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2025 DAILYLAW 3920 (HP)

Lakhbeer Singh v. Khanna Katha Udhyog

2025-12-08

Sushil Kukreja

body2025
JUDGMENT : SUSHIL KUKREJA, J. 1. The instant petition has been filed by the petitioner-accused/convict (hereinafter referred to as the accused) under Section 438 read with Section 442 of Bharatiya Nagrik Suraksha Sanhita, 2023 (for short “BNSS”) against the judgment dated 31.12.2024, passed by the learned Additional Sessions Judge-II, Una, District Una, H.P., whereby the judgment of conviction dated 27.07.2024 and order of sentence dated 31.07.2024, passed by the learned Chief Judicial Magistrate, Una, District Una, HP, in Criminal case No.354/2020 were affirmed, with a prayer to quash and set aside the impugned judgments. 2. Brief facts of the case, as emerge from the record, are that the accused, who was a government approved licensed Forest Contractor, approached the complainant (respondent herein) to sell 440 quintals of Khair wood at the rate of Rs.2500/- per quintal including carriage and loading, but excluding unloading at industrial premises as costs of labour for unloading, which was to be paid by the complainant. The entire agreed forest produce was required to be supplied to the complainant upto 31.12.2019. The complainant agreed to the same and a sum of Rs.11,00,000/- as advance was transferred to the account of the accused as full and final payment for the forest produce to be supplied to him. However, the accused had failed to supply even a single consignment of forest produce to the complainant. On the persistent demand of the complainant, the accused issued a cheque bearing No.253231, dated 11.06.2020, amounting to Rs.11,00,000/-, drawn on Punjab National Bank, Branch, Samoh, District Bilaspur, HP in favour of the complainant. However, on presentation of the said cheque, it was returned unpaid to the complainant with the remarks “funds insufficient’, vide memo dated 19.06.2020. Thereafter, the complainant issued a legal notice dated 14.07.2020 to the accused demanding the cheque amount, but the accused failed to pay the cheque amount within the stipulated period. Subsequently, the complainant filed a complaint under Section 138 of Negotiable Instruments Act (NI Act) against the accused before the learned trial Court. 3. Thereafter, the complainant issued a legal notice dated 14.07.2020 to the accused demanding the cheque amount, but the accused failed to pay the cheque amount within the stipulated period. Subsequently, the complainant filed a complaint under Section 138 of Negotiable Instruments Act (NI Act) against the accused before the learned trial Court. 3. The learned trial Court, after having found sufficient material against the accused had, put notice of accusation to him vide order dated 27.03.2021 and on conclusion of trial, the learned trial Court convicted the accused for the commission of the offence under Section 138 of the NI Act and sentenced him to undergo simple imprisonment for one year and to pay compensation of Rs.13,00,000/-. Feeling aggrieved, the accused preferred an appeal before the learned Appellate Court, however, the learned Additional Sessions Judge-II, Una, District Una, HP, vide judgment dated 31.12.2024, dismissed the same and upheld the judgment/order of the learned trial Court. 4. The accused/petitioner, feeling dissatisfied with the impugned judgment of the learned Appellate Court, preferred the present revision petition. 5. Learned counsel for the petitioner contended that both the learned Courts below have not appreciated the law and wrongly relied upon untrustworthy evidence led by the respondent/complainant. He further contended that there was no legal liability to be discharged in favour of the complainant by the petitioner as the petitioner had simply provided two loaded vehicles of wood to the complainant through Bishan Dass @ Rs.9500/- per quintal and apart from that, there was no dealing between them, whereas, the cheque in question given as security by the accused to Bishan Dass has been misused. 6. On the other hand, learned Senior Counsel for the respondent supported the judgments of the learned Courts below and contended that the cheque was issued in discharge of the existing debt and since the cheque was returned unpaid and the accused had failed to pay the cheque amount within the stipulated period, both the Courts below had rightly convicted and sentenced the accused on the basis of proper appreciation of evidence. 7. I have heard learned counsel for the petitioner as well as learned Senior Counsel for the respondent and also gone through the record carefully. 8. Before adverting to the merits of the case, it would be apposite to have a look into the legal position. 7. I have heard learned counsel for the petitioner as well as learned Senior Counsel for the respondent and also gone through the record carefully. 8. Before adverting to the merits of the case, it would be apposite to have a look into the legal position. The scope of revision is very limited and unless the revision petitioner can show that the judgments of the courts below were perverse or grossly erroneous, this Court would not ordinarily interfere with their decisions. 9. In State of Kerala vs. Puttumana Illath Jathavedan Namboodiri , (1999) 2 SCC 452 . The Hon'ble Apex Court observed as under:- “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 miscarriage of jusitce. 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 as 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 gross miscarriage of justice." 10. The Hon'ble Apex Court in Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao Phalke and Others , (2015) 3 SCC 123 (6 supra) also held that:- "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. Revisional power of the court under Sections 397 to 401 of Cr.P.C. is not to be equated with that of an appeal. 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. Revisional power of the court under Sections 397 to 401 of Cr.P.C. 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 decision in exercise of their revisional jurisdiction." 11. It is a settled proposition of law that presumption under Section 139 of NI Act is a presumption of law, as distinguished from a presumption of fact, such a presumption is a rebuttable presumption and the drawer of the cheque may dispel the same. The rebuttal does not have to be conclusively established, but such evidence must be adduced in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable; the standard of reasonability being that of a 'prudent man'. The aforesaid position in law stands settled in the judgment of the Hon'ble Supreme Court in the matter of Hiten P. Dalal Vs. Bratindranath Banerjee , (2001) 6 SCC 16 . While dealing with the aspect of presumption in terms of Section 139 of NI Act, the Hon'ble Supreme Court observed as under:- “21. The appellant's submission that the cheques were not drawn for the 'discharge in whole or in part of any debt or other liability' is answered by the third presumption available to the Bank under Section 139 of the Negotiable Instruments Act. This section provides that "it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability". The effect of these presumptions is to place the evidential burden on the appellant of proving that the cheque was not received by the Bank towards the discharge of any liability. 22. The effect of these presumptions is to place the evidential burden on the appellant of proving that the cheque was not received by the Bank towards the discharge of any liability. 22. Because both Sections 138 and 139 require that the Court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras vs. A. Vaidyanatha Iyer AIR 1958 SC 61 , it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. "It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused" (ibid). Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces 7 of 36 evidence showing the reasonable possibility of the non- existence of the presumed fact. 23. In other words, provided the facts required to form the basis of a presumption of law exists, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, "after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists". Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the 'prudent man'. 24. Judicial statements have differed as to the quantum of rebutting evidence required. 24. Judicial statements have differed as to the quantum of rebutting evidence required. In Kundan Lal Rallaram vs Custodian, Evacuee Property, Bombay AIR 1961 SC 1316 , this Court held that the presumption of law under Section 118of Negotiable Instruments Act could be rebutted, in certain circumstances, by a presumption of fact raised under Section 114 of the Evidence Act. The decision must be limited to the facts of that case. The more authoritative view has been laid down in the subsequent decision of the Constitution Bench in Dhanvantrai Balwantrai Desai vs State of Maharashtra, AIR 1964 SC 575 , where this Court reiterated the principle enunciated in State of Madras vs Vaidyanath Iyer (Supra) and clarified that the distinction between the two kinds of presumption lay not only in the mandate to the Court, but also in the nature of evidence required to rebut the two. In the case of a discretionary presumption the presumption if drawn may be rebutted by an explanation which "might reasonably be true and which is consistent with the innocence" of the accused. On the other hand in the case of a mandatory 8 of 36 presumption "the burden resting on the accused person in such a case would not be as light as it is where a presumption is raised under S.114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation offered by the accused is reasonable and probable. It must further be shown that the explanation is a true one. The words 'unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted " 12. In the matter of Kumar Exports Vs. Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted " 12. In the matter of Kumar Exports Vs. Sharma Carpets , (2009) 2 SCC 513 , it has been held by the Hon'ble Supreme Court that Section 118 of the NI Act inter-alia directs that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration. The relevant portion of the aforesaid judgment is reproduced as under:- “13. In a significant departure from the general rule applicable to contracts, Section 118 of the Act provides certain presumptions to be raised. This Section lays down some special rules of evidence relating to presumptions. The reason for these presumptions is that, negotiable instrument passes from hand to hand on endorsement and it would make trading very difficult and negotiability of the instrument impossible, unless certain presumptions are made. The presumption, therefore, is a matter of principle to facilitate negotiability as well as trade. Section 118 of the Act provides presumptions to be raised until the contrary is proved (i) as to consideration, (ii) as to date of instrument, (iii) as to time of acceptance, (iv) as to time of transfer, (v) as to order of indorsements, (vi) as to appropriate stamp and (vii) as to holder being a holder in due course. 14. Section 139 of the Act provides that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. 19. The use of the phrase "until the contrary is proved" in Section 118 of the Act and use of the words "unless the contrary is proved" in Section 139 of the Act read with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over.” 13. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over.” 13. In the instant case, in support of its case, the proprietor of the complainant/firm, Krishan Kumar Khanna appeared in the witness box as CW-1 and re-asserted and reiterated the averments made in the complaint under Section 138 of NI Act. He also placed on record cheque Ext. C-3, return memo Ext. C-4, legal notice Ext.C-5 and postal receipt Ext.C-6. 14. From the perusal of the evidence of the complainant, it has become clear that the cheque Ext.C-3 was dishonoured on account of “funds insufficient” in the bank account of the accused, vide memo Ext.C-4. In light of the evidence on record, the complainant has discharged its initial burden and, therefore, it is required to be presumed that the cheque in question was drawn for consideration and the complainant received the same in discharge of the existing debt. The onus, therefore, shifts upon the accused to establish probable defence so as to rebut such presumption. 15. The law is well settled that in order to rebut the statutory presumption, the accused is not expected to prove his defence beyond reasonable doubt as is expected of the prosecution in a criminal trial. The accused may adduce direct evidence to prove that the cheque in question was not supported by consideration and that there was no debt or liability to be discharged by him. On the aspects relating to preponderance of probabilities, the accused has to bring on record such facts and such circumstances which may lead this court to conclude either that the consideration did not exist or that its non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that the consideration did not exist. It is settled position of law that though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfill the requirements of the rebuttal as envisaged under Sections 118 and 139 of NI Act. It is settled position of law that though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfill the requirements of the rebuttal as envisaged under Sections 118 and 139 of NI Act. Reference can also be made to the judgment of the Hon'ble Supreme Court in Rangappa vs. Sri Mohan (2010) 11 SCC 441 , wherein it has been observed that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of preponderance of probabilities. The relevant paras of the aforesaid judgment are reproduced as under:- ''26. In light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. 27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the 14 of 36 dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. 28. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. 28. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.' In the present case on hand, the accused merely denied the case of complainant and he has not placed sufficient materials before the court to believe his defence. Mere denial of the case of complainant is not sufficient ground to believe the defence of accused that the complainant has not lent an amount of Rs.30 lakhs to the accused.” 16. In Rohitbhai Jivanlal Patel Vs. State of Gujarat and another , (2019) 18 SCC 106 , it has been held by the Hon'ble Supreme Court that once the accused could not deny his signatures on the cheque in question that had been drawn in favour of the complainant, therefore, it is required to be presumed that the cheque in question was drawn for consideration and the holder of the cheque i.e. the complainant received the same in discharge of an existing debt. Para-15 of the aforesaid judgment is reproduced as under:- "15. So far the question of existence of basic ingredients for drawing of presumption under Sections 118 and 139 of the NI Act is concerned, apparent it is that the appellant- accused could not deny his signatures on the cheques in question that had been drawn in favour of the complainant on a bank account maintained by the accused for a sum of Rs.3 lakhs each. The said cheques were presented to the bank concerned within the period of their validity and were returned unpaid for the reason of either the balance being insufficient or the account being closed. All the basic ingredients of Section 138 as also of Sections 118 and 139 are apparent on the fact of the record. The trial court had also consciously taken note of these facts and had drawn the requisite presumption. Therefore, it is required to be presumed that the cheques in question were drawn for consideration and the holder of the cheques i.e. the complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the appellant-accused to establish a probable defence so as to rebut such a presumption." 17. The Hon’ble Supreme Court of India in Triyambak S. Hegde Vs. Sripad , (2022) 1 SCC 742 , while relying upon the the constitution bench judgment of Basalingappa v. Mudibasappa , (2019) 5 SCC 418 , under para 14 of its judgment reiterated that once the cheque was issued and that the signatures are upon the cheque are accepted by the accused, the presumptions under section 118(a) and section 139 of the NI Act arise against the accused. That is, unless the contrary is proved, it shall be presumed that the cheques in question were drawn by the accused for a consideration and that the complainant had received the cheque in question in discharge of debt/liability from the accused. Relevant portion of the aforesaid judgment reads as under:- "25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability. 25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. 25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. 25.4. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. 25.4. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.” 18. In his statement recorded under Section 313, Cr.P.C., the accused had not disputed his signatures on the cheque in question. Therefore, it is required to be presumed that the cheque in question was drawn for a consideration and the holder of the cheque, i.e. the complainant received the same in discharge of an existing debt. Now, the onus shifts upon the accused to establish a probable defence so as to rebut such a presumption. The defence of the accused is that he had issued the cheque in question as a security in favour of the complainant. In support of his case, the accused examined as many as six witnesses. DW-1 Bishan Dass deposed that he sold his file to the accused comprising of 150 Khair trees after taking due permission from the authorities. DW-2 Joginder Singh proved on record copies of transit receipts Ext. DW2/A-1 to Ext.DW2/A-6 and Ext. DW2/B-1 to Ext. DW2/B-6 in respect of vehicles bearing registration Nos. HP62A-3663 and HP63B-0583. In his cross- examination, he admitted the suggestion that the reference was not made in the receipts as to from which place, the wood was booked. DW-3 Kishori Lal, Senior Assistant, deposed that as per export permit Ext. DW3/A dated 21.01.2018, 217.39 of forest produce of Khair wood had been exported by contractor Bishan Dass (DW-1) to the complainant firm, out of which 174.39 quintal was hard wood and 43.40 quintal was Khair stumps. DW-4 Prem Sagar, Forest Guard, proved on record Parcha Hamrahi Ext. DW4/A and Ext. DW4/B, issued by the Forest Office, Karsog in favour of contractor Bishan Dass (DW-1). DW-5 Naseeb Kumar proved on record copies of register Ext.DW5/A to Ext. DW5/D. DW-6 Jeet Singh deposed that after loading Khair wood from Tattapani, he had taken the vehicle for unloading in Khair Katha Udyog, which was weighed in Dharam Kanta, situated inside the said Udyog. 19. DW-5 Naseeb Kumar proved on record copies of register Ext.DW5/A to Ext. DW5/D. DW-6 Jeet Singh deposed that after loading Khair wood from Tattapani, he had taken the vehicle for unloading in Khair Katha Udyog, which was weighed in Dharam Kanta, situated inside the said Udyog. 19. However, after going through the evidence on record led by the accused, it is revealed that he has adduced evidence only in respect of transportation of wood and stumps of Khair wood in trucks from Tattapani to Una and after loading the same from Tattapani, the vehicle was taken for unloading in Khair Katha Udyog, which was weighed in Dharam Kanta, situated inside the said Udyog. But there is nothing on record to show the name of complex of the Udyog and there is also nothing on record as to whether the wood was unloaded at M/s Khanna Katha Udyog and even if it is believed that the wood was unloaded at M/s Khanna Katha Udyog, whether the same was in pursuant to the dealing of the accused or whether it was at the behest of DW-1 Bishan Dass. The learned Appellate Court has rightly observed that the evidence adduced by the accused has been created by him in league with DW-1 to escape from criminal liability despite knowing falsity thereof. Thus, from the evidence led by the accused, it cannot be said that he has discharged the onus to rebut the presumption under Section 118(a) and 139 of NI Act. 20. Therefore, in the absence of any cogent and satisfactory evidence on record on the part of the accused, it is presumed that the cheque in question had been drawn for consideration and the complainant received the same in discharge of an existing debt. 21. Hence, on overall appraisal of the material available on record, it is the considered opinion of this Court that the accused had failed to discharge his burden to rebut the statutory presumption. From the perusal of the material available on record, the complainant has proved the guilt of the accused that he is liable to pay the amount covered under the cheque. There is no substance in the probable defence of the accused, whereas the complainant has discharged its burden and proved the guilt of the accused. The accused has failed to rebut the statutory presumption drawn against him under Section 138 of NI Act. There is no substance in the probable defence of the accused, whereas the complainant has discharged its burden and proved the guilt of the accused. The accused has failed to rebut the statutory presumption drawn against him under Section 138 of NI Act. All the basic ingredients of Section 138 as well as Sections 118 and 139 of NI Act are apparent in the facts and circumstances of the present case. There is sufficient evidence to come to the conclusion that the cheque Ext.C-3 was issued by the accused and received by the complainant in discharge of an existing debt as such the accused has committed an offence punishable under Section 138 of NI Act. 22. Consequently, the present revision petition is dismissed being devoid of any merit and the petitioner-accused is directed to surrender before the learned trial Court forthwith to serve the sentence as awarded by the learned trial Court, if not already served. Bail bonds of the petitioner are cancelled and discharged. Interim direction, if any, stands vacated. Pending application(s), if any, also stand disposed of.