2026 Supreme(Online)(HP) 2445

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
HON'BLE MR. JUSTICE RAKESH KAINTHLA
RUPESH SHARMA – Appellant
Versus
MURLIDHAR – Respondent
CR.R/71/2025

Under the NI Act, once signatures on a cheque are not disputed, a presumption of debt arises. This must be rebutted by leading evidence, as a Section 313 CrPC statement is insufficient. Dishonour due to 'account closed' constitutes an offence under Section 138.

Headnote:(A) Negotiable Instruments Act, 1881 - Sections 118(a), 138 and 139 - Dishonour of cheque - Presumption of liability - Once the signature on a cheque is admitted or not disputed, a statutory presumption arises under Sections 118(a) and 139 that the cheque was issued for consideration to discharge a legally enforceable debt or liability (Paras 6, 25, 27) - The burden shifts to the accused to rebut this presumption - A statement recorded under Section 313 of the Code of Criminal Procedure, 1973 is not substantive evidence and mere denial therein is insufficient to rebut the statutory presumption; the accused must lead evidence to prove a probable defence (Para 21).

(B) Negotiable Instruments Act, 1881 - Section 138 - Dishonour due to "account closed" - When a cheque is returned by the bank with an endorsement that the account is closed, it amounts to returning the cheque unpaid because the amount of money standing to the credit of the account was insufficient to honour the cheque, thus attracting the penal provisions of Section 138 (Paras 34, 35, 36).

(C) Negotiable Instruments Act, 1881 - Section 138 - Service of notice - A drawer who claims not to have received the statutory notice can avoid the complaint by making payment of the cheque amount within 15 days of the receipt of summons from the Court; failure to do so precludes the drawer from taking the plea of non-receipt of notice (Para 38).

(D) Code of Criminal Procedure, 1973 - Section 397 - Scope of revisional jurisdiction - A revisional court is not an appellate court and its jurisdiction is limited to rectifying patent defects, errors of jurisdiction, or errors of law - It cannot reappreciate evidence or upset concurrent factual findings of two lower courts in the absence of perversity (Paras 13, 14, 15).

Facts of the case:
The accused issued a cheque for ‘3,50,000/- towards the purchase of fruit from an orchard. The cheque was dishonoured with the endorsement 'account closed'. Despite the service of a legal notice, the accused failed to make the payment. The accused contended that the cheque was handed over to a third party and that there existed no legal liability. The Trial Court convicted the accused, and the Appellate Court upheld the conviction.

Findings of Court:
The court found that since the signatures on the cheque were not disputed, the presumptions under Sections 118(a) and 139 of the NI Act were triggered. The accused failed to lead any defence evidence to rebut these presumptions. It was further held that the closure of the account falls within the ambit of Section 138. The sentence and compensation awarded by the Trial Court were found to be reasonable.

Issues: Whether the revisional court can reappreciate evidence to set aside concurrent findings; whether the statutory presumptions under the NI Act were successfully rebutted by the accused; and whether a cheque dishonoured due to 'account closed' attracts liability under Section 138.

Ratio Decidendi: Revisional jurisdiction is supervisory and cannot be used to re-analyse evidence unless there is gross perversity. Under the NI Act, the onus is on the accused to rebut the presumption of liability through evidence; mere denial does not suffice. A cheque returned as 'account closed' is legally equivalent to 'insufficient funds' for the purposes of Section 138.

Result: Revision dismissed.