Himachal Pradesh High Court

_____________________________________________________________________ vs M/S Satish Enterprises on 25 July, 2024

Author: Sandeep Sharma

Bench: Sandeep Sharma

    IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA




                                                                    .
                                                         Cr.R No.156 of 2016





                                                 Date of Decision: 24.7.2024
    _____________________________________________________________________
    Rajesh Kumar





                                                                        .........Petitioner
                                         Versus
    M/s Satish Enterprises
                                                                       .......Respondent





    Coram

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

    For the Petitioner:       Mr. Nishant Khidtta, Legal Aid Counsel.

    For the Respondent:       Nemo.
    ___________________________________________________________________________
    Sandeep Sharma, J. (Oral)

Instant criminal revision petition filed under Section 397

Cr.PC, lays challenge to judgment dated 11.1.2016, passed by the learned

Additional Sessions Judge (II), Solan, District Solan, H.P., in Criminal

Appeal No. 29FTC/10 of 2011, affirming the judgment of conviction and

order of sentence dated 18.8.2011, in Complaint No. 94/3 of 2006, passed

by the learned Judicial Magistrate First Class-1, Kasauli, District Solan,

H.P., whereby the learned trial Court while holding the petitioner-accused

guilty of having committed offence punishable under Section 138 of the

Negotiable Instruments Act (in short the "Act"), convicted and sentenced

him to undergo simple imprisonment for a period of three months and pay

compensation to the tune of Rs. 52,000/- to the complainant.

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

that respondent/complainant lodged complaint under Section 138 of the

Act before the competent court of law, stating therein that complainant-

firm had supplied goods worth Rs. 42,000/- to the accused, who with a

view to discharge his liability, issued cheque dated 24.7.2006 amounting to

Rs. 42,000/-, however fact remains that aforesaid cheque on its

presentation to the bank concerned, was dishonoured. Since accused

failed to make the payment good within the stipulated period despite

having received legal notice issued to him, complainant had no option but

to initiate proceedings under Section 138 of the Act in the competent court

of law.

3. Learned trial Court on the basis of material adduced on record

by the respective parties, vide judgment/order dated 18.8.2011, held the

petitioner-accused guilty of having committed offence under Section 138 of

the Act and accordingly, convicted and sentenced him as per the

description given herein above.

4. Being aggrieved and dissatisfied with the aforesaid judgment of

conviction recorded by the court below, petitioner-accused preferred an

appeal before the learned first appellate Court, but the same was dismissed

vide judgment dated 11.1.2016. In the aforesaid background, accused has

approached this Court in the instant proceedings, praying therein to set-

aside the judgment of conviction and order of sentence recorded by the

court below.

5. Vide order dated 24.6.2016, this Court suspended the

substantive sentence imposed by the court below subject to petitioner's

furnishing personal bonds within a period of four weeks. Vide order dated

22.6.2017, this Court, while making interim order dated 24.6.2016

absolute, directed the petitioner-accused to deposit the amount of Rs.

52,000/- within six weeks, but aforesaid amount never came to be

deposited. Initially the petitioner was being represented by Mr. Rajiv Rai,

Advocate, but since he expressed his inability to conduct the case on the

ground that petitioner-accused was not coming forward to impart

instructions, this Court appointed Mr. Ajeet Sharma, Advocate, as Legal Aid

Counsel, but he also expressed his inability to conduct the case for the

similar reasons, as were stated by earlier counsel.

6. Though having noticed aforesaid conduct of the petitioner, this

court was convinced and satisfied that petitioner is no more interested to

prosecute the case further, but yet with a view to do substantial justice,

requested Mr. Nishant Khidtta, Advocate, to render his services as Legal

Aid Counsel. Mr. Khidtta, also tried to contact the petitioner repeatedly but

in vain.

7. Vide order dated 2.7.2024, this Court issued court notice to

the petitioner for today's date. Though petitioner-accused stands served for

today's date, but since he has not come present today, this Court has no

option, but to decide the petition on the basis of material available on

record.

8. Having heard learned counsel for the parties and perused

material available on record vis-à-vis reasoning assigned in the judgment

impugned in the instant proceedings, this Court is not persuaded to agree

with Mr. Nishant Khidtta, learned counsel appearing for the petitioner that

courts below have failed to appreciate the evidence in its right perspective,

rather this Court finds that both the courts below have dealt with each and

every aspect of the matter very meticulously and there is no scope of

interference. Interestingly, in the case at hand, there is no denial, if any,

on the part of the petitioner-accused with regard to issuance of cheque as

well as signatures thereupon, rather he categorically admitted factum of his

having purchased goods from the complainant-firm as well as issuance of

cheque towards discharge of liability. If it is so, no illegality can be said to

have been committed by the court below while invoking Sections 118 and

139 of the Negotiable Instruments Act, which clearly provide that there

shall be presumption available in favour of the holder of the cheque that

same was issued in discharge of the lawful liability. No doubt, aforesaid

presumption is rebuttable, but for that purpose, accused is/was under

obligation to raise probable defence. Probable defence could be raised by

the accused by referring to the documents adduced on record by the

complainant or by leading some cogent and convincing evidence. However,

in the case at hand, accused, despite ample opportunities, failed to raise

the probable defence. r

9. The Hon'ble Apex Court in M/s Laxmi Dyechem V. State of

Gujarat, 2013(1) RCR(Criminal), has categorically held that 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 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."

10. If the entire evidence led on record by the complainant is read

in its entirety, it clearly suggests that he successfully proved all the

ingredients of Section 138 of the Act. With a view to rebut the

presumption, accused tried to set up a case that cheque in question was

issued as security but such defence of him never came to be probablized.

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

examined Mr. Shankar Kumar (GPA) as CW1. Complainant Satish Kumar

(proprietor of the firm) examined himself as CW2. Apart from oral evidence,

complainant also furnished documentary evidence on record i.e. Cheque

Ext. CW1/A, Memo Ext.CW1/B, memo of the Cooperative bank

Ext.CW1/D, forwarding memo Ext.CW1C, legal notice CW2/A, UPC receipt

Ext.CW2/B, postal receipts Ext. CW1/F & Ext.CW1/F-1, UPC receipt

Ext.CW1/G, acknowledgements Ext.CW1/H & Ex.CW1/J, General Power of

Attorney Ext.CW1/X and another notice Ex.CW1/E. Both Shankar Kumar

(CW1) and complainant Satish (CW2) successfully proved the contents of

the complaint. If the cross-examination conducted upon these witnesses is

perused in its entirety, it cannot be said that accused was able to extract

anything contrary to what these witnesses stated in their examinations-in-

chief.

12. Evidence adduced on record clearly reveals that cheque

Ext.CW1/A amounting to Rs. 42,000/- was issued by accused on

24.7.2006 in the name of M/s Satish Enterprises towards discharge of his

liability. Memo Ext.CW1/D shows that afore cheque was dishonoured for

want of sufficient funds on 12.8.2006. Since petitioner accused in his

statement recorded under Section 313 CrPC categorically admitted factum

with regard to his having purchased certain goods from the complainant as

well as issuance of cheque in lieu of that, learned courts below rightly

concluded that factum of purchase of goods by the accused from the

complainant stands established, meaning thereby, once accused also

admitted factum with regard to his having issued cheque, courts below

rightly arrived at a conclusion that cheque in question was issued towards

the discharge of his lawful liability.

13. To rebut the presumption that cheque was issued towards the

discharge of lawful liability, accused attempted to set up a defence that

cheque in question was issued as security, but interestingly, neither he

produced any evidence in defence that he had issued the cheque as

security nor he rebutted the evidence of the complainant. Once it is not in

dispute that he purchased certain goods from the complainant, he was

otherwise duty bound to pay the cost of the goods to the complainant.

Once there is nothing on record that apart from aforesaid cheque, payment,

if any, was ever made by him in cash or through different cheques, court

below rightly arrived at a conclusion that cheque in question was issued

towards discharge of lawful liability.

14. Complainant successfully proved on record that before

instituting proceedings under Section 138 of the Act, he had served legal

notice upon the accused, thereby calling upon him to make the payment

good. Neither he replied to the legal notice, nor paid the money. Similarly

factum with regard to signatures and issuance of cheque by the accused

towards discharge of lawful liability stands duly established on record.

Defence set up by the accused that cheque in question was issued as

security never came to be proved on record in accordance with law.

15. 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.

16. Needless to say, expression "Security cheque" is not a

statutorily defined expression in the Negotiable Instruments Act, 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.

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

Section 397 of the Cr.PC, 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 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.

another Versus

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

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 judicial process or

illegality of sentence or order, but learned counsel representing the accused

has failed to point out any material irregularity committed by the courts

below while appreciating the evidence and as such, this Court sees no

reason to interfere with the well reasoned judgments passed by the courts

below.

20. Consequently, in view of the discussion made herein above as

well as law laid down by the Hon'ble Apex Court, this Court sees no valid

reason to interfere with the well reasoned judgments recorded by the courts

below, which otherwise, appear to be based upon proper appreciation of

evidence available on record and as such, same are upheld.

21. Accordingly, the present criminal revision petition is dismissed

being devoid of any merit. The petitioner is directed to surrender himself

before the learned trial Court forthwith to serve the sentence as awarded by

the learned trial Court, if not already served. Interim direction, if any,

stands vacated. Learned court below is also directed to release the amount,

if any, deposited before it by the accused, on filing appropriate application

by the complainant. Pending applications, if any, also stand disposed of.

Needless to say, complainant shall always be at liberty to initiate

appropriate proceedings for recovery of amount of compensation.

    July 24, 2024                                             (Sandeep Sharma),
          (manjit)                                                 Judge