2025:HHC:30680 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Cr. Appeal No. 32 of 2014 Reserved on: 28.08.2025 Date of Decision: 09.09.2025 Sanjeev Sood ... Appellant Versus Raj Kishore Sharma ...Respondent Coram Hon’ble Mr Justice Rakesh Kainthla, Judge. Whether approved for reporting?1 No For the Appellant : Mr. Lakshay Thakur, Advocate. For the Respondent : Mr. Prashant Pandey, Advocate. Rakesh Kainthla, Judge The appellant has filed the present appeal against the judgment dated 30.11.2013 passed by learned Special Judicial Magistrate (constituted under the NI Act), Shimla, District Shimla, H.P. (learned Trial Court) vide which the complaint filed by the appellant (complainant before the learned Trial Court) was dismissed. (Parties shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for convenience.) 1 Whether reporters of Local Papers may be allowed to see the judgment? Yes. P a g e | 2 2025:HHC:30680 2. Briefly stated, the facts giving rise to the present appeal are that the complainant filed a complaint before the learned Trial Court for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act (in short ‘NI Act’). It was asserted that the complainant advanced an amount of ₹2,50,000/- to the accused per his request. The accused issued a cheque of ₹2,50,000/-drawn on State Bank of India, the Mall, Shimla. H.P. to discharge his liability. The complainant presented the cheque to the bank, but it was dishonoured on 29.06.2012 with an endorsement ‘insufficient funds’. The complainant issued a legal notice asking the accused to repay an amount within 15 days, which was duly served upon the accused, but he failed to repay the amount. Therefore, the complaint was filed before the learned Trial Court for taking action as per law. 3. 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. P a g e | 3 2025:HHC:30680 4. The complainant examined himself (CW1) to prove his case. 5. The accused, in his statement recorded under Section 313 of Cr.P.C., stated that he had taken a loan of ₹50,000/- and issued two blank cheques. He had deposited ₹30,000/- in the complainant’s bank account. He also paid an amount of ₹20,000/- to the accused in cash. No notice was received by him. The complainant misused the blank cheque to extract money from the accused. A receipt of deposit of ₹30,000/- was tendered in evidence by his counsel. 6. Learned Trial Court held that the accused admitted the issuance of the cheque. Therefore, a presumption under Sections 118(a) and 139 of the NI Act arose that the cheque was issued for consideration in discharge of the liability. The burden would shift upon the accused to rebut the presumption. The plea taken by the accused that he had only borrowed a sum of ₹50,000/-, which was repaid by him, was not probable. The complainant admitted in his cross-examinaton that his monthly income was ₹20,000/-, which showed that he had no financial capacity to lend ₹2,50,000/- to the accused. The absence of any document would also disprove the P a g e | 4 2025:HHC:30680 complainant’s version regarding the advancement of the loan. Therefore, the complaint was dismissed. 7. Being aggrieved by the judgment passed by the learned Trial Court, the complainant has filed the present appeal asserting that the learned Trial Court erred in acquitting the accused. Learned Trial Court erred in holding that the complainant was required to prove the advancement of the loan. There is no such requirement because of the presumption under Section 118(a) and 139 of the NI Act. Therefore, it was prayed that the present appeal be allowed and the judgment passed by the learned Trial Court be set aside. 8. I have heard Mr. Lakshay Thakur, learned counsel for the appellant and Mr. Prashant Pandey, learned counsel for the respondent. 9. Mr. Lakshay Thakur, learned counsel for the appellant, submitted that the learned Trial Court erred in holding that the complainant was required to prove the advancement of the loan. There was no such requirement because of the presumption under Section 118(a) and 139 of the NI Act. The burden is upon the accused to rebut the presumption. He failed to produce any P a g e | 5 2025:HHC:30680 satisfactory evidence to rebut the presumption. Therefore, he prayed that the present appeal be allowed and the judgment passed by the learned Trial Court be set aside. 10. Mr. Prashant Pandey, learned counsel for the respondent, submitted that the complainant had failed to prove his financial capacity, and the learned Trial Court was justified in insisting upon the production of satisfactory evidence to advance the loan. No such evidence was produced and the learned Trial Court was justified in acquitting the accused. This was a reasonable view, and no interference is required with it. He relied upon the following judgments in support of his submission:  John K. John vs. Tom Varghese and another 2008(1) Banker’s Journal 1;  Kalamani Tax and another vs. P. Balasubaramanian 2021(5) SCC 283;  Uttam Ram vs. Devinder Singh Hudan and another 2019 (10) SCC 287 11. I have given considerable thought to the submissions made at the bar and have gone through the records carefully. 12. The present appeal has been filed against a judgment of acquittal. It was laid down by the Hon’ble Supreme Court in Surendra Singh v. State of Uttarakhand, 2025 SCC OnLine SC 176: P a g e | 6 2025:HHC:30680 (2025) 5 SCC 433 that the Court can interfere with a judgment of acquittal if it is patently perverse, is based on misreading/omission to consider the material evidence and reached at a conclusion which no reasonable person could have reached. It was observed: “11. Recently, in the case of Babu Sahebagouda Rudragoudar v. State of Karnataka 2024 SCC OnLine SC 4035, a Bench of this Court to which one of us was a Member (B.R. Gavai, J.) had an occasion to consider the legal position with regard to the scope of interference in an appeal against acquittal. It was observed thus: “38. First of all, we would like to reiterate the principles laid down by this Court governing the scope of interference by the High Court in an appeal filed by the State for challenging the acquittal of the accused recorded by the trial court. 39. This Court in Rajesh Prasad v. State of Bihar [Rajesh Prasad v. State of Bihar, (2022) 3 SCC 471: (2022) 2 SCC (Cri) 31] encapsulated the legal position covering the field after considering various earlier judgments and held as below: (SCC pp. 482-83, para 29) “29. After referring to a catena of judgments, this Court culled out the following general principles regarding the powers of the appellate court while dealing with an appeal against an order of acquittal in the following words: (Chandrappa case [Chandrappa v. State of Karnataka, (2007) 4 SCC 415: (2007) 2 SCC (Cri) 325], SCC p. 432, para 42) ‘42. From the above decisions, in our considered view, the following general principles regarding the powers of the appellate court while dealing with an appeal against an order of acquittal emerge: P a g e | 7 2025:HHC:30680 (1) An appellate court has full power to review, reappreciate and reconsider the evidence upon which the order of acquittal is founded. (2) The Criminal Procedure Code, 1973, puts no limitation, restriction or condition on the exercise of such power and an appellate court, on the evidence before it, may reach its own conclusion, both on questions of fact and law. (3) Various expressions, such as “substantial and compelling reasons”, “good and sufficient grounds”, “very strong circumstances”, “distorted conclusions”, “glaring mistakes”, etc., are not intended to curtail the extensive powers of an appellate court in an appeal against acquittal. Such phraseologies are more in the nature of “flourishes of language” to emphasise the reluctance of an appellate court to interfere with an acquittal than to curtail the power of the court to review the evidence and to come to its own conclusion. (4) An appellate court, however, must bear in mind that in the case of acquittal, there is a double presumption in favour of the accused. Firstly, the presumption of innocence is available to him under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, the accused, having secured his acquittal, the presumption of his innocence is further reinforced, reaffirmed and strengthened by the trial court. (5) If two reasonable conclusions are possible on the basis of the evidence on record, the appellate court should not disturb the finding of acquittal recorded by the trial court.” P a g e | 8 2025:HHC:30680 40. Further, in H.D. Sundara v. State of Karnataka [H.D. Sundara v. State of Karnataka, (2023) 9 SCC 581: (2023) 3 SCC (Cri) 748], this Court summarised the principles governing the exercise of appellate jurisdiction while dealing with an appeal against acquittal under Section 378CrPC as follows: (SCC p. 584, para 8) 8. … 8.1. The acquittal of the accused further strengthens the presumption of innocence. 8.2. The appellate court, while hearing an appeal against acquittal, is entitled to reappreciate the oral and documentary evidence; 8.3. The appellate court, while deciding an appeal against acquittal, after reappreciating the evidence, is required to consider whether the view taken by the trial court is a possible view which could have been taken on the basis of the evidence on record; 8.4. If the view taken is a possible view, the appellate court cannot overturn the order of acquittal on the ground that another view was also possible; and 8.5. The appellate court can interfere with the order of acquittal only if it comes to a finding that the only conclusion which can be recorded on the basis of the evidence on record was that the guilt of the accused was proved beyond a reasonable doubt and no other conclusion was possible.” 41. Thus, it is beyond the pale of doubt that the scope of interference by an appellate court for reversing the judgment of acquittal recorded by the trial court in favour of the accused has to be exercised within the four corners of the following principles: 41.1. That the judgment of acquittal suffers from patent perversity. 41.2. That the same is based on a misreading/omission to consider material evidence on record; and P a g e | 9 2025:HHC:30680 41.3. That no two reasonable views are possible and only the view consistent with the guilt of the accused is possible from the evidence available on record.” 12. It could thus be seen that it is a settled legal position that the interference with the finding of acquittal recorded by the learned trial judge would be warranted by the High Court only if the judgment of acquittal suffers from patent perversity; that the same is based on a misreading/omission to consider material evidence on record; and that no two reasonable views are possible and only the view consistent with the guilt of the accused is possible from the evidence available on record.” 13. The present appeal is required to be decided as per the parameters laid down by the Hon’ble Supreme Court. 14. The complainant stated in his cross-examination that his monthly income was ₹20,000/-. He used to file an income tax return. He mentioned the advancement of a loan of ₹2,50,000/- to the accused in his income tax return; however, he had not produced its copy. 15. Statement of the complainant shows that his monthly income was ₹20,000/-, which means that he earned ₹2,40,000/- per year. He would have spent money on himself and his family members. Therefore, the amount of ₹2,50,000/- for the complainant was significant and the learned Trial Court was justified in insisting upon the proof of advancing the loan. It was laid down by the Hon’ble Supreme Court in Tedhi Singh Versus P a g e | 10 2025:HHC:30680 Narayan Dass Mahant (2022) 6 SCC 735 that the accused has a right to demonstrate that the complainant did not have the financial capacity to advance the loan stated to have been advanced by him. It was observed: - “9….However, the accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable, which he can do by producing independent materials, namely, by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, further achieve this result through the cross-examination of the witnesses of the complainant. Ultimately, it becomes the duty of the Courts to consider carefully and appreciate the totality of the evidence and then come to a conclusion whether, in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence.” 16. It was held 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: - “ 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 has been given out by the complainant and his financial capacity being questioned, it was incumbent on the complainant to have explained his financial capacity. The P a g e | 11 2025:HHC:30680 court cannot insist on a person to lead negative evidence. 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.” 17. 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….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.” 18. A similar view was taken in John K. Abraham Versus Simon C. Abraham & Another (2014) 2 SCC 236, wherein it was held:- “9. It has to be stated that in order to draw the presumption under Section 118 read along with 139 of the Negotiable 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 P a g e | 12 2025:HHC:30680 issuance of the cheque in support of the said payment advanced 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.” 19. Therefore, the learned Trial Court was justified in doubting the complainant’s case due to the lack of financial capacity. 20. It was submitted that the evidence of the financial capacity was not required to be given because of the presumption contained in Sections 118(a) and 139 of the NI Act. There is no dispute with the proposition of law that a presumption arises by the admission of the signature on the cheque under the NI Act that it was issued for consideration in the discharge of the legal liability. However, the presumption is rebuttable, and the moment evidence is led, the presumption would stand rebutted. It was laid down by the Hon’ble Supreme Court in Rajesh Jain v. Ajay Singh, (2023) 10 SCC 148: 2023 SCC OnLine SC 1275 that the presumption applies in the absence of evidence and disappears after the evidence is produced. It was observed: “38. John Henry Wigmore [John Henry Wigmore and the Rules of Evidence: The Hidden Origins of Modern Law] on Evidence states as follows: “The peculiar effect of the presumption of law is merely to invoke a rule of law compelling the Jury to P a g e | 13 2025:HHC:30680 reach the conclusion in the absence of evidence to the contrary from the opponent but if the opponent does offer evidence to the contrary (sufficient to satisfy the Judge's requirement of some evidence), the presumption ‘disappears as a rule of law and the case is in the Jury's hands free from any rule’.” 21. In the present case, the cross-examination of the complainant made his financial capacity doubtful, and the presumption would be displaced. 22. Therefore, the learned Trial Court had taken a reasonable view while acquitting the accused, and this Court will not interfere with it while deciding an appeal against the acquittal. 23. In view of the above, the present appeal fails, and it is dismissed. 24. Record of the learned Trial Court be sent back forthwith, along with a copy of this judgment. (Rakesh Kainthla) Judge 09th September, 2025 (ravinder)