Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(HP) 1284

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Rakesh Kainthla, J.
Naginder Pal - Petitioner
Versus
Mohinder Singh Verma & anr. - Respondents
Cr. Revision No. 505 of 2024
Decided On : 12-09-2025

Advocates Appeared:
For the Petitioner:Mr. Chandresh Pal, Advocate, vice Mr. Lovneesh Singh Thakur, Advocate.
For the Respondent:Mr. Bhender Kumar, Advocate, Ms. Sunaina, Deputy Advocate General

Admission of cheque issuance triggers Section 139 presumption of debt discharge, rebuttable only by probable defence on preponderance of probabilities; uncorroborated security claim fails rebuttal; revisional jurisdiction limited, no reappraisal absent perversity.

Headnote:(A) Negotiable Instruments Act, 1881 - Sections 138, 139 and 118(a) - Dishonour of cheques - Presumption arises on admission of issuance and signature that cheque issued for discharge of debt or liability - Rebuttable by preponderance of probabilities via probable defence, direct or circumstantial evidence - Accused's defence of cheques given as security for rented shuttering plates, returned without returning cheques, and misused, unsupported by witness or receipt, not put to complainant in cross-examination, thus abandoned - Fails to rebut presumption - Cheques dishonoured for insufficient funds - Notice deemed served on return unclaimed under Section 27 General Clauses Act - All ingredients proved - Conviction upheld. (Paras 18-33)

(B) Criminal Procedure Code, 1973 - Sections 397 and 401 - Revisional jurisdiction supervisory, limited to patent defects, jurisdictional errors, perversity or gross miscarriage - Not appellate to reappraise evidence or substitute views on concurrent findings absent glaring defects. (Paras 13-17)

(C) Negotiable Instruments Act, 1881 - Section 138 - Sentence - Simple imprisonment of three months deterrent - Compensation up to twice cheque amount with interest reasonable after delay, considering lost opportunity and litigation costs - Default imprisonment valid to enforce compensation. (Paras 35-41)

Facts of the case:
Complainant supplied steel shuttering plates worth Rs.6,50,000/-, accused issued three cheques totalling Rs.6,46,000/-, dishonoured for insufficient funds, legal notice returned unclaimed, accused claimed rent transaction with return of plates and cash payment but no proof, convicted under Section 138, sentence of three months simple imprisonment, compensation Rs.9,50,000/- or fifteen days default, upheld in appeal, revision filed.

Findings of Court:
Presumption under Section 139 not rebutted, notice deemed served, conviction and sentence proper, no interference in revision.

Issues: Whether accused rebutted presumption of debt, validity of deemed service of notice, correctness of concurrent findings, adequacy of sentence and compensation.

Ratio Decidendi: Accused admits issuance, presumption holds unless probable defence raised by preponderance; uncorroborated self-serving statement insufficient; revisional court restrains from reappreciating evidence without perversity; compensation twice amount justified post-delay.

Result: Revision dismissed.

Table of Content
1. steel shuttering sale led to dishonoured cheques. (Para 1 , 2)
2. accused claims cheques issued as security. (Para 3 , 4 , 5)
3. lower courts upheld conviction via presumption. (Para 6 , 7)
4. petitioner contests notice service, probable defence. (Para 8 , 9 , 10 , 11)
5. revisional jurisdiction limited to patent errors. (Para 12 , 13 , 14 , 15 , 16 , 17)
6. s.139 presumes cheque for debt discharge. (Para 18 , 19 , 20)
7. accused admits liability, fails rebuttal evidence. (Para 21 , 22)
8. unchallenged cross-exam plea deemed abandoned. (Para 23 , 24)
9. presumption relieves complainant proving consideration. (Para 25 , 26 , 27)
10. bank dishonour memo presumed accurate. (Para 28 , 29)
11. unclaimed notice constitutes deemed service. (Para 30 , 31 , 32 , 33)
12. s.138 ni act offence ingredients proved. (Para 34)
13. imprisonment sentence serves as deterrent. (Para 35 , 36)
14. compensation justified for delay and costs. (Para 37 , 38)
15. default imprisonment for compensation valid. (Para 40 , 41)
16. revision dismissed; conviction sentence upheld. (Para 42 , 43 , 44)

JUDGMENT :

Rakesh Kainthla, J.

The present revision is directed against the judgment dated 03.07.2024, passed by learned Sessions Judge, Mandi, District Mandi, H.P. (learned Appellate Court), vide which the judgment of conviction and order of sentence dated 07.12.2023 passed by learned Judicial Magistrate, First Class, Chachiot at Gohar, District Mandi, H.P. (learned Trial Court) were upheld and the appeal filed by the petitioner (accused before the learned Trial Court) was dismissed. (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 complainant and the accused were well known to each other. The complainant is a Government Contractor working under the name and style of Monal Construction Pvt. Ltd. The accused purchased steel shuttering worth Rs.6,50,000/- from the complainant in August, September and October 2018. The accused issued three cheques worth Rs.6,46,000/- to discharge his liability. The complainant presented the cheque to his bank, but the cheques were dishonoured with the endorsement ‘insufficient funds’. The complainant issued a legal notice to the accused asking him to repay the amount, but it was returned with the report that the addressee was not at home. The accused failed to repay the amount despite the deemed service of notice. 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 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.

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 knew the complainant. He denied the rest of the complainant’s case. He stated that he had issued the cheques to the complainant as security, and the complainant misused them. He examined himself (DW-1) to prove his plea.

6. Learned Trial Court held that the accused admitted the issuance of the cheques. A presumption arose that the cheque was issued for consideration in discharge of the liability. The accused claimed that he had taken 78 shuttering plates from the complainant on rent and issued three cheques to him. This defence was not probable. The cheques were dishonoured with an endorsement ‘insufficient funds’, and the accused failed to repay the amount despite the deemed receipt of the notice. Hence, the accused was convicted for the commission of an o