Himachal Pradesh High Court

Date Of Decision: 01.08.2024 vs Surjeet Singh And Another on 1 August, 2024

Author: Sandeep Sharma

Bench: Sandeep Sharma

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THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

Cr. Revision No.215 of 2023

Date of Decision: 01.08.2024

_______________________________________________________ M/s Paras Kanwar & Company .......Petitioner

Versus

Surjeet Singh and another ... Respondent _______________________________________________________ Coram:

Hon'ble Mr. Justice Sandeep Sharma, Judge. Whether approved for reporting? 1

For the Petitioner : Mr. G.R.Palsra, Advocate.

For the Respondents : Ms. Komal Chaudhary, Advocate, for respondent No.1.

Mr. Rajan Kahol, Mr. Vishal Panwar and Mr. B.C.Verma, Additional

Advocate Generals, with Mr. Ravi Chauhan, Deputy Advocate General, for respondent No.2/State.

_______________________________________________________

Sandeep Sharma, Judge(oral):

Instant Criminal Revision petition filed under Section 397

read with Section 401 of the Code of Criminal Procedure, lays

challenge to judgment dated 20.01.2023 passed by learned Sessions

Judge, Mandi, District Mandi, Himachal Pradesh in Criminal Appeal

No.68/2022/2019, affirming the judgment of conviction dated

30.11.2018 and order of sentence dated 03.12.2018 passed by

learned Additional Chief Judicial Magistrate, Court No.1, Mandi,

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

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District Mandi, Himachal Pradesh in NIA Act/ complaint No.77-III/ 18/

2015, titled as Surjeet Singh vs. M/s Paras Kanwar & Company,

whereby learned trial Court, while holding petitioner-accused guilty of

having committed an offence punishable under Section 138 of the

Negotiable Instruments Act, convicted and sentenced him to undergo

simple imprisonment for a period of six months and pay fine in the

form of compensation to the tune of Rs.55,000/- to the respondent-

complainant.

2. Precisely, the facts of the case, as emerge from the

record are that respondent-complainant (for short 'complainant')

filed a complaint under Section 138 of the Negotiable Instruments Act

(for short 'Act') in the competent Court of law, alleging therein that

accused had issued three post dated cheques bearing No.560698,

dated 11.06.2015, amounting to Rs. 50,000/-, cheque No.8419457,

dated 13.06.2015, amounting to Rs. 50,000/- and cheque

No.8419458, dated 17.06.2015, amounting to Rs. 50,000/-, drawn on

H.P. State Co-operative Bank, Mandi Branch, District Mandi,

Himachal Pradesh. One of the cheque bearing No. 8419458, dated

17.06.2015, amounting to Rs. 50,000/- was presented for encashment

before the Bank of India, Mandi Branch, however same was returned

unpaid with the remarks "insufficient funds" through memo dated

23.06.2015. Though, complainant served accused with legal notice

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sent through registered post and also through courier service on

16.07.2015 calling upon him to pay the cheque amount within 15 days

from the receipt of legal notice, however, fact remains that afore legal

notice was returned with the endorsement "shop door closed". In the

aforesaid background, complainant instituted proceedings under

Section 138 of the Act in the competent Court of law, which

subsequently on the basis of the pleadings as well as evidence

adduced on record by the respective parties, held accused guilty of

having committed offence punishable under Section 138 of the Act,

and accordingly convicted and sentenced him, as per the description

given hereinabove.

3. Though, at first instance being aggrieved and

dissatisfied with the aforesaid judgment of conviction and order of

sentence recorded by learned trial court, present petitioner-accused

preferred an appeal in the Court of learned Sessions Judge, Mandi,

District Mandi, Himachal Pradesh, but same also came to be

dismissed vide judgment dated 20.01.2023. In the aforesaid

background, petitioner-accused has approached this Court in the

instant proceedings, praying therein for his acquittal after quashing

and setting aside the impugned judgment of conviction and order of

sentence recorded by Courts below.

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4. Vide order dated 24.04.2023, this Court suspended the

substantive sentence imposed by Court below, subject to petitioner-

accused depositing entire compensation amount and furnishing

personal bond in the sum of Rs. 25,000/- with one surety in the like

amount to the satisfaction of learned trial Court within a period of four

weeks. However, fact remains that aforesaid order never came to be

complied with. This Court repeatedly adjourned the case on the

request of learned counsel for the petitioner-accused, enabling

petitioner-accused to deposit the compensation amount. However,

neither the amount was deposited nor accused put appearance in this

Court despite there being Bailable warrants. Lastly, vide order dated

27.06.2024, this Court issued NBWs for securing the presence of the

petitioner-accused, but proprietor of petitioner company has chosen

not to come present. In the aforesaid background, learned counsel for

the petitioner requested this Court to decide the petition on its own

merit.

5. Having heard learned counsel representing the parties

and perused material available on record vis-à-vis reasoning assigned

in the impugned judgments of conviction and order of sentence

recorded by Courts below, this Court is not persuaded to agree with

the submission of Mr. G.R. Palsra, learned counsel for the petitioner-

accused that both the Courts below have failed to appreciate the

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evidence in its right perspective, rather this Court finds that both the

courts below have very meticulously dealt with each and every aspect

of the matter and there is no scope left for interference.

6. In the case at hand, factum of issuance of cheque as well

as signatures thereupon has been nowhere disputed by the accused,

rather while making statement under Section 313 Cr.P.C, he has

categorically admitted factum of his having issued cheque as well as

signatures thereupon. However, he has claimed to have issued the

cheque as a security. Since factum with regard to issuance of cheque

as well as signatures thereupon is not in dispute, Courts below rightly

invoked Sections 118 and 139 of the Act, which talk about

presumption in favour of the holder of the cheque that cheque was

issued towards discharge of lawful liability. No doubt, aforesaid

presumption is rebuttable, but to rebut such presumption, accused

either can refer to the documents and evidence led on record by the

complainant or presumption can be rebutted by leading positive

evidence, if any. However, in the instant case, despite sufficient

opportunities, petitioner-accused failed to lead any evidence and as

such, he otherwise failed to probablize the defence, sought to be

raised by him, while deposing under Section 313 Cr.P.C.

7. The Hon'ble Apex Court in M/s Laxmi Dyechem V.

State of Gujarat, 2013(1) RCR(Criminal), has categorically held that

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if the accused is able to establish a probable defence which creates

doubt about the existence of a legally enforceable debt or liability, the

prosecution can fail. To raise probable defence, accused can rely on

the materials submitted by the complainant. Needless to say, if the

accused/drawer of the cheque in question neither raises a probable

defence nor able to contest existence of a legally enforceable debt or

liability, statutory presumption under Section 139 of the Negotiable

Instruments Act, regarding commission of the offence comes into

play. It would be profitable to reproduce relevant paras No.23 to 25 of

the judgment herein:-

"23. Further, a three judge Bench of this Court in the matter of Rangappa vs. Sri Mohan [3] held that Section 139 is an example of a reverse onus clause that has

been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies the strong criminal remedy in relation to the dishonour of the

cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. The Court however, further observed that it

must be remembered that the offence made punishable by Section 138can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose money is usually

confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant accused cannot be expected to discharge an unduly high standard of proof". The Court further observed that it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is all preponderance of probabilities.

24. Therefore, if the accused is able to establish a probable defence which creates doubt about the

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existence of a legally enforceable debt or liability, the prosecution can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is inconceivable that in some cases the accused

.

may not need to adduce the evidence of his/her

own. If however, the accused/drawer of a cheque in question neither raises a probable defence nor able to contest existence of a legally enforceable debt or liability, obviously statutory presumption

under Section 139 of the NI Act regarding commission of the offence comes into play if the same is not rebutted with regard to the materials submitted by the complainant.

25. It is no doubt true that the dishonour of cheques in order to qualify for prosecution under Section 138 of the NI Act precedes a statutory notice where the drawer is called upon by allowing him to avail the opportunity to arrange the payment of the amount covered by the cheque

and it is only when the drawer despite the receipt

of such a notice and despite the opportunity to make the payment within the time stipulated under the statute does not pay the amount, that the said default would be considered a dishonour constituting an offence, hence punishable. But

even in such cases, the question whether or not there was lawfully recoverable debt or liability for discharge whereof the cheque was issued, would be a matter that the trial court will have to examine having regard to the evidence adduced

before it keeping in view the statutory presumption that unless rebutted, the cheque is

presumed to have been issued for a valid consideration. In view of this the responsibility of the trial judge while issuing summons to conduct the trial in matters where there has been

instruction to stop payment despite sufficiency of funds and whether the same would be a sufficient ground to proceed in the matter, would be extremely heavy.

8. In the case at hand, complainant with a view to prove his

case examined himself as CW-3. While tendering his evidence by

way of affidavit Ex. CW3/A, he reiterated the contents of the

complaint. He successfully proved on record cheque Ex. CW1/B,

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return memo Ex. CW1/C, legal notice Ex.CW1/D, postal receipt Ex.

CW1/E, courier delivery receipts Ex.CW1/F and CW1/G, undelivered

registered post CW1/H, acknowledgment Ex. CW1/J and intimation

memo Ex.CW1/K. If the cross-examination conducted upon this

witness, is read in its entirety, it nowhere suggests that accused was

able to extract anything contrary to what this witness stated in his

examination-in-chief. In his cross-examination, CW-3 categorically

deposed that he knows the accused Jaspal Singh for the last 33 years

and he is an employee of the firm Surjeet Singh & Sons. While

voluntarily stating that his son Mandeep Singh is owner of afore firm,

he categorically stated that he looks after the shop and accounts of

the said firm. He stated that accused used to purchase material from

them. He had been purchasing material from them since the year

1990-92. He deposed that accused used to pay the amount of

consideration by way of cheques. While admitting that accused had

not purchased any material from them after the year 2014, he

specifically denied suggestion put to him that he has any liabilty

towards the accused firm. He also stated that at no point of time firm

filed any civil suit against the firm of the accused.

9. CW-1, Ajay Kumar, official of the Bank of India, School

Bazar Mandi, Himachal Pradesh testified that cheque Ex. CW1/B was

sent for encashment to H.P. State Co-operative Bank Limited Mandi,

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however same was returned through memo Ex. CW1/C and such fact

was intimated to the complainant through memo Ex. CW1/K.

10. CW-2, Sh. Chetan Gupta, Manager, H.P. State Co-

operative Bank Limited Mandi, testified that the cheque Ex. CW1/B

was returned unpaid through return memo Ex. CW1/C on account of

insufficient funds in the bank account of the accused.

11. CW-4, Sh. Piru Ram deposed that he is employed as a

Delivery boy in Trackon Courier company. He stated that he had

delivered the registered letter on 16.07.2015 at Mahazan Bazar. He

proved receipts in that regard i.e. Ex. CW1/F and Ex. CW1/G. He

categorically deposed that he delivered the courier to Narayan Singh,

who claimed to be the son of house owner i.e. petitioner/accused.

12. If the cross-examination conducted upon these witnesses

is read in its entirety, this Court sees no reason to differ with the

findings returned by both courts below that accused failed to extract

anything contrary to what these witnesses stated in their examination-

in-chief.

13. Having scanned the entire evidence adduced on record

as well as the statements made by aforesaid witnesses, this Court is

fully convinced that complainant has successfully proved all the basic

ingredients of Section 138 of the Act. Though, learned counsel for the

petitioner attempted to argue that legal notice sent through registered

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post was not received by the accused, however, such plea of him is

totally falsified on account of statement of CW-4, Piru Ram, who while

proving receipts EX. CW1/F and Ex. CW1/G categorically deposed

that he had delivered the registered letter on 16.07.2024 to son of the

accused. Since accused despite service of legal notice failed to pay

the amount, Courts below rightly proceeded to hold the accused

guilty.

14. By now it is well settled that dishonour of cheque issued

as security can also attract offence under Section 138 of the

Negotiable Instruments Act. Hon'ble Apex Court in case titled Sripati

Singh v. State of Jharkhand, Criminal Appeal No. 1269-1270 of

2021, decided on 28.10.2021, has held as under:

"16. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the

state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to

which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not

repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of N.I. Act would flow.

15. Needless to say, expression "security cheque" is not a

statutorily defined expression in the Negotiable Instruments Act,

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rather same is to be inferred from the pleadings as well as evidence, if

any, led on record with regard to issuance of security cheque. The

Negotiable Instruments Act does not per se carve out an exception in

respect of a "security cheque" to say that a complaint in respect of

such a cheque would not be maintainable as there is a debt existing

in respect whereof the cheque in question is issued, same would

attract provision of Section 138 of the Act in case of its dishonour.

16. Having scanned the entire evidence adduced on record

by the respective parties, this Court finds that all the basic ingredients

of Section 138 of the Act are met in the case at hand. Similarly,

factum with regard to signatures and issuance of cheque by the

accused towards discharge of lawful liability stands duly established

on record.

17. Moreover, this Court has a very limited jurisdiction under

Section 397 of the Cr.P.C, to re-appreciate the evidence, especially,

in view of the concurrent findings of fact and law recorded by the

courts below. In this regard, reliance is placed upon the judgment

passed by Hon'ble Apex Court in case "State of Kerala Vs.

Puttumana Illath Jathavedan Namboodiri" (1999) 2 Supreme Court

Cases 452, wherein it has been held as under:-

"In its revisional jurisdiction, the High Court can call for and examine the record of any proceedings for the purpose of satisfying 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

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the High Court for correcting miscarriage of justice. But the said revisional power cannot be equated with 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 re-appreciate the evidence

.

and come to its own conclusion on the same when the

evidence has already been appreciated by the Magistrate as well as Sessions Judge in appeal, unless any glaring feature is brought to the notice of the High Court which would otherwise tantamount to gross miscarriage of justice."

18. Since after having carefully examined the evidence in the

present case, this Court is unable to find any error of law as well as

fact, if any, committed by the courts below, while passing impugned

judgments, there is no occasion, whatsoever, to exercise the

revisional power.

19. True it is that the Hon'ble Apex Court in Krishnan and

another Versus Krishnaveni and another, (1997) 4 Supreme

Court Case 241; has held that in case Court notices that there is a

failure of justice or misuse of judicial mechanism or procedure,

sentence or order is not correct, it is salutary duty of the High Court to

prevent the abuse of the process or miscarriage of justice or to correct

irregularities/ incorrectness committed by inferior criminal court in its