AI Structured Summary
Not yet generated for this judgment
Judgment
Rakesh Kainthla, Judge
The petitioner has filed the present petition against the judgment dated 23.05.2014 passed by learned Sessions Judge Sirmaur, District Nahan (learned Appellate Court) vide which the judgment of conviction dated 10.01.2014 and order of sentence dated 05.02.2014 passed by learned Judicial Magistrate First Class, Rajgarh, District Sirmaur, H.P. (learned Trial Court) were upheld. (The parties shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for convenience).
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 NI Act. It was asserted that the complainant and accused were known to each other. The accused borrowed ₹2,00,000/- from the complainant on 27.09.2010 and issued a post-dated cheque to return the amount. The complainant presented the cheque before the bank, but it was dishonoured with the endorsement “insufficient funds”. The complainant issued a notice to the accused, but it was returned undelivered, and it is deemed to be served. The complainant failed to repay the money despite the deemed receipt of the notice of demand. Hence, a complaint was filed before the learned Trial Court for taking action as per the law.
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.
The complaint examined Avdesh Kumar Singh (CW1), Roshan Lal (CW2) and himself (CW3).
The accused, in his statement recorded under Section 313 of the Code of Criminal Procedure (CrPC), denied the complainant's case in its entirety. He claimed that he had not taken any money from the complainant. He admitted that he never had the money in his account to honour the cheque. He examined ASI Neel Kant (DW1) to prove his defence.
Learned Trial Court held that the complainant’s statement was acceptable that the accused had issued a cheque to return the amount taken by him. The defence taken by the accused that he had misplaced the cheque was not believable. The cheque was dishonoured with endorsement “insufficient funds”. The notice, issued to the accused, was returned undelivered and is deemed to be served. The accused had not paid the money to the complainant. All the ingredients of the commission of an offence punishable under Section 138 of the NI Act were duly satisfied. 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 6 months and pay a fine of ₹2,20,000/-, which was ordered to be paid to the complainant as compensation.
Being aggrieved by the judgment and order passed by the learned Trial Court, the accused filed an appeal which was decided by the learned Sessions Judge (learned Appellate Court). The learned Appellate Court concurred with the findings recorded by the learned Trial Court that the accused had issued the cheque to repay the amount taken by him. The plea taken by the accused that he had misplaced the cheque was not believable as the serial number of the misplaced cheque was not mentioned in the report made to the police. The cheque carried with it a presumption that it was issued for consideration to discharge the debt/liability. The burden is upon the accused to rebut the presumption. However, he failed to rebut the presumption. The cheque was dishonoured with endorsement “insufficient funds”. The registered letter containing the notice was returned undelivered and is deemed to be served. All the ingredients of commission of an offence punishable under Section 138 of the NI Act were duly satisfied. Learned Trial Court had imposed an adequate sentence which did not require any interference from the Appellate Court. Hence, the appeal was dismissed.
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 had failed to prove his capacity to lend the money. The complainant had lost his cheque book, and he had reported the matter to the police. This defence was wrongly ignored by the learned Courts below. The handwriting in the body of the cheque and signatures were different. These circumstances were sufficient to rebut the presumption. Therefore, it was prayed that the present revision be allowed and the judgments and order passed by the learned Courts below be set aside.
I have heard M/s N.K. Tomar through VC and Mr Pranshul, learned Counsel present in the Court for the petitioner, and Ms Megha, learned Advocate vice Mr C.S. Thakur, learned counsel for the respondent.
Mr N.K. Tomar, learned counsel for the petitioner, submitted that the learned Courts below erred in appreciating the evidence on record. The complainant had failed to prove his financial capacity to lend the amount of ₹2,00,000/-. The accused had lost his cheque book, and he had reported the matter to the police. This fact was duly proved by the statement of the defence witness. Learned Courts below erred in not appreciating the testimony of the defence witness. Therefore, he prayed that the present revision be allowed and the judgments and order passed by the learned Courts below be set aside.
Ms Megha, learned vice counsel representing the respondent, submitted that both the learned Courts below have concurrently held that the complainant had advanced money to the accused and the accused had issued a post-dated cheque to repay the money. This is a pure finding of fact, and this Court should not re-appreciate the evidence to disturb the concurrent finding of facts. The accused claimed that he had lost the cheque book, but there is no evidence that the cheque in the present case formed part of the lost cheque book. The learned Courts below had rightly rejected the defence taken by the accused. There is no infirmity in the judgments and order passed by the learned Courts below. Hence, she prayed that the present revision be dismissed.
I have given considerable thought to the submissions made at the bar and have gone through the records carefully.
It was laid down by the Hon’ble Supreme Court in Kuntegowda v. Thurubaiah, 2026 SCC OnLine SC 1485, that a revisional court does not act as an appellate court and it can only determine the correctness, legality and propriety of the findings and sentence recorded by the lower court. It was observed: -
“7.Before parting, we would like to accentuate the revisional jurisdiction of the High Courts and the contours and inherent limits while exercising powers as a revisional authority. Section 397 of the Criminal Procedure Code, 1973 (now, Section 438 of Bharatiya Nagarik Suraksha Sanhita, 2023) encapsulates the power of High Courts and Sessions Courts to examine the correctness, legality or propriety of any order 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.
(3)If an application under this section has been made by any person either to the High Court or to the Sessions Judge, no further application by the same person shall be entertained by the other of them.”
Discretion in the exercise of revisional jurisdiction should be exercised within the four corners of this section whenever there has been miscarriage of justice. However, while exercising power under this section, the Court does not act as an appellate Court and therefore, while considering the legality, propriety or the correctness of a finding or a conclusion, the revisional court does not and should not dwell upon the facts and the evidence of the case as an appellate Court. The court, in revision, considers the material only to satisfy itself about the correctness, legality and propriety of the findings, sentence and order recorded by the lower court, and should refrain from substituting its conclusion on an elaborate consideration of evidence, and the findings of the lower courts should not be reversed merely on the ground that an alternative view is possible on the facts of the case. In this case, such a position did not also emanate from the evidence on record.
7.1.This Court, in the State of Maharashtra v. Jagmohan Singh Kuldip Singh Anand, (2004) 7 SCC 659: 2004 SCC (Cri) 2003, observed that the High Court, in exercise of its revisional jurisdiction, cannot embark upon an in-depth roving re-examination of the oral evidence and medical evidence and come to a conclusion contrary to the consistent one reached by two courts below. In the facts of the present case, in the impugned judgment, the High Court gravely erred in upsetting the concurrent findings of conviction of the trial court and the Appellate Court by substituting its own conclusions and reasoning on the merits of the case and thereby erred in setting aside the well-reasoned and correct judgment and orders of the trial and appellate courts.
Upon perusal of the impugned judgment and order dated 06.10.2023, it is apparent that the High Court went into great detail into each of the testimonies, documents and merits of the case, which could have been avoided, especially when the subject matter had come under its revisional jurisdiction. Instead, acting as an appellate Court, the High Court deemed it fit to go into the merits of the case, something which is 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 miscarriage of justice. On scrutinising the impugned judgment of the High Court from the aforesaid standpoint, we have no hesitation in coming to the conclusion that the High Court exceeded its jurisdiction in interfering with the conviction of the Respondent by reappreciating the oral evidence. …”
The contours for exercise of revisional jurisdiction have been well settled by the judicial dicta of this Court wherein time and again it has been observed that the High Court shall not interfere with the orders of the lower court unless:
The order or finding of the lower court is perverse, grossly erroneous, glaringly unreasonable or wholly unreliable or untenable in law.
The lower court has passed the impugned order after considering immaterial or irrelevant material or no material at all.
There is a non-consideration of any relevant material or the judicial discretion has been exercised arbitrarily or capriciously.
This Court, in Sanjabij Tari v. Kishore S. Borcar, 2025 INSC 1158, in similar facts and circumstances wherein the High Court had reversed concurrent findings of conviction under Section 138 of NI Act, while setting aside the impugned order, observed as under:
“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. This Court is of the view that it is not for the Revisional Court to reanalyse 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 concurrent findings of the Trial Court and the Sessions Court.”
In the facts of the present case, we find that the High Court has failed to highlight any reason or material satisfaction to the effect that there was any such glaring contradiction or perversity apparent on the face of the record so as to justify the exercise of the powers under revisional jurisdiction 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.
The ingredients of the commission of an offence punishable under Section 138 of the NI Act were explained in Kuntegowda (supra) 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 satisfied for making out a case under the provision are:
(i)a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person out of that account for the discharge of any debt or other liability;
(ii)that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(iii)that cheque is returned by the bank unpaid, either because the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(iv)the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(v)the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
11.If the aforementioned ingredients are satisfied, then the person who has drawn the cheque shall be deemed to have committed an offence. In the explanation to the section, clarification is made that the phrase “debt or other liability” means a legally enforceable debt or other liability.
5.4.The ingredients of the offence under Section 138 are as follows:
i.The drawing of a cheque by a person on an account maintained by him with the banker for the payment of any amount of money to another from that account.
ii.The cheque being drawn for the discharge in whole or in part of any debt or other liability.
iii.Presentation of the cheque to the bank within the period of six months or within the period of its validity.
iv.The return of the cheque by the drawee bank as unpaid either because the amount of money standing to the credit of that account is insufficient to honour the cheque or because it exceeds the amount arranged to be paid from that account.
v.A notice by the payee or the holder in due course making a demand for the payment of the amount to the drawer of the cheque within thirty days of the 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.
The present revision has to be decided as per the parameters laid down by the Hon’ble Supreme Court.
The complainant, Jagat Ram (CW3), reiterated the contents of his complaint in his proof affidavit (Ext.CW3/A). He stated in his cross-examination that the accused is his friend. The money was lying with him after selling the crop. He was earning ₹2½ lakh per year. The accused had demanded the money at the complainant's home. He denied that the accused had lost the cheque and that he had misused the cheque.
There is nothing in the cross-examination of this witness to show that he was making a false statement. He explained that he is an agriculturist and he earns ₹2-2½ lakhs per annum. There is no reason to disbelieve this part of his testimony. Therefore, the submission made on behalf of the accused that the complainant did not have financial capacity to advance ₹2,00,000/- to the accused is not believable.
In any case, the accused had not sent any reply to the notice issued to him. It was laid down by the Hon’ble Supreme Court in Tedhi Singh v. Narayan Dass Mahant, (2022) 6 SCC 735: 2022 SCC OnLine SC 302, that the complainant is not required to show his financial capacity unless it is challenged by sending a reply to the 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 proceeding 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, the courts in our view were right in holding on those lines….”
This position was reiterated in Kuntegowda(supra) wherein it was observed:
6.7.Furthermore, the failure of the accused to respond to the statutory notice issued under Section 138 of the NI Act gives rise to an inference that the complainant's version carries merit. The initial burden of raising a defence that the complainant lacked the financial capacity to advance the loan rests upon the accused and ought to have been specifically pleaded in the reply to the demand notice. In the absence of such a plea, the complainant cannot be expected to adduce evidence establishing his financial capacity to pay the loan to the accused while leading his evidence. The accused may discharge this burden by producing independent witnesses or documentary evidence to demonstrate the complainant's lack of financial means. Alternatively, he may rely upon the materials produced by the complainant himself or establish the same through an effective cross-examination of the complainant and his witnesses. In the facts of the present case, no such contra material has been placed on record before us to further the case of the accused that the complainant did not have any means to extend the hand loan; therefore, the argument and defence of the accused on this aspect fall flat.
In the present case, the accused had not sent any reply to the notice questioning the complainant’s financial capacity, and he is not entitled to say that the complainant did not have the financial capacity to advance the loan.
The accused claimed that he had misplaced the cheque book. He relied upon Entry No. 13 (Ext.DW1/A), in which it was mentioned that cheque book number 10568 of UCO Bank was misplaced by the accused and an endorsement was made that, due to a clerical mistake, cheque book number should be read as 10565 instead of 10568. The cheque (Ext.CW3/B) bears the number 471327, and there is no evidence to connect it to the cheque book No. 10565 or 10568. Therefore, the learned Courts below had rightly held that the defence evidence was not sufficient to prove that the complainant had misused the lost cheque.
Complainant's statement does not show that he was making a false statement. No reason was elicited in his cross-examination as to why he should depose falsely against the accused. Thus, there is no infirmity in the finding recorded by the learned Courts below that the complainant’s testimony was believable that the accused had issued the postdated cheque to him.
It was laid down by the Hon’ble Supreme Court in Kuntegowda (supra) that a statutory presumption arises on the admission or proof of the execution of the negotiable instrument, 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 118 and 139 of the NI Act help him and shift the burden of rebutting the said presumptions upon the said drawer. Since these presumptions are rebuttable, the accused has the burden of disproving the same by leading evidence, either direct or indirect, to the effect that there did not exist any consideration or debt or that the non-existence of the said debt or consideration is so probable that a prudent man ought to suppose that no consideration or debt existed. However, a bare denial of the passing of any consideration or existence of any debt does not support the defence of the accused and, therefore, to disprove the presumptions, something which is probable has to be brought on record for getting the burden of proof shifted back to the complainant. The accused has to bring on record such facts and circumstances, upon consideration of which the court may either believe that the consideration and the debt did not exist or their non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that it did not exist.
Thus, the learned Courts below had rightly held that the cheque in the present case attracted a presumption that it was issued for consideration to discharge the debt/liability.
The evidence produced by the accused that he had lost the cheque book is not sufficient to rebut this presumption as shown above. There is no other evidence to rebut the presumption, and there is no infirmity in the findings recorded by learned Courts below that the accused had failed to rebut the presumption attached to the cheque.
The complainant asserted that the cheque was dishonoured with endorsement “insufficient funds”. Roshan Lal (CW2) stated that the cheque was dishonoured with endorsement “insufficient funds”. His statement is duly corroborated vide the cheque returning memo (Ext.CW2/C). The accused also admitted in his statement recorded under Section 313 of the CrPC that he never had the money in his account to honour the cheque. Therefore, it was duly proved on record that the cheque was dishonoured with an endorsement “funds insufficient”.
The complainant asserted that he issued a notice to the accused which was returned undelivered. The registered letter (Ext.CW3/E) shows that it was returned with an endorsement that the addressee had refused to accept the notice, and the registered letter was returned to the sender. It was laid down by the Hon’ble Supreme Court in N. Parameswaran Unni v. G. Kannan, (2017) 5 SCC 737: 2017 SCC OnLine SC 293, that when a notice is returned with endorsement “refused”, it is deemed to be served. It was observed at page 741:
“15.This Court in a catena of cases has held that when a notice is sent by registered post and is returned with postal endorsement “refused” or “not available in the house” or “house locked” or “shop closed” or “addressee not in station”, due service has to be presumed [Jagdish Singh v. Natthu Singh, (1992) 1 SCC 647; 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] ….”
Therefore, the notice is deemed to be served upon the accused.
The accused did not claim that he had paid the money to the complainant after the receipt of the notice. Therefore, learned Courts below had rightly held that all the ingredients of the commission of an offence punishable under Section 138 of the NI Act were duly satisfied.
Learned Trial Court had sentenced the accused to undergo simple imprisonment for 6 months and pay a fine of ₹2,20,000/-. 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 provision 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 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.”
Keeping in view the deterrent nature of the punishment, a sentence of 6 months cannot be said to be excessive.
The accused had issued a cheque of ₹2,00,000/- on 27.09.2010 and learned Trial Court imposed a sentence on 05.02.2014 after the lapse of more than 3 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 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]”
The complainant was deprived of the interest which he would have gained had he invested the money; he had to engage a counsel to prosecute the complaint before the learned Trial Court, and he was entitled to be compensated. The amount of ₹20,000/- awarded by the learned Trial Court on the cheque amount of ₹ 2,00,000/- cannot be said to be excessive; rather, it appears to be less; however, no appeal has been filed seeking the enhancement of the sentence, and it is impermissible to interfere with the order passed by the learned Trial Court.
No other point was urged.
In view of the above, the present revision fails, and it is dismissed. All the pending applications, if any, also stand disposed of.
A copy of the judgment, along with records of the learned Courts below, be sent back forthwith.