The Himachal Pradesh High Court has dismissed a criminal revision petition filed by a convict in a cheque bounce case, upholding the concurrent findings of the lower courts. The Court ruled that once the issuance of a cheque and the signature are admitted, the statutory presumption under the Negotiable Instruments (NI) Act arises, shifting the burden of proof to the accused.
Justice Rakesh Kainthla, presiding over the matter, further held that a compensation of ₹15 lakhs against a cheque amount of ₹9 lakhs was not excessive, considering the lapse of over 10 years and the loss of interest to the complainant.
Background of the Case
The dispute originated from a complaint filed by Kishan Chand (the respondent/complainant) against Inderjeet (the petitioner/accused) under Section 138 of the NI Act. According to the complainant, the accused borrowed ₹9,00,000/- in July 2011 and issued a cheque of the same amount on October 25, 2011, drawn on Union Bank of India, Bhuntar, to repay the debt.
The cheque was dishonoured with the endorsement “funds insufficient.” After the accused refused to receive the statutory legal notice, the complainant approached the Trial Court. On December 7, 2022, the Chief Judicial Magistrate, Kullu, convicted the accused, sentencing him to six months of simple imprisonment and directing him to pay ₹15,00,000/- as compensation. This judgment was upheld by the Sessions Judge, Kullu, on October 3, 2023.
Arguments Presented
For the Petitioner (Accused): Mr. Maan Singh, learned counsel for the petitioner, argued that the lower courts erred in drawing presumptions under Sections 118(a) and 139 of the NI Act as the accused had denied his signature and the issuance of the cheque. He further contended:
- The complaint was premature.
- The complainant failed to produce an Income Tax Return (ITR) or a receipt to prove the advancement of ₹9,00,000/-.
- The affidavit for the complaint was sworn before the cause of action had fully arisen.
For the Respondent (Complainant): Mr. Surya Chauhan, learned counsel for the respondent, submitted that the accused did not dispute the issuance of the cheque during cross-examination. He emphasized that the complainant had established the source of funds through a bank statement showing the withdrawal of ₹9,00,000/- on July 5, 2011.
Court’s Analysis and Observations
The High Court emphasized that its revisional jurisdiction is limited and cannot be equated with that of an appellate court. Citing Malkeet Singh Gill v. State of Chhattisgarh (2022) and Bir Singh v. Mukesh Kumar (2019), the Court noted:
“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.”
On Presumption of Liability: The Court observed that during cross-examination, the defense suggested that the cheque was handed over by a Bank Manager, which indirectly admitted the issuance of the cheque. Justice Kainthla remarked:
“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.”
The Court relied on APS Forex Services (P) Ltd. v. Shakti International Fashion Linkers (2020), stating that when the signature is not disputed, the burden shifts to the accused to lead evidence to rebut the presumption, which the petitioner failed to do.
On Financial Capacity and ITR: Regarding the lack of ITR filings, the Court cited Surinder Singh vs. State of H.P. (2018) and Ashok Singh v. State of U.P. (2025), holding that:
“Just by taking a counter-stand to raise a probable defence would not shift the onus on the complainant… even if it is presumed that the complainant had not proved the source of the money… the same ipso facto, would not negate such claim for the reason that the cheques having being issued and signed by the petitioners has not been denied.”
On Deemed Service and Premature Complaint: The Court rejected the “premature complaint” argument, noting that an endorsement of “refused” on a registered letter constitutes deemed service. Referring to C.C. Alavi Haji vs. Pala Pelly Mohd. (2007), the Court found the cause of action was complete on the date the complaint was filed.
Decision
The High Court found no merit in the revision. Addressing the sentence and compensation, the Court noted that the penal provision of Section 138 is intended to be a deterrent.
On the compensation amount, the Court observed that the cheque was issued in 2012, and the compensation was awarded in 2023. Referring to Kalamani Tex v. P. Balasubramanian (2021), the Court calculated that 9% interest on ₹9 lakhs for 10 years would amount to ₹8,10,000/-. Thus, the total compensation of ₹15 lakhs (inclusive of the ₹9 lakh principal) was deemed reasonable.
Case Details:
- Case Title: Inderjeet vs. Kishan Chand
- Case No.: Cr. Revision No. 556 of 2023
- Bench: Justice Rakesh Kainthla
- Date : March 6, 2026
