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2025 (7) TMI 406
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.... filed a complaint before the learned Trial Court against the accused for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act (NI Act). It was asserted that the complainant is a Body Corporate constituted under the Regional Rural Bank Act, 1976. It is carrying on banking business throughout Himachal Pradesh. The accused approached the complainant for grant of a term loan for the purchase of a new truck/vehicle for Rs.21,15,000/-. The complainant agreed to the request made by the accused and advanced a sum of Rs.21,15,000/- on 12.6.2013. The accused executed the necessary documents. The loan was to be repaid in 72 equal monthly instalments plus a contractual rate of interest @13.25% per annum. The accused defaulted on the payment of the instalment. She issued a cheque of Rs.11,84,811.08 to discharge her liability. The complainant presented the cheque to its Bank, but it was dishonoured with an endorsement 'funds insufficient'. The complainant sent a notice to the accused asking her to repay the amount. The notice was duly served upon the accused, but the accused failed to repay the amount. Hence, the complaint was filed to take action against ....
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.... amount to the complainant. Hence, she was rightly convicted by the learned Trial Court. However, the sentence of imprisonment of one year was held to be harsh and was reduced to imprisonment till rising of the Court. The compensation was adequate, and no interference was required with it. Therefore, the appeal filed by the accused was partly allowed, and the judgment and order passed by the learned Trial Court were partly modified. 8. Being aggrieved from the judgments and order passed by the learned Courts below, the accused has filed the present revision, asserting that the loan was insured under the CGTMSC Scheme. The bank had claimed the amount due under the Scheme; however, this fact was not disclosed in the complaint. The complainant failed to satisfy the ingredients of the commission of an offence punishable under Section 138 of the NI Act. The cheque was not filled by the accused, and there were material alterations. No legally enforceable liability existed towards the complainant. The complainant obtained an amount of Rs.7,24,786/- by filing the claim under the Credit Guarantee Fund Trust for Micro and Small Enterprises. An amount of Rs.10,53,241/- was also received. The....
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.... 25332 of 2016 (N), Kiran Sharma Vs. Brinda Jewellers and another, 2024:HHC:7951, India Saree Museum Vs. P. Kapurchand & others 1989 SCC OnLine Kar 124, Jeet Ram Vs. HP Gramin Bank 2023:HHC:2849, Yashpal Singh Vs. Guman Singh 2024:HHC:9540, Balak Ram Vs. Ajay Kumar Sharma and another 2024:HHC:8601, B.R. Bhatia Vs. Amarjit Singh 2024:HHC:10249, Vee Kay Concast Pvt. Ltd. Vs. M/s Stanely Products and anr. 2025 NCPHHC 20038, Vee Kay Concast Private Limited Vs. M/s Stanley Products and another 2023:PHHC:028762 and ICICI Bank Ltd. Vs. Prafull Chandra and others ILR (2007) II Delhi 250 in support of her submission. 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 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: - "10. Before adverting to the merits of the contentions, at the outset, it is apt to mention that there are concurrent findings of conviction....
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....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 framing of charge is a much-advanced stage in the proceedings under the CrPC." 15. It was held in Kishan Rao v. Shankargouda, (2018) 8 SCC 165: (2018) 3 SCC (Cri) 544: (2018) 4 SCC (Civ) 3....
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....view is possible. The following has been laid down in para 14: (SCC p. 135) "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." 14. In the above case, also conv....
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....icated by this Court in the matter of Credential Finance Limited v. State of Maharashtra decided on 1st March, 2000, reported in (2000) 3 Mah LJ 544. The learned Single Judge of this Court giving reference to the provisions of Sections 7, 123, 124, 125 and 131 of the Negotiable Instrument Act, 1881 has held that there could not be any liability in terms of Section 138 of the Negotiable Instrument Act against the Payee of the cheque and the observations of the learned Additional Sessions Judge was disapproved." 19. The Bombay High Court held that the bank would be a holder in due course and entitled to file a complaint. It was observed: - 10. The same learned Single Judge in the matter of Ramesh Deshpande v. Panjab and Sind Bank, reported in (2000) 0 AIJ-MH 123889, by order dated 3rd April, 2000 explained the effect of drawee, drawer's cheque, bills of exchange, dishonor of cheque for insufficiency of fund in the account and placed reliance on the aforementioned Judgment of Credential Finance Limited Later order was carried to Supreme Court and the Hon'ble Supreme Court in the matter of Panjab and Sind Bank v. Vinkar Sahakari Bank Ltd., reported in (2001) 7 SCC 721 overru....
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....bove facts, the view expressed by the learned Single Judge of this Court, having not been approved by the Supreme Court as recorded hereinabove, I find no force in the contentions of the Applicant." (Emphasis supplied) 20. In the present case, the cheque was drawn in the account number mentioned on the cheque. The accused did not dispute in her statement recorded under Section 313 of Cr.P.C. that she had taken the loan from the complainant. It is not shown that the account number mentioned in the cheque is incorrect. Therefore, the cheque was drawn by the accused in the loan account in her name. Since the loan account was maintained by the complainant and the complainant was entitled to the money deposited in the loan account, therefore, the complainant was the holder in the due course and entitled to file the complaint. Hence, the submission that the cheque was not issued in the name of the complainant and the complaint filed by the complainant is not maintainable cannot be accepted. 21. The accused did not dispute that the cheque was issued by her. It was stated in para (g) of the grounds of revision that the complainant had taken the cheque from the accused in advance and fill....
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....n 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 an 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." 24. 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 t....
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....39 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." 25. The presumption under Section 139 of the NI Act was explained by the Hon'ble Supreme Court in 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 A....
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....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 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 into 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 sup....
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..... 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 signature being admitted has been reiterated. Hence, whether there is a rebuttal or not would depend on the facts and circumstances of each case." 26. 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 fo....
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.... 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 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 had 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 wi....
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....ion is required to prove the guilt of an accused. The accused is not expected to prove the non- existence of the presumed fact beyond a 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]] 29. Thus, the Court has to start with a presumption that the cheque was issued by the accused for consideration, and the burden is upon the accused to rebut this presumption. 30. Harinder Kumar (CW1) stated in his cross- examination that the complainant had seized the vehicle and sold it. It was submitted that this amount was not credited to the account of the accused, and the accused is not liable to pay the amount mentioned in the cheque. This submission cannot be accepted. It was suggested to Harinder Kumar (CW1) that there was a hike in interest due to which the accused could not make the payment. This suggestion clearly shows that the default in the payment was not disputed. The accused had taken a loan of Rs.21,15,000/-, which fact was admitted by her in response to Question N....
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....s concerned. If the contention of the petitioners is accepted, the borrowers will have no obligation to repay the loans/credit facilities availed." 32. A similar view was taken by this Court in Jeet Ram (supra), wherein it was observed:- "11. During proceedings of the case, Ms. Devyani Sharma, learned senior counsel appearing for the respondent- complainant/bank invited attention of this court to Credit Guarantee Fund Scheme for Micro and Small Enterprises, under which, some amount is alleged to have been recovered, to state that amount, if any, recovered under this scheme is liable to be repaid to the Central Government." 33. A similar view was taken in Indian Overseas Bank vs. Global Marine Products 2003 STPL 580 Kerala, wherein it was observed: 9. The appellant has contended that though the total loss claimed by the appellant was much more, the ECGC of India Ltd. admitted only a lesser amount and paid the same. It is clear from Clause 18 of Ext. A65 agreement entered into between the appellant and the ECGC of India Ltd. that the amount paid by the Corporation to the appellant is on condition that the appellant should institute recovery proceedings against exporter or any o....
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.... that post-dated blank signed security cheque was issued in favour of the petitioner. 38. Even if the cheque was issued as a security, the same would attract the provisions of the NI Act. It was laid down by this Court in Hamid Mohammad Versus Jaimal Dass 2016 (1) HLJ 456, that even if the cheque was issued towards the security, the accused will be liable. It was observed: "9. Submission of learned Advocate appearing on behalf of the revisionist that the cheque in question was issued to the complainant as security and on this ground, criminal revision petition be accepted is rejected being devoid of any force for the reasons hereinafter mentioned. As per Section 138 of the Negotiable Instruments Act 1881, if any cheque is issued on account of other liability, then the provisions of Section 138 of the Negotiable Instruments Act 1881 would be attracted. The court has perused the original cheque, Ext. C-1 dated 30.10.2008 placed on record. There is no recital in the cheque Ext. C-1, that cheque was issued as a security cheque. It is well-settled law that a cheque issued as security would also come under the provision of Section 138 of the Negotiable Instruments Act 1881. See 2016 (....
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....the cheque, there was a debt/liability in praesenti in terms of the loan agreement, as against the case of Indus Airways (supra), where the purchase order had been cancelled and a cheque issued towards advance payment for the purchase order was dishonoured. In that case, it was found that the cheque had not been issued for discharge of liability but as an advance for the purchase order, which was cancelled. Keeping in mind this fine, but the real distinction, the said judgment cannot be applied to a case of the present nature where the cheque was for repayment of a loan instalment which had fallen due, though such deposit of cheques towards repayment of instalments was also described as "security" in the loan agreement. In applying the judgment in Indus Airways (supra), one cannot lose sight of the difference between a transaction of the purchase order which is cancelled and that of a loan transaction where the loan has actually been advanced and its repayment is due on the date of the cheque. 13. The crucial question to determine the applicability of Section 138 of the Act is whether the cheque represents the discharge of existing enforceable debt or liability, or whether it rep....
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....ies is a sine qua non to not present the cheque which was issued as security. These are only the defences that would be available to the drawer of the cheque in proceedings initiated under Section 138 of the N.I. Act. Therefore, there cannot be a hard and fast rule that a cheque, which is issued as security, can never be presented by the drawee of the cheque. If such is the understanding, a cheque would also be reduced to an 'on-demand promissory note' and in all circumstances, it would only be civil litigation to recover the amount, which is not the intention of the statute. When a cheque is issued even though as 'security' the consequence flowing therefrom is also known to the drawer of the cheque and in the circumstance stated above if the cheque is presented and dishonoured, the holder of the cheque/drawee would have the option of initiating the civil proceedings for recovery or the criminal proceedings for punishment in the fact situation, but in any event, it is not for the drawer of the cheque to dictate terms with regard to the nature of litigation." 41. Hence, the accused cannot escape from the liability by taking a plea that she had handed over a blank si....
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....." 43. This position was reiterated in Oriental Bank of Commerce v. Prabodh Kumar Tewari, 2022 SCC OnLine SC 1089, wherein it was observed: "12. The submission, which has been urged on behalf of the appellant, is that even assuming, as the first respondent submits, that the details in the cheque were not filled in by the drawer, this would not make any difference to the liability of the drawer. xxxxxx 32. A drawer who signs a cheque and hands it over to the payee is presumed to be liable unless the drawer adduces evidence to rebut the presumption that the cheque has been issued towards payment of a debt or in the discharge of a liability. The presumption arises under Section 139. 44. Therefore, the cheque is not bad even if it is not filled by the drawer. 45. The accused did not lead any evidence and relied upon the statement under Section 313 of Cr.P.C. to prove her defence. This was not sufficient. It was held in Sumeti Vij v. Paramount Tech 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 her statement under Section 313 of Cr.P.C. is not sufficient to rebut the presumption....
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.... bond furnished by her. Therefore, notice was sent to the correct address and was deemed to be served. 50. 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: "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 ....
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....he sentence imposed by the learned Appellate Court. 55. Learned Trial Court ordered the payment of compensation of Rs.1,18,481/- being 10% of the cheque amount. The cheque was issued on 16.10.2015, and the sentence was imposed on 31.10.2020 after the lapse of five years. The complainant lost interest on the amount which it would have obtained by lending the amount to other persons. The complainant also paid the litigation expenses for filing the complaint. He was entitled to be compensated for the same. 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 th....
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....essary, by instalments, may also be given. The court may enforce the order by imposing a sentence in default." 21. This position also finds support in R. v. Oliver John Huish [(1985) 7 Cri App R (S) 272]. The Lord Justice Croom Johnson, speaking for the Bench, has observed: "When compensation orders may be made, the most careful examination is required. Documents should be obtained, and evidence, either on affidavit or orally, should be given. The proceedings should, if necessary, be adjourned to arrive at the true state of the defendant's affairs. Very often, a compensation order is made and a very light sentence of imprisonment is imposed, because the court recognises that if the defendant is to have an opportunity of paying the compensation, he must be enabled to earn the money with which to do so. The result is therefore an extremely light sentence of imprisonment. If the compensation order turns out to be virtually worthless, the defendant has got off with a very light sentence of imprisonment as well as no order of compensation. In other words, generally speaking, he has got off with everything." 22. The law laid down in Hari Singh v. Sukhbir Singh [(1988) 4 SCC 5....
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....Kerala. We express our disapproval of the course adopted by the said Judge in Rajendran v. Jose [(2001) 3 KLT 431]. It is unfortunate that when the Sessions Judge has correctly done a course in accordance with the discipline, the Single Judge of the High Court has incorrectly reversed it." 23. In order to set at rest the divergent opinion expressed in Ahammedkutty case [(2009) 6 SCC 660 : (2009) 3 SCC (Cri) 302], this Court in Vijayan v. Sadanandan K. [(2009) 6 SCC 652 : (2009) 3 SCC (Cri) 296], after noticing the provision of Sections 421 and 431 CrPC, which dealt with mode of recovery of fine and Section 64 IPC, which empowered the courts to provide for a sentence of imprisonment on default of payment of fine, the Court stated: (Vijayan case [(2009) 6 SCC 652 : (2009) 3 SCC (Cri) 296], SCC p. 658, para 24) "24. We have carefully considered the submissions made on behalf of the respective parties. Since a decision on the question raised in this petition is still in a nebulous state, there appear to be two views as to whether a default sentence of imprisonment can be imposed in cases where compensation is awarded to the complainant under Section 357(3) CrPC. As pointed out by M....
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....er which it was committed, the position of the offender and other relevant considerations before ordering the offender to suffer imprisonment in default of payment of a fine." (emphasis in original) 25. In Kuldip Kaur v. Surinder Singh [(1989) 1 SCC 405: 1989 SCC (Cri) 171: AIR 1989 SC 232], in the context of Section 125 CrPC observed that sentencing a person to jail is sometimes a mode of enforcement. In this regard, the Court stated: (SCC p. 409, para 6) "6. A distinction has to be drawn between a mode of enforcing recovery on the one hand and effecting actual recovery of the amount of monthly allowance which has fallen in arrears on the other. Sentencing a person to jail is a 'mode of enforcement'. It is not a 'mode of satisfaction' of the liability. The liability can be satisfied only by making actual payment of the arrears. The whole purpose of sending to jail is to oblige a person liable to pay the monthly allowance who refuses to comply with the order without sufficient cause, to obey the order and to make the payment. The purpose of sending him to jail is not to wipe out the liability which he has refused to discharge. It should also be realised that a person ordered to....