Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(HP) 1706

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
RAKESH KAINTHLA, J.
Sohan Lal - Petitioner
Versus
Jagdish Kumar Sharma - Respondent
Cr. Revision No. 188 of 2025
Decided On : 20-12-2025

Advocates Appeared:
For the Petitioner:Mr I.S. Chandel, Advocate.
For the Respondent:Mr Vivek Singh Attri, Advocate.

Admission of cheque signature raises presumption of debt under NI Act ss118(a),139; accused's lost cheque plea fails without bank report; revisional jurisdiction limited to perversity, upholding concurrent conviction for dishonour.

Headnote:(A) Negotiable Instruments Act, 1881 - Sections 138, 118(a) and 139 - Cheque dishonour - Accused admitted signature on cheque - Presumption arises that cheque issued for consideration to discharge debt/liability - Accused failed to rebut presumption as plea of lost cheque not supported by reporting loss to bank or other evidence - Notice of demand duly served proved by matching postal receipt and delivery envelope - Cheque returned unpaid for insufficient funds proved by bank statement showing zero balance - Complaint not premature as filed after 15 days of deemed service and within one month. (Paras 20, 23-29, 32)

(B) Code of Criminal Procedure, 1973 - Section 397 - Revisional jurisdiction - Limited scope - Cannot reappreciate evidence or substitute view unless patent defect, jurisdictional error, perversity or gross miscarriage of justice - Concurrent findings by trial and appellate courts not to be interfered with absent perversity. (Paras 13-18)

(C) Negotiable Instruments Act, 1881 - Section 138 - Sentence - Simple imprisonment of one year and compensation twice cheque amount (Rs.5,00,000/- on Rs.2,50,000/- cheque) held not excessive considering deterrent object, time lapse (7 years), interest loss and litigation costs - Uniform approach to levy fine up to twice amount with interest recommended. (Paras 34-37)

Facts of the case:
Accused issued cheque to discharge liability, dishonoured for insufficient funds - Notice sent and served - No payment made - Convicted under Section 138, sentenced to one year simple imprisonment and Rs.5,00,000/- compensation by trial court, upheld in appeal - Revision challenging proof of debt, lost cheque misuse, notice service and prematurity of complaint.

Findings of Court:
All ingredients of offence under Section 138 satisfied - Presumptions not rebutted - Notice served - Complaint timely - No perversity in concurrent findings - Sentence and compensation proper.

Issues: Whether presumption under Sections 118(a) and 139 rebutted by lost cheque plea; validity of notice service and complaint timing; scope of revisional interference with concurrent conviction.

Ratio Decidendi: Admission of cheque signature triggers presumption of valid debt discharge which accused must rebut with probable defence; revisional court interferes only on perversity, not reappreciating evidence; failure to report lost cheque undermines defence; service proved by documents; compensation up to twice amount justified for restitutive purpose. Result : Revision dismissed.

Table of Content
1. factual background of s.138 ni act case. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7)
2. arguments on premature complaint and cheque misuse. (Para 8 , 10 , 11)
3. revisional jurisdiction limited; no evidence re-appreciation. (Para 9 , 12 , 13 , 14 , 15 , 16 , 17 , 18)
4. presumptions under ss.118(a),139 on cheque admission. (Para 19 , 20 , 21 , 22 , 23)
5. accused failed to rebut presumption; no loss proof. (Para 24 , 25 , 26)
6. dishonour and notice service duly proved. (Para 27 , 28 , 29)
7. notice valid; complaint timely; ingredients satisfied. (Para 30 , 31 , 32 , 33)
8. sentence and compensation upheld; revision dismissed. (Para 34 , 35 , 36 , 37 , 38 , 39)

JUDGMENT :

Rakesh Kainthla, J.

The present revision is directed against the judgment dated 16.01.2025, passed by learned Additional Sessions Judge, Rohru, Camp at Theog, District Shimla, H.P. (learned Appellate Court) vide which the judgment of conviction dated 17.04.2023 and order of sentence dated 19.04.2023, passed by learned Additional Chief Judicial Magistrate, Theog, 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 (NI Act). It was asserted that the complainant and the accused were known to each other. The accused issued a cheque of Rs.2,50,000/- in favour of the complainant to discharge his liability. The complainant presented the cheque in his bank account in Punjab National Bank, Branch at Theog, but it was dishonoured with the endorsement “funds insufficient.” The complainant sent a notice to the accused on 21.06.2016 through registered post. The notice was served upon the accused, but he failed to repay the amount despite receiving the notice. Hence, a complaint was filed before the learned Trial Court to take action as per the law.

3. The learned Trial Court found sufficient reasons to summon the accused. When the accused appeared before the learned Trial Court, 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), Rahul Ranta (CW2) and Ankush Chauhan (CW3) to prove his case.

5. The accused, in his statement recorded under Section 313 of Cr.P.C., admitted that the cheque bears his signature. He denied that a notice was served upon him. He stated that he had lost the cheque, which was misused by the complainant. A false complaint was made against him. He examined himself (DW1) to prove his defence.

6. Learned Trial Court held that the accused admitted his signature on the cheque; hence, a presumption arose that the cheque was issued for consideration to discharge the liability. The plea taken by the accused that he had lost the cheque was not probable. The accused failed to controvert the allegations made in the notice by sending a reply. The cheque was dishonoured with an endorsement “funds insufficient.” The notice was duly served upon the accused, but he failed to repay the amount. Consequently, the learned Trial Court convicted the accused for the commission of an offence punishable under Section 138 of the N.I. Act and sentenced him to undergo simple imprisonment for one year and to pay a compensation of Rs.5,00,000/- to the complainant.

7. Being aggrieved by the judgment and order passed by the learned Trial Court, the accused filed an appeal, which was decided by the learned Additional Sessions Judge, Rohru, Camp at Theog, District Shimla, H.P. (learned Appellate Court). The learned Appellate Court concurred with the findings recorded by the learned Trial Court that the admission of the signatures on the cheque wo