Can Revisional Courts Reappreciate Evidence and Interfere with Concurrent Convictions under Section 138 NI Act? — Precedent Affirmed, Limited Revisional Interference Upheld

The Himachal Pradesh High Court reaffirmed that Revisional Courts under Section 397 CrPC cannot reappreciate evidence or substitute concurrent factual findings of the Trial and Appellate Courts unless there is manifest perversity or error of law. Existing Supreme Court precedents on presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act and the scope of revisional jurisdiction are upheld, providing binding clarity for cheque dishonour prosecutions.

Summary

Practical Impact

What’s New / What Lawyers Should Note

• Confirms: Revisional courts cannot reappreciate evidence or substitute the concurrent factual findings of Trial and Appellate Courts in Section 138 NI Act cases unless findings are perverse or legally erroneous.
• Clarifies: Mandatory presumptions under Sections 118(a) and 139 of the NI Act operate once execution and signature of the cheque are admitted; accused bears the evidentiary burden to rebut by showing improbability or nonexistence of consideration on preponderance of probabilities.
• Upholds: Default sentence of imprisonment in case of non-payment of compensation (awarded under Section 357(3) CrPC) is legally permissible; mere denial in Section 313 CrPC statement is not enough to rebut presumption.
• Reiterates: Service of notice under Section 138 NI Act is presumed valid when returned unclaimed/refused/”door locked” unless accused proves otherwise.
• Procedural Point: Legal heirship of complainant can be proved by unchallenged oral testimony unless specifically contested with evidence.

Summary of Legal Reasoning

• The High Court referred extensively to Supreme Court precedents (Malkeet Singh Gill, State of Gujarat v. Dilipsinh Kishorsinh Rao, Amit Kapoor v. Ramesh Chander, Kishan Rao v. Shankargouda, Bir Singh v. Mukesh Kumar) to delimit revisional powers under Section 397 CrPC, emphasizing they cannot be equated with appellate powers.
• The appellate and trial courts were found to have correctly applied the mandatory legal presumptions under Sections 118(a) and 139, in line with authorities such as APS Forex Services, N. Vijay Kumar v. Vishwanath Rao N., and Kumar Exports v. Sharma Carpets.
• The court highlighted that the burden on the accused is to rebut the presumption on a preponderance of probabilities, not by mere denial, and that direct or circumstantial evidence is required.
• It reaffirmed, via Mandvi Cooperative Bank, D. Vinod Shivappa, C.C. Allavi Haji, and Krishna Swaroop Agarwal, the principles relating to presumption of service of notice where returned unclaimed or refused.
• The court relied on Kalamani Tex and K.A. Abbas v. Sabu Joseph to hold that awarding default imprisonment for non-payment of compensation under Section 357(3) CrPC is valid, provided quantum is reasonable and within the accused’s ability to pay.
• Found all evidentiary, statutory, and procedural requirements for conviction under Section 138 NI Act satisfied; noticed no patent defect or perversity.

Arguments by the Parties

Petitioner

• The ₹3,00,000/- taken was already returned to the complainant.
• The agreement to sell was not proved; Yashwant was not proved to be a legal heir.
• The deceased was residing with his son Arun, not Yashwant.
• The complainant failed to prove financial capacity to pay ₹7,50,000/-.
• Courts below failed to appreciate material on record; prayed for acquittal.

Respondent

• No appearance recorded (Nemo for respondents).
• Testimonial assertions by Yashwant, legal heir, as summarized in the facts.

Factual Background

• The complainant entered into a land sale agreement with the accused, paid ₹3,00,000/- by cheque and ₹4,50,000/- in cash as advance, with sale deed to be executed by 31st July 2015.
• Sale deed was not executed; accused agreed to refund and issued a cheque for ₹7,50,000/-, which was dishonoured for “funds insufficient”.
• Statutory notice was issued and returned with endorsements like “door locked”, “refusal”.
• During trial, the complainant died; legal heir Yashwant testified.
• Both Trial and Appellate Courts convicted and sentenced the accused under Section 138 NI Act.

Statutory Analysis

• Section 397 CrPC: Revisional power is supervisory, not appellate; can only correct patent errors or jurisdictional mistakes.
• Sections 118(a) and 139 NI Act: Mandatory presumptions of consideration and discharge of liability arise when execution and signature not disputed; burden shifts to the accused.
• Section 146 NI Act: Presumption in favour of bank memo’s correctness as to cheque dishonour.
• Section 138 NI Act: Requirements—cheque issued for discharge of liability, presentation, dishonour, notice, and failure to pay within statutory period—were detailed with reference to Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul (2025 SCC OnLine SC 2019).
• Section 357(3) CrPC: Permits order for compensation; courts may impose default sentence per K.A. Abbas v. Sabu Joseph and others.
• Section 27 General Clauses Act: Presumption of service when notice sent to correct address by registered post.

Dissenting / Concurring Opinion Summary

No concurring or dissenting opinions recorded.

Procedural Innovations

No new procedural innovations or guidelines were set by the judgment.

Alert Indicators

• ✔ Precedent Followed – Existing legal principles regarding the scope of revisional jurisdiction under Section 397 CrPC, and presumptions under the NI Act, were affirmed and comprehensively applied.