Legal Awareness & Information.

HP High Court Upholds Cheque Dishonour Conviction, Rejects Bid for Additional Evidence

Shimla , HP - In a significant ruling on cheque dishonour cases under the Negotiable Instruments Act, 1881 (NI Act), the High Court of Himachal Pradesh, presided over by Hon’ble Mr Justice RakeshKainthla , dismissed a revision petition challenging concurrent convictions. The court reaffirmed that once the issuance and signature on a cheque are admitted, the burden shifts entirely onto the accused to prove they are not liable, and that denial alone is insufficient.

The case, Vinod Kumar vs UCO Bank (CR.R/359/2024) , arose from a complaint filed by UCO Bank against Vinod Kumar under Section 138 of the NI Act. The bank alleged that it had advanced a loan of ₹7,00,000 to Kumar in April 2013, and he later issued a cheque for ₹7,47,068 on July 30, 2016, towards repayment. The cheque was dishonoured due to "insufficient funds". Despite receiving a legal notice, Kumar failed to pay the amount, leading to the complaint.

The Trial Court (Additional Chief Judicial Magistrate, Ghumarwin) convicted Vinod Kumar , sentencing him to simple imprisonment for three months and ordering compensation of ₹8,00,000. The conviction and sentence were upheld by the first Appellate Court (Additional Sessions Judge, Ghumarwin).

Aggrieved by the judgments, Vinod Kumar filed a revision petition before the High Court. His primary contentions included that the lower courts failed to appreciate the evidence correctly, there was no proof of legally enforceable liability, and the bank had misused signed blank cheques given as security. He also argued that the amount on the cheque was incorrect.

During the revision proceedings, the petitioner also filed an application (Cr.MP No. 5157/2024) seeking to introduce additional evidence – a customer account ledger report obtained under the Right to Information Act – to demonstrate a lower balance than the cheque amount. He claimed he could not produce it earlier due to the COVID-19 pandemic.

The High Court, however, found no merit in the petition or the application for additional evidence. Justice Kainthla , citing Supreme Court precedents like Malkeet Singh Gill , Dilipsinh Kishorsinh Rao , and Kishan Rao , reiterated that the scope of revisional jurisdiction is narrow, confined to correcting patent defects, errors of jurisdiction, or perversity, and does not permit a re-appreciation of evidence as in an appeal.

Regarding the opportunity to lead defence evidence, the court noted from the trial court record that the accused had been granted multiple opportunities between 2019 and 2022, but failed to produce any evidence. The court found the excuse of the COVID-19 pandemic factually incorrect, as evidence was closed in July 2022, well after the main period of disruption.

Dismissing the application for additional evidence, the High Court referenced Supreme Court judgments including Sukhjeet Singh , State (NCT of Delhi) v. Pankaj Chaudhary , and Ajitsinh Chehuji Rathod . The court emphasized that power under Section 391 CrPC (or Section 432 BNSS) is limited, not meant for filling gaps or conducting a re-trial, and requires proof that the party was prevented from presenting evidence despite due diligence or that the facts came to light later. As the account report was anterior to the closure of defence evidence and no valid reason for not producing it earlier was provided, the application was rejected.

Crucially, the High Court addressed the core issue of liability under the NI Act. Since the accused admitted taking the ₹7,00,000 loan in his Section 313 CrPC statement, the advancement of the loan was undisputed. The court highlighted that the accused did not deny his signatures on the cheque. Citing a series of Supreme Court rulings including Basalingappa v. Mudibasappa , Kalamani Tex v. P. Balasubramanian , and Rajesh Jain v. Ajay Singh , the judgment underscored that once execution of the cheque is admitted or proved, a mandatory presumption arises under Sections 118 and 139 of the NI Act that the cheque was issued for a legally enforceable debt or liability.

This presumption, while rebuttable, requires the accused to lead concrete evidence, not mere denial or plausible explanation, to prove the contrary on a balance of probabilities. The court noted that the accused neither testified himself nor produced any witness or document to substantiate his claims of repayment or misuse of blank security cheques. A denied suggestion in cross-examination, or a bare denial in the Section 313 statement, is insufficient to rebut the statutory presumption, as held in Sumeti Vij v. Paramount Tech Fab Industries .

Addressing the argument about the cheque body being filled by a different pen or the cheque being a security cheque, the High Court relied on Bir Singh v. Mukesh Kumar and Sampelly Satyanarayana Rao , confirming that such factors do not invalidate the cheque or absolve the drawer of liability under Section 138 NI Act, particularly when a legally enforceable debt exists and matures.

The court also found the bank memo showing "insufficient funds" to carry a presumption of correctness under Section 146 of the Indian Evidence Act, which was unrebutted. Service of the legal notice was deemed proved as it was sent to the correct address, and the accused's failure to pay the amount within 15 days of receiving court summons negated any defence of non-receipt of the notice, following the principle in C.C. Allavi Haji vs. Pala Pelly Mohd .

Finding all ingredients of Section 138 NI Act duly proved, the High Court upheld the conviction. The sentence of three months simple imprisonment was deemed non-excessive, aligning with the deterrent object of Section 138 as noted in Bir Singh . The compensation of ₹8,00,000 was found reasonable, considering the cheque amount, the time elapsed, interest loss, and litigation costs, in line with the compensatory purpose of the NI Act provisions and Supreme Court guidelines in Kalamani Tex , which suggest levying fines up to twice the cheque amount plus interest.

In conclusion, the High Court found no infirmity in the judgments of the lower courts and dismissed the revision petition, emphasizing the strong statutory presumptions in cheque dishonour cases and the burden on the accused to discharge it with cogent evidence.

The records of the lower courts, along with a copy of the judgment, have been ordered to be sent back.

[Case: Vinod Kumar vs UCO Bank, CR.R/359/2024, decided on 02.06.2025]