Indira v. Dr. G. Adinarayana (2003) 8 SCC 300 , this Court enlisted the components, aspects and the acts, the concatenation of which would make the offence under Section 138 of the Act complete, to be these (i) drawing of the cheque by a person on an account maintained by him with a banker, for payment to another person from out of that account for discharge in whole/in part of any debt or liability, (ii) presentation of the cheque by the payee or the holder in due course to the bank, (iii) returning the cheque unpaid by the drawee bank for want of sufficient funds to

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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 accused admitted in his statement recorded under

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Section 313 of the Cr.P.C that he was the customer of the concern owned by Smt. Priya Sharma. He also admitted that he had issued a signed cheque drawn on Kangra Central Cooperative Bank bearing his signature to discharge his debt/liability. Thus, the accused had admitted the major part of the complainant's case that he had issued the cheque which bears his signature and that he was a customer of the complainant's concern. Learned Courts below had rightly held that the issuance of the cheque and admission of the signatures triggerred the presumption under Section 118 (a) and 139 of the NI Act that the cheque was issued to discharge the debt/liability. It was laid down by the Hon'ble Supreme Court in APS Forex Services (P) Ltd. v. Shakti International Fashion Linkers (2020) 12 SCC 724 , that when the issuance of a cheque and signature on the cheque are not disputed, a presumption would

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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 because the accused has admitted the issuance of the cheques and his signature on the cheque and that the cheque in question was issued for the second time after the earlier cheques were dishonoured and that even according to the accused some amount was due and payable, there is a presumption under Section 139 of the NI Act that there exists a legally enforceable debt or liability. Of course, such a presumption is rebuttable. However, to rebut the presumption, the accused was required to lead evidence that the full amount due and payable to the complainant had been paid. In the present case, no such evidence has been led by the accused. The story put forward by the accused that the cheques were given by way of security is not believable in the absence of further evidence to rebut the presumption, and more particularly, the cheque in question was issued for the second time after the earlier cheques were dishonoured. Therefore, both the courts below have materially erred in not properly appreciating and considering the presumption in favour of the complainant that there exists a legally enforceable debt or liability as per Section 139 of the NI Act. It appears that both the learned trial court as well as the High Court have committed an error in shifting the burden upon the complainant to prove the debt or liability, without appreciating the presumption under Section 139 of the NI Act. As observed above, Section 139 of the Act is an example of a 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 a legally enforceable debt or liability and thereafter, it is for the accused to rebut such presumption by leading evidence.”

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

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

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This position was reiterated in Sanjabij Tari v. Kishore

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

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

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17. Needless to mention that the presumption contemplated under Section 139 of the NI Act is 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 ]. 23. Thus, the learned Courts below were justified in raising

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the presumption that the cheque was issued in discharge of the liability for consideration.

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The accused examined Vipan Kumar (DW1), who stated that 4 cheque books were issued to the accused, which were duly entered in the register maintained by the bank. He admitted in his cross-examination that the cheque (Ext.C1) was issued to the accused, and it was duly mentioned at page number 205. The learned Courts below had rightly pointed out that the testimony of this witness strengthened the complainant's version that the accused had issued the cheque because the cheque book was issued in his favour, and no advantage can be derived from the testimony of this witness.

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It was submitted that the chequebooks were issued in the favour of the accused after the present cheque and it is highly improbable that the accused would have issued the cheque from the earlier chequebooks. This submission will not help the

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accused. In Criminal Appeal no. 256/2014 titled M/s Banarsi Dass & Sons vs. M/s Bhardwaj General Store and others decided on 29.03.2018 , the learned trial Court had acquitted the accused on the ground that the issuance of many cheques after the issue of the cheque to the complainant will make it probable that the cheque was issued as a security. The Hon’ble High Court held that issuance of the cheques to other persons after the accused cannot lead to an inference that the cheque was issued as a security. It was observed: -

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“5. While recording the said findings, learned Trial Court has erred in not appreciating that simply because after the cheque book in issue from which the cheque was presented by the complainant, which was dishonoured, other chequebooks were also issued to the accused by the bank concerned, it cannot be assumed or presumed that the cheque was issued by the respondent to the accused as a security.”

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Therefore, in view of the binding precedent of this Court, an inference cannot be drawn by the issuance of the cheque to many persons after the accused that there is something wrong with the cheque.

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Priya Sharma (CW3) stated in her cross-examination that she had appointed SP Sharma as a manager, and she was not managing the daily affairs of the petrol pump. She admitted that

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the accused had not filled his vehicle in her presence. These admissions will not help the accused because the accused admitted in his statement recorded under Section 313 of the Cr.P.C. that he was the customer of the complainant’s concern.

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It was submitted that the ledger (Mark X) and the copies of the bills (Mark Y) were only marked, and they were not proved as per the law. Hence, there is no satisfactory evidence that the accused had taken the diesel from the complainant’s petrol pump, or the amount of diesel taken by the accused. This submission will not help the accused. 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. The 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 the amount due, and the 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

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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 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 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 a loan. In the case at hand, the appellant had categorically stated in his deposition and reiterated in the crossexamination 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 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-in-chief and crossexamination, by the appellant with regard to withdrawing the money from the bank for giving it to the accused has

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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 instance that he hadi 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

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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).

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

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“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 and are treating the proceedings under the NI Ac t as another civil recovery proceedings and are directing the 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.”

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Therefore, the complainant's version cannot be doubted because she had not exhibited the documents but had merely marked them.

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The complainant stated that the cheque was dishonoured with an endorsement “exceeds arrangement and drawers' signatures differ”. This is duly corroborated by the memo of dishonour (Ext.C2). Ranjan Kumar (CW1) stated that the cheque was received in the bank for realisation, but it was dishonoured because the signatures on the cheque did not tally with the specimen signatures, and the arrangement made by the accused for the payment was not sufficient to honour the cheque. Hence, it was dishonoured with the memo (Ext.C2). He was crossexamined regarding the issuance of the cheque to the accused. He admitted that the accused had withdrawn the amount in excess of the sanctioned limit. The payment was not made in the present case because of the difference in the signatures. Thus, his testimony that the cheque was dishonoured with the endorsement of drawer’s signature differs has gone unrebutted.

¶136

Learned Courts below had rightly held that there was no reason to disbelieve the testimony of this witness. He is a bank

¶137

¶138

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official who has no interest in favouring the accused or the complainant, and his testimony was to be accepted as correct. Learned Trial Court had rightly held that the dishonour of the cheque on the ground of “signature differs” would also attract the provisions of Section 138 of the NI Act. It was laid down by the Hon’ble Supreme Court in Laxmi Dyechem v. State of Gujarat, (2012) 13 SCC 375: (2012) 4 SCC (Cri) 283: 2012 SCC OnLine SC 970 , that the dishonour of a cheque with an endorsement of signature mismatch attracts the provisions of section 138 of N.I. Act. It was observed at page 388: -

¶140

16. The above line of decisions leaves no room for holding that the two contingencies envisaged under Section 138 of the Act must be interpreted strictly or literally. We find ourselves in respectful agreement with the decision in the Magma case [(1999) 4 SCC 253: 1999 SCC (Cri) 524 ] that the expression “amount of money … is insufficient” appearing in Section 138 of the Act is a genus and dishonour for reasons such “as account closed”, “payment stopped”, “referred to the drawer” are only species of that genus. Just as dishonour of a cheque on the ground that the account has been closed is a dishonour falling in the first contingency referred to in Section 138, so also dishonour on the ground that the “signatures do not match” or that the “image is not found”, which too implies that the specimen signatures do not match the signatures on the cheque would constitute a dishonour within the meaning of Section 138 of the Act .” (Emphasis supplied)

¶141

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Karnataka High Court held in Peeranbi v. Hajimalang,

¶144

2013 SCC OnLine Kar 10420: (2013) 2 Kant LJ 569: (2013) 3 KCCR 2223: (2014) 1 AIR Kant R 405: (2013) 3 BC 532: (2014) 5 RCR (Cri) 757 that the dishonour of the cheque due to signature mismatch will attract penal liability under Section 138 of the NI Act. It was observed:

¶145

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

¶146

¶147

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upon such dissolution having fallen into disuse over a period of time, sought to be forged and fabricated at a later date by the appellant, was clearly on the respondent. There is no such evidence forthcoming except the self-serving evidence of the respondent. Further, in the event that any such cheque leaves were misused, a duty was cast on the respondent to inform his banker to stop payment, against such cheques which were lost or misplaced. There is no such evidence forthcoming. Nor is it the case of the respondent that the cheques being misplaced, he had reported to the nearest Police Station of such loss. There was no demand made on the appellant to return such cheque leaves left behind. Therefore, the evidence of the respondent was clearly self-serving, and it was a burden cast on the respondent to establish the fact that there were cheque leaves which were left behind, and it was possible for the appellant to misuse the same. If once it is apparent that the cheque had been issued on the account held by the respondent, the presumption under Section 139 is clearly in favour of the appellant to establish that it was forged by the accused. The burden is clearly on the respondent, and it is not for the appellant to establish that the respondent had deliberately changed his signature in order that it would be dishonoured by his Bank. This may indeed have been the intention in changing his signature at the time of issuing the cheque. As already stated, the burden to establish that it was lost and that it has been misused by the appellant was clearly on the respondent. The Court below has also committed an error in holding that the liability in respect of which the cheque had been issued was required to be proved by the appellant. The proceedings were not in the nature of a suit for recovery of money but for prosecution of an offence punishable under Section 138 of the NI Act. The limited scope of those proceedings is whether there was dishonour of the cheque issued by the accused. That aspect of the matter has been established on the face of it. Therefore, the Court below has clearly committed an error in addressing the case of the complainant and in dismissing

¶149

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the complaint. Consequently, the appeal is allowed. The complainant has established his case beyond a reasonable doubt. The respondent, therefore, is liable for punishment. Accordingly, he shall pay a fine of Rs. 3,50,000/- in default of which, the respondent shall suffer simple imprisonment for a period of six months. The fine amount shall be paid forthwith, in any event, within a period of 15 days. Out of the fine amount, a sum of Rs. 3,40,000/- shall be paid as compensation to the appellant.”

¶152

Madras High Court also held in R. Manimehalai v. Banumathi, 2018 SCC OnLine Mad 13802, that the dishonour of a cheque due to signature mismatch attracts the provision of Section 138 of the NI Act. It was observed:

¶153

“ 10… . It is true that the impugned cheque was returned on two grounds, namely, (a) insufficient funds, and (b) the signature of the drawer differs. On receipt of the statutory notice, dated 31.12.2013, [EX-P3] from the complainant, the accused has sent a belated reply notice, dated 17.3.2014, [EX-P5], in which the accused also did not take the plea that her signature has been forged in the cheque. She has taken a plea that the impugned cheque was issued by her for a different debt. The accused took pains to examine Ganeshamoorthy, Senior Manager of Syndicate Bank, in which the accused has an account, to say that the signature in the cheque differed from the specimen signature with the Bank. This only shows that the accused had deliberately put her signature differently in the impugned cheque with the intention of cheating the complainant. However, a charge of cheating has not been framed against the accused. This conduct of the accused in giving the cheque by affixing her signature differently is relevant under Section 8 of the Indian Evidence Act, 1872. The presumption under. Section 139 of the Negotiable Instruments Act, 1881, comes into force, when once the cheque has been issued by the accused

¶154

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for the debt in question. Of course, this is a rebuttable presumption and the same can be dislodged by the accused by preponderance of probabilities and not by proof beyond reasonable doubt, as held by the Supreme Court in Rangappa v. Sri Mohan, (2010) 2 BC 693 (SC): II (2010) CCR 433 (SC) : (2010) 4 SLT 56 : (2010) 2 DLT (Cri) 699 (SC) : (2010) 11 SCC 441 . In this case, the accused has failed to discharge her burden even by a preponderance of probabilities. She was trying to take advantage of the difference in signature in order to wriggle out of the prosecution…”

¶157

Therefore, the difference in the signatures will not result in the acquittal of the accused.

¶158

The complainant stated that a notice was sent to the accused, which was returned with an endorsement “house locked”. This is duly corroborated by the endorsement on the registered letter (Ext.C5), wherein an endorsement was made that the addressee was residing at Chandigarh and the house was locked. Hence, the notice was returned to the sender. It was laid down by the Hon’ble Supreme Court in D. Vinod Shivappa v. Nanda Belliappa, (2006) 6 SCC 456: (2006) 3 SCC (Cri) 114: 2006 SCC OnLine SC 629 , that a notice returned with an endorsement “house locked” would lead to a presumption that the notice was validly served and the burden would be upon the accused to show that the report is incorrect. It was observed at page 462:

¶159

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“14. If a notice is issued and served upon the drawer of the cheque, no controversy arises. Similarly, if the notice is refused by the addressee, it may be presumed to have been served. This is also not disputed. This leaves us with the third situation where the notice could not be served on the addressee for one or the other reason, such as his nonavailability at the time of delivery, or premises remaining locked on account of his having gone elsewhere, etc. etc. If in each such case the law is understood to mean that there has been no service of notice, it would completely defeat the very purpose of the Act. It would then be very easy for an unscrupulous and dishonest drawer of a cheque to make himself scarce for some time after issuing the cheque so that the requisite statutory notice can never be served upon him, and consequently, he can never be prosecuted. There is good authority to support the proposition that once the complainant, the payee of the cheque, issues notice to the drawer of the cheque, the cause of action to file a complaint arises on the expiry of the period prescribed for payment by the drawer of the cheque. If he does not file a complaint within one month of the date on which the cause of action arises under clause ( c ) of the proviso to Section 138 of the Act, his complaint gets barred by time. Thus, a person who can dodge the postman for about a month or two, or a person who can get a fake endorsement made regarding his non-availability, can successfully avoid his prosecution because the payee is bound to issue notice to him within a period of 30 days from the date of receipt of information from the bank regarding the return of the cheque as unpaid. He is, therefore, bound to issue the legal notice, which may be returned with an endorsement that the addressee is not available at the given address.

¶162

xxxxx

¶163

18. This Court noticed the position well settled in law that the notice refused to be accepted by the drawer can be presumed to have been served on him. In that case, the notice was returned as “unclaimed” and not as refused. The Court posed the question, “Will there be any significant

¶164

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difference between the two so far as the presumption of service is concerned?” Their Lordships referred to Section 27 of the General Clauses Act and observed that the principle incorporated therein could profitably be imported in a case where the sender had dispatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sendee, unless he proves that it was not really served and that he was not responsible for such non-service. This Court dismissed the appeal preferred by the drawer, holding that where the notice is returned by the addressee as unclaimed, such date of return to the sender would be the commencing date in reckoning the period of 15 days contemplated in clause ( c ) of the proviso to Section 138 of the Act. This would be without prejudice to the right of the drawer of the cheque to show that he had no knowledge that the notice was brought to his address. Since the appellant did not attempt to discharge the burden to rebut the aforesaid presumption, the appeal was dismissed by this Court. The aforesaid decision is significant for two reasons. Firstly, it was held that the principle incorporated in Section 27 of the General Clauses Act would apply in a case where the sender dispatched the notice by post with the correct address written on it, but that would be without prejudice to the right of the drawer of the cheque to show that he had no knowledge that the notice was brought to his address.”

¶167

It was laid down by the Hon’ble Supreme Court of India

¶168

in C.C. Allavi Haji vs. Pala Pelly Mohd. 2007(6) SCC 555, that when a notice is returned unclaimed, it is deemed to be served. It was observed:

¶169

“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

¶170

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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 nonservice.”

¶173

This position was reiterated in Priyanka Kumari vs.

¶174

Shailendra Kumar (13.10.2023- SC Order): MANU/ SCOR/ 133284/

¶175

2023, wherein it was observed:

¶176

“As it was held by the Hon'ble Supreme Court in K. Bhaskaran Vs. Sankaran Vaidhyan Balan and Another, (1999) 7 Supreme Court Cases 51 0, that when notice is returned as 'unclaimed', it shall be deemed to be duly served upon the addressee, and it is a proper service of notice. In the case of Ajeet Seeds Limited Vs. K. Gopala Krishnaiah (2014) 12 SCC 685 (2014) , the Hon'ble Court, while interpreting Section 27 of the General Clauses Act 1897 and also Section 114 of the Evidence Act 1872, held as under: -

¶177

"Section 114 of the Evidence Act, 1872, enables the court to presume that in the common course of natural events, the communication sent by post would have been delivered at the address of the addressee. Further, Section 27 of the General Clauses Act, 1897 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. It is not necessary to aver in the complaint that, despite the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which

¶178

¶179

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the letter would have been delivered in the ordinary course of business."

¶181

A similar view was taken in Krishna Swaroop Agarwal v. Arvind Kumar, 2025 SCC OnLine SC 1458, wherein it was observed:

¶182

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

¶183

“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”.

¶184

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

¶185

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 prepaid 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 no difficulty, for the

¶186

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acceptance or refusal can be treated as a service on, and receipt by the addressee.”

¶189

14.2 In the context of Section 138 of the Negotiable Instruments Act, 1881, it 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 ]

¶190

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 SubRule (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.

¶191

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 .

¶192

In the present case, the accused has not proved that he

¶193

was not responsible for non-service; therefore, the learned Courts below had rightly held that the notice was deemed to be served upon the accused.

¶194

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In any case, it was laid down in C.C. Allavi Haji vs. Pala Pelly Mohd. 2007(6) SCC 555, that the person who claims that he

¶197

had not received the notice has to pay the amount within 15 days from the date of the receipt of the summons from the Court and in case of failure to do so, he cannot take the advantage of the fact that notice was not received by him. It was observed:

¶198

“It is also to be borne in mind that the requirement of giving notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of the complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court, along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring the statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act . In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskaran’s case (supra), if the giving of notice in the context of Clause (b) of the proviso was the same as the receipt of notice, a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from the legal consequences of Section 138 of the Act.” (Emphasis supplied)

¶199

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The accused did not claim that he had repaid the money to the complainant, and it was duly proved on record that the accused had failed to repay the amount despite the receipt of the notice.

¶202

Therefore, it was duly proved on record that the accused had issued a cheque to discharge his liability, which was dishonoured with an endorsement “signature differs and exceeds arrangement”, and the accused failed to repay the money despite the deemed receipt of a notice of demand. Hence, all the ingredients of the commission of an offence punishable under Section 138 of the NI Act were duly satisfied, and the learned Trial Court had rightly convicted the accused of the commission of an offence punishable under Section 138 of the NI Act.

¶203

The learned Trial Court had sentenced the accused to undergo simple imprisonment for 6 months and pay a fine amount of ₹7,32,225/-. 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 is deterrent in nature. It was observed at page 203:

¶204

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“6. The object of Section 138 of the Negotiable Instruments Act is to infuse credibility into negotiable instruments, including cheques, and to encourage and promote the use of negotiable instruments, including cheques, in financial transactions. The penal provision of Section 138 of the Negotiable Instruments Act is intended to be a deterrent to callous issuance of negotiable instruments such as cheques without serious intention to honour the promise implicit in the issuance of the same.”

¶207

Keeping in view the deterrent nature of the punishment, the sentence of 6 months cannot be said to be excessive.

¶208

In the present case, the cheque was issued on 18.07.2013, and the sentence was imposed on 31.07.2023. Thus, the compensation was awarded after 10 years of the issuance of the cheque. It was laid down by the Hon’ble Supreme Court in Kalamani Tex v. P. Balasubramanian, (2021) 5 SCC 283: (2021) 3 SCC (Civ) 25: (2021) 2 SCC (Cri) 555: 2021 SCC OnLine SC 75 that the Courts should uniformly levy a fine up to twice the cheque amount along with simple interest at the rate of 9% per annum. It was observed at page 291: -

¶209

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

¶210

¶211

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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 ] ”

¶213

An amount of ₹3,51,000/- would be payable on the

¶214

amount of ₹3,90,000/- for 10 years @ 9 % per annum. Learned Trial Court had awarded an amount of ₹7,32,225/- or ₹3, 42, 225 as interest, which is less than the interest to which the complainant would be entitled as per the judgment of Hon'ble Supreme Court. Thus, there is no infirmity in the fine awarded by the Learned Trial Court.

¶215

No other point was urged.

¶216

In view of the above, the present revision petition fails and is dismissed.

¶217

The present petition stands disposed of, and so are the pending applications, if any.

¶218

10^th July, 2026 (Nikita)

¶219

(Rakesh Kainthla) Judge

Sanjiv Baloria v. Narendra and Company and Another

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Sanjiv Baloria v. Narendra and Company and Another

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