IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

Cr. Revision No. 88 of 2025

Reserved on: 12.12.2025

Date of Decision: 01.01.2026

Virender Singh Thakur .... Petitioner

Versus

Rishab Singh Thakur .... Respondent

Coram

Hon’ble Mr Justice Rakesh Kainthla, Judge.

Whether approved for reporting?

1

For the Petitioner : Ms. Neelam, Advocate, vice

Mr. T.K. Verma, Advocate.

For the Respondent

No.1.

: Mr. Arun K. Verma,

Advocate.

Rakesh Kainthla, Judge

The present revision is directed against the

judgment dated 28.12.2024, passed by learned Sessions Judge

(Forests), District Shimla, H.P. (learned Appellate Court) vide

which the judgment of conviction dated 21.12.2022 and order

of sentence dated 26.12.2022 passed by learned Chief Judicial

1

. Whether reporters of the local papers may be allowed to see the judgment? Yes

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Magistrate, Shimla, District Shimla, (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 parties had

known each other for the last 12 years. The complainant lent

₹50,000, ₹35,000, and ₹50,000 (total ₹1,35,000) to the

accused on 13.04.2018, 16.04.2018, and 27.04.2018,

respectively, in the presence of one Mohit Yadav. The accused

issued two cheques of ₹49,000/- each on 10.09.2019 and

25.09.2019, respectively, to discharge his liability. The

complainant presented the cheques to his bank, but they were

dishonoured with the endorsement ‘payment stopped by the

drawer’. The complainant served a legal notice upon the

accused, but the accused failed to repay the money after

receipt of the legal notice. Hence, the complaint was filed

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before the learned Trial Court to take action against the

accused as per the law.

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 himself (CW-1) to

prove his complaint.

5. The accused, in his statement recorde d under

Section 313 of Cr.P.C., denied the case of the complainant in its

entirety. He claimed that he had stood guarantor of the

complainant for his car loan and had furnished the cheques

as security. He examined Narotam Kumar (DW-1), Shakuntla

Thakur (DW-2) and himself (DW-3) to prove his defence.

6. Learned Trial Court held that the accused admitted

his signature on the cheques, and a presumption would arise

that the cheques were issued to discharge the liability. The

plea taken by the accused that he had furnished the cheques

as a guarantor for the car loan of the complainant was not

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proved. The cheques were dishonoured with an endorsement

‘payment stopped by the drawer’. The notice was served upon

the accused, but he failed to repay the amount despite receipt

of the notice. Hence, the accused was convicted of the

commission of an offence punishable under Section 138 of the

NI Act and was sentenced to undergo simple imprisonment

for six months and pay a compensation of ₹1,10,000/-.

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 Sessions Judge (Forests), District

Shimla, H.P. (learned Appellate Court). Learned Appellate

Court concurred with the findings recorded by the learned

Trial Court that the accused had not disputed the issuance of

the cheques; therefore, a presumption would arise that the

cheques were issued for consideration to discharge the legal

liability. The accused failed to rebut the presumption attached

to the cheques. The statement of Nartotam Kumar (DW-1)

falsified the version of the accused that the cheques were

furnished by him as guarantor to the car loan of the

complainant. The cheque s were dishonoured with an

endorsement ‘payment stopped by the drawer’. The notice

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was duly served upon the accused, but he failed to repay the

amount. The learned Trial Court imposed an adequate

sentence, and no interference was required with it. Hence, the

appeal was dismissed.

8. Being aggrieved by the judgments and order

passed by the learned Courts below, the accused filed the

present revision asserting that the learned Courts below erred

in appreciating the material on record. The accused had

rebutted the presumption attached to the cheque by leading

evidence. The defence evidence was wrongly ignored. Mohit

Yadav, in whose presence the money was lent , was not

examined, and an adverse inference should have been drawn

against the complainant. Hence, it was prayed that the

present revision be allowed and the judgments and order

passed by the learned Courts below be set aside.

9. I have heard Ms Neelam, vice Mr T.K. Verma,

learned counsel for the petitioner/accused, and Mr Arun K.

Verma, learned counsel for the respondent/complainant.

10. Ms Neelam, learned vice counsel representing the

petitioner/accused, submitted that the learned Courts below

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erred in appreciating the evidence on record. There was no

evidence regarding the advancement of the loan, and Mohit

Yadav, in whose presence the loan was advanced , was not

examined; hence, an adverse inference should have been

drawn against the complainant. Hence, she prayed that the

present petition be allowed, and the judgments and order

passed by the learned Courts below be set aside.

11. Mr Arun K. Verma, learned counsel for the

respondent/complainant, submitted that the plea taken by the

accused that he had furnished the cheques to the bank and

these were misused by the complainant was falsified by the

statement of Narotam Kumar (DW -1). Both the learned

Courts below have concurrently held that the ingredients of

Section 138 of the NI Act were duly satisfied, and this Court

should not interfere with the concurrent findings of fact.

Hence, he prayed that the present revision petition be

dismissed.

12. I have given considerable thought to the

submissions made at the bar and have gone through the

records carefully.

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13. It was laid down by the Hon’ble Supreme Court in

Malkeet Singh Gill v. State of Chhattisgarh, (2022) 8 SCC 204:

(2022) 3 SCC (Cri) 348: 2022 SCC OnLine SC 786 that a

revisional court is not an appellate court and it can only

rectify the patent defect, errors of jurisdiction or the law. It

was observed at page 207-

“10. Before adverting to the merits of the contentions,

at the outset, it is apt to mention that there are

concurrent findings of conviction arrived at by two

courts after a detailed appreciation of the material and

evidence brought on record. The High Court in criminal

revision against conviction is not supposed to exercise

the jurisdiction like the appellate court, and the scope

of interference in revision is extremely narrow. Section

397 of the Criminal Procedure Code (in short “CrPC”)

vests jurisdiction to satisfy itself or himself as to the

correctness, legality or propriety of any finding,

sentence or order, recorded or passed, and as to the

regularity of any proceedings of such inferior court.

The object of the provision is to set right a patent

defect or an error of jurisdiction or law. There has to be

a well-founded error that is to be determined on the

merits of individual cases. It is also well settled that

while considering the same, the Revisional Court does

not dwell at length upon the facts and evidence of the

case to reverse those findings.

14. This position was reiterated in State of Gujarat v.

Dilipsinh Kishorsinh Rao, (2023) 17 SCC 688: 2023 SCC OnLine SC

1294, wherein it was observed at page 695:

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“14. The power and jurisdiction of the Higher Court

under Section 397 CrPC, which vests the court with the

power to call for and examine records of an inferior

court, is for the purposes of satisfying itself as to the

legality and regularities of any proceeding or order

made in a case. The object of this provision is to set

right a patent defect or an error of jurisdiction or law or

the perversity which has crept in such proceedings.

15. It would be apposite to refer to the judgment of this

Court in Amit Kapoor v. Ramesh Chander [Amit Kapoor v.

Ramesh Chander, (2012) 9 SCC 460: (2012) 4 SCC (Civ)

687: (2013) 1 SCC (Cri) 986], where scope of Section 397

has been considered and succinctly explained as under:

(SCC p. 475, paras 12-13)

“12. Section 397 of the Code vests the court with

the power to call for and examine the records of

an inferior court for the purposes of satisfying

itself as to the legality and regularity of any

proceedings or order made in a case. The object

of this provision is to set right a patent defect or

an error of jurisdiction or law. There has to be a

well-founded error, and it may not be

appropriate for the court to scrutinise the orders,

which, upon the face of it, bear a token of careful

consideration and appear to be in accordance

with law. If one looks into the various judgments

of this Court, it emerges that the revisional

jurisdiction can be invoked where the decisions

under challenge are grossly erroneous, there is

no compliance with the provisions of law, the

finding recorded is based on no evidence,

material evidence is ignored, or judicial

discretion is exercised arbitrarily or perversely.

These are not exhaustive classes, but are merely

indicative. Each case would have to be

determined on its own merits.

13. Another well-accepted norm is that the revisional

jurisdiction of the higher court is a very limited one and

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cannot be exercised in a routine manner. One of the

inbuilt restrictions is that it should not be against an

interim or interlocutory order. The Court has to keep in

mind that the exercise of revisional jurisdiction itself

should not lead to injustice ex facie. Where the Court is

dealing with the question as to whether the charge has

been framed properly and in accordance with law in a

given case, it may be reluctant to interfere in the

exercise of its revisional jurisdiction unless the case

substantially falls within the categories aforestated.

Even the framing of the charge is a much -advanced

stage in the proceedings under CrPC.”

15. It was held in Kishan Rao v. Shankargouda, (2018) 8

SCC 165: (2018) 3 SCC (Cri) 544: (2018) 4 SCC (Civ) 37: 2018 SCC

OnLine SC 651 that it is impermissible for the High Court to

reappreciate the evidence and come to its conclusions in the

absence of any perversity. It was observed at page 169:

“12. This Court has time and again examined the scope

of Sections 397/401 CrPC and the grounds for

exercising the revisional jurisdiction by the High Court.

In State of Kerala v. Puttumana Illath Jathavedan

Namboodiri, (1999) 2 SCC 452: 1999 SCC (Cri) 275], while

considering the scope of the revisional jurisdiction of

the High Court, this Court has laid down the following:

(SCC pp. 454-55, para 5)

5. … In its revisional jurisdiction, the High Court

can call for and examine the record of any

proceedings to satisfy itself as to the correctness,

legality or propriety of any finding, sentence or

order. In other words, the jurisdiction is one of

supervisory jurisdiction exercised by the High

Court for correcting a miscarriage of justice. But

the said revisional power cannot be equated with

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the power of an appellate court, nor can it be

treated even as a second appellate jurisdiction.

Ordinarily, therefore, it would not be appropriate

for the High Court to reappreciate the evidence

and come to its conclusion on the same when the

evidence has already been appreciated by the

Magistrate as well as the Sessions Judge in

appeal, unless any glaring feature is brought to

the notice of the High Court which would

otherwise amount to a gross miscarriage of

justice. On scrutinising the impugned judgment

of the High Court from the aforesaid standpoint,

we have no hesitation in concluding that the

High Court exceeded its jurisdiction in

interfering with the conviction of the respondent

by reappreciating the oral evidence. …”

13. Another judgment which has also been

referred to and relied on by the High Court is the

judgment of this Court in Sanjaysinh Ramrao

Chavan v. Dattatray Gulabrao Phalke, (2015) 3 SCC

123: (2015) 2 SCC (Cri) 19]. This Court held that the

High Court, in the exercise of revisional

jurisdiction, shall not interfere with the order of

the Magistrate unless it is perverse or wholly

unreasonable or there is non-consideration of

any relevant material, the order cannot be set

aside merely on the ground that another view is

possible. The following has been laid down in

para 14: (SCC p. 135)

“14. … Unless the order passed by the

Magistrate is perverse or the view taken by

the court is wholly unreasonable or there is

non-consideration of any relevant material

or there is palpable misreading of records,

the Revisional Court is not justified in setting

aside the order, merely because another view

is possible. The Revisional Court is not meant

to act as an appellate court. The whole

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purpose of the revisional jurisdiction is to

preserve the power in the court to do justice

in accordance with the principles of criminal

jurisprudence. The revisional power of the

court under Sections 397 to 401 CrPC is not to

be equated with that of an appeal. Unless the

finding of the court, whose decision is sought

to be revised, is shown to be perverse or

untenable in law or is grossly erroneous or

glaringly unreasonable or where the decision

is based on no material or where the material

facts are wholly ignored or where the judicial

discretion is exercised arbitrarily or

capriciously, the courts may not interfere

with the decision in exercise of their

revisional jurisdiction.”

16. This position was reiterated in Bir Singh v. Mukesh

Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC

(Civ) 309: 2019 SCC OnLine SC 13, wherein it was observed at

page 205:

“16. It is well settled that in the exercise of revisional

jurisdiction under Section 482 of the Criminal

Procedure Code, the High Court does not, in the

absence of perversity, upset concurrent factual

findings. It is not for the Revisional Court to re-analyse

and re-interpret the evidence on record.

17. As held by this Court in Southern Sales & Services v.

Sauermilch Design and Handels GmbH, (2008) 14 SCC

457, it is a well-established principle of law that the

Revisional Court will not interfere even if a wrong

order is passed by a court having jurisdiction, in the

absence of a jurisdictional error. The answer to the first

question is, therefore, in the negative.”

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17. A similar view was taken in Sanjabij Tari v. Kishore

S. Borcar, 2025 SCC OnLine SC 2069, wherein it was observed:

“27. It is well settled that in exercise of revisional ju-

risdiction, the High Court does not, in the absence of

perversity, upset concurrent factual findings [See: Bir

Singh(supra)]. This Court is of the view that it is not for

the Revisional Court to re-analyse and re-interpret the

evidence on record. As held by this Court in Southern

Sales & Services v. Sauermilch Design and Handels GMBH,

(2008) 14 SCC 457, it is a well-established principle of

law that the Revisional Court will not interfere, even if

a wrong order is passed by a Court having jurisdiction,

in the absence of a jurisdictional error.

28. Consequently, this Court is of the view that in the

absence of perversity, it was not open to the High Court

in the present case, in revisional jurisdiction, to upset

the concurrent findings of the Trial Court and the Ses-

sions Court.

18. The present revision has to be decided as per the

parameters laid down by the Hon’ble Supreme Court.

19. Accused Varinder Singh (DW -3) admitted his

signatures on cheques (Ext. CW-1/B and Ext. CW-1/C). It was

laid down by the Hon'ble Supreme Court in APS Forex Services

(P) Ltd. v. Shakti International Fashion Linkers (2020) 12 SCC

724, that when the issuance of a cheque and signature on the

cheque are not disputed, a presumption would arise that the

cheque was issued in discharge of the legal liability. It was

observed: -

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“9. Coming back to the facts in the present case and

considering the fact that the accused has admitted the

issuance of the cheques and his signature on the

cheque and that the cheque in question was issued for

the second time after the earlier cheques were

dishonoured and that even according to the accused

some amount was due an d payable, there is a

presumption under Section 139 of the NI Act that there

exists a legally enforceable debt or liability. Of course,

such a presumption is rebuttable. However, to rebut the

presumption, the accused was required to lead

evidence that the full amount due and payable to the

complainant had been paid. In the present case, no

such evidence has been led by the accused. The story

put forward by the accused that the cheques were given

by way of security is not believable in the absence of

further evidence to rebut the presumption, and more

particularly, the cheque in question was issued for the

second time after the earlier cheques were

dishonoured. Therefore, both the courts below have

materially erred in not properly appreciating and

considering the presumption in favour of the

complainant that there exists a legally enforceable debt

or liability as per Section 139 of the NI Act. It appears

that both the learned trial court as well as the High

Court have committed an error in shifting the burden

upon the complainant to prove the debt or liability,

without appreciating the presumption under Section

139 of the NI Act. As observed above, Section 139 of the

Act is an example of reverse onus clause and therefore,

once the issuance of the cheque has been admitted and

even the signature on the cheque has been admitted,

there is always a presumption in favour of the

complainant that there exists legally enforceable debt

or liability and thereafter, it is for the accused to rebut

such presumption by leading evidence.”

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20. A similar view was taken in N. Vijay Kumar v.

Vishwanath Rao N., 2025 SCC OnLine SC 873, wherein it was

held as under:

“6. Section 118 (a) assumes that every negotiable

instrument is made or drawn for consideration, while

Section 139 creates a presumption that the holder of a

cheque has received the cheque in discharge of a debt

or liability. Presumptions under both are rebuttable,

meaning they can be rebutted by the accused by raising

a probable defence.”

21. This position was reiterated in Sanjabij Tari v.

Kishore S. Borcar, 2025 SCC OnLine SC 2069, wherein it was

observed:

“ONCE EXECUTION OF A CHEQUE IS ADMITTED,

PRESUMPTIONS UNDER SECTIONS 118 AND 139 OF THE NI

ACT ARISE

15. In the present case, the cheque in question has

admittedly been signed by the Respondent No. 1 -

Accused. This Court is of the view that once the

execution of the cheque is admitted, the presumption

under Section 118 of the NI Act that the cheque in

question was drawn for consideration and the

presumption under Section 139 of the NI Act that the

holder of the cheque received the said cheque in

discharge of a legally enforceable debt or liability arises

against the accused. It is pertinent to mention that

observations to the contrary by a two-Judge Bench in

Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4

SCC 54, have been set aside by a three-Judge Bench in

Rangappa(supra).

16. This Court is further of the view that by creating

this presumption, the law reinforces the reliability of

cheques as a mode of payment in commercial

transactions.

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17. Needless to mention that the presumption

contemplated under Section 139 of the NI Act is a

rebuttable presumption. However, the initial onus of

proving that the cheque is not in discharge of any debt

or other liability is on the accused/drawer of the

cheque [See: Bir Singhv. Mukesh Kumar, (2019) 4 SCC

197].

22. Thus, the learned Courts below were justified in

raising the presumption that the cheque s were issued in

discharge of the liability for consideration.

23. Accused Varinder Singh Thakur (DW-3) stated that

he had furnished the guarantee of the car loan taken by the

complainant. This plea was falsified by Narotam Kumar

(DW-1), who stated in his cross-examination that no cheque

was taken from the accused Varinder Singh Thaku r. This

witness was put forward as a witness of truth by the accused,

and his testimony falsifies the version of the accused that he

had furnished the cheques (Ext.CW-1/B and Ext. CW-1/C) at

the time of taking the loan.

24. Shakuntla Thakur (DW-2) stated that the accused

demanded ₹1,50,000/- from the complainant and the

complainant advanced ₹1,35,000/-. The money was paid in

two instalments in her presence, and she was not present at

the time of advancing the third instalment. She admitted in

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her cross-examination that the complainant had advanced

₹50,000/- and ₹30,000/- to the accused in her presence. This

money was to be returned within one year, but the accused

failed to return it. She was also put forward as a witness of

truth by the accused; therefore, her testimony that the

complainant had advanced ₹1,35,000/- out of which two

instalments of ₹50,000/-and ₹35,000/- were advanced in her

presence has to be accepted as correct.

25. Therefore, the learned Courts below had rightly

held that defence evidence corroborated the complainant’s

case instead of rebutting the presumption.

26. It was submitted that the complainant asserted in

paragraph 3 of the complaint that the money was advanced in

the presence of Mohit Yadav . The complainant failed to

examine Mohit Yadav, and an adverse inference should be

drawn against the complainant. This submission is not

acceptable. The accused admitted his signature s on the

cheques, which triggered the presumption under Section

118(a) and 139 of the NI Act that the cheques were issued for

consideration to discharge the debt/liability. It was laid down

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by the Hon’ble Supreme Court in Uttam Ram v. Devinder Singh

Hudan, (2019) 10 SCC 287: (2020) 1 SCC (Cri) 154: (2020) 1 SCC

(Civ) 126: 2019 SCC OnLine SC 1361, that a presumption under

Section 139 of NI Act would obviate the requirement to prove

the existence of consideration. It was observed:

“20. Th̨ e trial court and the High Court proceeded as if

the appellant was to prove a debt before the civil court,

wherein the plaintiff is required to prove his claim on

the basis of evidence to be laid in support of his claim

for the recovery of the amount due. An dishonour of a

cheque carries a statutory presumption of

consideration. The holder of the cheque in due course is

required to prove that the cheque was issued by the

accused and that when the same was presented, it was

not honoured. Since there is a statutory presumption of

consideration, the burden is on the accused to rebut the

presumption that the cheque was issued not for any

debt or other liability.”

27. This position was reiterated in Ashok Singh v. State

of U.P., 2025 SCC OnLine SC 706, wherein it was observed:

“22. The High Court while allowing the criminal

revision has primarily proceeded on the presumption

that it was obligatory on the part of the complainant to

establish his case on the basis of evidence by giving the

details of the bank account as well as the date and time

of the withdrawal of the said amount which was given

to the accused and also the date and time of the

payment made to the accused, including the date and

time of receiving of the cheque, which has not been

done in the present case. Pausing here, such

presumption on the complainant, by the High Court,

appears to be erroneous. The onus is not on the

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complainant at the threshold to prove his

capacity/financial wherewithal to make the payment in

discharge of which the cheque is alleged to have been

issued in his favour. Only if an objection is raised that

the complainant was not in a financial position to pay

the amount so claimed by him to have been given as a

loan to the accused, only then would the complainant

would have to bring before the Court cogent material to

indicate that he had the financial capacity and had

actually advanced the amount in question by way of

loan. In the case at hand, the appellant had

categorically stated in his deposition and reiterated in

the cross-examination that he had withdrawn the

amount from the bank in Faizabad (Typed Copy of his

deposition in the paperbook wrongly mentions this as

‘Firozabad’). The Court ought not to have summarily

rejected such a stand, more so when respondent no. 2

did not make any serious attempt to dispel/negate such

a stand/statement of the appellant. Thus, on the one

hand, the statement made before the Court, both in

examination-in-chief and cross-examination, by the

appellant with regard to withdrawing the money from

the bank for giving it to the accused has been

disbelieved, whereas the argument on behalf of the

accused that he had not received any payment of any

loan amount has been accepted. In our decision in S. S.

Production v. Tr. Pavithran Prasanth, 2024 INSC 1059, we

opined:

‘8. From the order impugned, it is clear that though

the contention of the petitioners was that the said

amounts were given for producing a film and were

not by way of return of any loan taken, which may

have been a probable defence for the petitioners in

the case, but rightly, the High Court has taken the

view that evidence had to be adduced on this point

which has not been done by the petitione₹ Pausing

here, the Court would only comment that the

reasoning of the High Court, as well as the First

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Appellate Court and Trial Court, on this issue is

sound. Just by taking a counter-stand to raise a

probable defence would not shift the onus on the

complainant in such a case, for the plea of defence

has to be buttressed by evidence, either oral or

documentary, which in the present case has not

been done. Moreover, even if it is presumed that the

complainant had not proved the source of the

money given to the petitioners by way of loan by

producing statement of accounts and/or Income Tax

Returns, the same ipso facto, would not negate such

claim for the reason that the cheques having being

issued and signed by the petitioners has not been

denied, and no evidence has been led to show that

the respondent lacked capacity to provide the

amount(s) in question. In this regard, we may make

profitable reference to the decision in Tedhi Singh v.

Narayan Dass Mahant, (2022) 6 SCC 735:

‘10. The trial court and the first appellate court have

noted that in the case under Section 138 of the NI

Act, the complainant need not show in the first

instance that he had the capacity. The proceedings

under Section 138 of the NI Act are not a civil suit. At

the time, when the complainant gives his evidence,

unless a case is set up in the reply notice to the

statutory notice sent, that the complainant did not

have the wherewithal, it cannot be expected of the

complainant to initially lead evidence to show that

he had the financial capacity. To that extent, the

courts in our view were right in holding on those

lines. However, the accused has the right to

demonstrate that the complainant in a particular

case did not have the capacity and therefore, the

case of the accused is acceptable, which he can do

by producing independent materials, namely, by

examining his witnesses and producing documents.

It is also open to him to establish the very same

aspect by pointing to the materials produced by the

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complainant himself. He can further, more

importantly, further achieve this result through the

cross-examination of the witnesses of the

complainant. Ultimately, it becomes the duty of the

courts to consider carefully and appreciate the

totality of the evidence and then come to a

conclusion whether, in the given case, the accused

has shown that the case of the complainant is in

peril for the reason that the accused has established

a probable defence. ’(emphasis supplied)’

(underlining in original; emphasis supplied by

us in bold).

28. A similar view was taken in Sanjay Sanjabij Tari v.

Kishore S. Borcar, 2025 SCC OnLine SC 2069, wherein it was

observed:

“21. This Court also takes judicial notice of the fact that

some District Courts and some High Courts are not

giving effect to the presumptions incorporated in

Sections 118 and 139 of the NI Act and are treating the

proceedings under the NI Act as another civil recovery

proceedings and are directing the complainant to prove

the antecedent debt or liability. This Court is of the

view that such an approach is not only prolonging the

trial but is also contrary to the mandate of Parliament,

namely, that the drawer and the bank must honour the

cheque; otherwise, trust in cheques would be

irreparably damaged.”

29. Therefore, the complainant’s case cannot be

doubted because of the non-examination of Mohit Yadav.

30. Accused Varinder Singh Thakur (DW-3) stated in

his examination-in-chief that he had not taken any money

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from the complainant and was not required to pay any money

to the complainant. This statement corroborates the

testimonies of Shakuntla Thakur (DW-2) and the complainant

that the accused had failed to return the money.

31. The accused did not lead any other evidence to

rebut the presumption, and the learned Courts below rightly

held that the accused had failed to rebut the presumption

attached to the cheque.

32. The complainant stated that the cheque was

dishonoured with an endorsement ‘payment stopped by the

drawer’. This is duly corroborated by the memos of dishonour

(Ext.CW1/D and Ext.CW-1/E), in which the reason for

dishonour was mentioned that ‘payment stoppe d by the

drawer’. It was laid down by the Hon’ble Supreme Court in

Mandvi Cooperative Bank Ltd. v. Nimesh B. Thakore, (2010) 3

SCC 83: (2010) 1 SCC (Civ) 625: (2010) 2 SCC (Cri) 1: 2010 SCC

OnLine SC 155 that the memo issued by the Bank is presumed

to be correct and the burden is upon the accused to rebut the

presumption. It was observed at page 95:

“24. Section 146, making a major departure from the

principles of the Evidence Act, provides that the bank's

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slip or memo with the official mark showing that the

cheque was dishonoured would, by itself, give rise to

the presumption of dishonour of the cheque, unless

and until that fact was disproved. Section 147 makes

the offences punishable under the Act compoundable.”

33. In the present case, no evidence was produced to

rebut the presumption, and the learned Courts below had

rightly held that the cheque was dishonoured with an

endorsement ‘payment stopped by the drawer’.

34. It was laid down by the Hon’ble Supreme Court in

Laxmi Dyechem v. State of Gujarat, (2012) 13 SCC 375: (2012) 4

SCC (Cri) 283: 2012 SCC OnLine SC 970 that the dishonour of a

cheque on the ground that the drawer stopped the payment

will attract the provisions of Section 138 of the NI Act. It was

observed at page 388:

12. In Modi Cements Ltd. [(1998) 3 SCC 249: 1999 SCC

(Cri) 252], a similar question had arisen for the

consideration of this Court. The question was whether

dishonour of a cheque on the ground that the drawer

had stopped payment was a dishonour punishable

under Section 138 of the Act. Relying upon two earlier

decisions of this Court in Electronics Trade &

Technology Development Corpn. Ltd. v. Indian

Technologists and Engineers (Electronics) (P) Ltd. [(1996)

2 SCC 739: 1996 SCC (Cri) 454] and K.K. Sidharthan v. T.P.

Praveena Chandran [(1996) 6 SCC 369: 1996 SCC (Cri)

1340], it was contended by the drawer of the cheque

that if the payment was stopped by the drawer, the

dishonour of the cheque could not constitute an

23

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offence under Section 138 of the Act. That contention

was specifically rejected by this Court. Not only that,

the decision in Electronics Trade & Technology

Development Corpn. Ltd. [(1996) 2 SCC 739: 1996 SCC

(Cri) 454] to the extent that the same held that

dishonour of the cheque by the bank after the drawer

had issued a notice to the holder not to present the

same would not constitute an offence, was overruled.

This Court observed: (Modi Cements Ltd. case [(1998) 3

SCC 249: 1999 SCC (Cri) 252], SCC pp. 257-58, paras 18 &

20)

“18. The aforesaid propositions in both these

reported judgments, in our considered view, with

great respect, are contrary to the spirit and object of

Sections 138 and 139 of the Act. If we are to accept

this proposition, it will make Section 138 a dead

letter, for, by giving instructions to the bank to stop

payment immediately after issuing a cheque against

a debt or liability, the drawer can easily get rid of

the penal consequences, notwithstanding the fact

that a deemed offence was committed. Further, the

following observations in para 6 in Electronics Trade

& Technology Development Corpn. Ltd. [(1996) 2 SCC

739: 1996 SCC (Cri) 454] (SCC p. 742)

Section 138 is intended to prevent dishonesty on

the part of the drawer of a negotiable instrument

to draw a cheque without sufficient funds in his

account maintained by him in a bank and induce

the payee or holder in due course to act upon it.

Section 138 draws the presumption that one

commits the offence if one issues the cheque

dishonestly.

In our opinion, do not also lay down the law

correctly.

***

20. On a careful reading of Section 138 of the Act, we

are unable to subscribe to the view that Section 138

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of the Act draws a presumption of dishonesty

against the drawer of the cheque if he without

sufficient funds to his credit in his bank account to

honour the cheque issues the same and, therefore,

this amounts to an offence under Section 138 of the

Act. For the reasons stated hereinabove, we are

unable to share the views expressed by this Court in

the above two cases, and we respectfully differ with

the same regarding the interpretation of Section 138

of the Act to the limited extent as indicated above.”

(emphasis in original)

13. We may also, at this stage, refer to the decisions of

this Court in M.M.T.C. Ltd. v. Medchl Chemicals and

Pharma (P) Ltd. [(2002) 1 SCC 234: 2002 SCC (Cri) 121],

where to this Court considering an analogous question

held that even in cases where the dishonour was on

account of “stop-payment” instructions of the drawer,

a presumption regarding the cheque being for

consideration would arise under Section 139 of the Act.

The Court observed: (SCC p. 240, para 19)

“19. Just such a contention has been negatived by

this Court in Modi Cements Ltd. v. Kuchil Kumar

Nandi [(1998) 3 SCC 249: 1999 SCC (Cri) 252]. It has

been held that even though the cheque is

dishonoured by reason of a ‘stop -payment’

instruction, an offence under Section 138 could still

be made out. It is held that the presumption under

Section 139 is also attracted in such a case. The

authority shows that even when the ch eque is

dishonoured by reason of ‘stop -payment’

instructions by virtue of Section 139, the court has

to presume that the cheque was received by the

holder for the discharge, in whole or in part, of any

debt or liability. Of course, this is a rebuttable

presumption. The accused can thus show that the

‘stop-payment’ instructions were not issued

because of insufficiency or paucity of funds. If the

accused shows that in his account there were

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sufficient funds to clear the amount of the cheque at

the time of presentation of the cheque for

encashment at the drawer bank and that the stop-

payment notice had been issued because of other

valid reasons, including that there was no existing

debt or liability at the time of presentation of a

cheque for encashment, then offence under Section

138 would not be made out. The important thing is

that the burden of so proving would be on the

accused. Thus, a court cannot quash a complaint on

this ground.”

14. To the same effect is the decision of this Court in

Goaplast (P) Ltd. v. Chico Ursula D'Souza [(2003) 3 SCC

232: 2003 SCC (Cri) 603: 2003 Cri LJ 1723] where this

Court held that “stop-payment instructions” and

consequent dishonour of a post-dated cheque attract

the provision of Section 138. This Court observed: (SCC

pp. 232g-233c)

“Chapter XVII, containing Sections 138 to 142, was

introduced in the Act by Act 66 of 1988 with the

object of inculcating faith in the efficacy of banking

operations and giving credibility to negotiable

instruments in business transactions. The said

provisions were intended to discourage people from

not honouring their commitments by way of

payment through cheques. The court should lean in

favour of an interpretation which serves the object

of the statute. A post-dated cheque will lose its

credibility and acceptability if its payment can be

stopped routinely. The purpose of a post-dated cheque

is to provide some accommodation to the drawer of the

cheque. Therefore, it is all the more necessary that the

drawer of the cheque should not be allowed to abuse

the accommodation given to him by a creditor by way

of acceptance of a post-dated cheque.

In view of Section 139, it has to be presumed that a

cheque is issued in the discharge of any debt or

other liability. The presumption can be rebutted by

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adducing evidence, and the burden of proof is on

the person who wants to rebut the presumption.

This presumption, coupled with the object of Chapter

XVII of the Act, leads to the conclusion that by

countermanding payment of a post-dated cheque, a

party should not be allowed to get away from the penal

provision of Section 138 of the Act. A contrary view

would render Section 138 a dead letter and will provide

a handle to persons trying to avoid payment under

legal obligations undertaken by them through their

own acts, which, in other words, can be said to be

taking advantage of one's own wrong.” (emphasis

supplied)

35. The complainant stated that he had served a notice

upon the accused. Acknowledg ement (Ext.CW-1/K) bearing

the signatures was placed on record. Thus, the learned Courts

below had rightly held that the notice was served upon the

accused.

36. Therefore, it was duly proved on record that the

accused had issued the cheques in discharge of his liability,

which were dishonoured with an endorsement ‘payment

stopped by the drawer’, and the accused failed to repay the

amount despite the receipt of the notice of demand.

Therefore, all the ingredients of the commission of offences

punishable under Section 138 of N. I Act were satisfied, and

the learned Trial Court had rightly convicted the accused of

27

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the commission of an offence punishable under Section 138 of

the NI Act.

37. The learned Trial Court had sentenced the accused

to undergo simple imprisonment for six months. It was laid

down by the Hon’ble Supreme Court in Bir Singh v. Mukesh

Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC

(Civ) 309: 2019 SCC OnLine SC 138 that the penal provision of

Section 138 of the N.I.Act is a deterrent in nature. It was

observed at page 203:

“6. The object of Section 138 of the Negotiable

Instruments Act is to infuse credibility into negotiable

instruments, including cheques, and to encourage and

promote the use of negotiable instruments, including

cheques, in financial transactions. The penal provision

of Section 138 of the Negotiable Instruments Act is

intended to be a deterrent to callous issuance of

negotiable instruments such as cheques without

serious intention to honour the promise implicit in the

issuance of the same.”

38. Therefore, the sentence of six months is not

excessive.

39. The learned Trial Court had awaited a

compensation of ₹ 1,10,000/-. The two cheques were issued

for ₹49,000/- each. Thus, the total amount of the cheque was

₹98,000/- and a compensation of ₹ 11,000/- was awarded on

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2026:HHC:48

the cheque amount. The complainant lost interest on the

amount that he would have obtained by investing the money.

The complainant had to pay the litigation expenses for filing

the complaint. He was entitled to be compensated for the

same. It was laid down by the Hon’ble Supreme Court in

Kalamani Tex v. P. Balasubramanian, (2021) 5 SCC 283: (2021) 3

SCC (Civ) 25: (2021) 2 SCC (Cri) 555: 2021 SCC OnLine SC 75 that

the Courts should uniformly levy a fine up to twice the cheque

amount along with simple interest at the rate of 9% per

annum. It was observed at page 291: -

19. As regards the claim of compensation raised on

behalf of the respondent, we are conscious of t he

settled principles that the object of Chapter XVII of NIA

is not only punitive but also compensatory and

restitutive. The provisions of NIA envision a single

window for criminal liability for the dishonour of a

cheque as well as civil liability for the realisation of the

cheque amount. It is also well settled that there needs

to be a consistent approach towards awarding

compensation, and unless there exist special

circumstances, the courts should uniformly levy fines

up to twice the cheque amount along w ith simple

interest @ 9% p.a. [R. Vijayan v. Baby, (2012) 1 SCC 260,

para 20: (2012) 1 SCC (Civ) 79: (2012) 1 SCC (Cri) 520]”

40. In the present case, the learned Trial Court ordered

payment of compensation of ₹1,10,000/-. The cheques were

issued on 10.09.2019 and 25.09.2019, amounting to ₹49,000/-

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each. The compensation was awarded on 26.12.2022 after the

lapse of three years; hence, the compensation of ₹11,000/-

was grossly inadequate. However, the complainant has not

preferred any appeal against the inadequacy of the amount of

compensation, and no interference is required with the

amount of compensation awarded by the learned Trial Court,

as affirmed by the learned Appellate Court.

41. No other point was urged.

42. In view of the above, the present petition fails, and

the same is dismissed, so also pending application(s), if any.

43. Records of the learned Courts below be sent back

forthwith, along with a copy of this judgment.

(Rakesh Kainthla)

Judge

1

st

January, 2026

(ravinder)