( 2025:HHC:24725 ) IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Cr. Revision No. 508 of 2024 Reserved on: 08.07.2025 Date of Decision: 29.7.2025. Prashar Enterprises ...Petitioner Versus Prakash Chand & Anr. ..Respondents Coram Hon’ble Mr Justice Rakesh Kainthla, Judge. Whether approved for reporting?1 No. For the Petitioner : Mr. Sanjay Ranta, Advocate. For Respondent No.1 : Mr. Lalit K. Sharma, Advocate. For Respondent No.2-State : Mr. Jitender Sharma, Additional Advocate General. Rakesh Kainthla, Judge The present revision is directed against the judgment dated 03.07.2024, passed by learned Sessions Judge, Mandi, H.P. (learned Appellate Court), vide which the judgment of conviction dated 02.01.2024 and order of sentence dated 06.01.2024, passed by learned Judicial Magistrate First Class, Court No. (3), Mandi, District Mandi, H.P. (learned Trial Court) were upheld. (Parties shall hereinafter be referred to in the same 1 Whether reporters of Local Papers may be allowed to see the judgment? Yes. 2 ( 2025:HHC:24725 ) manner as they were arrayed before the learned Trial Court for convenience.) 2. Briefly stated, the facts giving rise to the present revision are that the complainant filed a complaint before 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 and the accused were friends and they had very good relations with each other. In January 2012, the accused informed the complainant that he required financial assistance to repay the loan instalment for the truck he owned. The bank was threatening to attach the vehicle for sale. Hence, the complainant advanced a sum of ₹5,20,000/- to the accused. The accused issued a cheque of ₹20,000/- and a cheque of ₹5,00,000/- to the complainant to repay the amount. The complainant presented the cheques to his bank for realisation of the amount, but they were dishonoured with the remarks “funds insufficient”. The complainant issued a notice to the accused asking him to repay the amount within 15 days of the receipt of the notice. The notice was duly served upon the accused, but he failed to repay any money despite the receipt of the notice of 3 ( 2025:HHC:24725 ) demand. Hence, a complaint was filed to take action as per the law. 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 himself (CW1) in support of his complaint. 5. The accused, in his statement recorded under Section 313 of Cr.P.C., denied the case of the complainant and asserted that the complainant had given two cheques of ₹90,000/- to him and obtained 05 blank cheques from him. He has already paid ₹3,50,000/- inclusive of interest to the complainant. Initially, the complainant presented a cheque of ₹2,30,000/- and filed a complaint. The case was decided in his (accused) favour. The complainant presented another cheque. He tendered the documents in his defence. 6. Learned Trial Court held that the accused admitted his signatures on the cheque and there is a presumption that the 4 ( 2025:HHC:24725 ) cheque was issued for consideration in discharge of the legal liability. The burden shifted upon the accused to rebut this presumption. The documents placed on record by the accused were not sufficient to rebut the presumption. The cheque was dishonoured with endorsement “insufficient funds”. The notice was served upon the accused. He had failed to repay the money despite the receipt of legal notice of demand. Hence, the accused was convicted for the commission of an offence punishable under Section 138 of the NI Act and was sentenced to undergo simple imprisonment for 07 months and pay a fine of ₹9,00,000/- and in default of payment of fine to undergo simple imprisonment for 25 days. 7. Being aggrieved by the judgment and order passed by the learned Trial Court, the accused preferred an appeal which was decided by the learned Sessions Judge, Mandi (learned Appellate Court). Learned Appellate Court concurred with the findings recorded by the learned Trial Court that since the issuance of cheque was not disputed, therefore, the presumption would arise that the cheque was issued in discharge of the legal liability. The evidence led by the accused was not sufficient to rebut the presumption. The cheque was dishonoured with 5 ( 2025:HHC:24725 ) endorsement “insufficient funds”. The accused failed to pay the money despite the receipt of a valid notice of demand. All the ingredients of Section 138 of NI Act were duly satisfied. Learned Trial Court had imposed an adequate sentence, and no interference was required with it. Hence, the judgment and order passed by the learned Trial Court were upheld. 8. Being aggrieved by the judgments and order passed by the learned Courts below, the accused has preferred the present revision, asserting that the learned Courts below failed to properly appreciate the evidence. The documents exhibited by the accused were not properly appreciated. There were serious contradictions in the statement of the complainant. He had filed a complaint earlier in which he had claimed that ₹2,50,000/- was borrowed by the accused, whereas he has inflated the amount to ₹5,20,000/-in the present complaint. The accused had taken a loan of ₹1,80,000/-. The complainant had taken blank signed cheques from the accused at the time of advancing the loan. The complainant concealed the material facts from the Court. Therefore, it was prayed that the present revision be allowed and the judgments and order passed by learned Courts below be set aside. 6 ( 2025:HHC:24725 ) 9. I have heard Mr. Sanjay Ranta, learned counsel for the petitioner/accused, Mr. Lalit K. Sharma, learned counsel for respondent No.1/complainant and Mr. Jitender Sharma, learned Additional Advocate General for respondent No.2-State. 10. Mr. Sanjay Ranta, learned counsel for the petitioner/accused, submitted that the learned Courts below erred in appreciating the evidence placed before them. It was duly proved by the documents placed on record that the complainant had filed a complaint for the dishonour of the cheque in November 2011. It is highly unlikely that the complainant would hand over a sum of ₹5,20,000/- to the accused in January 2012. The learned Courts below failed to appreciate this aspect. Therefore, he prayed that the present revision be allowed and the judgments and order passed by learned Courts below be set aside. 11. Mr. Lalit K. Sharma, learned counsel for respondent No.1/complainant, submitted that the accused had admitted his signatures on the cheque and learned Courts below had rightly held that a presumption would arise that the cheque was issued in discharge of his legal liability. The evidence led by the accused 7 ( 2025:HHC:24725 ) was not sufficient to rebut this presumption. There is no infirmity in the judgments and order passed by learned Courts below; hence, he prayed that the present revision be dismissed. 12. Mr. Jitender Sharma, learned Additional Advocate General for respondent No.2-State, supported the submissions advanced by Mr. Lalit K. Sharma, learned counsel for respondent No.1/complainant. 13. I have given considerable thought to the submissions made at the bar and have gone through the records carefully. 14. 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 the 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 arrived at by two courts after a detailed appreciation of the material and evidence brought on record. The High Court in criminal revision against conviction is not supposed to exercise jurisdiction like the appellate court, and the scope of interference in revision is extremely narrow. Section 397 of the Criminal Procedure Code (in short “CrPC”) vests jurisdiction to 8 ( 2025:HHC:24725 ) satisfy 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. The object of the provision is to set right a patent defect or an error of jurisdiction or law. There has to be a well-founded error which is to be determined on the merits of individual cases. It is also well settled that while considering the same, the Revisional Court does not dwell at length upon the facts and evidence of the case to reverse those findings. 15. This position was reiterated in State of Gujarat v. Dilipsinh Kishorsinh Rao, (2023) 17 SCC 688: 2023 SCC OnLine SC 1294, wherein it was observed at page 695: 14. The power and jurisdiction of the Higher Court under Section 397CrPC, which vests the court with the power to call for and examine records of an inferior court, is for the purposes of satisfying itself as to the legality and regularities of any proceeding or order made in a case. The object of this provision is to set right a patent defect or an error of jurisdiction or law or the perversity which has crept in such proceedings. 15. It would be apposite to refer to the judgment of this Court in Amit Kapoor v. Ramesh Chander [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460: (2012) 4 SCC (Civ) 687: (2013) 1 SCC (Cri) 986], where scope of Section 397 has been considered and succinctly explained as under: (SCC p. 475, paras 12-13) “12. Section 397 of the Code vests the court with the power to call for and examine the records of an inferior court for the purposes of satisfying itself as to the legality and regularity of any proceedings or order made in a case. The object of this provision is to set right a patent defect or an error of jurisdiction or law. There has to be a well-founded error, and it may not be appropriate for the court to scrutinise the orders, 9 ( 2025:HHC:24725 ) which, upon the face of it, bear a token of careful consideration and appear to be in accordance with law. If one looks into the various judgments of this Court, it emerges that the revisional jurisdiction can be invoked where the decisions under 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 CrPC.” 16. This Court in the aforesaid judgment in Amit Kapoor case [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460 : (2012) 4 SCC (Civ) 687 : (2013) 1 SCC (Cri) 986] has also laid down principles to be considered for exercise of jurisdiction under Section 397 particularly in the context of prayer for quashing of charge framed under Section 228CrPC is sought for as under : (Amit Kapoor case [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460 : (2012) 4 SCC (Civ) 687 : (2013) 1 SCC (Cri) 986], SCC pp. 482-83, para 27) “27. Having discussed the scope of jurisdiction under these two provisions, i.e. Section 397 and Section 482 of the Code, and the fine line of jurisdictional distinction, it will now be appropriate for us to enlist 10 ( 2025:HHC:24725 ) the principles with reference to which the courts should exercise such jurisdiction. However, it is not only difficult but inherently impossible to state such principles with precision. At best and upon objective analysis of various judgments of this Court, we are able to cull out some of the principles to be considered for proper exercise of jurisdiction, particularly, with regard to quashing of charge either in exercise of jurisdiction under Section 397 or Section 482 of the Code or together, as the case may be: 27.1. Though there are no limits to the powers of the Court under Section 482 of the Code but the more power, the more due care and caution is to be exercised in invoking these powers. The power of quashing criminal proceedings, particularly, the charge framed in terms of Section 228 of the Code, should be exercised very sparingly and with circumspection and that too in the rarest of rare cases. 27.2. The Court should apply the test as to whether the uncontroverted allegations as made from the record of the case and the documents submitted therewith prima facie establish the offence or not. If the allegations are so patently absurd and inherently improbable that no prudent person can ever reach such a conclusion, and where the basic ingredients of a criminal offence are not satisfied, then the Court may interfere. 27.3. The High Court should not unduly interfere. No meticulous examination of the evidence is needed for considering whether the case would end in conviction or not at the stage of framing of charge or quashing of charge. *** 27.9. Another very significant caution that the courts have to observe is that it cannot examine the facts, evidence and materials on record to determine whether there is sufficient material on the basis of 11 ( 2025:HHC:24725 ) which the case would end in a conviction; the court is concerned primarily with the allegations taken as a whole whether they will constitute an offence and, if so, is it an abuse of the process of court leading to injustice. *** 27.13. Quashing of a charge is an exception to the rule of continuous prosecution. Where the offence is even broadly satisfied, the Court should be more inclined to permit continuation of prosecution rather than its quashing at that initial stage. The Court is not expected to marshal the records with a view to decide admissibility and reliability of the documents or records, but is an opinion formed prima facie.” 17. The revisional court cannot sit as an appellate court and start appreciating the evidence by finding out inconsistencies in the statement of witnesses, and it is not legally permissible. The High Courts ought to be cognizant of the fact that the trial court was dealing with an application for discharge. 16. This position was reiterated in State of Gujarat v. Dilipsinh Kishorsinh Rao, (2023) 17 SCC 688: 2023 SCC OnLine SC 1294, wherein it was observed at page 695: 14. The power and jurisdiction of the Higher Court under Section 397CrPC, which vests the court with the power to call for and examine records of an inferior court, is for the purposes of satisfying itself as to the legality and regularities of any proceeding or order made in a case. The object of this provision is to set right a patent defect or an error of jurisdiction or law or the perversity which has crept in such proceedings. 15. It would be apposite to refer to the judgment of this Court in Amit Kapoor v. Ramesh Chander [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460: (2012) 4 SCC 12 ( 2025:HHC:24725 ) (Civ) 687: (2013) 1 SCC (Cri) 986], where scope of Section 397 has been considered and succinctly explained as under: (SCC p. 475, paras 12-13) “12. Section 397 of the Code vests the court with the power to call for and examine the records of an inferior court for the purposes of satisfying itself as to the legality and regularity of any proceedings or order made in a case. The object of this provision is to set right a patent defect or an error of jurisdiction or law. There has to be a well-founded error, and it may not be appropriate for the court to scrutinise the orders, which, upon the face of it, bear a token of careful consideration and appear to be in accordance with law. If one looks into the various judgments of this Court, it emerges that the revisional jurisdiction can be invoked where the decisions under 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 CrPC.” 16. This Court in the aforesaid judgment in Amit Kapoor case [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460 : 13 ( 2025:HHC:24725 ) (2012) 4 SCC (Civ) 687 : (2013) 1 SCC (Cri) 986] has also laid down principles to be considered for exercise of jurisdiction under Section 397 particularly in the context of prayer for quashing of charge framed under Section 228CrPC is sought for as under : (Amit Kapoor case [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460 : (2012) 4 SCC (Civ) 687 : (2013) 1 SCC (Cri) 986], SCC pp. 482-83, para 27) “27. Having discussed the scope of jurisdiction under these two provisions, i.e. Section 397 and Section 482 of the Code, and the fine line of jurisdictional distinction, it will now be appropriate for us to enlist the principles with reference to which the courts should exercise such jurisdiction. However, it is not only difficult but inherently impossible to state such principles with precision. At best and upon objective analysis of various judgments of this Court, we are able to cull out some of the principles to be considered for proper exercise of jurisdiction, particularly, with regard to quashing of charge either in exercise of jurisdiction under Section 397 or Section 482 of the Code or together, as the case may be. 27.1. Though there are no limits to the powers of the Court under Section 482 of the Code but the more the power, the more due care and caution is to be exercised in invoking these powers. The power of quashing criminal proceedings, particularly, the charge framed in terms of Section 228 of the Code, should be exercised very sparingly and with circumspection and that too in the rarest of rare cases. 27.2. The Court should apply the test as to whether the uncontroverted allegations as made from the record of the case and the documents submitted therewith prima facie establish the offence or not. If the allegations are so patently absurd and inherently improbable that no prudent person can ever reach such a conclusion, and where the basic ingredients of a criminal offence are not satisfied, then the Court may interfere. 14 ( 2025:HHC:24725 ) 27.3. The High Court should not unduly interfere. No meticulous examination of the evidence is needed for considering whether the case would end in conviction or not at the stage of framing of charge or quashing of charge. *** 27.9. Another very significant caution that the courts have to observe is that it cannot examine the facts, evidence and materials on record to determine whether there is sufficient material on the basis of which the case would end in a conviction; the court is concerned primarily with the allegations taken as a whole whether they will constitute an offence and, if so, is it an abuse of the process of court leading to injustice. *** 27.13. Quashing of a charge is an exception to the rule of continuous prosecution. Where the offence is even broadly satisfied, the Court should be more inclined to permit continuation of prosecution rather than its quashing at that initial stage. The Court is not expected to marshal the records with a view to decide admissibility and reliability of the documents or records, but is an opinion formed prima facie.” 17. The revisional court cannot sit as an appellate court and start appreciating the evidence by finding out inconsistencies in the statement of witnesses, and it is not legally permissible. The High Courts ought to be cognizant of the fact that the trial court was dealing with an application for discharge. 17. It was held in Kishan Rao v. Shankargouda, (2018) 8 SCC 165: (2018) 3 SCC (Cri) 544: (2018) 4 SCC (Civ) 37: 2018 SCC OnLine SC 651 that it is impermissible for the High Court to 15 ( 2025:HHC:24725 ) reappreciate the evidence and come to its conclusions in the absence of any perversity. It was observed on page 169: “12. This Court has time and again examined the scope of Sections 397/401 CrPC and the ground for exercising the revisional jurisdiction by the High Court. In State of Kerala v. Puttumana Illath Jathavedan Namboodiri [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: (SCC pp. 454-55, para 5) “5. … In its revisional jurisdiction, the High Court can call for and examine the record of any proceedings to satisfy 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 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 concluding that the High Court exceeded its jurisdiction in interfering with the conviction of the respondent by reappreciating the oral evidence. …” 13. Another judgment which has also been referred to and relied on by the High Court is the judgment of this Court in Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao Phalke [Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao Phalke, (2015) 3 SCC 123: (2015) 2 SCC (Cri) 19]. This Court 16 ( 2025:HHC:24725 ) held that the High Court, in the exercise of revisional jurisdiction, shall not interfere with the order of the Magistrate unless it is perverse or wholly unreasonable or there is non-consideration of any relevant material; the order cannot be set aside merely on the ground that another 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 conviction of the accused was recorded, and the High Court set aside [Dattatray Gulabrao Phalke v. Sanjaysinh Ramrao Chavan, 2013 SCC OnLine Bom 1753] the order of conviction by substituting its view. This Court set aside the High Court's order holding that the High Court exceeded its jurisdiction in substituting its views, and that too without any legal basis. 17 ( 2025:HHC:24725 ) 18. This position was reiterated in Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ) 309: 2019 SCC OnLine SC 13, wherein it was observed at page 205: “16. It is well settled that in the exercise of revisional jurisdiction under Section 482 of the Criminal Procedure Code, the High Court does not, in the absence of perversity, upset concurrent factual findings. It is not for the Revisional Court to re-analyse and re-interpret the evidence on record. 17. As held by this Court in Southern Sales & Services v. Sauermilch Design and Handels GmbH [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. The answer to the first question is, therefore, in the negative.” 19. The present revision has to be decided as per the parameters laid down by the Hon’ble Supreme Court. 20. The complainant admitted in his cross-examination that he had filed a complaint against accused, Ram Singh, for the recovery of ₹2,50,000/-, in which he had stated about the payment of ₹7,60,000/-. He admitted that the accused was acquitted in that complaint. He volunteered to say that the matter was pending before this Court. 18 ( 2025:HHC:24725 ) 21. The copy of the earlier complaint filed by the complainant (Ex-DB) shows that the accused had borrowed ₹2,50,000 and issued a cheque dated 12.10.2011 to settle his liability. The cheque was dishonoured with the endorsement “insufficient funds.” Furthermore, the copy of the complaint reveals that it was filed on 15.11.2011. The complainant asserted in the present complaint that the accused had demanded ₹5,20,000 in January 2012, which he paid to the accused, and that the accused issued two cheques—one for ₹5,00,000 and another for ₹20,000—in favour of the complainant. This version appears highly improbable. It is difficult to believe that the complainant would have advanced ₹5,00,000 to the accused, knowing that the ₹2,50,000 borrowed earlier had not been repaid, and that he had to file a complaint to recover the amount. The Hon’ble Supreme Court laid down in John K. John v. Tom Varghese, (2007) 12 SCC 714: (2008) 3 SCC (Cri) 374: 2007 SCC OnLine SC 1293 that where three civil suits had been instituted against the accused, it was very unlikely that a loan would have been advanced to him. It was observed at page 716: “11. The relationship between the parties is not in dispute. The complainant is a partner of a firm which is in the business of running a chitty fund. The fact that the 19 ( 2025:HHC:24725 ) respondent subscribed three chitties and that he could not pay the instalments of the prized amount is not in dispute. The pendency of three civil suits filed by the firm through the appellant against the respondent is also not in dispute. The High Court, upon analysing the materials brought on record by the parties, had arrived at a finding of fact that, in view of the conduct of the parties, it would not be prudent to hold that the respondent borrowed a huge sum despite the fact that the suits had already been filed against him by the appellant. Presumption raised in terms of Section 139 of the Act is rebuttable. If, upon analysis of the evidence brought on record by the parties, in a fact situation obtaining in the instant case, a finding of fact has been arrived at by the High Court that the cheques had not been issued by the respondent in discharge of any debt, in our opinion, the view of the High Court cannot be said to be perverse warranting interference by us in exercise of our discretionary jurisdiction under Article 136 of the Constitution. The High Court was entitled to take notice of the conduct of the parties. It has been found by the High Court, as of fact, that the complainant did not approach the Court with clean hands. His conduct was not that of a prudent man. Why no instrument was executed, although a huge sum of money was allegedly paid to the respondent, was a relevant question which could be posed in the matter. It was open to the High Court to draw its own conclusion therein. Not only had no document been executed, even no interest had been charged. It would be absurd to form an opinion that, despite knowing that the respondent was not even in a position to discharge his burden to pay instalments in respect of the prized amount, an advance would be made to him and that too even after the institution of three civil suits. The amount advanced did not even carry any interest. If in a situation of this nature, the High Court has arrived at a finding that the respondent has discharged his burden of proof cast on him under Section 139 of the Act, no exception thereto can be taken.” (emphasis supplied) 20 ( 2025:HHC:24725 ) 22. A similar view was taken in A.M. Perumal v. Star Tours and Travels (India) Ltd., 2010 SCC OnLine Ker 4874: 2010 Cri LJ 3732, wherein it was observed at page 3735: “8. The evidence of PW 1 and Dwl would show that there were various transactions between the revision petitioner and the first respondent, and there are various payments also. Ext. D12 would show that the revision petitioner had been facing another prosecution for dishonour of three other cheques, all issued in discharge of liability, that arose out of a business transaction. This circumstance persuades me to doubt the genuineness of the plea that the cheque was issued in discharge of the liability. In the normal course, if an earlier cheque is dishonoured, the first attempt would be to clear that liability. No debtor would deliver another cheque to make room for another prosecution. The possibility of demanding and delivering blank cheques as security cannot be ruled out. No creditor would be content with another cheque for a subsequently arisen liability when the earlier cheque issued in discharge of another liability returned dishonoured and the liability remains not discharged. Acceptance of another cheque in that circumstance would be either with the intent to go for prosecution or to get proof…” (emphasis supplied) 23. In the present case, the complainant had advanced ₹2,50,000/- to the accused. Accused issued a cheque of ₹2,50,000/- on 12.10.2011, which was dishonoured. The accused failed to repay the money, and the complainant had filed the complaint under Section 138 of the NI Act to prosecute the accused. It is difficult to believe that the complainant would be 21 ( 2025:HHC:24725 ) naive enough to advance ₹5,20,000/- to the accused in January 2012 and take two cheques, one amounting to ₹5,00,000/- and another amounting to ₹20,000/-, knowing fully well that the cheques issued by the accused were not honoured in October 2011. The complainant admitted in his cross-examination that he had filed complaints under Section 138 of the NI Act against 2-3 other persons, including Achhar Singh, which shows that the complainant had a bitter experience with other persons as well. He admitted in his cross-examination that he does not advance the money to the person who has not repaid the earlier loan. Thus, the very basis of the complainant’s case that he had advanced ₹5,20,000/- to the accused in January is highly doubtful. 24. The complainant stated in his cross-examination that his annual income was ₹7,00,000/-. He also admitted that he was filing an Income Tax return. He claimed to have advanced money to other persons against whom he had filed complaints under Section 138 of the NI Act. He stated that he was filing the complaints under Section 138 of the NI Act for 24-25 years. He also stated that he had filed the complaint against Achhar Singh 22 ( 2025:HHC:24725 ) regarding the cheque of ₹22,000/- (Ex-DK), ₹4,00,000/-(Ex- DL) and ₹4,00,000/- (Ex-DM). 25. A perusal of the complaint (Ex-DJ) shows that the complainant had advanced ₹22,000/- to Achhar Singh, and Achhar Singh had issued a cheque of ₹22,000/- on 19.11.2012. Complaint (Ex-DL) shows that the complainant filed a compaint against Achhar Singh stating that he had advanced ₹4,00,000/- to accused Achhar Singh and accused Achhar Singh issued a cheque of ₹4,00,000/- on 14.08.2012. These complaints show that the complainant had advanced ₹4,22,000/- to Achhar Singh and ₹5,20,000/- to the complainant (Prakash Cahnd) in the year 2012, which is much more than the annual income of ₹7,00,000/-. This makes the financial capacity of the complainant highly suspect, especially when no Income Tax Return was filed to show the annual income. 26. It was laid down by the Hon’ble Supreme Court in Basalingappa Versus Mudibasappa (2019) 5 SCC 418 that where the financial capacity to pay ₹ 6,00,000/- was questioned and there was no satisfactory reply, the accused had raised a probable defence. It was observed: - 23 ( 2025:HHC:24725 ) “26. Applying the preposition of law as noted above, in the facts of the present case, it is clear that the signature on the cheque, having been admitted, a presumption shall be raised under Section 139 that the cheque was issued in discharge of debt or liability. The question to be looked into is as to whether any probable defence was raised by the accused. In cross-examination of the PW1, when the specific question was put that a cheque was issued in re- lation to a loan of Rs. 25,000/-taken by the accused, the PW1 said that he does not remember. PW1 in his evidence admitted that he retired in 1997, on which date he re- ceived a monetary benefit of Rs. 8 lakhs, which was en- cashed by the complainant. It was also brought in the evi- dence that in the year 2010, the complainant entered into a sale agreement for which he paid an amount of Rs. 4,50,000/-to Balana Gouda towards sale consideration. Payment of Rs. 4,50,000/-being admitted in the year 2010 and further payment of loan of Rs. 50,000/-with re- gard to which complaint No.119 of 2012 was filed by the complainant, a copy of which complaint was also filed as Ex.D2, there was a burden on the complainant to prove his financial capacity. In the years 2010-2011, as per the own case of the complainant, he made a payment of Rs. 18 lakhs. During his cross-examination, when the financial capacity to pay Rs. 6 lakhs to the accused was questioned, there was no satisfactory reply given by the complainant. The evidence on record, thus, is a probable defence on be- half of the accused, which shifted the burden on the com- plainant to prove his financial capacity and other facts. 27. There was another evidence on the record, i.e., a copy of the plaint in O.S. No. 148 of 2011 filed by the com- plainant for recovery of a loan of Rs. 7 lakhs given to one Balana Gouda in December 2009. Thus, there was evi- dence on record to indicate that in December 2009, he gave ₹ 7 lakhs in a sale agreement, in 2010, he made a payment of ₹ 4,50,000/-towards sale consideration. and further, he gave a loan of ₹ 50,000/-for which a com- plaint was filed in 2012 and a further loan of ₹ 6 lakhs in 24 ( 2025:HHC:24725 ) November 2011. Thus, during the period from 2009 to November 2011, an amount of ₹ 18 lakhs was given by the complainant to different persons including the accused, which put a heavy burden to prove the financial capacity when it was questioned on behalf of the accused, the ac- cused being a retired employee of State Transport Corpo- ration, who retired in 1997 and total retirement benefits, which were encashed were ₹ 8 lakhs only. The High Court observed that though the complainant is a retired em- ployee, the accused did not even suggest that pension is the only means for the survival of the complainant. The following observations were made in Paragraph 16 of the judgment of the High Court: "17. Though the complainant is a retired employee, the accused did not even suggest that a pension is the only means for the survival of the complainant. Under these circumstances, the Trial Court's finding that the complainant failed to discharge his initial burden of proof of lending capacity is perverse." 28. There is one more aspect of the matter which also needs to be noticed. In the complaint filed by the com- plainant as well as in the examination-in-chief, the com- plainant has not mentioned on which date the loan of Rs. 6 lakhs was given to the accused. It was during cross-ex- amination, he gave the date as November 2011. Under Section 118 (b), a presumption shall be made as to the date that every negotiable instrument was made or drawn on such date. Admittedly, the cheque is dated 27.02.2012; there is not even a suggestion by the complainant that a post-dated cheque was given to him in November 2011 bearing a date 27.02.2012. Giving of a cheque on 27.02.2012, which was deposited on 01.03.2012, is not compatible with the case of the complainant when we read the complaint submitted by the complainant, espe- cially Para 1 of the complaint, which is extracted as below: "1. The accused is a very good friend of the com- plainant. The accused requested the Complainant a hand loan to meet out the urgent and family neces- 25 ( 2025:HHC:24725 ) sary sum of 6,00,000/-(Rupees Six Lakh) and on ac- count of long-standing friendship and knowing the difficulties, which is being faced by the accused the complainant agreed to lend hand loan to meet out the financial difficulties of the accused and accord- ingly the Complainant lends hand loan Rs. 6,00,000/-(Rupees Six Lakh) dated 27.02.2012 in favour of the Complainant stating that on its pre- sentation, it will be honoured. But to the surprise of the Complainant on presentation of the same for collection through his Bank, the Cheque was re- turned by the Bank with an endorsement "Funds In- sufficient" on 01-03-2012." 29. Thus, there is a contradiction in what was initially stated by the complainant in the complaint and his exam- ination-in-chief regarding the date on which the loan was given on one side and what was said in cross-exami- nation on the other side, which has not been satisfactorily explained. The High Court was unduly influenced by the fact that the accused did not reply to the notice denying the execution of the cheque or legal liability. Even before the trial court, the appellant-accused had not denied his signature on the cheque. 30. We are of the view that when evidence was led before the Court to indicate that apart from a loan of Rs. 6 lakhs given to the accused, within 02 years, an amount of Rs. 18 lakhs have been given out by the complainant and his fi- nancial capacity being questioned, it was incumbent on the complainant to have explained his financial capacity. The court cannot insist that a person lead negative evi- dence. The observation of the High Court that the trial court's finding that the complainant failed to prove his financial capacity for lending money is perverse cannot be supported. We fail to see how the trial court's findings can be termed as perverse by the High Court when it was based on consideration of the evidence, which was led on behalf of the defence.” 26 ( 2025:HHC:24725 ) 27. It was laid down by the Hon’ble Supreme Court in Dattatraya v. Sharanappa, (2024) 8 SCC 573: (2024) 3 SCC (Cri) 776: 2024 SCC OnLine SC 1899 that when the financial capacity of the accused is not established, the accused is entitled to acquittal. It was observed: “29. Applying the aforementioned legal position to the present factual matrix, it is apparent that there existed a contradiction in the complaint made by the appellant as against his cross-examination relatable to the time of presentation of the cheque by the respondent, as per the statements of the appellant. This is to the effect that while the appellant claimed the cheque to have been issued at the time of advancing of the loan as a security, however, as per his statement during the cross- examination it was revealed that the same was presented when an alleged demand for repayment of alleged loan amount was raised before the respondent, after a period of six months of advancement. Furthermore, there was no financial capacity or acknowledgement in his income tax returns by the appellant to the effect of having advanced a loan to the respondent. Even further, the appellant has not been able to showcase as to when the said loan was advanced in favour of the respondent, nor has he been able to explain as to how a cheque issued by the respondent allegedly in favour of Mr Mallikarjun landed in the hands of the instant holder, that is, the appellant. 28. A similar view was taken in John K. Abraham Versus Simon C. Abraham & Another (2014) 2 SCC 236 wherein it was held:- 27 ( 2025:HHC:24725 ) “9. It has to be stated that in order to draw the presump- tion under Section 118 read along with 139 of the Nego- tiable Instruments Act, the burden was heavy upon the complainant to have shown that he had required funds for having advanced the money to the accused; that the issuance of the cheque in support of the said payment ad- vanced was true and that the accused was bound to make the payment as had been agreed while issuing the cheque in favour of the complainant. 10. Keeping the said statutory requirements in mind, when we examine the facts as admitted by the respon- dent-complainant, as rightly concluded by the learned trial Judge, the respondent was not even aware of the date when the substantial amount of Rs.1,50,000/- was ad- vanced by him to the appellant, that he was not sure as to who wrote the cheque, that he was not even aware when exactly and where exactly the transaction took place for which the cheque came to be issued by the appellant. Apart from the said serious lacuna in the evidence of the complainant, he further admitted as PW.1 by stating once in the course of the cross-examination that the cheque was in the handwriting of the accused and the very next moment taking a diametrically opposite stand that it is not in the handwriting of the accused and that it was written by the complainant himself, by further reiterating that the amount in words was written by him. 29. Both the learned Courts below proceeded on the basis that the issuance of cheques was not disputed; therefore, the presumption arose that the cheques were issued in discharge of the legal liability for consideration. There is no dispute with this proposition of law; however, this presumption is rebuttable and once the accused has created a reasonable doubt regarding the financial capacity of the complainant or the loan could not have 28 ( 2025:HHC:24725 ) been advanced to him, the presumption is displaced, and the burden shifts upon the complainant to prove his case that he had advanced the money to the accused by leading satisfactory evidence. In the present case, there was no such satisfactory evidence. There is no evidence at all that the accused was liable to repay money to the bank in January 2012, and the bank was threatening to repossess the vehicle. Hence, the accused could not have been convicted. Both the learned Courts below had taken a view which no reasonable person would have taken, and such a view is liable to be interfered with even while exercising revisional jurisdiction as per the judgment of Hon’ble Supreme Court in John K. John’s Case (supra). 30. In view of the above, the present revision is allowed, and judgments and order passed by learned Courts below are ordered to be set aside. The accused is acquitted for the commission of an offence punishable under Section 138 of the NI Act. The fine amount, if deposited be refunded to the accused, if no appeal is preferred in case of appeal the same be dealt with in the order of the Hon’ble Supreme Court. 29 ( 2025:HHC:24725 ) 31. In view of the provisions of Section 437-A of the Code of Criminal Procedure (Section 481 of Bhartiya Nagarik Suraksha Sanhita, 2023) the petitioner/accused is directed to furnish bail bonds in the sum of ₹50,000/- with one surety of the like amount to the satisfaction of the learned Trial Court which shall be effective for six months with a stipulation that in an event of a Special Leave Petition being filed against this judgment or on grant of the leave, the petitioner/accused on receipt of notice thereof shall appear before the Hon'ble Supreme Court. 32. The present petition stands disposed of, so also the pending miscellaneous application(s), if any. 33. A copy of the judgment, along with records of the learned Courts below, be sent back forthwith. (Rakesh Kainthla) Judge 29th July, 2025 (Shamsh Tabrez)