2026:HHC:22045 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Cr. Appeal No. 353 of 2015 Reserved on: 12.05.2026 Date of Decision: 15.06.2026 Lakhan Pal Singh ...Appellant Versus Vishal Awasthi ...Respondent Coram Hon’ble Mr Justice Rakesh Kainthla, Judge. Whether approved for reporting?1No For the Appellant : Mr G.R. Palsra, Advocate. For the Respondent : Mr Suneel Awasthi, Advocate. Rakesh Kainthla, Judge The present appeal is directed against the judgment dated 03.06.2015 passed by the learned Additional Chief Judicial Magistrate, Court No.1, Mandi (learned Trial Court) vide which the respondent (accused before the learned Trial Court) was acquitted of the commission of an offence punishable under Section 138 of the Negotiable Instruments Act (NI Act). (The 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. 2 2026:HHC:22045 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. It was asserted that the accused had issued a cheque of ₹4,50,000/- to the complainant to discharge his liability. The complaint presented the cheque to his bank, but it was dishonoured with the endorsement “insufficient funds”. The complainant served a notice upon the accused asking him to repay the amount within 15 days of the receipt of the notice. The accused sent a reply to the notice but did not repay the amount. Hence, the complainant filed a complaint before the learned Trial Court to take action against the accused as per the 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. 4. The complainant examined himself (CW1) to prove his complaint. 3 2026:HHC:22045 5. The accused, in his statement recorded under Section 313 of the Code of Criminal Procedure (Cr.P.C), denied the prosecution's case in its entirety. He claimed that he had issued the cheque as security to the complainant. He had not filled in the cheque, but only signed it. The complainant filed a false complaint to extract money from him. He examined himself (DW1). 6. The learned Trial Court held that the complainant had not mentioned the nature of the liability in his complaint or the statement on oath. There was a variation in the bills, the ledger account and the tax audit report produced by the complainant. The complainant had also claimed interest on the amount, but had not specified the rate of interest being charged by him. The complainant had failed to prove the existence of a legally enforceable debt. Hence, the learned Trial Court acquitted the accused. 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 failed to properly appreciate the material on record. Learned Trial Court failed to consider the ledger account, which showed that an amount of ₹4,69,457/- was to be recovered from the accused. The accused admitted that he 4 2026:HHC:22045 had purchased goods from the complainant on a credit basis, which corroborated the entries in the book of account. The accused had also admitted his signature on the cheque, and a presumption under Section 118 (a) and 139 of the NI Act would be triggered. Mere defence that the cheque was issued as a security was not sufficient to acquit the accused. Hence, 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 G.R. Palsra, learned counsel for the appellant/complainant and Mr Suneel Awasthi, learned counsel for the respondent/accused. 9. Mr GR Palsra, learned counsel for the appellant/complainant, submitted that the documents produced on record showed that the accused had a subsisting liability of more than ₹4,50,000/- and the cheque of ₹4,50,000/- was issued in discharge of the liability. Learned Trial Court failed to notice the presumption, which vitiated the judgment. Hence, he prayed that the present appeal be allowed and the judgment passed by the learned Trial Court be set aside. 5 2026:HHC:22045 10. Mr Suneel Awasthi, learned counsel for the respondent/accused, submitted that the documents produced by the complainant showed different amounts, and the liability to repay ₹4,50,000/- was not established. Since the essential ingredient of the commission of an offence punishable under Section 138 of the NI Act was not satisfied, the learned Trial Court was justified in recording the acquittal. No interference is required with the reasonable view of the learned Trial Court. Hence, he prayed that the present appeal be dismissed. He relied upon the judgments of H.D. Sundara and others vs. State of Karnatka (2023) 9 SCC 581 and Babu Sahebagouda Rudragoudar and others vs. State of Karnataka (2024) 8 SCC 149 in support of his submissions. 11. I have given a 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: (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 6 2026:HHC:22045 which no reasonable person could have reached. It was observed at page 440: “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. This position was reiterated in P. Somaraju v. State of A.P., 2025 SCC OnLine SC 2291, wherein it was observed: “ 12. To summarise, an Appellate Court undoubtedly has full power to review and reappreciate evidence in an appeal against acquittal under Sections 378 and 386 of the Criminal Procedure Code, 1973. However, due to the reinforced or ‘double’ presumption of innocence after acquittal, interference must be limited. If two reasonable views are possible on the basis of the record, the acquittal should not be disturbed. Judicial intervention is only warranted where the Trial Court's view is perverse, based on misreading or ignoring material evidence, or results in a manifest miscarriage of justice. Moreover, the Appellate Court must address the reasons given by the Trial Court for acquittal before reversing it and assigning its own. A catena of the recent judgments of this Court has more firmly entrenched this position, including, inter alia, Mallappa v. State of Karnataka 2024 INSC 104, Ballu @ Balram @ Balmukund v. The State of Madhya Pradesh 2024 INSC 258, Babu Sahebagouda Rudragoudar v. State of Karnataka 2024 INSC 320, and Constable 907 Surendra Singh v. State of Uttarakhand 2025 INSC 114.” 7 2026:HHC:22045 14. Similar principles of law were laid down in H.D. Sundara (supra) and Babu Sahebagouda Rudragoudar (supra). 15. While dealing with the appeal against the acquittal in a complaint filed for the commission of an offence punishable under Section 138 of the NI Act the Hon’ble Supreme Court held in Rohitbhai Jivanlal Patel v. State of Gujarat (2019) 18 SCC 106 that the normal rules with same rigour cannot be applied to the cases under Negotiable Instruments Act because there is a presumption that the holder had received the cheque for consideration to discharge the debt/liability. The Appellate Court is entitled to look into the evidence to determine whether the accused has discharged the burden or not. It was observed: - “12…. The principles aforesaid are not of much debate. In other words, ordinarily, the appellate court will not be upsetting the judgment of acquittal, if the view taken by the trial court is one of the possible views of the matter and unless the appellate court arrives at a clear finding that the judgment of the trial court is perverse i.e. not supported by evidence on record or contrary to what is regarded as normal or reasonable; or is wholly unsustainable in law. Such general restrictions are essential to remind the appellate court that an accused is presumed to be innocent unless proven guilty beyond a reasonable doubt, and a judgment of acquittal further strengthens such presumption in favour of the accused. However, such restrictions need to be visualised in the context of the particular matter before the appellate court and the nature of the inquiry therein. The same rule with the same rigour cannot be applied in a matter relating 8 2026:HHC:22045 to the offence under Section 138 of the NI Act, particularly where a presumption is drawn that the holder has received the cheque for the discharge, wholly or in part, of any debt or liability. Of course, the accused is entitled to bring on record the relevant material to rebut such presumption and to show that preponderance of probabilities are in favour of his defence but while examining if the accused has brought about a probable defence so as to rebut the presumption, the appellate court is certainly entitled to examine the evidence on record in order to find if preponderance indeed leans in favour of the accused. 13. For determination of the point as to whether the High Court was justified in reversing the judgment and orders of the trial court and convicting the appellant for the offence under Section 138 of the NI Act, the basic questions to be addressed are twofold: as to whether the complainant Respondent 2 had established the ingredients of Sections 118 and 139 of the NI Act, so as to justify drawing of the presumption envisaged therein; and if so, as to whether the appellant-accused had been able to displace such presumption and to establish a probable defence whereby, the onus would again shift to the complainant?” 16. The present appeal has to be decided as per the parameters laid down by the Hon’ble Supreme Court. 17. The ingredients of the offence punishable under Section 138 of the NI Act were explained by the Hon’ble Supreme Court in Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul, 2025 SCC OnLine SC 2019 as under: - “5.1.1. In K.R. Indira v. Dr. G. Adinarayana (2003) 8 SCC 300, this Court enlisted the components, aspects and the acts, the concatenation of which would make the offence under Section 138 of the Act complete, to be these (i) drawing of the cheque by a person on an account maintained by him with a 9 2026:HHC:22045 banker, for payment to another person from out of that account for discharge in whole/in part of any debt or liability, (ii) presentation of the cheque by the payee or the holder in due course to the bank, (iii) returning the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque, (iv) giving notice in writing to the drawer of the cheque within 15 days of the receipt of information by the payee from the bank regarding the return of the cheque as unpaid, demanding payment of the cheque amount, and (v) failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the cheque, within 15 days of the receipt of the notice.” 18. The complainant stated in his cross-examination that he was to take ₹3,50,000/- from the accused. The cheque mentions the amount with interest. Learned Trial Court had rightly pointed out that in the absence of the rate of interest and the period for which such interest was charged, it could not be said that an amount of ₹1 lakh was due as the interest on the amount of ₹3,50,000/-. 19. The complainant relied upon the bills (Ext.CW2/P1 to Ext.CW2/P4), Tax Audit Report (Ext.CW2/A) and the ledger account. The Tax Audit Report (Ext.CW2/A) mentions an amount of ₹4,69,657/- due as on 31.03.2012 from Awasthi Electronics, Jogindernagar. The ledger of Awasthi Electronics shows that an amount of ₹4,16,357 was due on 31.03.2011. The cheque was issued 10 2026:HHC:22045 on 04.05.2011. Thus, as per the ledger account, the amount of ₹4,50,000/- was not due on the date of issuance of the cheque. 20. The complainant had stated in his cross-examination that he was to take ₹3,50,000/- from the accused. Thus, the complainant has made different statements regarding the amount due from the accused, and the learned Trial Court was justified in doubting the complainant’s version that the cheque was issued for consideration. 21. 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 complainant was unable to put forth the details of the loan and made contradictory statements, the presumption attached to the cheque will not help him. It was observed: 30. Admittedly, the appellant was able to establish that the signature on the cheque in question was of the respondent and in regard to the decision of this Court in Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Civ) 309: (2019) 2 SCC (Cri) 40, a presumption is to ideally arise. However, in the above-referred context of the factual matrix, the inability of the appellant to put forth the details of the loan advanced, and his contradictory statements, the ratio therein would not impact the present case to the effect of giving rise to the statutory presumption under Section 139 of the NI Act, 1881. The respondent has been able to shift the 11 2026:HHC:22045 weight of the scales of justice in his favour through the preponderance of probabilities. 31. The trial court had rightly observed that the appellant was not able to plead even a valid existence of a legally recoverable debt, as the very issuance of a cheque is dubious based on the fallacies and contradictions in the evidence adduced by the parties. Furthermore, the fact that the respondent had inscribed his signature on the agreement drawn on white paper and not on stamp paper, as presented by the appellant, creates another set of doubts in the case. Since the accused has been able to cast a shadow of doubt on the case presented by the appellant, he has therefore successfully rebutted the presumption stipulated by Section 139 of the NI Act, 1881. 22. It was submitted that the cheque carried with it a presumption that it was issued for consideration to discharge the liability. There can be no dispute with the proposition of law that a cheque carries with it a presumption that it was issued for consideration in discharge of the liability; however, the presumption is rebuttable, and can be rebutted by the cross- examination of the complainant’s witnesses or the evidence led by the accused. 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: 12 2026:HHC:22045 “The peculiar effect of the presumption of law is merely to invoke a rule of law compelling the Jury to 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’.” 23. In the present case, the presumption was rebutted by the complainant’s evidence. 24. Thus, the learned Appellate Court had taken a reasonable view while deciding the appeal, and this Court will not interfere with the reasonable view of the learned Appellate Court even if another view is possible. 25. No other point was urged. 26. In view of the above, the present appeal fails, and the same is dismissed. 27. Record of the learned Trial Court be sent back forthwith, along with a copy of this judgment. (Rakesh Kainthla) Judge 15th June, 2026 (Nikita)