Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(HP) 1207

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
RAKESH KAINTHLA, J.
Krishna Devi - Petitioner
Versus
Himachal Pradesh Gramin Bank and Another – Respondent
Cr. Revision No. 496 of 2025
Decided On : 16-09-2025

Advocates Appeared:
For the Petitioner:M/s Owais Khan Pathan and Akhil Rajta, Advocates.
For the Respondents:Mr. K.B. Khajuria, Adv., Mr. Jitender Sharma, Additional Advocate General.

Presumption under Sections 118(a) and 139 NI Act arises on cheque execution admission; accused must rebut by evidence, not mere Section 313 statement. Security cheque liable if debt exists. Revisional jurisdiction limited; default imprisonment for compensation upheld.

Headnote:(A) Negotiable Instruments Act, 1881 - Sections 118(a), 139 and 138 - Cheque dishonour - Accused admitted loan advanced, subsisting liability, signatures on cheque - Presumption that cheque issued for discharge of debt/liability - Accused claimed security cheque but failed to lead evidence to rebut presumption by preponderance of probabilities - Mere statement under Section 313 CrPC insufficient - Even security cheque attracts Section 138 liability if issued towards existing enforceable debt - Cheque dishonoured for insufficient funds - Valid notice served, no payment within 15 days - All ingredients proved - Conviction proper. (Paras 19-32)

(B) Criminal Procedure Code - Sections 397, 401 - Revisional jurisdiction - Limited to patent defects, errors of jurisdiction or law - Not to reappreciate evidence or substitute views absent perversity - Concurrent findings by trial and appellate courts not to be interfered. (Paras 14-18)

(C) Criminal Procedure Code - Section 357(3) - Compensation - Courts may impose imprisonment in default of payment - To enforce order and provide immediate relief to complainant - Default sentence distinct from substantive sentence. (Paras 34-37)

Facts of the case:
Complainant advanced personal loan, accused defaulted with liability outstanding, issued cheque towards discharge which was dishonoured for insufficient funds, notice served but no repayment, leading to conviction under Section 138 NI Act with sentence of imprisonment and compensation, modified on appeal to nominal imprisonment on deposit of compensation within time, challenged in revision.

Findings of Court:
Conviction and sentence upheld; accused directed to deposit compensation within one month, failing which to undergo two months' simple imprisonment.

Issues: Whether existence of legally enforceable liability proved; presumption under Sections 118(a) and 139 rebutted; defence of security cheque sustainable; scope of revisional interference; validity of default sentence for compensation and appellate modification.

Ratio Decidendi: Upon admission of cheque execution and signatures, presumption of debt/liability arises, rebuttable only by probable defence on preponderance of probabilities via evidence, not mere denial; security cheque enforceable against subsisting liability; revisional court examines only for perversity, not reappreciates facts; default imprisonment for compensation valid to enforce payment.

Result: Revision dismissed.

Table of Content
1. revision against s.138 conviction and sentence modification. (Para 1 , 2)
2. accused admitted loan, cheque signatures, claimed security. (Para 3 , 4 , 5)
3. lower courts applied ni act presumptions correctly. (Para 6 , 7)
4. dispute on liability proof versus presumption reliance. (Para 8 , 10 , 11 , 12)
5. revisional jurisdiction limited to patent errors. (Para 13 , 14 , 15 , 16 , 17 , 18)
6. presumption under s.139 on admitted cheque issuance. (Para 19 , 20 , 21 , 22)
7. security cheque liable for subsisting debt. (Para 23 , 24 , 25)
8. no evidence rebutted s.139 presumption. (Para 26 , 27 , 28)
9. dishonour notice non-payment proved s.138 ingredients. (Para 29 , 30 , 31 , 32)
10. default imprisonment valid for compensation. (Para 33 , 34 , 35 , 36 , 37)
11. revision dismissed with deposit time extension. (Para 38 , 39 , 40 , 41)

JUDGMENT :

Rakesh Kainthla, J.

The present revision is directed against the judgment dated 5.7.2025, passed by learned Sessions Judge, Sirmour District at Nahan, H.P. (learned Appellate Court), vide which the judgment of conviction and order of sentence dated 21.10.2024, passed by learned Judicial Magistrate First Class Nahan, District Sirmour, H.P. (learned Trial Court) were partly modified, and the accused was directed to undergo imprisonment till the rising of the Court on deposit of the compensation amount of Rs.3.00 lacs within two months from the date of the judgment, and in case of default, to undergo simple imprisonment for two months by way of default sentence. (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 alleged that the complainant is engaged in banking activities. The accused applied for a personal loan of Rs.2,50,000/-, which was extended to her on interest @ @13% per annum with monthly rests. This amount was to be repaid in equated monthly instalments, but the accused defaulted on the repayment. An amount of Rs.1,58,285/- became due on 20.8.2019. The accused issued a cheque of Rs.1,50,000/- to discharge her liability. The complainant presented the cheque to the bank, but it was dishonoured with the endorsement ‘funds insufficient’. The complainant served a notice upon the accused asking her to repay the amount within 15 days of the date of the receipt of the notice. The notice was served upon the accused, but the accused failed to repay the amount. Hence, the 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 Dharam Singh Parmar (CW1) to prove its case.

5. The accused, in her statement recorded under Section 313 of Cr.P.C., admitted that she had borrowed the money and that Rs.1,58,285/- was due. She admitted her signatures on the cheque. She stated that she had issued a security cheque and she needed time to repay the amount. She opted to lead evidence but failed to produce any evidence despite the opportunities granted by the learned Trial Court. Hence, the evidence was closed on 27.9.2024.

6. Learned Trial Court held that the issuance of the cheque was not disputed. The accused also admitted that she had taken the loan from the bank. A presumption arose under Section 118(a) and 139 of the NI Act that the cheque was issued for consideration in discharge of debt/liability. The burden was upon the accused to rebut the presumption, but the accused failed to do so. The cheque was dishonoured with an endorsemen