Himachal Pradesh High Court

Date Of Decision: 03.10.2024 vs Hans Raj And Another on 3 October, 2024

Author: Sandeep Sharma

Bench: Sandeep Sharma

                                                                 2024:HHC:9643



        IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
                                            Cr. Revision No.471 of 2024
                                           Date of Decision: 03.10.2024
__________________________________________________________________________
Kishori Lal                                             .........Petitioner
                                         Versus
Hans Raj and Another                                    .......Respondents

Coram
Hon'ble Mr. Justice Sandeep Sharma, Judge.
Whether approved for reporting?
For the Petitioner:       Ms. Kiran Dhiman, Advocate.
For the Respondents: Mr. Vijay Kumar Verma, Advocate, for respondent
                     No.1.

                        Mr. Rajan Kahol, Mr. Vishal Panwar and Mr. B.C.
                        Verma, Additional Advocates General, with Mr.
                        Ravi Chauhan, Deputy Advocate General, for
                        respondent No.2/State.
__________________________________________________________________________
Sandeep Sharma, J. (Oral)

Instant criminal revision petition filed under Section 438 read

with Section 442 of BNSS, 2023, lays challenge to judgment dated

01.11.2023, passed by the learned Sessions Judge, Mandi Division, District

Mandi, Himachal Pradesh, Criminal Appeal No.60 of 2023, titled Kishori Lal

Vs. Hans Raj, affirming judgment of conviction and order of sentence dated

21.07.2023/27.07.2023, passed by the learned Judicial Magistrate First

Class, Chachiot at Gohar, District Mandi, Himachal Pradesh, in complaint

No.256-I/2026/115-III/2016, whereby the learned trial Court while holding

the petitioner-accused (hereinafter, "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 2024:HHC:9643

imprisonment for a period of two months and pay compensation to the tune

of Rs.1,10,000/- to the respondent-complainant.

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

that respondent-complainant (hereinafter, 'complainant') instituted a

complaint under Section 138 of the Act, in the competent Court of law,

alleging therein that in the month of April 2016, he had supplied hardware

material to the accused amounting to Rs.80,000/-, who with a view to

discharge his liability, issued two Cheques i.e. Cheque bearing No.885414

dated 03.06.2016 for Rs.40,000/- (Ex.C1) and another Cheque bearing

No.885415 dated 03.06.2016 for Rs.40,000/- (Ex.C3), drawn on Punjab

National Bank, Branch Office Baggi, District Mandi, Himachal Pradesh,

however, on its presentation to Bank concerned, the same were

dishonoured vide returning memos Ex.C2 and Ex.C4 with the remarks

"Insufficient Funds". After receipt of aforesaid return memos, complainant

served accused with a legal notice (Ex.C5) through registered post, however,

since petitioner-accused failed to make the payment good within the time

stipulated in the legal notice, respondent/complainant was compelled to

initiate proceedings under Section 138 of the Act in the Court of learned

Judicial Magistrate First Class, Chachiot at Gohar, District Mandi,

Himachal Pradesh.

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

by the respective parties, vide judgment/order dated 2024:HHC:9643

21.07.2023/27.07.2023, 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 hereinabove.

4. Though, at the first instance, accused preferred an appeal in

the Court of learned Sessions Judge, Mandi Division, District Mandi,

Himachal Pradesh, however, same was dismissed vide judgment dated

01.11.2023. In the aforesaid background, petitioner-accused has

approached this Court by way of instant proceedings, seeking therein his

acquittal after setting aside the judgments of conviction recorded by the

Courts below.

5. Vide order dated 22.07.2024, this Court stayed the substantive

sentence imposed by the learned Court below, subject to

petitioner/accused depositing entire compensation amount and furnishing

personal bond in the sum of Rs.20,000/-, however, fact remains that

despite repeated request for extension of time, aforesaid order was never

complied with.

6. Today during proceedings of the case, learned counsel

representing the petitioner fairly stated that since petitioner/accused is not

coming forward to impart instructions and he has not complied with the

order dated 22.07.2024, this Court may proceed to decide the petition on

its own merits.

2024:HHC:9643

7. Having heard learned counsel for the parties and perused

material adduced on record, vis-a-vis reasoning assigned in the impugned

judgments, this Court sees no reason to agree with Ms. Kiran Dhiman,

learned counsel representing the petitioner that Courts below have fallen in

grave error while appreciating the evidence, rather this Court finds that

both the Courts below have meticulously dealt with each and every aspect

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

8. In the instant case, there is no specific denial, if any, on the

part of the accused with regard to his having issued Cheques as well as his

signatures thereupon, rather, in his statement recorded under Section 313

Cr.P.C., he admitted complainant to be his acquaintance as well as factum

of his having purchased the material, but for less amount. He categorically

deposed that he had issued blank Cheque as a security, which

subsequently came to be misused by the complainant. However, to

probablize the aforesaid defence, no cogent and convincing evidence ever

came to be led on record at the behest of accused, as such, no illegality

can be said to have been committed by the learned Appellate Court while

upholding the judgment of conviction and order of sentence recorded by

learned trial Court. Since in the case at hand, factum of issuance of

Cheques as well as his signatures thereupon never came to be refuted at

the behest of accused, no illegality can be said to have been committed by

both the Courts below while invoking Sections 118 and 139 of the Act, 2024:HHC:9643

which speak about presumption in favour of the holder of the Cheque that

Cheque was issued towards discharge of a 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, neither anything could be

pointed out from the pleadings as well as evidence adduced on record by

the accused that Cheques in question were not issued towards discharge of

lawful liability nor he led any evidence suggestive of the fact that no

hardware material amounting to Rs.80,000/- was purchased by him from

the complainant. In his statement recorded under Section 313 Cr.P.C., he

while admitting complainant to be his acquaintance, specifically stated that

he had purchased material, but for less amount. Most importantly, accused

admitted factum with regard to his having issued blank Cheques, but as a

security. Despite sufficient opportunity, accused failed to lead any defence,

as such, defence attempted to be put forth on his behalf never came to be

probablized.

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 2024:HHC:9643

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.

2024:HHC:9643

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 2024:HHC:9643

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. In the case at hand, complainant while examining himself as

CW-1, tendered affidavit Ex.CW1/A wherein he successfully reiterated the

contents of the complaint. He successfully proved on record that he had

sold articles of hardware and grill gate amounting to Rs.80,000/- to the

accused, who with a view to discharge his liability issued two Cheques for

sum of Rs.40,000/- each, but same were dishonoured on account of

insufficient funds in his bank account vide returning memos Ex.C2 and

Ex.C4. He also proved on record that before initiating proceedings under

Section 138 of the Act, he served accused with legal notice, but despite

service, neither accused returned the money, nor he replied to the legal

notice. Though, there is no evidence worth credence suggestive of the fact

that Cheques in question were issued as a security, but even if it is

presumed that Cheques in question were issued as a security, that may not

be of much help to the accused for the reason that by now it is well settled

that Cheques, if any, issued as a 'security' can also be presented for

encashment, if amount taken or promised to be repaid is not paid.

2024:HHC:9643

11. 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."

12. 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 2024:HHC:9643

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.

13. 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. Since Cheque issued by accused

towards discharge of his lawful liability was returned on account of

insufficient funds in the bank account of accused and he despite having

received legal notice failed to make the payment good within the stipulated

time, complainant had no option but to institute proceedings under Section

138 of the Act, which subsequently rightly came to be decided by both the

Courts below on the basis of pleadings as well as evidence adduced on

record by the respective parties.

14. 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 relied upon 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 2024:HHC:9643

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."

15. 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.

16. 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

judicial process or illegality of sentence or order, but learned counsel