Himachal Pradesh High Court

Reserved On: 20.09.2024 vs Nar Singh Dass on 25 October, 2024

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

Cr. Revision No. 102 of 2023 Reserved on: 20.09.2024 Date of Decision: 25.10.2024.

    Ramesh Kumar                                                                 ...Petitioner

                                          Versus

    Nar Singh Dass                                                               ...Respondent


    Coram

Hon'ble Mr Justice Rakesh Kainthla, Judge. Whether approved for reporting?1 No.

For the Petitioner : Mr. H.S. Rangra, Advocate. For the Respondent : Mr. Rakesh Thakur, Advocate.

Rakesh Kainthla, Judge

The present revision is directed against the judgment

dated 09.12.2022 passed by learned Additional Sessions Judge-I,

Mandi camp at Karsog, District Mandi (learned Appellate Court)

vide which the judgment of conviction dated 25.10.2021 and

order of sentence dated 15.11.2021 passed by learned Judicial

Magistrate, First Class, Karsog (learned Trial Court) were

Whether reporters of Local Papers may be allowed to see the judgment? Yes.

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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 for the commission of an offence punishable

under Section 138 read with Section 142 of the Negotiable

Instruments Act (in short 'NI Act'). It was asserted that

the accused is on friendly terms with the complainant. He

borrowed ₹2,50,000/- from the complainant in August 2016. He

issued a post-dated cheque dated 04.09.2017 for a sum of

₹2,50,000/- drawn on State Bank of India Branch at Karsog to

discharge his liability. The complainant presented the cheque

for collection before his Bank. The cheque was dishonoured with

an endorsement of 'funds insufficient'. The complainant issued

a registered notice to the accused on 28.09.2017 asking him to

pay the amount within 15 days of the receipt of the notice but the

accused did not accept the notice; hence, it was prayed that the

action be taken against the accused.

3. Learned Trial Court found sufficient reasons to

summon the accused. When the accused appeared, a notice of

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accusation was put to him for the commission of an offence

punishable under section 138 of the NI Act, to which the accused

pleaded not guilty and claimed to be tried.

4. The complainant examined Ramesh Kumar (CWI)

and himself (CW2) to prove his case.

5. The accused in his statement recorded under Section

313 of CrPC denied the prosecution case in its entirety. He stated

that the cheque might contain his signatures because he keeps

signed cheques at home. He did not receive any notice. He is not

liable to pay ₹ 2,50,000/-. The cheque was handed over by his

father to the complainant. His father had taken ₹1,50,000/-

from the complainant. The complainant only advanced

₹1,25,000/- after deducting the interest of ₹25,000/-. His father

had returned ₹20,000/- and ₹ 22,000/-. He examined himself as

DW1.

6. Learned Trial Court held that the issuance of the

cheque was not disputed. The plea taken by him that his father

had borrowed the money from the complainant and had handed

over a blank cheque was not proved. The accused had not filed

any complaint regarding misuse of the cheque. The accused

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admitted his signatures on the cheque and a presumption of

consideration applied to the present case. The burden was upon

the accused to rebut this presumption. The accused has not

examined his father as a witness who was the best person to say

whether he had handed over the cheque to the complainant or

not. The father of the accused was liable to pay the money and

even if the complainant had filled the amount, it would not make

the cheque bad. Even a security check attracts the provisions of

Section 138 of the NI Act. The cheque was dishonoured due to

insufficient funds. The notice was returned with a postal

endorsement 'refused' and is deemed to be served. All the

ingredients of Section 138 of the NI Act were satisfied; hence, the

accused was convicted of committing an offence punishable

under Section 138 of the NI Act. He was sentenced to undergo

simple imprisonment for nine months and to pay a

compensation of ₹2,90,000/- to the complainant.

7. Being aggrieved from the judgment passed by

the learned Trial Court, the accused filed an appeal which was

decided by learned Additional Sessions Judge-1, Mandi (learned

Appellate Court). The learned Appellate Court concurred with

the findings recorded by the learned Trial Court that the

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admission of the signatures on the cheque attracted the

provisions of Section 139 of the NI Act. The Court has to draw the

presumption that the cheque was issued for consideration and

the burden is upon the accused to rebut the presumption. His

evidence was not sufficient to rebut the presumption. The

cheque was dishonoured due to insufficient funds. The notice

was returned with the endorsement 'refused' and is deemed to

be served. All the ingredients of Section 138 of N. I Act were

satisfied, and there is no error in the judgment and order passed

by the learned Trial Court. Hence the appeal was dismissed.

8. Being aggrieved from the judgments and order

passed by learned Courts below, the accused filed the present

revision, asserting that the learned Courts below failed to

appreciate the statements of the witnesses. There were lot of

contradictions in the statements of the witnesses. The defence

taken by the accused that the cheque was handed over as a

security by the father of the accused was probable and the

learned Courts below erred in rejecting it. The complainant had

not produced his bank statement to prove his financial condition

and the amount advanced by him to the accused. Learned Trial

Court ignored this fact. Therefore, it was prayed that the present

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revision be allowed and the judgment and order passed by the

learned Trial Court be set aside.

9. I have heard Mr. H.S. Rangra, learned counsel for the

petitioner and Mr. Rakesh Thakur, learned counsel for the

respondent.

10. Mr H.S. Rangra, learned counsel for the

petitioner/accused submitted that the learned Courts below

erred in appreciating the evidence. The complainant had failed

to show his financial condition to advance the huge loan of

₹2,50,000/-. The plea taken by the accused that the cheque was

handed over to the complainant by his father was highly

probable. The notice was not served upon the accused and he

could not have been held liable for the commission of an offence

punishable under Section 138 of the NI Act. Therefore, he prayed

that the present revision be allowed and the judgment and order

passed by the learned Trial Court be set aside.

11. Mr. Rakesh Thakur, learned counsel for the

respondent/complainant supported the judgments and order

passed by learned Courts below and submitted that no

interference is required with it.

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12. I have given considerable thought to the submissions

made at the bar and have gone through the records carefully.

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 the revisional

court is not an appellate jurisdiction and the revisional Court can

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

was observed on 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 to 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 which 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.

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

Dilipsinh Kishorsinh Rao, 2023 SCC OnLine SC 1294 wherein it was

observed:

"13. The power and jurisdiction of the Higher Court under Section 397 Cr. P.C. 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 into such proceedings. It would be apposite to refer to the judgment of this court in Amit Kapoor v. Ramesh Chandra, (2012) 9 SCC 460 where the scope of Section 397 has been considered and succinctly explained as under:

"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 the 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 framing of charge is a much-advanced stage in the proceedings under the CrPC."

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

parameters laid down by the Hon'ble Supreme Court.

16. The complainant reiterated the contents of the

complaint in his proof affidavit (Ext. CW2/A). He stated in his

cross-examination that he is on visiting terms with the accused.

Their houses are located at a distance of half kilometre. No date

for advancing the loan was mentioned in the complaint. He

denied that the father of the accused had borrowed ₹1,50,000/-

and ₹1,00,000/- from him. He denied that he had deducted the

interest of ₹25,000/- from the amount of ₹2,50,000/-. He

denied that he asked the father of the accused to return the

amount, and he handed over a cheque as a security to him. He

had sent the notice to the correct address of the accused, but it

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was returned un-served. He denied that the accused was not

liable to pay any amount to the complainant.

17. The accused while appearing as DW-I stated that his

father had taken the loan in two installments of ₹1,50,000/- and

₹1,00,000/-. Interest of ₹35,000/- was deducted from this

amount. ₹20,000/- out of this amount was returned and a blank

cheque was handed over to the complainant. His father had

handed over his cheque because he (his father) did not have a

chequebook. He (the accused) had kept the chequebook at home

because the money was required at home. He had not taken any

money from the complainant. He had only put his signatures on

three cheques. He had also not received any notice from the

complainant. He stated in his cross-examination that Jagat Ram

is his father, who resides with him. He had not filed any

complaint against the complainant for misusing the cheque. He

admitted that his father had not received the notice even though

the postman had visited his house 7-8 times. He volunteered to

say that he was residing at Sanarli. He admitted that the cheque

was dishonoured due to insufficient funds. He admitted that he

had not handed over the money to the complainant despite the

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dishonour of the cheque. He denied that he had told the

complainant that he would pay the money.

18. As per the version of the accused, his father had

taken the loan of ₹2,50,000/- and had handed over the cheque

of the accused. This would attract the provisions of Section 138

of the NI Act. Section 138 provides for the issuance of the cheque

for the discharge in whole or in part of any debt or other liability.

It was laid down by the Hon'ble Supreme Court in ICDS Ltd. v.

Beena Shabeer, (2002) 6 SCC 426: 2002 SCC (Cri) 1342: 2002 SCC

OnLine SC 733 that the cheque issued as a guarantor falls under

the other liability and attracts the provisions of Section 138 of NI

Act. It was observed at page 429:

"10. The language, however, has been rather specific as regards the intent of the legislature. The commencement of the section stands with the words "Where any cheque".

The above-noted three words are of extreme significance, in particular, by reason of the user of the word "any" -- the first three words suggest that in fact for whatever reason if a cheque is drawn on an account maintained by him with a banker in favour of another person for the discharge of any debt or other liability, the highlighted words if read with the first three words at the commencement of Section 138, leave no manner of doubt that for whatever reason it may be, the liability under this provision cannot be avoided in the event the same stands returned by the banker unpaid. The legislature has been careful enough to record not only the discharge in whole

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or in part of any debt but the same includes other liability as well. This aspect of the matter has not been appreciated by the High Court, neither been dealt with or even referred to in the impugned judgment.

11. The issue as regards the coextensive liability of the guarantor and the principal debtor, in our view, is totally out of the purview of Section 138 of the Act, neither the same calls for any discussion therein. The language of the statute depicts the intent of the law-makers to the effect that wherever there is a default on the part of one in favour of another and in the event a cheque is issued in discharge of any debt or other liability there cannot be any restriction or embargo in the matter of application of the provisions of Section 138 of the Act. "Any cheque" and "other liability" are the two key expressions which stand as clarifying the legislative intent so as to bring the factual context within the ambit of the provisions of the statute. Any contra-interpretation would defeat the intent of the legislature. The High Court, it seems, got carried away by the issue of guarantee and guarantor's liability and thus has overlooked the true intent and purport of Section 138 of the Act. The judgments recorded in the order of the High Court do not have any relevance in the contextual facts and the same thus do not lend any assistance to the contentions raised by the respondents."

19. Thus, the cheque issued as a guarantor for the

repayment of the loan taken by some other person will fall

within the definition of other liability and the plea of the accused

that he is not liable to pay any amount to the complainant and

only his father was liable will not help him.

20. The learned Trial Court had rightly pointed out that

the accused had not examined his father. He was the best person

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to depose whether he had taken any loan or not or whether he

had issued any cheque drawn on an account maintained by the

accused to the complainant or not. In the absence of his

examination, the plea taken by the accused that his father had

taken the cheque lying at home and had handed it over to the

complainant could not have been believed.

21. It was submitted that the complainant had not shown

any financial capacity to advance the huge amount of ₹

2,50,000/-. This submission will not help the accused. It was

laid down by the Hon'ble Supreme Court in Tedhi Singh v.

Narayan Dass Mahant, (2022) 6 SCC 735 : (2022) 2 SCC (Cri) 726 :

(2022) 3 SCC (Civ) 442: 2022 SCC OnLine SC 302 that the

complainant is not to lead the evidence of his financial capacity

unless it is disputed in reply to the statutory notice. It was

observed at page 740:

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 is 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,

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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 complainant himself. He can further, more importantly, 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.

22. The accused admitted in his statement recorded on

oath that the cheque bears his signature. It was laid down by this

Court in Naresh Verma vs. Narinder Chauhan 2020(1) Shim. L.C.

398 that where the accused had not disputed his signatures on

the cheque, the Court has to presume that it was issued in

discharge of legal liability and the burden would shift upon the

accused to rebut the presumption. It was observed:-

"8. Once signatures on the cheque are not disputed, the plea with regard to the cheque having not been issued towards discharge of lawful liability, rightly came to be rejected by learned Courts below. Reliance is placed upon Hiten P. Dalal v. Bartender NathBannerji, 2001 (6) SCC 16, wherein it has been held as under:

"The words 'unless the contrary is proved' which occur in this provision make it clear that the

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presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted......"

9. S.139 of the Act provides that it shall be presumed unless the contrary is proved, that the holder of a cheque received the cheque of nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.

23. Similar is the judgment in Basalingappa vs.

Mudibasappa 2019 (5) SCC 418 wherein it was held:

"26. Applying the proposition of law as noted above, in the facts of the present case, it is clear that the signature on the cheque having been admitted, a presumption shall be raised under Section 139 that the cheque was issued in discharge of debt or liability."

24. This position was reiterated in Kalamani Tex v. P.

Balasubramanian, (2021) 5 SCC 283: (2021) 3 SCC (Civ) 25 : (2021)

2 SCC (Cri) 555: 2021 SCC OnLine SC 75wherein it was held at page

289:

"13. Adverting to the case in hand, we find on a plain reading of its judgment that the trial court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA. The statute mandates that once the signature(s) of an accused on the cheque/negotiable

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instrument are established, then these "reverse onus"

clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has been crystallised by this Court in Rohitbhai Jivanlal Patel v. State of Gujarat [Rohitbhai Jivanlal Patel v. State of Gujarat, (2019) 18 SCC 106, para 18 : (2020) 3 SCC (Civ) 800 : (2020) 3 SCC (Cri) 575] in the following words : (SCC pp. 120-21, para 18) "18. In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the trial court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the trial court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant-accused."

14. Once the 2nd appellant had admitted his signatures on the cheque and the deed, the trial court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt. The trial court fell in error when it called upon the respondent complainant to explain the circumstances under which the appellants were liable to pay. Such approach of the trial court was directly in the teeth of the established legal position as discussed above, and amounts to a patent error of law.."

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25. Similar is the judgment in APS Forex Services (P) Ltd.

v. Shakti International Fashion Linkers (2020) 12 SCC 724, wherein

it was observed: -

7.2. What is emerging from the material on record is that the issuance of a cheque by the accused and the signature of the accused on the said cheque are not disputed by the accused. The accused has also not disputed that there were transactions between the parties. Even as per the statement of the accused, which was recorded at the time of the framing of the charge, he has admitted that some amount was due and payable. However, it was the case on behalf of the accused that the cheque was given by way of security and the same has been misused by the complainant. However, nothing is on record that in the reply to the statutory notice it was the case on behalf of the accused that the cheque was given by way of security.

Be that as it may, however, it is required to be noted that earlier the accused issued cheques which came to be dishonoured on the ground of "insufficient funds" and thereafter a fresh consolidated cheque of ₹9,55,574 was given which has been returned unpaid on the ground of "STOP PAYMENT". Therefore, the cheque in question was issued for the second time. Therefore, once the accused has admitted the issuance of a cheque which bears his signature, there is a presumption that there exists a legally enforceable debt or liability under Section 139 of the NI Act. However, such a presumption is rebuttable in nature and the accused is required to lead the evidence to rebut such presumption. The accused was required to lead evidence that the entire amount due and payable to the complainant was paid.

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

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time after the earlier cheques were dishonoured and that even according to the accused some amount was due and payable, there is a presumption under Section 139 of the NI Act that there exists a legally enforceable debt or liability. Of course, such presumption is rebuttable in nature. However, to rebut the presumption, the accused was required to lead the 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 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.

26. Learned Courts below had rightly held that there is a

presumption under Section 139 of the N.I. Act that the cheque

was issued in the discharge of the legal liability. This

presumption was explained by the Hon'ble Supreme Court in

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Triyambak S. Hegde v. Sripad, (2022) 1 SCC 742: (2022) 1 SCC (Civ)

512: 2021 SCC OnLine SC 788 as under at page 747:

"12. From the facts arising in this case and the nature of the rival contentions, the record would disclose that the signature on the documents at Exts. P-6 and P-2 are not disputed. Ext. P-2 is the dishonoured cheque based on which the complaint was filed. From the evidence tendered before the JMFC, it is clear that the respondent has not disputed the signature on the cheque. If that be the position, as noted by the courts below a presumption would arise under Section 139 in favour of the appellant who was the holder of the cheque. Section 139 of the NI Act reads as hereunder:

"139. Presumption in favour of holder. --It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability."

13. Insofar as the payment of the amount by the appellant in the context of the cheque having been signed by the respondent, the presumption for passing of the consideration would arise as provided under Section 118(a) of the NI Act which reads as hereunder:

"118. Presumptions as to negotiable instruments. -- Until the contrary is proved, the following presumptions shall be made:

(a) of consideration: that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration."

14. The above-noted provisions are explicit to the effect that such presumption would remain until the contrary is proved. The learned counsel for the appellant in that

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regard has relied on the decision of this Court in K. Bhaskaran v. Sankaran Vaidhyan Balan [K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510:

1999 SCC (Cri) 1284] wherein it is held as hereunder: (SCC pp. 516-17, para 9) "9. As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date on which the cheque bears. Section 139 of the Act enjoins on the Court to presume that the holder of the cheque received it for the discharge of any debt or liability. The burden was on the accused to rebut the aforesaid presumption. The trial court was not persuaded to rely on the interested testimony of DW 1 to rebut the presumption. The said finding was upheld [Sankaran Vaidhyan Balan v. K. Bhaskaran, Criminal Appeal No. 234 of 1995, order dated 23-10-1998 (Ker)] by the High Court. It is not now open to the accused to contend differently on that aspect."

15. The learned counsel for the respondent has however referred to the decision of this Court in Basalingappa v. Mudibasappa [Basalingappa v. Mudibasa ppa, (2019) 5 SCC 418: (2019) 2 SCC (Cri) 571] wherein it is held as hereunder: (SCC pp. 432-33, paras 25-26) "25. We having noticed the ratio laid down by this Court in the above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in the following manner:

25.1. Once the execution of the cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.

25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard

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of proof for rebutting the presumption is that of preponderance of probabilities.

25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.

25.4. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.

25.5. It is not necessary for the accused to come into the witness box to support his defence.

26. Applying the preposition of law as noted above, in facts of the present case, it is clear that the signature on the cheque having been admitted, a presumption shall be raised under Section 139 that the cheque was issued in discharge of debt or liability. The question to be looked into is as to whether any probable defence was raised by the accused. In cross-examination of PW 1, when the specific question was put that a cheque was issued in relation to a loan of Rs 25,000 taken by the accused, PW 1 said that he does not remember. PW 1 in his evidence admitted that he retired in 1997 on which date he received a monetary benefit of Rs 8 lakhs, which was encashed by the complainant. It was also brought in evidence that in the year 2010, the complainant entered into a sale agreement for which he paid an amount of Rs 4,50,000 to Balana Gouda towards sale consideration. Payment of Rs 4,50,000 being admitted in the year 2010 and further payment of loan of Rs 50,000 with regard to

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which Complaint No. 119 of 2012 was filed by the complainant, copy of which complaint was also filed as Ext. D-2, there was a burden on the complainant to prove his financial capacity. In the years 2010-2011, as per own case of the complainant, he made a payment of Rs 18 lakhs.

During his cross-examination, when the financial capacity to pay Rs 6 lakhs to the accused was questioned, there was no satisfactory reply given by the complainant. The evidence on record, thus, is a probable defence on behalf of the accused, which shifted the burden on the complainant to prove his financial capacity and other facts."

16. In that light, it is contended that the very materials produced by the appellant and the answers relating to lack of knowledge of property details by PW 1 in his cross- examination would indicate that the transaction is doubtful and no evidence is tendered to indicate that the amount was paid. In such an event, it was not necessary for the respondent to tender rebuttal evidence but the case put forth would be sufficient to indicate that the respondent has successfully rebutted the presumption.

17. On the position of law, the provisions referred to in Sections 118 and 139 of the NI Act as well as the enunciation of law as made by this Court need no reiteration as there is no ambiguity whatsoever. In, Basalingappav. Mudibasappa [Basalingappa v. Mudibasappa, (2019) 5 SCC 418 : (2019) 2 SCC (Cri) 571] relied on by the learned counsel for the respondent, though on facts the ultimate conclusion therein was against raising presumption, the facts and circumstances are entirely different as the transaction between the parties as claimed in the said case is peculiar to the facts of that case where the consideration claimed to have been paid did not find favour with the Court keeping in view the various transactions and extent of amount involved. However, the legal position relating to the presumption arising under Sections 118 and 139 of the NI Act on

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signature being admitted has been reiterated. Hence, whether there is a rebuttal or not would depend on the facts and circumstances of each case."

27. This position was reiterated in Tedhi Singh v. Narayan

Dass Mahant, (2022) 6 SCC 735: (2022) 2 SCC (Cri) 726 : (2022) 3

SCC (Civ) 442: 2022 SCC OnLine SC 302 wherein it was held at

page 739:

"8. It is true that this is a case under Section 138 of the Negotiable Instruments Act. Section 139 of the NI Act provides that the court shall presume that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. This presumption, however, is expressly made subject to the position being proved to the contrary. In other words, it is open to the accused to establish that there is no consideration received. It is in the context of this provision that the theory of "probable defence" has grown. In an earlier judgment, in fact, which has also been adverted to in Basalingappa [Basalingappa v. Mudibasappa, (2019) 5 SCC 418: (2019) 2 SCC (Cri) 571], this Court notes that Section 139 of the NI Act is an example of reverse onus (see Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010) 11 SCC 441: (2010) 4 SCC (Civ) 477: (2011) 1 SCC (Cri) 184]). It is also true that this Court has found that the accused is not expected to discharge an unduly high standard of proof. It is accordingly that the principle has developed that all which the accused needs to establish is a probable defence. As to whether a probable defence has been established is a matter to be decided on the facts of each case on the conspectus of evidence and circumstances that exist..."

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28. Similar is the judgment in P. Rasiya v. Abdul Nazer,

2022 SCC OnLine SC 1131 wherein it was observed:

"As per Section 139 of the N.I. Act, it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for discharge, in whole or in part, of any debt or other liability. Therefore, once the initial burden is discharged by the Complainant that the cheque was issued by the accused and the signature and the issuance of the cheque are not disputed by the accused, in that case, the onus will shift upon the accused to prove the contrary that the cheque was not for any debt or other liability. The presumption under Section 139 of the N.I. Act is a statutory presumption and thereafter, once it is presumed that the cheque is issued in whole or in part of any debt or other liability which is in favour of the Complainant/holder of the cheque, in that case, it is for the accused to prove the contrary."

29. This position was reiterated in Rajesh Jain v. Ajay

Singh, (2023) 10 SCC 148: 2023 SCC OnLine SC 1275 wherein it was

observed at page 161:

33. The NI Act provides for two presumptions: Section 118 and Section 139. Section 118 of the Act inter alia directs that it shall be presumed until the contrary is proved, that every negotiable instrument was made or drawn for consideration. Section 139 of the Act stipulates that "unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque, for the discharge of, whole or part of any debt or liability". It will be seen that the "presumed fact" directly relates to one of the crucial ingredients necessary to sustain a conviction under Section 138. [The rules discussed hereinbelow are common to both the presumptions under Section 139 and

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Section 118 and are hence, not repeated--reference to one can be taken as reference to another]

34. Section 139 of the NI Act, which takes the form of a "shall presume" clause is illustrative of a presumption of law. Because Section 139 requires that the Court "shall presume" the fact stated therein, it is obligatory for the Court to raise this presumption in every case where the factual basis for the raising of the presumption has been established. But this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary as is clear from the use of the phrase "unless the contrary is proved".

35. The Court will necessarily presume that the cheque had been issued towards the discharge of a legally enforceable debt/liability in two circumstances. Firstly, when the drawer of the cheque admits issuance/execution of the cheque and secondly, in the event where the complainant proves that the cheque was issued/executed in his favour by the drawer. The circumstances set out above form the fact(s) which bring about the activation of the presumptive clause. [Bharat Barrel & Drum Mfg.

Co. v. Amin Chand Payrelal [Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal, (1999) 3 SCC 35]]

36. Recently, this Court has gone to the extent of holding that presumption takes effect even in a situation where the accused contends that a blank cheque leaf was voluntarily signed and handed over by him to the complainant. [Bir Singh v. Mukesh Kumar [Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Civ) 309: (2019) 2 SCC (Cri) 40] ]. Therefore, the mere admission of the drawer's signature, without admitting the execution of the entire contents in the cheque, is now sufficient to trigger the presumption.

37. As soon as the complainant discharges the burden to prove that the instrument, say a cheque, was issued by the accused for discharge of debt, the presumptive device under Section 139 of the Act helps shift the burden on the

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accused. The effect of the presumption, in that sense, is to transfer the evidential burden on the accused of proving that the cheque was not received by the Bank towards the discharge of any liability. Until this evidential burden is discharged by the accused, the presumed fact will have to be taken to be true, without expecting the complainant to do anything further.

38. John Henry Wigmore [John Henry Wigmore and the Rules of Evidence: The Hidden Origins of Modern Law] on Evidence states as follows:

"The peculiar effect of the presumption of law is merely to invoke a rule of law compelling the Jury to reach the conclusion in the absence of evidence to the contrary from the opponent but if the opponent does offer evidence to the contrary (sufficient to satisfy the Judge's requirement of some evidence), the presumption 'disappears as a rule of law and the case is in the Jury's hands free from any rule'."

39. The standard of proof to discharge this evidential burden is not as heavy as that usually seen in situations where the prosecution is required to prove the guilt of an accused. The accused is not expected to prove the non- existence of the presumed fact beyond reasonable doubt. The accused must meet the standard of "preponderance of probabilities", similar to a defendant in a civil proceeding. [Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010) 11 SCC 441: (2010) 4 SCC (Civ) 477: (2011) 1 SCC (Cri) 184: AIR 2010 SC 1898]]

30. Therefore, the Court has to start with the

presumption that the cheque was issued in discharge of legal

liability and the burden is upon the accused to prove the

contrary.

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31. The complainant denied in his cross-examination

that he had advanced the money to the father of the accused. As

already stated, the father of the accused was not brought to the

Court to establish the plea taken by the accused. Hence, there

was insufficient evidence to rebut the presumption of

consideration attached to the cheque and learned Courts below

had rightly held that the version of the complainant that he had

advanced loan to the accused and the accused had issued a

cheque in discharge of his liability has to be accepted as correct.

32. The accused admitted in his cross-examination that

the cheque was dishonoured due to insufficient funds. Hence, he

has not disputed the dishonour of the cheque and the reason for

the dishonour. Ramesh Chand (CW1) stated that a memo of

dishonour (Ext. CW1/A) was issued by the bank. The cheque was

dishonoured because of insufficient funds. He stated in his

cross-examination that he had not brought the statement of the

account. However, this will not make any difference because

there is a presumption of correctness attached to the memo of

dishonour under Section 146 of the NI Act. The accused had not

led any evidence to rebut this presumption; rather, he admitted

the dishonour of the cheque due to insufficient funds; hence the

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version of the complainant was rightly accepted by the learned

Courts below that the cheque was dishonoured due to

insufficient funds.

33. The complainant stated that he had issued a notice to

the accused asking him to pay the amount within 15 days of the

receipt of the notice. The registered cover acknowledgement due

(Ext. CW2/E) shows that the notice was sent to the address of

a resident of village Kakano (Mehran), PO Sapnot, Tehsil Karsog

District Mandi and it was returned with the report that

the addressee was not available at home and should be returned

to the addressor. There is an endorsement that the addressee

was running a shop of electronics at Sanarli. There are the

endorsements of 'not met'. The accused had furnished his

address as a resident of Kakano, PO Sapnot, Tehsil Karsog,

Mandi in the bail bonds furnished by him. He has given this

address while appearing as DW1. He claimed that he was residing

at Sanarli. The post office had attempted to deliver the notice at

Sanarli as well but could not deliver the letter because none was

available at home. It was laid down by the Hon'ble Supreme

Court in C.C. Alavi Haji v. Palapetty Muhammed, (2007) 6 SCC 555:

(2007) 3 SCC (Cri) 236: 2007 SCC OnLine SC 772 that when the

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registered letter containing the notice is returned unserved with

the endorsement of addressee not found, the notice is deemed to

have been served. It was observed at page 564:

"14. Section 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. This Court has already held that when a notice is sent by registered post and is returned with a postal endorsement "refused" or "not available in the house" "house locked"

"shop closed" or "addressee not in the station", due service has to be presumed. (Vide Jagdish Singh v. Natthu Singh [(1992) 1 SCC 647: AIR 1992 SC 1604]; State of M.P. v. Hiralal [(1996) 7 SCC 523] and V. Raja Kumari v. P. Subbarama Naidu [(2004) 8 SCC 774: 2005 SCC (Cri) 393] .) It is, therefore, manifest that in view of the presumption available under Section 27 of the Act, it is not necessary to aver in the complaint under Section 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the return of the notice unserved."

34. Thus, the notice is deemed to be served upon the

accused and the learned Courts below had rightly held that the

notice was delivered to the accused.

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35. In any case, the accused did not pay the amount to

the complainant within 15 days of his appearance in the Court. It

was laid down in C.C. Allavi Haji vs. Pala Pelly Mohd. 2007(6) SCC

555 that the person who claims that he had not received the

notice has to pay the amount within 15 days from the date of the

receipt of the summons from the Court and in case of failure to

do so, he cannot take the advantage of the fact that notice was

not received by him. It was observed:

"17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of the complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskaran's case (supra), if the giving of notice in the context of Clause (b) of the proviso was the same as the receipt of notice a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and

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escape from legal consequences of Section 138 of the Act."

(Emphasis supplied).

36. Thus, it was duly proved that the accused had issued

a cheque in discharge of his legal liability, which was

dishonoured due to insufficient funds and the accused had not

paid the amount despite the deemed service; hence, he was

rightly convicted of the commission of an offence punishable

under Section 138 of NI Act.

37. The learned Trial Court had imposed the sentence of

simple imprisonment of nine months for the commission of an

offence punishable under Section 138 of the NI Act. The

legislature had introduced the offence of dishonour of cheques

to instil confidence in the public about the transactions carried

through the cheque. 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 provisions of Section 138 is 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

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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. Hence, the sentence of nine months is not excessive.

39. Learned Trial Court awarded the compensation of

₹2,90,000/- to the complainant. The cheque was issued on

04.09.2017. Learned Trial Court had imposed the sentence on

15.11.2021. 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 the 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 with 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]"