2026 Supreme(Online)(HP) 1931

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Rakesh Kainthla, J
Manoj Kumar – Appellant
Versus
Shankar Dass – Respondent
Cr. Revision No. 384 of 2015

Once a cheque’s issuance and signature are admitted, a rebuttable presumption arises under Section 139 of the Negotiable Instruments Act that it was issued for a dischargeable debt. A cheque issued as security is not exempt from Section 138 liability if the debt exists upon presentation.

Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 - Dishonour of cheque - Presumption of liability - Once issuance of cheque and signature are admitted, there is a presumption under Section 139 that the cheque was issued for discharge of a debt or liability - This is a rebuttable presumption, and the burden shifts to the accused to lead evidence to rebut it - Mere denial in statement under Section 313 Cr.P.C. is insufficient to rebut the presumption. (Paras 6, 28, 30, 31, 35)

(B) Criminal Procedure Code, 1973 - Sections 397 and 401 - Revisional jurisdiction - Scope is narrow and supervisory - High Court cannot sit as an appellate court to reappreciate evidence unless there is patent illegality, perversity, or error of jurisdiction - Revisional power is not to be exercised in a routine manner. (Paras 14, 15, 16, 17)

(C) Negotiable Instruments Act, 1881 - Section 138 - Proprietorship concern - A proprietorship concern has no legal identity distinct from its proprietor - A complaint can be validly filed by the proprietor in their individual name or in the name of the proprietary concern represented by the proprietor. (Paras 20, 22, 26, 27)

(D) Negotiable Instruments Act, 1881 - Section 138 - Security cheque - Cheque issued as security for a transaction does not absolve the drawer of criminal liability under Section 138 if the debt or liability exists upon presentation and the cheque is dishonoured. (Paras 32, 33, 34)

Facts of the case:
The complainant filed a complaint against the accused for an offence under Section 138 of the Negotiable Instruments Act based on the dishonour of cheques issued for the purchase of goods. The accused admitted the issuance of the cheques but claimed they were provided as blank security cheques. Both the trial and appellate courts convicted the accused. The matter reached the High Court in revision, with the accused challenging the conviction on grounds of jurisdiction, legal identity of the proprietary concern, and the character of the cheques as security.

Findings of Court:
The courts below correctly applied the law regarding the presumption of liability under the Act. The accused failed to lead any evidence to rebut the presumption. The argument regarding the legal status of the proprietorship concern was rejected, as the proprietor is one and the same as the business entity. The claim regarding the lack of territorial jurisdiction was also dismissed, as the court where the cheque is presented for collection has jurisdiction after the relevant statutory amendments.

Issues: The primary issues were: (i) whether a proprietary concern can validly initiate a complaint under Section 138, (ii) the scope of revisional jurisdiction regarding concurrent findings of fact, (iii) whether a cheque issued as 'security' attracts liability under Section 138, and (iv) the determination of territorial jurisdiction for the offence.

Ratio Decidendi: The court held that once execution and signature of a cheque are admitted, the statutory presumption under Section 139 arises, placing the burden on the accused to rebut it with evidence, not mere assertions. A proprietorship concern has no separate identity from its owner, and the owner is competent to file the complaint. A cheque issued as security matures for payment if the underlying liability exists, and territorial jurisdiction resides with the court where the payee’s bank is located.

Result: Revision dismissed.