The presumption of consideration under Sections 118 and 139 of the Negotiable Instruments Act applies once a cheque's issuance is admitted, shifting the burden to the accused to rebut this presumption.

JUDGMENT :

Rakesh Kainthla, J.

The present revision is directed against the judgment dated 07.09.2024, passed by learned Additional Sessions Judge-I, Shimla, H.P. (learned Appellate Court), vide which the judgment and order dated 05.04.2024, passed by learned Chief Judicial Magistrate, Shimla, H.P. (learned Trial Court) were upheld (Parties shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for convenience).

2. 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 asked for a loan of Rs. 4 lacs from the complainant for domestic purposes. He promised to pay the amount on or before 25.12.2015. An agreement was executed between the parties regarding the transaction. The complainant asked the accused to return the money, however, the accused issued a cheque of Rs. 4 lacs drawn on the State Bank of India, Branch Deha Tehsil Theog. The complainant presented the cheque before his banker, the UCO Bank Branch at Kamyana. The cheque was dishonoured by the bank of the accused with an endorsement ‘insufficient funds’. The complainant issued a notice to the accused asking him to pay the money within 15 days of the receipt of the notice. The accused received the notice but failed to pay the money. Hence, the complainant filed a complaint before the learned Trial Court to take action against the accused.

3. The learned Trial Court found sufficient reasons to summon the accused. When the accused appeared, notice of accusation was put to him, to which he pleaded not guilty and claimed to be tried.

4. The complainant examined himself (CW1) to prove his case.

5. The accused, in his statement recorded under Section 313 of Cr.P.C., admitted that he had approached the complainant for seeking financial help. He admitted that an agreement was executed between the parties. He stated that he had taken a loan of Rs. 3,70,000/- and had pledged the gold as security. The complainant had advanced a sum of Rs. 1,70,000/- in cash and had issued a cheque of Rs. 2 lacs. He stated that he had issued the cheque as a security. He admitted that the cheque was dishonoured with an endorsement of insufficient funds, and the complainant had issued a notice to him. He stated that he had sent the reply to the notice of the complainant. He examined Sanjeev Chauhan (DW-1).

6. Learned Trial Court held that issuance of the cheque was not in dispute. There is a presumption under Section 118(a) and 139 of the NI Act that the cheque was issued for the consideration and in discharge of the legal liability. The plea taken by the accused that the complainant had only advanced Rs. 3,70,000/- was not proved on the balance of probability. The cheque was dishonoured due to insufficient funds, and the notice was served upon the accused. The accused failed to pay the amount despite the receipt of the notice. Hence, the accused was convicted of the commission of an offence punishable under Section 138 of the NI Act and was sentenced to undergo six months' simple imprisonment. The accused was also directed to pay compensation of Rs. 4,50,000/-.

7. Being aggrieved from the judgment and order passed by the learned Trial Court, the accused filed an appeal which was decided by the learned Additional Sessions Judge-1, Shimla (learned appellate Court). Learned Appellate Court concurred with the findings recorded by the learned Trial Court that the cheque was issued in discharge of the legal liability. Even if the cheque was issued towards the security, the complainant had sufficient authority to fill the amount and present the cheque before the bank. The accused did not have sufficient funds on the date of presentation of the cheque. The accused failed to pay the money despite the receipt of a valid notice of dema