2026:HHC:31515 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Cr. Appeal (A-SB) No. 40 of 2026 Reserved on: 24.7.2026 Date of Decision: 30.7.2026. Devender Chauhan …. Appellant Versus Sheela Devi …. Respondent Coram Hon’ble Mr Justice Rakesh Kainthla, Judge. Whether approved for reporting?1 No. For the Appellant : Mr Jeevesh Sharma, Advocate. For the Respondent : None. Rakesh Kainthla, Judge The present appeal is directed against the judgment dated 12.01.2026, passed by the learned Additional Sessions Judge- II, Shimla, District Shimla, HP, Camp at Theog (learned Appellate Court) vide which the judgment of conviction dated 20.01.2024 and order of sentence dated 19.02.2024 (not placed on record) were ordered to be set aside. (The parties shall hereinafter be referred to in 1 Whether reporters of Local Papers may be allowed to see the judgment? Yes. 2 2026:HHC:31515 the same manner as they were arrayed before the learned Trial Court for convenience). 2. Briefly stated, the facts giving rise to the present appeal are that the complainant filed a complaint before the 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 accused were known to each other. The complainant advanced ₹2,50,000/- to the accused in the first week of September, 2017, as per her demand. The accused issued a post-dated cheque (Ex.C2/CW1) for a sum of ₹2,50,000/- to repay the money. The complainant presented the cheque at his bank, but it was dishonoured with an endorsement ‘funds insufficient’. The complainant served a notice (Ex.C4/CW1) on the accused, but the accused failed to repay the money despite the receipt of the notice. Hence, he filed a complaint before the learned Trial Court for taking action against the accused 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 her for the commission of an offence 3 2026:HHC:31515 punishable under Section 138 of the NI Act, to which she pleaded not guilty and claimed trial. 4. The complainant examined himself (CW1) to prove the complaint. 5. The accused in her statement recorded under Section 313 of the Code of Criminal Procedure (Cr.PC) denied the complainant's case in its entirety. She examined Rakesh Kumar (DW1), Ashutosh Sharma (DW2) and herself (DW3) to prove her defence. 6. Learned Trial Court held that the accused admitted the issuance of the cheque and her signatures on it. Therefore, a presumption would arise that the cheque was issued to discharge the debt/liability. The accused claimed that she had repaid part of the money, but this payment was made before the issuance of the cheque and could not have been stated to be towards the repayment of the money shown in the cheque. The defence taken by the accused was contradictory and insufficient to rebut the presumption attached to the cheque. The cheque was dishonoured with an endorsement ‘insufficient funds’. The notice was served upon the accused. Hence, the learned Trial Court convicted and 4 2026:HHC:31515 sentenced the accused for the commission of an offence punishable under Section 138 of the NI Act. 7. Being aggrieved by the judgment and order passed by the learned Trial Court, the accused filed an appeal which was decided by the learned Additional Session Judge-II, Shimla, District Shimla, Camp at Theog (learned Appellate Court). The learned Appellate Court held that the defence of the accused proved that she had made payment of various amounts to the complainant, which were not explained by the complainant. The payments made the defence of the accused highly probable that the transaction had not taken place in the year 2017 but much before that, and the cheque was issued as a security which was misused despite the payment of the money. The accused is required to prove her defence based on the balance of probability, and the evidence on record was sufficient to rebut the presumption. Learned Trial Court erred in holding that all the ingredients of the commission of an offence punishable under Section 138 of the NI Act were duly satisfied. Hence, the learned Appellate Court accepted the appeal and set aside the judgment of conviction and order of sentence passed by the learned Trial Court. 5 2026:HHC:31515 8. Being aggrieved by the judgment passed by the learned Appellate Court, the complainant has filed the present application seeking leave to appeal. It has been asserted that the learned Appellate Court erred in appreciating the material placed before the Court. The accused admitted the signatures on the cheque and a presumption arose that the cheque was issued for consideration to discharge the debt/liability. The learned Appellate Court relied upon the bank transfers made by the accused in the complainant’s favour, but these payments were made before the issuance of the cheque and could not have been adjusted towards the amount mentioned in the cheque. The plea taken by the accused that a security cheque issued by her was misused was not probable because the accused had neither filed any FIR nor made any complaint to the bank regarding the misuse of the cheque. Therefore, it was prayed that the present application be allowed and the leave to appeal be granted. 9. Mr Jeevesh Sharma, learned counsel for the appellant, submitted that the learned Appellate Court erred in appreciating the material placed before it. The accused admitted the issuance of the cheque and a presumption would arise that the cheque was issued for consideration to discharge the debt/liability. Learned 6 2026:HHC:31515 Appellate Court erred in holding that the evidence led by the accused was sufficient to rebut the presumption. The payments proved on record were made before the issuance of the cheque and could not have been adjusted towards the amount mentioned in the cheque. Learned Appellate Court erred in reversing a well-reasoned judgment passed by the learned Trial Court. Hence, he prayed that the present application be allowed and the leave to appeal be granted. 10. I have given a considerable thought to the submissions made at the bar and have gone through the records carefully. 11. The accused admitted on oath that she had issued the cheque in favour of the complainant, and that the cheque (Ex.C2/CW1) bore her signature inside red circle ‘A’. Therefore, the learned Trial Court had rightly held that the signatures on the cheque and issuance of the cheque were not disputed. It was laid down by the Hon'ble Supreme Court in APS Forex Services (P) Ltd. v. Shakti International Fashion Linkers (2020) 12 SCC 724, that when the issuance of a cheque and signature on the cheque are not disputed, a presumption would arise that the cheque was issued in discharge of the legal liability. It was observed: - 7 2026:HHC:31515 “9. Coming back to the facts in the present case and considering the fact that the accused has admitted the issuance of the cheques and his signature on the cheque and that the cheque in question was issued for the second time after the earlier cheques were dishonoured and that even according to the accused some amount was due and payable, there is a presumption under Section 139 of the NI Act that there exists a legally enforceable debt or liability. Of course, such a presumption is rebuttable. However, to rebut the presumption, the accused was required to lead evidence that the full amount due and payable to the complainant had been paid. In the present case, no such evidence has been led by the accused. The story put forward by the accused that the cheques were given by way of security is not believable in the absence of further evidence to rebut the presumption, and more particularly, the cheque in question was issued for the second time after the earlier cheques were dishonoured. Therefore, both the courts below have materially erred in not properly appreciating and considering the presumption in favour of the complainant that there exists a legally enforceable debt or liability as per Section 139 of the NI Act. It appears that both the learned trial court as well as the High Court have committed an error in shifting the burden upon the complainant to prove the debt or liability, without appreciating the presumption under Section 139 of the NI Act. As observed above, Section 139 of the Act is an example of a reverse onus clause and therefore, once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always a presumption in favour of the complainant that there exists legally enforceable debt or liability and thereafter, it is for the accused to rebut such presumption by leading evidence.” 12. This position was reiterated in N. Vijay Kumar v. Vishwanath Rao N., 2025 SCC OnLine SC 873, wherein it was held as under: 8 2026:HHC:31515 “6. Section 118 (a) assumes that every negotiable instrument is made or drawn for consideration, while Section 139 creates a presumption that the holder of a cheque has received the cheque in discharge of a debt or liability. Presumptions under both are rebuttable, meaning they can be rebutted by the accused by raising a probable defence.” 13. A similar view was taken in Sanjabij Tari v. Kishore S. Borcar, 2025 SCC OnLine SC 2069, wherein it was observed: “ONCE EXECUTION OF A CHEQUE IS ADMITTED, PRESUMPTIONS UNDER SECTIONS 118 AND 139 OF THE NI ACT ARISE 15. In the present case, the cheque in question has admittedly been signed by the Respondent No. 1-Accused. This Court is of the view that once the execution of the cheque is admitted, the presumption under Section 118 of the NI Act that the cheque in question was drawn for consideration and the presumption under Section 139 of the NI Act that the holder of the cheque received the said cheque in discharge of a legally enforceable debt or liability arises against the accused. It is pertinent to mention that observations to the contrary by a two-Judge Bench in Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54, have been set aside by a three-Judge Bench in Rangappa (supra). 16. This Court is further of the view that by creating this presumption, the law reinforces the reliability of cheques as a mode of payment in commercial transactions. 17. Needless to mention that the presumption contemplated under Section 139 of the NI Act is rebuttable. However, the initial onus of proving that the cheque is not in discharge of any debt or other liability is on the accused/drawer of the cheque [See: Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197]. 14. Thus, the Court has to start with the presumption that the cheque was issued for consideration in discharge of the 9 2026:HHC:31515 debt/liability, and the burden shifts to the accused to rebut this presumption. 15. The accused stated that she had taken a loan of ₹1,40,000/- in the year 2015. She had returned ₹1,00,000/- through cheque and ₹40,000/- in cash. She had handed over a blank cheque to the complainant, which was misused by him. 16. Ashutosh Sharma (DW2)) and Rakesh Kumar (DW1) brought the record and proved that the complainant had paid ₹8,000/- on 01.07.2016, ₹8,000/- on 02.08.2016, ₹3,600/- on 03.04.2017, ₹50,000/- on 21.04.2016, ₹50,000/- on 07.05.2016, and ₹7000/- on 01.06.2016. It was submitted that these payments were made before the issuance of the cheque and could not have been adjusted towards the amount mentioned in the cheque. This submission will not help the complainant. The complainant stated that the accused had borrowed ₹2,50,000/- from him in September 2017. He has not stated that any other amount was borrowed by the accused from him which was repaid by the accused. Therefore, the complainant failed to explain the payments received by him from the accused and the learned Appellate Court was justified in holding that he was not disclosing the complete truth before the Court. The 10 2026:HHC:31515 documentary evidence showed that payments were made in the year 2016-2017, and in the absence of any explanation regarding the payments received by the complainant from the accused, the explanation provided by the accused has to be accepted as correct that the money was taken in the year 2015, and the payments were made towards its repayment. This was a probable view that could have been taken based upon the material placed on record. 17. It was submitted that the learned Appellate Court had not taken note of the presumption. This submission cannot be accepted. The learned Appellate Court noticed the presumption and held that the evidence on record was sufficient to rebut the presumption. 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 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 11 2026:HHC:31515 presumption ‘disappears as a rule of law and the case is in the Jury's hands free from any rule’.” 18. Therefore, it was impermissible to rely upon the presumption after the evidence was brought on record. 19. In view of the above, the applicant/complainant has no arguable case in his favour, and the leave to appeal cannot be granted. Hence, the present application fails and is dismissed. Cr. Appeal (A-SB) No. 40 of 2026 20. Since the application to grant leave to appeal has been dismissed, the present appeal does not survive and is dismissed. (Rakesh Kainthla) Judge 30th July, 2026 (Chander)