Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(HP) 1504

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Rakesh Kainthla, J.
Sita Ram - Petitioner
Versus
Baldev Chand - Respondent
Cr. Revision No.797 of 2024
Decided On : 12-11-2025

Advocates Appeared:
For the Petitioner:Mr G.R. Palsra, Advocate.
For the Respondent:Mr H.S. Rangra, Advocate.

Section 139 NI Act presumption of liability rebuttable by probable defence on preponderance of probabilities; contradictory accused pleas and non-examination of witness fail rebuttal; revisional jurisdiction limited absent perversity; refused notice deemed served; compensation twice cheque amount upheld.

Headnote:(A) Negotiable Instruments Act, 1881 - Sections 138, 139 and 118(a) - Cheque dishonour - Presumption that cheque issued for discharge of debt or liability when execution and signature admitted - Rebuttable by preponderance of probabilities via probable defence; accused's contradictory pleas (blank cheque to third party, no knowledge of possession by complainant) and failure to examine key witness fail to rebut - Adverse inference justified - Affidavit evidence by accused impermissible. (Paras 19-26)

(B) Criminal Procedure Code, 1973 - Section 397 - Revisional jurisdiction supervisory, not appellate - Limited to patent defects, jurisdictional errors, perversity or gross miscarriage; no re-appreciation of evidence or substitution of views sans glaring unreasonableness. (Paras 13-17)

(C) Negotiable Instruments Act, 1881 - Proviso (b) to Section 138 - Demand notice within 30 days of receipt of dishonour information, not issuance date - Even assuming receipt on memo date (22.06.2015), notice (09.07.2015) timely. (Para 29)

(D) Negotiable Instruments Act, 1881 read with Section 357(3) CrPC - Notice refused - Deemed service under Section 27 General Clauses Act. (Paras 31-33) (E) Negotiable Instruments Act, 1881 - Sentence and compensation - 4 months simple imprisonment deterrent, not excessive; compensation twice cheque amount (Rs.2,50,000/-) plus 9% interest for 9 years reasonable considering time value, litigation costs - Imprisonment (1 month) in default permissible for enforcement. (Paras 34-40)

Facts of the case:
Payee advanced Rs.2,50,000/- loan; drawer issued cheque dishonoured for insufficient funds on 18.06.2015 (memo 22.06.2015); notice (09.07.2015) refused; convicted under Section 138, sentenced to 4 months SI and Rs.5,00,000/- compensation (1 month default SI); appeal and revision dismissed.

Findings of Court:
All Section 138 ingredients proved; presumption not rebutted; notice deemed served; sentence/quantum not excessive; no perversity warranting interference.

Issues: Whether presumption rebutted; complaint time-barred; notice served; accused's affidavit/statement credible; compensation excessive; revisional interference justified.

Ratio Decidendi: Accused must raise probable defence on preponderance of probabilities to rebut Section 139 presumption; inconsistent defences and non-examination of witness insufficient; revisional court examines only legality/propriety, not re-weighs evidence; refused notice valid service; compensation uniformly up to twice amount with interest, enforceable via default imprisonment.

Result: Revision dismissed.

Table of Content
1. revision challenges conviction under section 138 ni act. (Para 1 , 2)
2. trial proceedings and accused's defence statement. (Para 3 , 4 , 5)
3. lower courts upheld presumption and conviction. (Para 6 , 7)
4. petitioner's claims: time-bar, misuse, excessive compensation. (Para 8 , 10)
5. respondent: presumption not rebutted without evidence. (Para 11)
6. revisional jurisdiction limited to patent errors, no reappreciation. (Para 12 , 13 , 14 , 15 , 16 , 17)
7. ingredients of section 138 ni offence enumerated. (Para 18)
8. presumption of liability on admitted signature, rebuttable by probabilities. (Para 19 , 20 , 21)
9. accused affidavit evidence impermissible under ni act. (Para 22 , 23)
10. contradictory defences fail to rebut presumption. (Para 24 , 25)
11. adverse inference for non-examination of key witness. (Para 26)
12. bank memo presumes dishonour for insufficient funds. (Para 27)
13. notice within 30 days of dishonour memo receipt. (Para 28 , 29)
14. refused notice deemed validly served. (Para 30 , 31 , 32 , 33)
15. compensation up to twice cheque amount justified. (Para 34 , 35 , 36)
16. default imprisonment enforceable for non-payment. (Para 37 , 38 , 39 , 40)
17. revision dismissed, conviction and sentence upheld. (Para 41 , 42 , 43)

JUDGMENT :

Rakesh Kainthla, J.

The present revision is directed against the judgment dated 08.11.2024, passed by learned Sessions Judge, Mandi, District Mandi, H.P. (learned Appellate Court) vide which the appeal filed by the petitioner (accused before learned Trial Court) was dismissed and the judgment of conviction and order of sentence dated 02.07.2024, passed by learned Additional Chief Judicial Magistrate, Court No.1, 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 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 had borrowed Rs.2,50,000/- from the complainant for his domestic needs for six months. The complainant asked the accused to return the money after the expiry of six months. The accused issued a cheque No. 822112 drawn on State Bank of India for Rs.2,50,000/-. The complainant presented the cheque to his bank on 18.06,2015; however, the cheque was dishonoured with an endorsement ‘funds insufficient’. Memo dated 22.06.2015 was issued by the bank. The complainant sent a notice to the accused asking him to repay the amount within fifteen days. The registered cover containing the notice was returned with an endorsement that “the addressee had refused to accept the notice’. Hence, the complaint was filed before the learned Trial Court against the accused for taking action as per the 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) and Baldev Chand (CW-2) to prove his case.

5. The accused, in his statement recorded under Section 313 of CrPC, stated that he did not owe anything to the complainant. A blank and signed cheque was issued to one Shyam Lal. The accused had paid the money to Shyam Lal. He had no dealings with the complainant, and the complainant misused the cheque issued by the accused. He admitted that he had received the notice. The accused examined himself (DW-1).

6. Learned Trial Court held that the accused had admitted his signature on the cheque, and the presumption that the cheque was issued in consideration for the discharge of liability would arise. The burden would shift upon the accused to rebut the p