In revisional jurisdiction, concurrent conviction under Section 138 NI Act upheld where accused admits cheque issuance but fails to rebut presumption of debt with evidence, rejecting unsupported security defence claim.

Headnote:(A) Negotiable Instruments Act, 1881 - Sections 118(a), 139 and 138 - Cheques issued towards balance payment for jewellery purchase - Part cash paid, cheques dishonoured for insufficient funds - Issuance admitted, presumption of consideration and debt arises - Accused failed to rebut by leading evidence - Defence of security for loan taken by husband improbable, contradictory and unsupported - Memos of dishonour presumed correct - Valid demand notice served, no payment made - All ingredients proved - Complaint maintainable by proprietor of proprietary concern - Power of attorney holder with personal knowledge of transaction competent to depose and prove case - Concurrent conviction, sentence of simple imprisonment for three months and compensation upheld in revision. (Paras 18-35)

(B) Criminal Procedure Code, 1973 - Section 397 - Revisional jurisdiction - Narrow scope - Not appellate - No reappreciation of evidence or substitution of view - Interference only for patent defect, jurisdictional error, perversity or gross irregularity - Concurrent findings not to be disturbed absent perversity. (Paras 12-17)

(C) Negotiable Instruments Act, 1881 - Section 138 - Sentence and compensation - Penal provision deterrent - Compensation up to twice cheque amount with interest justified considering time lapse, legal expenses and lost opportunity - Uniform approach recommended. (Paras 36-39)

Facts of the case:
Accused purchased jewellery worth Rs.13,10,000/-, paid Rs.1,10,000/- cash, issued two cheques of Rs.3,00,000/- each - Cheques dishonoured for insufficient funds - Demand notice served, reply denying liability - Trial court convicted under Section 138, sentenced to three months simple imprisonment and Rs.10,00,000/- compensation - Appeal dismissed - Revision claiming erroneous appreciation, probable security defence, invalid complaint.

Findings of Court:
Presumption not rebutted, contradictory defences unreliable without evidence - Cheques proved issued for debt discharge - Dishonour, notice and non-payment established - Complaint and evidence valid - Sentence and compensation adequate.

Issues: Whether lower courts erred in rejecting security defence and holding presumption unrebutted; validity of complaint by proprietor and attorney evidence; scope of revisional interference; adequacy of sentence and compensation.

Ratio Decidendi: Admission of cheque issuance triggers presumption of debt under Sections 118(a) and 139, rebuttable only by accused's evidence - Mere statement under Section 313 CrPC insufficient - Revisional court upholds concurrent findings unless perverse - Proprietor complaint for proprietary concern permissible - Attorney with personal knowledge valid witness.

Result: Revision dismissed.

Table of Content
1. cheque dishonour for jewellery purchase alleged. (Para 1 , 2 , 3 , 4 , 5)
2. lower courts upheld conviction under section 138. (Para 6 , 7)
3. security cheque defence probable; sale unproved. (Para 8 , 10)
4. revisional jurisdiction limited; no re-appreciation. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17)
5. presumption of debt on admitted cheque issuance. (Para 18 , 19 , 20 , 21)
6. proprietor files complaint validly for firm. (Para 22 , 23 , 24 , 25)
7. poa holder testifies with personal knowledge. (Para 26 , 27)
8. contradictory defence fails; evidence required. (Para 28 , 29 , 30 , 31)
9. dishonour and notice validly proved. (Para 32 , 33 , 34)
10. ingredients satisfied; sentence and compensation adequate. (Para 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42)

JUDGMENT :

RAKESH KAINTHLA, J.

1. The present revision is directed against the judgment dated 24.01.2025, passed by learned Additional Sessions Judge (CBI Court), Shimla, District Shimla, H.P. (learned Appellate Court) vide which judgment of conviction dated 17.05.2024 and order of sentence dated 25.05.2024 passed by learned Additional Chief Judicial Magistrate, Court No. 1, Shimla, District 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 petition are that the complainant filed a complaint against the accused before the learned Trial Court for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act (in short, ‘NI Act’). It was asserted that the accused is the sole proprietor of M/s Mahalaxmi Jewellers, Lower Bazar, Shimla and is engaged in the business of selling gold, silver, diamond and other jewellery. The accused had purchased jewellery worth Rs.13,10,000/- from the complainant’s shop vide voucher No. 6165 dated 01.01.2016. The accused paid a sum of Rs.1,10,000/- and issued two cheques of Rs.3,00,000/- each drawn on the H.P. State Co-operative Bank Ltd. H.P. Secretariat, Shimla, District Shimla, H.P. The complainant presented the cheques to her bank, but they were dishonoured with the remarks ‘funds insufficient’. The complainant served a legal notice upon the accused asking her to pay the money, but she issued a reply to the notice denying her liability instead of paying the money to the complainant. Hence, a complaint was filed before the learned Trial Court for taking action as per law.

3. The learned Trial Court found sufficient reasons to summon the accused. When the accused appeared, a notice of accusation was put to her for the commission of an offence punishable under Section 138 of the NI Act, to which she pleaded not guilty and claimed to be tried.

4. The complainant examined Karan Goel, her special power of attorney (CW-1), to prove her case.

5. The accused, in her statement recorded under Section 313 of CrPC, denied the complainant’s case in its entirety. She stated that her husband had taken a loan from the complainant and issued the cheque as security. She claimed that her husband had repaid the borrowed amount to the complainant. The complainant misused her cheques. The accused stated that she wanted to lead defence evidence but failed to produce any evidence; hence, her evidence was closed by the order of the Court on 26.04.2024.

6. Learned Trial Court held that the accused had not disputed the issuance of the cheque. A presumption would arise that the cheque was issued for consideration to discharge the debt/liability. The burden would shift upon the accused to rebut the presumption by leading evidence. The plea taken by her that the accused had issued the security cheque for a loan taken by her husband was not probable. The cheques were dishonoured with the endorsement ‘funds insufficient’. Notice was served upon the accused, and she had failed to repay the amount. All the ingredients of the commission of an offence punishable under Secti