TaxTMI 
TaxTMI 
2026 (9) TMI 1905
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....d for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act (in short 'NI Act'). It was asserted that the accused owed Rs.1,26,600/- for retreading and purchase of new tyres for his vehicle. The accused issued a cheque of Rs.1,26,600/-, drawn on UCO Bank, Branch Chakkar, Shimla, in favour of the complainant. The complainant presented the cheque before his bank, and it was dishonoured with the endorsement 'funds insufficient'. The complainant issued a legal notice on 24.06.2014 asking the accused to pay the amount within 15 days of the receipt of the notice. The notice was delivered to the accused, but the accused failed to pay the money despite the service of the notice. Hence, the complaint was filed before the learned Trial Court against the accused for the commission of an offence punishable under Section 138 of the NI Act. 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 Sanjay Sood (CW-....
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....led to prove the payment of money to the complainant. The cheque was dishonoured with an endorsement 'insufficient funds'. The notice was also presumed to be served upon the accused. The learned Trial Court had imposed an adequate sentence, which did not require any interference. 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 erred in appreciating the evidence on record. The complainant has not placed any bills of the sale/retreading. The plea taken by the accused that he had issued a blank signed cheque, which was misused by the complainant, was highly probable. Therefore, it was prayed that the present revision be allowed and the judgments and order passed by the learned Courts below be set aside. 9. I have heard Mr Mohan Singh, learned counsel for the petitioner/accused, Mr Bhairav Gupta, learned counsel for respondent No. 1/complainant, and Mr Jitender Sharma, learned Additional Advocate General, for the respondent No. 2/State. 10. Mr Mohan Singh, learned counsel for the petitioner/accused, submitted that the learned Cou....
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....er passed by an inferior criminal court. The said Section is extracted as hereunder: "438. Calling for records to exercise powers of revision.-(1) The High Court or any Sessions Judge may call for and examine the record of any proceeding before any inferior Criminal Court situate within its or his local jurisdiction for the purpose of satisfying 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, and may, when calling, for such record, direct that the execution of any sentence or order be suspended, and if the accused is in confinement that he be released on his own bond or bail bond pending the examination of the record. Explanation. -All Magistrates, whether Executive or Judicial, and whether exercising original or appellate jurisdiction, shall be deemed to be inferior to the Sessions Judge for the purposes of this subsection and of section 439. (2) The powers of revision conferred by sub-section (1) shall not be exercised in relation to any interlocutory order passed in any appeal, inquiry, trial or other proceeding. ....
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.... generally impermissible unless a glaring contradiction is apparent on the face of the record. In State of Kerala v. Puttumana Illath Jathavedan Namboodiri, (1999) 2 SCC 452: 1999 SCC (Cri) 275, while considering the scope of the revisional jurisdiction of the High Court, this Court has laid down the following: "5. ... In its revisional jurisdiction, the High Court can call for and examine the record of any proceedings for the purpose of satisfying itself as to the correctness, legality or propriety of any finding, sentence or order. In other words, the jurisdiction is one of supervisory jurisdiction exercised by the High Court for correcting 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 own 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 tantamount to a gross misc....
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....sdiction and thereby erred in interfering with the judgment and orders of the courts below. Therefore, the present appeal has to be allowed by setting aside the impugned order of the High Court. In view of the aforesaid discussion, we are of the view that the High Court committed an error in setting aside the order of conviction in exercise of revisional jurisdiction. No sufficient ground has been mentioned by the High Court in its judgment to enable it to exercise its revisional jurisdiction for setting aside the conviction. 15. The present revision has to be decided as per the parameters laid down by the Hon'ble Supreme Court of India. 16. The ingredients of the commission of an offence punishable under Section 138 of the NI Act were explained in Kuntegowda v. Thurubaiah, 2026 SCC OnLine SC 1485 as under: 5.3. At this juncture, it is pertinent to highlight the key ingredients as highlighted by this Court in the case of Kusum Ingots & Alloys Ltd. v. Pennar Peterson Securities Ltd., (2000) 2 SCC 745: 2000 SCC (Cri) 546: (2000) 100 COMP CAS 755. "10. On a reading of the provisions of Section 138 of the NI Act, it is clear that the ingredients which are to be ....
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....he receipt of information from the bank in regard to the return of the cheque. vi. Failure of the drawer of the cheque to make payment of the amount of money to the payee or the holder in due course within fifteen days of the receipt of the notice. vii. Filing of the complaint within a month from the date of expiry of the grace period of fifteen days before a Metropolitan Magistrate or a Judicial Magistrate not below first class. 17. The present revision has to be decided as per the parameters laid down by the Hon'ble Supreme Court. 18. The accused admitted in his statement recorded under Section 313 of the CrPC that he had issued a blank cheque. He admitted in his cross-examination that the cheque (Ext.CW-1/A) bears his signatures. He admitted that he had issued the cheque towards the payment of the tyres of the bus. He volunteered to say that he had purchased the tyres worth Rs.22,000/- and had handed over a blank signed cheque. Thus, it is apparent that the accused has not disputed the issuance of the cheque and his signatures on it. 19. It was laid down by the Hon'ble Supreme Court in Rajesh Jain v. Ajay Singh, (2023) 10 SCC 148 that where the acc....
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.... further of the view that by creating this presumption, the law reinforces the reliability of cheques as a mode of payment in commercial transactions. 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]. 21. It was laid down by the Hon'ble Supreme Court in Kuntegowda(supra) that the cheque carries a presumption that it was issued in discharge of the liability for consideration, and the burden is upon the accused to rebut this presumption. It was observed: 5.7.A conjoint and harmonious reading of the aforesaid provisions clearly indicates towards the statutory presumption that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of the negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument was executed by the drawer, the rules of presumption under Sections 1....
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....f the transaction with the accused; however, he had not produced any record of the transaction on record. He volunteered to say that he could have produced it if asked. It was submitted that the absence of evidence regarding the amount due to the accused would make the complainant's case highly suspect. This submission is not acceptable. It was laid down by the Hon'ble Supreme Court in Uttam Ram v. Devinder Singh Hudan, (2019) 10 SCC 287: 2019 SCC OnLine SC 1361, that a presumption under Section 139 of the NI Act would obviate the requirement to prove the existence of consideration. It was observed: "20. The trial court and the High Court proceeded as if the appellant was to prove a debt before the civil court, wherein the plaintiff is required to prove his claim on the basis of evidence to be laid in support of his claim for the recovery of the amount due, and the dishonour of a cheque carries a statutory presumption of consideration. The holder of the cheque in due course is required to prove that the cheque was issued by the accused and that when the same was presented, it was not honoured. Since there is a statutory presumption of consideration, the burden is on the ac....
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.... producing a film and were not by way of return of any loan taken, which may have been a probable defence for the petitioners in the case, but rightly, the High Court has taken the view that evidence had to be adduced on this point, which has not been done by the petitioners. Pausing here, the Court would only comment that the reasoning of the High Court, as well as the First Appellate Court and Trial Court, on this issue is sound. Just by taking a counter-stand to raise a probable defence would not shift the onus on the complainant in such a case, for the plea of defence has to be buttressed by evidence, either oral or documentary, which in the present case has not been done. Moreover, even if it is presumed that the complainant had not proved the source of the money given to the petitioners by way of loan by producing statement of accounts and/or Income Tax Returns, the same ipso facto would not negate such claim for the reason that the cheques having been issued and signed by the petitioners have not been denied, and no evidence has been led to show that the respondent lacked capacity to provide the amount(s) in question. In this regard, we may make profitable reference to the d....
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....ainant's version cannot be doubted merely because no record of the transaction was produced before the Court. 28. It was submitted that the cheque was issued in the name of Super Treads, Taradevi, and there is no evidence to connect Sanjay Sood to Super Treads, Taradevi; hence, the complaint is not maintainable. This submission will not help the accused. The accused admitted in his statement recorded under Section 313 Cr.P.C. that the complainant is engaged in the business of retreading and sale of new tyres under the name and style of Super Treads at Taradevi. He stated in his cross-examination that he used to purchase the tyres from Super Treads, Taradevi, Shimla, and that Sanjay Sood is the owner of Super Treads, Taradevi. Therefore, the accused never disputed that the complainant is the owner of Super Treads, Taradevi, and the submission that Sanjay Sood is not connected to Super Treads cannot be accepted. 29. The accused claimed that he had only purchased two tyres and had returned Rs.8,000/- to the complainant; however, he did not produce any receipt of the payment of the amount, and the plea taken by the accused is not acceptable. 30. There is no other evidence to s....
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....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 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." 35. Keeping in view the deterrent nature of the punishment, the sentence of three months cannot be said to be excessive. 36. The cheque was issued for Rs.1,26,600/-. The learned Trial Court imposed a fine of Rs.1,75,000/- and ordered that the amount of the fine be paid to the complainant as compensation, which means that Rs.48,400/- was paid as compensation to the complainant. The cheque was issued on 17.06.2014. The sentence was awarded on 03.09.2024 after the lapse of ten years. 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 ....