The presumption of dishonor under Section 138 can be rebutted by the accused, shifting the burden back to the complainant to prove the existence of enforceable debt.

JUDGMENT : 

RAKESH KAINTHLA, J.

1. The present revision is directed against the judgment dated 01.07.2024 passed by learned Sessions Judge, Mandi (learned Appellate Court) vide which the judgment of conviction dated 30.12.2023 and order of sentence dated 02.03.2024 passed by learned Chief Judicial Magistrate, Mandi, District Mandi, 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 before the learned Trial Court for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act (NI Act). It was asserted that the complainant purchased a Mahindra Earth Mover on 12.03.2012 from the accused by depositing Rs.3,60,000/- as margin money after taking a loan of Rs. 20 lakh from Himachal Gramin Bank. The accused handed over an old/already used earth mover to the complainant and assured to replace it with a new machine within one month of the purchase. The complainant requested the accused to provide a new earth mover after one month, as promised, but the accused failed to do so and took the old earth mover from the complainant after about one year. The accused issued a cheque of Rs. 27,00,000/- to the complainant to return the amount paid to him with interest and the compensation for the loss suffered by the complainant. The complainant presented the cheque to the bank, but it was dishonoured with the remarks ‘funds insufficient’. The complainant issued a legal notice to the accused, but it was returned undelivered. Hence, the complaint was filed before the learned Trial Court for taking action as per the law.

3. 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).

5. The accused, in his statement recorded under Section 313 of CrPC, denied the complainant’s case in its entirety. He stated that the cheque was issued by Deepak Jyoti and not by him. The cheque did not bear his signature. The witness deposed against him falsely, and he was falsely implicated. He examined Deepak Jyoti (DW1) and Shubham Gupta (DW2).

6. Learned Trial Court held that Deepak Jyoti (DW1) admitted the signature of the accused on the cheque, and that the accused was a proprietor of Mahabir automobile. A presumption would arise from the admission of the signature that the cheque was issued for consideration in discharge of the liability. The burden would shift upon the accused to rebut this presumption, and the accused failed to do so. The complainant served a notice upon the accused, which was returned undelivered. This is treated as deemed service in law. The accused failed to pay the amount to the complainant. All the ingredients of commission of an offence punishable under Section 138 of the NI Act were duly satisfied. Consequently, the accused was convicted of the commission of an offence punishable under Section 138 of the NI Act and was sentenced to undergo simple imprisonment for six months, pay a fine of Rs. 28,00,000/- and in default of payment of fine, to undergo one- month simple imprisonment. It was further ordered that the amount of fine would be disbursed to the complainant as compensation.

7. Being aggrieved by the judgment and passed by the learned Trial Court, the accused filed an appeal, which was decided by the learned Sessions Judge, Mandi (learned Appellate Court). Learned Appellate Court concurred with the findings recorded by the learned Trial Court that the issuance of cheque would give rise to a presumption under Section 118(a) and 139 of the NI Act that the cheque was issued for consideration to discharge the liability. The accused failed to re