The High Court of Himachal Pradesh has dismissed a criminal revision petition filed by an insurance agent challenging his conviction under Section 138 of the Negotiable Instruments Act. The Court held that statements made by an accused under Section 313 of the Code of Criminal Procedure (CrPC), which support the prosecution’s case, can be used to lend credence to the evidence and sustain a conviction.
Justice Rakesh Kainthla, presiding over the matter, observed that once the execution of a cheque is admitted, the statutory presumption under Section 139 of the NI Act arises, shifting the burden of proof to the accused to establish a probable defence.
Background of the Case
The case originated from a complaint filed by Padam Nath (now deceased, represented by legal heirs) against the petitioner, Nikka Ram. The accused, working as an insurance agent for Oriental Insurance Company, had insured the complainant’s vehicle. However, due to a “typing mistake,” the insured value of the vehicle was reduced from ₹9,00,000 to ₹80,000.
Following an accident involving the vehicle, the accused promised to compensate the complainant with ₹1,00,000 and issued a cheque for the said amount. The cheque was subsequently dishonoured by Punjab National Bank due to “insufficient funds.” Despite a legal notice, the accused failed to make the payment, leading to a trial.
The Judicial Magistrate 1st Class, Karsog, convicted Nikka Ram on July 2, 2022, sentencing him to six months of simple imprisonment and a compensation of ₹1,50,000. This judgment was upheld by the Additional Sessions Judge-I, Mandi, in December 2023.
Arguments Presented
The petitioner’s counsel, Mr. Pritam Singh Chandel, argued that the lower courts failed to appreciate that the accused, being a mere agent, had no personal liability to pay compensation as the vehicle was insured by the company. He further contended that the complainant had “snatched” the cheque from the accused and that no debt or liability actually existed.
Mr. Ajit Sharma, Deputy Advocate General for the State, submitted that the matter was primarily a dispute between private parties.
Court’s Analysis and Observations
The High Court emphasized the limited scope of revisional jurisdiction, noting that it should only be exercised to rectify patent defects, jurisdictional errors, or perversity in concurrent findings.
On the Admission under Section 313 CrPC
A pivotal aspect of the judgment was the Court’s reliance on the accused’s own statement recorded during the trial. The Court noted:
“The answers given by the accused in his statement recorded under Section 313 of the Cr.P.C. corroborate the complainant’s version.”
The Court cited several Supreme Court precedents, including State of Maharashtra v. Sukhdev Singh and Mohan Singh v. Prem Singh, to establish that while Section 313 statements are not evidence stricto sensu (as they are not on oath), they can be taken into consideration. Justice Kainthla quoted the Supreme Court:
“Where the accused takes benefit of this opportunity, then his statement made under Section 313 CrPC, insofar as it supports the case of the prosecution, can be used against him for rendering a conviction.”
The accused had admitted in his Section 313 statement that the insurance value was reduced by mistake and that he had entered into a compromise to pay ₹1,00,000.
On Statutory Presumptions
The Court reiterated the “reverse onus” principle under the NI Act. Referencing APS Forex (P) Ltd v. Shakti International Fashion Linkers, the Court observed:
“…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.”
The Court found the “snatching” theory improbable, as the police report (Ex. DW-1/A) filed by the accused himself stated that the cheque was given pursuant to a compromise, not snatched.
On the Liability of an Agent
The Court rejected the argument that the agent was not liable because the insurance was with a company. The Court held that the agent had agreed to compensate the complainant for a loss caused by his own specific act (the typing error), making this an independent agreement.
Decision
The High Court found no infirmity in the six-month sentence, noting that Section 138 is intended to be a “deterrent to callous issuance of negotiable instruments.” Regarding the compensation of ₹1,50,000, the Court deemed it appropriate, citing the Supreme Court’s direction in Kalamani Tex v. P. Balasubramanian to levy fines up to twice the cheque amount.
Consequently, the revision petition was dismissed, and the records were ordered to be sent back to the trial court for execution of the sentence.
Case Details
- Case Title: Nikka Ram vs. Padam Nath (since deceased) through his LRs & Anr.
- Case No.: Criminal Revision No. 34 of 2024
- Bench: Justice Rakesh Kainthla
- Decided on: March 05, 2026
