[Cites 57, Cited by 0]
Himachal Pradesh High Court
Reserved On: 11.3.2026 vs Of on 23 March, 2026
2026:HHC:8213
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No. 642 of 2025
.
Reserved on: 11.3.2026
Date of Decision: 23.3.2026.
Vijay Kumar ...Petitioner
Versus
of
M/s New Shilpi Jewellers through its Partner Pankaj Chauhan
...Respondent
Coram
rt
Hon'ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 No.
For the Petitioner : Mr Jeevan Kumar, Advocate.
For the Respondent : None.
Rakesh Kainthla, Judge
The present revision is directed against the judgment
dated 16.9.2025 passed by learned Additional Sessions Judge-1,
Kangra at Dharamshala, District Kangra, H.P. (learned Appellate
Court), vide which the judgment of conviction and order of
sentence dated 26.5.2025, passed by learned Chief Judicial
Magistrate, Kangra at Dharamshala, District Kangra, HP
(learned Trial Court) were upheld (Parties shall hereinafter be
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
2026:HHC:8213
referred to in the same manner as they were arrayed before the
learned Trial Court for convenience.)
.
2. Briefly stated, the facts giving rise to the present
revision are that the complainant filed a complaint before the
learned Trial Court against the accused for the commission of an
offence punishable under Section 138 of the Negotiable
of
Instruments Act (NI Act). It was asserted that the complainant is
a partner of M/s Shilpi Jewellers. The accused purchased gold
rt
worth ₹1,84,000/- from the complainant on 8.11.2019 vide
Invoice No. 1227. He issued a cheque of ₹1,84,000/- (Ex.C2),
drawn on State Bank of India, to discharge his liability. The
complainant presented the cheque to his bank, but it was
dishonoured with an endorsement 'insufficient funds' vide
memo (Ex.C4). The complainant issued a legal notice (Ex.C5)
asking the accused to repay the amount within 15 days of the
receipt of the notice. The notice was served upon the accused,
and an acknowledgment (Ex.C7) was received by him. The
accused failed to repay the amount; hence, the complaint was
filed before the learned Trial Court for taking action as per law.
2026:HHC:8213
3. The learned Trial Court found sufficient reasons to
summon the accused. When the accused appeared, a notice of
.
accusation was put to him for the commission of an offence
punishable under Section 138 of the NI Act, to which he pleaded
not guilty and claimed to be tried.
4. The complainant examined himself (CW1) to prove
of
his complaint.
5.
rt
The accused, in his statement recorded under Section
313 of Cr.P.C., denied the complainant's case. He asserted that
the cheque was issued as security, and it was misused by the
complainant. He did not produce any evidence in defence.
6. Learned Trial Court held that the issuance of the
cheque was not disputed. The complainant admitted in the
cross-examination that the accused had paid ₹1,76,000/-
during the pendency of the complaint. The complainant
produced the details (Ex.C8), which showed that the liability of
₹5,05,141/- was due. Therefore, the payment of the amount
during the pendency of the complaint would not help the
accused. All the ingredients of the commission of an offence
punishable under Section 138 of the NI Act were duly satisfied.
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Hence, the learned Trial Court convicted the accused of the
commission of an offence punishable under Section 138 of the NI
.
Act and sentenced him to undergo simple imprisonment for one
year, pay a fine of ₹2,60,000/- and in default of payment of the
fine to undergo further simple imprisonment for one month.
7. Being aggrieved by the judgment and order passed by
of
the learned Trial Court, the accused filed an appeal, which was
decided by the learned Additional Sessions Judge (I), Kangra at
rt
Dharamshala, District Kangra, HP (learned Appellate Court).
The learned Appellate Court concurred with the findings
recorded by the learned Trial Court that the issuance of the
cheque was not disputed. A presumption would arise that the
cheque was issued for consideration to discharge the
debt/liability. The accused failed to rebut the presumption. The
amount of ₹1,76,000/- deposited by the accused during the
pendency of the complaint was adjusted by the complainant
towards the overall liability, and a sum of ₹5,05,141/- was due as
per the details (Ex.C8). The cheque was dishonoured with an
endorsement 'insufficient funds'. The notice was duly served
upon the accused, and he failed to repay the amount. The
sentence imposed by the learned Trial Court was adequate, and
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no interference was required with it. Hence, the appeal was
dismissed.
.
8. Being aggrieved by the judgments and order passed
by the learned Courts below, the accused has filed the present
revision, asserting that the learned Courts below failed to
properly appreciate the material placed before them. The memo
of
of dishonour of the cheque was received by the complainant on
15.11.2019, and the legal notice was issued on 3.12.2019. The
rt
notice was served upon the accused on 4.12.2019. The complaint
was filed on 18.1.2020, which was beyond the period of
limitation. The cheque bearing Serial No.651308 was the subject
matter of another case bearing No.21-3/2020 filed before the
learned Chief Judicial Magistrate, Kangra and is the subject
matter in another revision. The same cheque cannot be issued
on two different occasions and for different amounts. An
amount of ₹1,76,000/- was paid during the pendency of the
proceedings. This payment was ignored by the learned Courts
below. Therefore, it was prayed that the present revision be
allowed and the judgments and order passed by the learned
Courts below be set aside.
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9. Mr Jeevan Kumar, learned Legal Aid Counsel for the
petitioner/accused, submitted that the learned Courts below
.
erred in appreciating the material placed before them. The
complaint was filed on behalf of M/s New Shilpi Jewellers, which
is stated to be a partner firm; however, no registration
certificate of the victim was produced on record, and a
of
complaint by an unregistered firm was not maintainable. The
complaint was barred by limitation. An amount of ₹1,76,000/-
rt
was paid during the pendency of the complaint. This amount
was wrongly excluded by the learned Courts below. Therefore,
he prayed that the present revision be allowed and judgments
and order passed by learned Courts below be set aside.
10. I have given considerable thought to the submissions
made at the bar and have gone through the records carefully.
11. It was laid down by the Hon'ble Supreme Court in
Malkeet Singh Gill v. State of Chhattisgarh, (2022) 8 SCC 204:
(2022) 3 SCC (Cri) 348: 2022 SCC OnLine SC 786 that a revisional
court is not an appellate court and it can only rectify the patent
defect, errors of jurisdiction or the law. It was observed at page
207-
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"10. Before adverting to the merits of the contentions, at
the outset, it is apt to mention that there are concurrent
findings of conviction arrived at by two courts after a
detailed appreciation of the material and evidence
.
brought on record. The High Court in criminal revision
against conviction is not supposed to exercise the
jurisdiction like the appellate court, and the scope of
interference in revision is extremely narrow. Section 397
of the Criminal Procedure Code (in short "CrPC") vests
jurisdiction to satisfy itself or himself as to the
of
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
rt
jurisdiction or law. There has to be a well-founded error
that is to be determined on the merits of individual cases.
It is also well settled that while considering the same, the
Revisional Court does not dwell at length upon the facts
and evidence of the case to reverse those findings.
12. This position was reiterated in State of Gujarat v.
Dilipsinh Kishorsinh Rao, (2023) 17 SCC 688: 2023 SCC OnLine SC
1294, wherein it was observed at page 695:
"14. The power and jurisdiction of the Higher Court under
Section 397 CrPC, which vests the court with the power to
call for and examine records of an inferior court, is for the
purposes of satisfying itself as to the legality and
regularities of any proceeding or order made in a case.
The object of this provision is to set right a patent defect
or an error of jurisdiction or law or the perversity which
has crept in such proceedings.
15. It would be apposite to refer to the judgment of this
Court in Amit Kapoor v. Ramesh Chander [Amit Kapoor v.
Ramesh Chander, (2012) 9 SCC 460: (2012) 4 SCC (Civ) 687:
(2013) 1 SCC (Cri) 986], where scope of Section 397 has
2026:HHC:8213
been considered and succinctly explained as under: (SCC
p. 475, paras 12-13)
"12. Section 397 of the Code vests the court with the
.
power to call for and examine the records of an
inferior court for the purposes of satisfying itself as
to the legality and regularity of any proceedings or
order made in a case. The object of this provision is
to set right a patent defect or an error of jurisdiction
or law. There has to be a well-founded error, and it
may not be appropriate for the court to scrutinise
of
the orders, which, upon the face of it, bear a token
of careful consideration and appear to be in
accordance with law. If one looks into the various
judgments of this Court, it emerges that the
rt
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
cannot be exercised in a routine manner. One of the
inbuilt restrictions is that it should not be against an
interim or interlocutory order. The Court has to keep in
mind that the exercise of revisional jurisdiction itself
should not lead to injustice ex facie. Where the Court is
dealing with the question as to whether the charge has
been framed properly and in accordance with law in a
given case, it may be reluctant to interfere in the exercise
of its revisional jurisdiction unless the case substantially
falls within the categories aforestated. Even the framing
of the charge is a much-advanced stage in the
proceedings under CrPC."
2026:HHC:8213
13. It was held in Kishan Rao v. Shankargouda, (2018) 8
SCC 165: (2018) 3 SCC (Cri) 544: (2018) 4 SCC (Civ) 37: 2018 SCC
.
OnLine SC 651 that it is impermissible for the High Court to
reappreciate the evidence and come to its conclusions in the
absence of any perversity. It was observed at page 169:
"12. This Court has time and again examined the scope of
of
Sections 397/401 CrPC and the grounds for exercising the
revisional jurisdiction by the High Court. In State of Kerala
v. Puttumana Illath Jathavedan Namboodiri, (1999) 2 SCC
rt
452: 1999 SCC (Cri) 275], while considering the scope of
the revisional jurisdiction of the High Court, this Court
has laid down the following: (SCC pp. 454-55, para 5)
5. ... In its revisional jurisdiction, the High Court can
call for and examine the record of any proceedings
to satisfy itself as to the correctness, legality or
propriety of any finding, sentence or order. In other
words, the jurisdiction is one of supervisory
jurisdiction exercised by the High Court for
correcting a miscarriage of justice. But the said
revisional power cannot be equated with the power
of an appellate court, nor can it be treated even as a
second appellate jurisdiction. Ordinarily, therefore,
it would not be appropriate for the High Court to
reappreciate the evidence and come to its
conclusion on the same when the evidence has
already been appreciated by the Magistrate as well
as the Sessions Judge in appeal, unless any glaring
feature is brought to the notice of the High Court
which would otherwise amount to a gross
miscarriage of justice. On scrutinising the
impugned judgment of the High Court from the
aforesaid standpoint, we have no hesitation in
concluding that the High Court exceeded its
2026:HHC:8213
jurisdiction in interfering with the conviction of the
respondent by reappreciating the oral evidence. ..."
13. Another judgment which has also been referred
.
to and relied on by the High Court is the judgment
of this Court in Sanjaysinh Ramrao Chavan v.
Dattatray Gulabrao Phalke, (2015) 3 SCC 123: (2015) 2
SCC (Cri) 19]. This Court held that the High Court, in
the exercise of revisional jurisdiction, shall not
interfere with the order of the Magistrate unless it
is perverse or wholly unreasonable or there is non-
of
consideration of any relevant material, the order
cannot be set aside merely on the ground that
another view is possible. The following has been
laid down in para 14: (SCC p. 135)
rt"14. ... Unless the order passed by the
Magistrate is perverse or the view taken by the
court is wholly unreasonable or there is non-
consideration of any relevant material or there
is palpable misreading of records, the
Revisional Court is not justified in setting aside
the order, merely because another view is
possible. The Revisional Court is not meant to
act as an appellate court. The whole purpose of
the revisional jurisdiction is to preserve the
power in the court to do justice in accordance
with the principles of criminal jurisprudence.
The revisional power of the court under
Sections 397 to 401 CrPC is not to be equated
with that of an appeal. Unless the finding of the
court, whose decision is sought to be revised, is
shown to be perverse or untenable in law or is
grossly erroneous or glaringly unreasonable or
where the decision is based on no material or
where the material facts are wholly ignored or
where the judicial discretion is exercised
arbitrarily or capriciously, the courts may not
interfere with the decision in exercise of their
revisional jurisdiction."
2026:HHC:8213
14. This position was reiterated in Bir Singh v. Mukesh
Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ)
.
309: 2019 SCC OnLine SC 13, wherein it was observed at page 205:
"16. It is well settled that in the exercise of revisional
jurisdiction under Section 482 of the Criminal Procedure
Code, the High Court does not, in the absence of
perversity, upset concurrent factual findings. It is not for
of
the Revisional Court to re-analyse and re-interpret the
evidence on record.
17. As held by this Court in Southern Sales & Services v.
Sauermilch Design and Handels GmbH, (2008) 14 SCC 457, it
rt
is a well-established principle of law that the Revisional
Court will not interfere even if a wrong order is passed by
a court having jurisdiction, in the absence of a
jurisdictional error. The answer to the first question is,
therefore, in the negative."
15. A similar view was taken in Sanjabij Tari v. Kishore S.
Borcar, 2025 SCC OnLine SC 2069, wherein it was observed:
"27. It is well settled that in exercise of revisional
jurisdiction, the High Court does not, in the absence of
perversity, upset concurrent factual findings [See: Bir
Singh(supra)]. This Court is of the view that it is not for
the Revisional Court to re-analyse and re-interpret the
evidence on record. As held by this Court in Southern Sales
& Services v. Sauermilch Design and Handels GMBH, (2008)
14 SCC 457, it is a well-established principle of law that
the Revisional Court will not interfere, even if a wrong
order is passed by a Court having jurisdiction, in the
absence of a jurisdictional error.
28. Consequently, this Court is of the view that in the
absence of perversity, it was not open to the High Court in
the present case, in revisional jurisdiction, to upset the
2026:HHC:8213
concurrent findings of the Trial Court and the Sessions
Court.
16. The present revision has to be decided as per the
.
parameters laid down by the Hon'ble Supreme Court.
17. It was submitted that no proof of the registration of
the firm was filed, and the complainant has to be treated as an
of
unregistered firm. A complaint filed by an unregistered firm is
not maintainable. This submission cannot be accepted. The law
rt
regarding the filing of the complaint by the unregistered firm
was discussed by this Court elaborately in Uttam Traders Ranghri
v. Tule Ram, 2018 SCC OnLine HP 3407, where the divergent views
of various High Courts were noticed by the Court and it was held
that Section 69(2) of the Indian Partnership Act only bars the
civil proceedings for the recovery of money by an unregistered
firm, and not the proceedings under Section 138 of NI Act. It was
observed: -
"33. From the aforesaid discussion, it would be noticed
that, save and except an isolated authority of the Division
Bench of Andhra Pradesh High Court in Amit Desai's
case (supra), all other High Courts in the country have
categorically held that the proceedings under Section 138
of the N.I. Act, are not recovery proceedings.
34. Therefore, even an unregistered Partnership firm can
maintain a complaint under Section 138 of the Act.
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35. That apart, it would further be noticed that the view
taken by the Andhra Pradesh High Court, in fact, is con-
trary to the ratio of the judgment laid down by the
Hon'ble Supreme Court in R. Vijayan's case (supra).
.
Therefore, in the given facts and circumstances, I am of
the considered view that the criminal prosecution initi-
ated by the complainant against the respondent is not hit
by Section 69 of the Partnership Act."
18. Hence, in view of the judgment of this Court, the
of
submission that a complaint filed by an unregistered firm is not
maintainable cannot be accepted.
19.
rt
It was submitted that the complainant had asserted
in the complaint that he was authorised by the partner of the
firm to file a complaint; however, no such authorisation was
placed on record, and the complaint is not maintainable. This
submission cannot be accepted. It was laid down by the
Karnataka High Court in Padmavati Finance Registered vs Md.
Yosuf Ali S/O Haji Abdul Hameed Criminal Appeal No.3608/2009
decided on 05-07-2013 that any partner of the firm can file a
complaint under Section 19(2)(a) to (h) of the Partnership Act. It
was observed: -
"21. Section 22 of the Indian Partnership Act deals with
the mode of doing an act to bind the firm, which reads as
follows:
"22. Mode of doing act to bind the firm.- In order to
bind a firm, an act or instrument done or executed
2026:HHC:8213
by a partner or other person on behalf of the firm
shall be done or executed in the firm's name, or in
any other manner expressing or implying an
intention to bind the firm".
.
Thus, as per the provisions which are barred under
Section 19(2)(a) to (h) of the Partnership Act, any partner
of the firm can file the complaint, as the definition under
Section 2(a) of the Partnership Act gives rise to a right
enforceable by or against the firm.
22. In the instant case, one of the partners of the firm
of
complained about the accused when the cheque issued by
him was dishonoured. The partner of the firm, therefore,
has an enforceable right under the law on behalf of the
rt
firm or against the firm unless barred under Section 19(2)
of the Partnership Act or against the bylaws of the
partnership deed.
23. In the instant case, learned counsel for the
complainant fairly submitted that there are no specific
bylaws permitting any partner of the firm to file a
complaint with the firm for the benefit of the firm, which
is the payee defined under Section 142 of the Act.
24. Even during the trial, the accused had not produced
any kind of evidence to prove that the firm is not
intending to prosecute him for the offence under Section
138 of the Act and that the firm has no intention to
prosecute him. In that view of the matter, the
complainant representing the firm is competent to lodge
the complaint on behalf of the firm for recovery of the
amount due to the firm from the accused by invoking the
provisions of Section 138 of the Act.
25. Having regard to the above facts and circumstances,
the learned Magistrate was not justified in acquitting the
accused on the sole ground that the complainant was not
authorised to file a complaint on behalf of the firm.
20. It was laid down by the Bombay High Court in Reshmi
Constructions v. Laxman Vithal Chunekar, 2014 SCC OnLine Bom
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2894: (2014) 5 Mah LJ 537 that the partner of a firm can file a
complaint on behalf of the firm without any authorisation. It
.
was observed at page 541:
"17. From the above provisions of the Act, it is clear that
every partner is an agent of the Firm and his other
partners for the purpose of business of the firm, and the
acts of every partner bind the firm and his partners,
of
unless, of course, the partner had, in fact, no authority to
act for the firm and his other partners. The learned trial
Magistrate relied upon the judgment of this Court in the
case of Alka Toraskar v. State of Goa, 2007 (1) Goa L.T. 159,
rt
which pertains to a Co-operative Society. The trial
Magistrate further relied upon Fragrant Leasing and
Finance Co. Ltd. v. Jagdish Katuria, 2008 All MR (Cri.)
Journal 3 and the judgment in the case of Chico Ursula
D'Souza v. Goa Plast Pvt. Ltd., 2008 (6) Mh. L.J. 353: 2008 (3)
Mh. L.J. (Cri.) 323: 2009 (1) All MR 290, both of which
pertain to Company. Admittedly, a Company is a separate
juristic person distinct from its directors or shareholders,
and the Company acts through the resolution passed by
the Board of Directors. Because of the above, a person who
claims to represent another is bound to produce an
authority or power which entitles him to appear. The
above is not the case with the Partnership Firm. As has
already been seen above, each partner is an agent of the
Firm. In the present case, it is not that some person, on
the strength of a power of attorney, had filed a complaint
and had deposed on behalf of the complainant. In the
present case, the complaint was not filed by PW 1, but it
was filed by the Firm, through PW 1, as a partner of that
Firm. The person who deposed on behalf of the
complainant was one of the partners of the said
Complainant-Firm. In fact, the agreement dated 5-4-
2005 was signed by the same partner, Shri Pandharinath
Chafadkar (PW 1), for himself and as attorney of the other
two partners, Arun Chafadkar and Narayan Nigalye. In the
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circumstances above, the finding of the Trial Magistrate
that there was no authority for PW 1 to file the complaint
or to depose on behalf of the complainant is not correct.
.
21. The accused claimed in his statement recorded under
Section 313 of Cr.P.C. that the cheque was issued as security,
which was misused by the complainant. Thus, the issuance of
the cheque and the signatures on the cheque were not disputed.
of
It was laid down by the Hon'ble Supreme Court in APS Forex
Services (P) Ltd. v. Shakti International Fashion Linkers (2020) 12
rt
SCC 724, that when the issuance of a cheque and signature on the
cheque are not disputed, a presumption would arise that the
cheque was issued in discharge of the legal liability. It was
observed: -
"9. Coming back to the facts in the present case and
considering the fact that the accused has admitted the
issuance of the cheques and his signature on the cheque
and that the cheque in question was issued for the second
time after the earlier cheques were dishonoured and that
even according to the accused some amount was due 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 a presumption is rebuttable.
However, to rebut the presumption, the accused was
required to lead evidence that the full amount due and
payable to the complainant had been paid. In the present
case, no such evidence has been led by the accused. The
story put forward by the accused that the cheques were
given by way of security is not believable in the absence of
further evidence to rebut the presumption, and more
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particularly, the cheque in question was issued for the
second time after the earlier cheques were dishonoured.
Therefore, both the courts below have materially erred in
not properly appreciating and considering the
.
presumption in favour of the complainant that there
exists a legally enforceable debt or liability as per Section
139 of the NI Act. It appears that both the learned trial
court as well as the High Court have committed an error
in shifting the burden upon the complainant to prove the
debt or liability, without appreciating the presumption
of
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
rt
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."
22. It was laid down in N. Vijay Kumar v. Vishwanath Rao
N., 2025 SCC OnLine SC 873, wherein it was held as under:
"6. Section 118 (a) assumes that every negotiable
instrument is made or drawn for consideration, while
Section 139 creates a presumption that the holder of a
cheque has received the cheque in discharge of a debt or
liability. Presumptions under both are rebuttable,
meaning they can be rebutted by the accused by raising a
probable defence."
23. A similar view was taken in Sanjabij Tari v. Kishore S.
Borcar, 2025 SCC OnLine SC 2069, wherein it was observed:
"ONCE EXECUTION OF A CHEQUE IS ADMITTED,
PRESUMPTIONS UNDER SECTIONS 118 AND 139 OF THE NI
ACT ARISE
15. In the present case, the cheque in question has
admittedly been signed by the Respondent No. 1-Accused.
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This Court is of the view that once the execution of the
cheque is admitted, the presumption under Section 118 of
the NI Act that the cheque in question was drawn for
consideration and the presumption under Section 139 of
.
the NI Act that the holder of the cheque received the said
cheque in discharge of a legally enforceable debt or
liability arises against the accused. It is pertinent to
mention that observations to the contrary by a two-Judge
Bench in Krishna Janardhan Bhat v. Dattatraya G. Hegde,
(2008) 4 SCC 54, have been set aside by a three-Judge
of
Bench in Rangappa (supra).
16. This Court is further of the view that by creating this
presumption, the law reinforces the reliability of cheques
as a mode of payment in commercial transactions.
rt
17. Needless to mention that the presumption
contemplated under Section 139 of the NI Act is
rebuttable. However, the initial onus of proving that the
cheque is not in discharge of any debt or other liability is
on the accused/drawer of the cheque [See: Bir Singh v.
Mukesh Kumar, (2019) 4 SCC 197].
24. Thus, the learned Courts below had rightly held that
the cheque was issued in discharge of the liability for
consideration, and the burden is upon the accused to rebut this
presumption.
25. It was submitted that the accused had paid
₹1,76,000/- during the pendency of the proceedings, which fact
was admitted by the complainant, and the complaint was not
maintainable. This submission will not help the accused. The
cause of action for filing the complaint was complete on the
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expiry of 15 days from the date of the receipt of the notice, and
any payment made thereafter will not help the accused. It was
.
laid down by the Hon'ble Supreme Court in Rajneesh Aggarwal v.
Amit J. Bhalla, (2001) 1 SCC 631, that any payment made after the
cause of action had arisen would not wipe out the offence. It was
observed:-
of
7. So far as the question of deposit of the money during
the pendency of these appeals is concerned, we may state
rt
that in course of hearing the parties wanted to settle the
matter in Court and it is in that connection, to prove the
bona fides, the respondent deposited the amount covered
under all the three cheques in the Court, but the
complainant's counsel insisted that if there is going to be
a settlement, then all the pending cases between the
parties should be settled, which was, however not agreed
to by the respondent and, therefore, the matter could not
be settled. So far as the criminal complaint is concerned,
once the offence is committed, any payment made
subsequent thereto will not absolve the accused of the
liability of criminal offence, though in the matter of
awarding of sentence, it may have some effect on the
court trying the offence. But by no stretch of imagination,
a criminal proceeding could be quashed on account of the
deposit of money in the court or that an order of quashing
of a criminal proceeding, which is otherwise
unsustainable in law, could be sustained because of the
deposit of money in this Court. In this view of the matter,
the so-called deposit of money by the respondent in this
Court is of no consequence.
26. Further, the learned Courts below had rightly pointed
out that the accused had a liability of ₹5,05,141/- as per the
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detail (Ex.C8). Section 59 of the Indian Contract Act enables a
debtor owing distinct debts to make the payment with express
.
intimation that the payment is to be applied to discharge the
particular debt. Section 60 of the Contract Act empowers the
creditor to appropriate the amount towards any of the debts in
the absence of any such stipulation. It was laid down by Delhi
of
High Court in Amazing Research Laboratories Ltd. v. Krishna
Pharma, 2023 SCC OnLine Del 1498, that the creditor is entitled to
rt
appropriate the amount towards any debt in the absence of a
specific stipulation from the debtor. It was observed:
"48. The underlying principles of apportionment as con-
tained in above sections according to Pollock & Mulla, In-
dian Contract Act, 12thEdition, is that when several debts
are due and owing to one person, any payment made by
the debtor either with an express intimation or under cir-
cumstances from which an intimation may be implied,
must be applied to the discharge of the debt in the man-
ner intimated or which can be implied from the circum-
stances. Mulla proceeds to observe that "where several
distinct debts are owed by a debtor to his creditor, the debtor
has the right when he makes a payment to appropriate the
money to any of the debts that he pleases, and the creditor is
bound, if he takes the money, to apply it in the manner di-
rected by the debtor. If the debtor does not make any appro-
priation at the time when he makes the payment, the right of
appropriation devolves on the creditor".
49. The Rule of Appropriation of money was summed up
by Mr Justice T.L. Venkatarama Aiyar (as he then was) in
the Full Bench decision of the Madras High Court
2026:HHC:8213
in Marimella Suryanarayana v. Venkataraman Rao (AIR
1953 Mad 458). His Lordship stated:
"The principles governing appropriation of payments
.
made by a debtor are under the general law, well settled.
When a debtor makes a payment, he has a right to have it
appropriated in such manner as he decides, and if the
creditor accepts the payment, he is bound to make the ap-
propriation in accordance with the directions of the
debtor. This is what is known in England as the rule
in 'Clayton's case" (1861) 1 Mar. 572: 35 E.R. 781, and it is
of
embodied in Section 59, Contract Act. But when the debtor
has not himself made any appropriation, the right de-
volves on the creditor who can exercise it at any time,
vide 'Cory Bros. & Co. v. Owners of the Turkish Steamship
rt
'Mecca', [1897] A.C. 286; and even at the time of the trial:
Vide 'Symore v. Picket', [1905] 1 K.B. 715. That is Section
60, Contract Act. It is only when there is no appropriation
either by the debtor or the creditor that the Court appro-
priates the payments as provided in Section 61, Contract
Act."
50. In the case of Anmol Steel Processors Private Lim-
ited v. Colour Roof (India) Limited (2022 SCC OnLine Bom
116), the Bombay High Court analysed Sections 60 and 61
of the Indian Contracts Act and observed:
"55. Under section 60 of the Indian Contract Act, where
the debtor has omitted to intimate and there are no settled
circumstances undertaking the debt to be applied, the
creditor may apply at his discretion to any lawful debt ac-
tually due and payable to him from the creditor, whether
is regular or is not barred by law in force for the time be-
ing as to the limits of the suit"
"56. At this stage, it would be apposite to refer to sec-
tion 61 of the Indian Contract Act, which provides that
where neither party makes any appropriation, the pay-
ment shall be applied in discharge of the debts in order of
time, whether they are or are not barred by the law in
force for the time being as to the limitation of suits. If the
2026:HHC:8213
debts are of equal standing, the payment shall be applied
in discharge of each proportionally."
51. Thus, to summarize where a debtor, owing several
.
distinct debts to one person, makes a payment indicating
that the payment is to be applied to the discharge of some
particular debt, the payment must be applied accordingly
in terms of S. 59 of the Contract Act. However, where the
debtor omits to so intimate, the creditor may apply it at
his discretion to any lawful debt actually due and payable
to him from the debtor, whether its recovery is or is not
of
barred by the law in force for the time being as to the limita-
tion of suits, according to S. 60. Where neither party makes
any appropriation, the payment shall be applied in dis-
charge of the debts in order of time, whether they are or
rt
are not barred by limitation in terms of Section 61 of the
Contract Act."
27. In the present case, there is no evidence that the
accused had specified that the amount was being paid towards
the cheque amount, and in the absence of any such stipulation,
the complainant was justified in adjusting the amount towards
the other payment.
28. It was submitted in the memo of the revision that
some other complaint was filed regarding the cheque bearing
No.651308; however, there is no foundation for this submission.
No copy of such a complaint or the judgment was brought on
record. The accused did not step into the witness box to assert
any such fact. Thus, the plea is without any foundation and
cannot be accepted. It was held in Sumeti Vij v. Paramount Tech
2026:HHC:8213
Fab Industries, (2022) 15 SCC 689: 2021 SCC OnLine SC 201 that the
accused has to lead defence evidence to rebut the presumption
.
and mere denial in his statement under Section 313 of Cr.P.C. is
not sufficient to rebut the presumption. It was observed at page
700:
"20. That apart, when the complainant exhibited all these
of
documents in support of his complaints and recorded the
statement of three witnesses in support thereof, the
appellant recorded her statement under Section 313 of the
rt
Code but failed to record evidence to disprove or rebut the
presumption in support of her defence available under
Section 139 of the Act. The statement of the accused
recorded under Section 313 of the Code is not substantive
evidence of defence, but only an opportunity for the accused
to explain the incriminating circumstances appearing in the
prosecution's case against the accused. Therefore, there is no
evidence to rebut the presumption that the cheques were
issued for consideration." (Emphasis supplied)"
29. There was no other evidence to rebut the
presumption attached to the cheque, and the learned Courts
below had rightly held that the accused had failed to rebut the
presumption.
30. The cheque was dishonoured with an endorsement
'funds insufficient' vide memo (Ex.C4). It was laid down by the
Hon'ble Supreme Court in Mandvi Cooperative Bank Ltd. v.
Nimesh B. Thakore, (2010) 3 SCC 83: (2010) 1 SCC (Civ) 625: (2010)
2026:HHC:8213
2 SCC (Cri) 1: 2010 SCC OnLine SC 155 that the memo issued by the
Bank is presumed to be correct and the burden is upon the
.
accused to rebut the presumption. It was observed at page 95:
24. Section 146, making a major departure from the
principles of the Evidence Act, provides that the bank's
slip or memo with the official mark showing that the
cheque was dishonoured would, by itself, give rise to the
of
presumption of dishonour of the cheque, unless and until
that fact was disproved. Section 147 makes the offences
punishable under the Act compoundable.
31. In the present case, no evidence was produced to
rt
rebut the presumption, and the learned Courts below had rightly
held that the cheque was dishonoured with an endorsement
'insufficient funds.'
32. The complainant sent a notice to the accused, which
was served upon him, and an acknowledgement (Ex.C7) was
received by him on 4.12.2019. It was submitted that the
complaint is barred by limitation. This cannot be accepted. As
per the acknowledgement, a legal notice was served upon the
accused on 4.12.2019. It was laid down by the Hon'ble Supreme
Court in Saketh India Ltd. v. India Securities Ltd., (1999) 3 SCC 1,
that the date on which the notice was served has to be excluded
while calculating the period of limitation. It was observed:-
2026:HHC:8213
7. The aforesaid principle of excluding the day from
which the period is to be reckoned is incorporated in
Section 12(1) and (2) of the Limitation Act, 1963. Section
.
12(1) specifically provides that in computing the period of
limitation for any suit, appeal or application, the day
from which such period is to be reckoned shall be
excluded. Similar provision is made in sub-section (2) for
appeal, revision or review. The same principle is also
incorporated in Section 9 of the General Clauses Act, 1897
which, inter alia, provides that in any Central Act made
of
after the commencement of the General Clauses Act, it
shall be sufficient, for the purpose of excluding the first
in a series of days or any other period of time, to use the
rt
word "from" and for the purpose of including the last in a
series of days or any other period of time, to use the word
"to".
8. Hence, there is no reason for not adopting the rule
enunciated in the aforesaid case, which is consistently
followed and which is adopted in the General Clauses Act
and the Limitation Act. Ordinarily, in computing the time,
the rule observed is to exclude the first day and to include
the last. Applying the said rule, the period of one month
for filing the complaint will be reckoned from the day
immediately following the day on which the period of 15
days from the date of the receipt of the notice by the
drawer expires. The period of 15 days in the present case
expired on 14-10-1995. So cause of action for filing a
complaint would arise from 15-10-1995. That day (15th
October) is to be excluded from counting the period of one
month. Complaint is filed on 15-11-1995. The result
would be that the complaint filed on 15th November is
within time.
33. This judgment was followed in Econ Antri Ltd. v. Rom
Industries Ltd., (2014) 11 SCC 769, wherein it was observed: -
2026:HHC:8213
42. Having considered the question of law involved in this
case in proper perspective, in the light of relevant
judgments, we are of the opinion that Saketh [Saketh India
Ltd. v. India Securities Ltd., (1999) 3 SCC 1: 1999 SCC (Cri)
.
329] lays down the correct proposition of law. We hold
that for the purpose of calculating the period of one
month, which is prescribed under Section 142(b) of the NI
Act, the period has to be reckoned by excluding the date
on which the cause of action arose. We hold that SIL
Import, USA [SIL Import, USA v. Exim Aides Silk Exporters,
of
(1999) 4 SCC 567: 1999 SCC (Cri) 600] does not lay down
the correct law. Needless to say, any decision of this Court
which takes a view contrary to the view taken
in Saketh [Saketh India Ltd. v. India Securities Ltd., (1999) 3
rt
SCC 1: 1999 SCC (Cri) 329] by this Court, which is
confirmed by us, do not lay down the correct law on the
question involved in this reference. The reference is
answered accordingly."
34. Therefore, the date of service of notice, i.e.,
4.12.2019, has to be excluded, and the complaint filed on
18.1.2020, within 45 days from the date of the service of notice,
cannot be said to be barred by limitation.
35. The accused had not paid the amount despite the
receipt of the notice. Hence, the learned Trial Court had rightly
held that all the ingredients of the commission of an offence
punishable under Section 138 of the NI Act were duly satisfied.
36. Learned Trial Court had sentenced the accused to
undergo simple imprisonment for one year. It was laid down by
the Hon'ble Supreme Court in Bir Singh v. Mukesh Kumar, (2019)
2026:HHC:8213
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 of the NI
.
Act is a deterrent in nature. It was observed at page 203:
"6. The object of Section 138 of the Negotiable
Instruments Act is to infuse credibility into negotiable
instruments, including cheques, and to encourage and
promote the use of negotiable instruments, including
of
cheques, in financial transactions. The penal provision of
Section 138 of the Negotiable Instruments Act is intended
to be a deterrent to callous issuance of negotiable
instruments such as cheques without serious intention to
rt
honour the promise implicit in the issuance of the same."
37. Keeping in view the deterrent sentence to be
awarded, the sentence of one year cannot be said to be excessive,
and no interference is required with it.
38. Learned Trial Court had awarded a compensation of
₹2,60,000/-. The cheque was issued on 8.11.2019. The
compensation was awarded on 26.5.2025 after the lapse of six
years. The complainant lost money that he would have gained by
depositing the cheque amount in the bank or by investing it
somewhere else. He had to engage a counsel to prosecute the
complaint filed by him. Therefore, he was entitled to be
compensated for his loss. It was laid down by the Hon'ble
Supreme Court in Kalamani Tex v. P. Balasubramanian, (2021) 5
2026:HHC:8213
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
of
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
rt
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]"
39. Therefore, the compensation of ₹2,60,000/- cannot
be said to be excessive.
40. It was submitted that the learned Trial Court could
not have awarded the sentence of imprisonment in default of
payment of compensation. This submission cannot be accepted.
It was laid down by the Hon'ble Supreme Court in K.A. Abbas v.
Sabu Joseph, (2010) 6 SCC 230: 2010 SCC OnLine SC 612 that the
Courts can impose a sentence of imprisonment in default of
payment of compensation. It was observed at page 237:
2026:HHC:8213
"26. From the above line of cases, it becomes very clear
that a sentence of imprisonment can be granted for
default in payment of compensation awarded under
Section 357(3) CrPC. The whole purpose of the provision
.
is to accommodate the interests of the victims in the
criminal justice system. Sometimes the situation becomes
such that there is no purpose served by keeping a person
behind bars. Instead, directing the accused to pay an
amount of compensation to the victim or affected party
can ensure the delivery of total justice. Therefore, this
of
grant of compensation is sometimes in lieu of sending a
person to bars or in addition to a very light sentence of
imprisonment. Hence, in default of payment of this
compensation, there must be a just recourse. Not
rt
imposing a sentence of imprisonment would mean
allowing the accused to get away without paying the
compensation, and imposing another fine would be
impractical, as it would mean imposing a fine upon
another fine and therefore would not ensure proper
enforcement of the order of compensation. While passing
an order under Section 357(3), it is imperative for the
courts to look at the ability and the capacity of the
accused to pay the same amount as has been laid down by
the cases above; otherwise, the very purpose of granting
an order of compensation would stand defeated."
40. This position was reiterated in R. Mohan v. A.K. Vijaya
Kumar, (2012) 8 SCC 721: 2012 SCC OnLine SC 486, wherein it was
observed at page 729:
"29. The idea behind directing the accused to pay
compensation to the complainant is to give him
immediate relief so as to alleviate his grievance. In terms
of Section 357(3), compensation is awarded for the loss or
injury suffered by the person due to the act of the accused
for which he is sentenced. If merely an order directing
compensation is passed, it would be totally ineffective. It
2026:HHC:8213
could be an order without any deterrence or apprehension
of immediate adverse consequences in case of its non-
observance. The whole purpose of giving relief to the
complainant under Section 357(3) of the Code would be
.
frustrated if he is driven to take recourse to Section 421 of
the Code. An order under Section 357(3) must have the
potential to secure its observance. Deterrence can only be
infused into the order by providing for a default sentence.
If Section 421 of the Code puts compensation ordered to
be paid by the court on a par with the fine so far as the
of
mode of recovery is concerned, then there is no reason
why the court cannot impose a sentence in default of
payment of compensation, as it can be done in case of
default in payment of a fine under Section 64 IPC. It is
rt
obvious that in view of this, in Vijayan [(2009) 6 SCC 652:
(2009) 3 SCC (Cri) 296], this Court stated that the
abovementioned provisions enabled the court to impose a
sentence in default of payment of compensation and
rejected the submission that the recourse can only be had
to Section 421 of the Code for enforcing the order of
compensation. Pertinently, it was made clear that
observations made by this Court in Hari Singh [(1988) 4
SCC 551: 1988 SCC (Cri) 984] are as important today as they
were when they were made. The conclusion, therefore, is
that the order to pay compensation may be enforced by
awarding a sentence in default.
30. In view of the above, we find no illegality in the order
passed by the learned Magistrate and confirmed by the
Sessions Court in awarding a sentence in default of
payment of compensation. The High Court was in error in
setting aside the sentence imposed in default of payment
of compensation.
41. Hence, the sentence of imprisonment in default of
payment of compensation is not bad.
42. No other point was urged.
2026:HHC:8213
43. In view of the above, the present revision fails, and it
is dismissed, and so are the pending miscellaneous applications,
.
if any.
(Rakesh Kainthla)
Judge
23rd March, 2026
(Chander)
of
rt
