Revisional court upheld s138 NI Act conviction where accused admitted cheque but failed to rebut ss118/139 presumptions via evidence; limited interference absent perversity in concurrent findings; financial capacity unchallenged; limitation excluded for pandemic period.

Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 - Presumptions under Sections 118(a) and 139 - Cheque dishonoured for insufficient funds - Accused admitted signature but failed to rebut presumption of discharge of debt/liability through evidence - Defence of transaction with complainant's brother neither suggested in cross-examination nor proved - Complainant not required to prove financial capacity absent challenge in reply notice or cross-examination - Notice deemed served under Section 27 General Clauses Act - Complaint not barred by limitation due to exclusion of period 15-3-2020 to 28-2-2022 - All ingredients proved; conviction for offence under Section 138 upheld. Sentence of 1 year 6 months simple imprisonment and fine/compensation of Rs.23,00,000/- (twice cheque amount) with default stipulation held adequate and deterrent. (Paras 17-43)

(B) Code of Criminal Procedure, 1973 - Sections 397 and 401 - Revisional jurisdiction - Limited to correcting patent defects, jurisdictional errors or perversity - Not appellate; no re-appreciation of evidence or substitution of views absent gross error in concurrent findings. Statement under Section 313 not substantive evidence for rebuttal. (Paras 11-16, 23-24)

Facts of the case:
Complainant advanced Rs.5 lakhs by cheque and Rs.2 lakhs cash, later Rs.4.7 lakhs, for land purchase; accused issued Rs.11.5 lakhs cheque on 25-2-2021 towards liability, dishonoured; notice 16-4-2021; complaint 16-6-2021; convicted by trial court (1.5 years SI, Rs.23 lakhs fine/compensation); upheld by appellate court; revision challenging evidence appreciation, defence, capacity, limitation.

Findings of Court:
Revision dismissed; judgments of courts below affirmed; accused failed to rebut statutory presumptions; no perversity warranting interference.

Issues: Scope of revisional jurisdiction; rebuttal of presumptions under NI Act; proof of financial capacity and transaction; service of notice; limitation considering pandemic exclusion; adequacy of sentence.

Ratio Decidendi: Execution of cheque admitted triggers rebuttable presumptions of consideration and liability; accused bears onus to prove otherwise via evidence, not mere denial; revisional court upholds concurrent findings sans perversity; complainant relieved of proving capacity unless timely challenged; limitation extended by Supreme Court order.

Result: Revision dismissed.

Table of Content
1. cheque issued discharging land purchase liability. (Para 1 , 2)
2. lower courts convicted for s.138 ni act. (Para 3 , 4 , 5 , 6 , 7)
3. defence of brother agreement, capacity, limitation raised. (Para 8 , 9)
4. revisional jurisdiction limited absent perversity. (Para 10 , 11 , 12 , 13 , 14 , 15 , 16)
5. five ingredients constitute s.138 offence. (Para 17)
6. presumptions under ss.118(a),139 upon execution. (Para 18 , 19 , 20 , 21)
7. s.313 statement insufficient to rebut presumption. (Para 22 , 23 , 24)
8. presumption obviates proving consideration initially. (Para 25 , 26 , 27 , 28)
9. financial capacity unchallenged; presumption unrebutted. (Para 29 , 30 , 31)
10. bank memo presumes insufficient funds dishonour. (Para 32 , 33)
11. notice deemed served; no repayment made. (Para 34 , 35 , 36)
12. covid orders extend s.138 limitation period. (Para 37 , 38)
13. all s.138 ingredients satisfied; conviction proper. (Para 39)
14. deterrent sentence, compensation twice amount justified. (Para 40 , 41 , 42 , 43)
15. revision dismissed; conviction upheld. (Para 44 , 45)

JUDGMENT :

Rakesh Kainthla, J.

The present revision is directed against the judgment dated 04.09.2025 passed by learned Additional Sessions Judge-II, Kangra at Dharamshala, District Kangra, H.P. (learned Appellate Court) vide which the judgment of conviction and order of sentence dated 12.11.2024 passed by learned Additional Chief Judicial Magistrate Court no. 1, Kangra, District Kangra (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 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 had paid Rs.5 lakhs by cheque and Rs.2,00,000/- in cash to the accused on 12th April 2019 to purchase the land at Palampur. The accused visited the complainant's house on 19th August 2019 and asked for Rs.4,70,000/-, which the complainant paid after withdrawing it from her bank account. The accused failed to sell the land to the complainant. The complainant demanded Rs.11,70,000/- paid by her to the accused. The accused returned Rs.20,000/- in January 2021 and issued a cheque of Rs.11,50,000/- (Ex. CW1/B) to discharge his legal liability. The complainant presented the cheque to her bank, but it was returned with an endorsement ‘insufficient funds’(Ex. CW1/C). The complainant served a legal notice (Ex. CW1/D) upon the accused, asking him to repay the amount. The notice was duly served upon the accused, but he failed to repay the amount. Hence, a complaint was filed before the learned Trial Court.

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 herself (CW-1) to prove her complaint.

5. The accused, in his statement recorded under Section 313 of Cr.P.C., admitted his signature on the cheque but denied the rest of the complainant’s case. He stated that the agreement to sell was executed between him and the complainant’s brother. He did not produce any evidence in defence.

6. Learned Trial Court held that the accused admitted the issuance of the cheque. There is a presumption that the cheque was issued for consideration in discharge of the debt/liability. The burden is upon the accused to rebut the presumption. However, the accused failed to rebut the presumption. The cheque was dishonoured with an endorsement ‘insufficient funds’. The notice was deemed to be served upon the accused, who had failed to repay the amount. Hence, the learned Trial Court convicted the accused of the commission of