The Himachal Pradesh High Court clarified that, on facts, payment to one partner can discharge the accused’s liability under Section 138 of the NI Act, even if the cheque was issued to the other. The judgment strictly applies the well-settled standards for appellate interference with acquittal and affirms existing Supreme Court precedent; it is binding within Himachal Pradesh and persuasive elsewhere, especially regarding payment in partnership contexts under criminal law.
Summary
| Category | Data |
|---|---|
| Case Name | CR.A/288/2012 of KAMAL PRAKASH Vs GIAN PARKASH SHARMA |
| CNR | HPHC010092822012 |
| Date of Registration | 01-01-2012 |
| Decision Date | 30-10-2025 |
| Disposal Nature | Dismissed |
| Judgment Author | Hon’ble Mr. Justice Rakesh Kainthla |
| Court | High Court of Himachal Pradesh |
| Precedent Value | Binding within Himachal Pradesh; persuasive elsewhere |
| Overrules / Affirms |
|
| Type of Law | Criminal Law / Negotiable Instruments Act / Law of Partnership |
| Questions of Law | Whether payment to one partner (not cheque payee) amounts to discharge of liability under Section 138 NI Act |
| Ratio Decidendi |
The presumption under Sections 118(a) and 139 of the NI Act is rebuttable if evidence shows liability is discharged. Payment made to the complainant’s partner Yan Singh Sonkhla, with whom the complainant jointly executed the work, constitutes discharge under Section 25 of the Partnership Act. The receipt by the partner and subsequent evidence rebuts the presumption in favour of the payee. Appellate interference with acquittal is limited to cases of patent perversity, misreading/omission of material evidence, or when no two views are reasonably possible. The judgment found none of these grounds satisfied and affirmed acquittal. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court |
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| Facts as Summarised by the Court |
Appellant and respondent, both contractors, worked as partners on an airport project. The accused issued a ₹1,00,000 cheque to the complainant, which was dishonoured for insufficient funds. The accused claimed to have made cash payment to the complainant’s partner, which was evidenced by a receipt. Trial court convicted accused; appellate court set aside conviction based on proof of payment to the partner. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts in Himachal Pradesh |
| Persuasive For | Other High Courts, Supreme Court, especially in cases involving payment to/among partners under NI Act |
| Follows |
|
What’s New / What Lawyers Should Note
- Clarifies that payment made to a complainant’s partner can discharge the accused’s liability under Section 138 of the NI Act if the work was executed jointly.
- Reaffirms that presumption under NI Act is rebuttable once credible evidence of discharge is led.
- Strictly applies the principles governing appellate court interference with acquittals: only where perversity or misreading/omission of evidence is manifest.
- Recognises the application of Section 25 of the Partnership Act to criminal liability in cheque dishonour cases involving partnership work.
Summary of Legal Reasoning
- The court began by reiterating the standard from Supreme Court precedents (Surendra Singh; Babu Sahebagouda Rudragoudar; Rajesh Prasad) that appellate interference with acquittal is narrowly confined.
- It reviewed the facts and held that complainant’s own admissions established a partnership between him and Yan Singh Sonkhla for execution of the contract work.
- Evidence (oral testimony, receipt Ex.DX) showed payment of the relevant sum to the complainant’s partner, which under Section 25 of the Partnership Act constituted discharge.
- The court emphasised that presumptions under Sections 118(a) and 139 NI Act are rebuttable; once rebutted by credible evidence, the presumption “disappears” and cannot form the basis for conviction.
- On this basis, the learned appellate court’s view acquitting the accused was a “possible view” and interference on appeal was unwarranted.
Arguments by the Parties
Petitioner:
- Payment made to a partner does not discharge the liability when cheque was issued to the complainant.
- The cheque was in the complainant’s name, not the firm, so the accused remained liable.
- The appellate court erred in relying on payment to partner.
Respondent:
- Complainant and Yan Singh Sonkhla worked together and jointly executed the work.
- Payment to Yan Singh Sonkhla, as a partner, satisfied the liability.
- The appellate court’s view is reasonable and should not be interfered with.
Factual Background
The appellant and respondent, both contractors, jointly executed excavation work at Bhunter Airport. A cheque for ₹1,00,000 was issued by the accused to the complainant for this work but was dishonoured for insufficient funds. The accused claimed to have already paid this amount in cash to the complainant’s partner, which was corroborated by a receipt. The trial court convicted the accused under Section 138 NI Act, but the appellate court acquitted him on the ground that the liability had been discharged by payment to the partner.
Statutory Analysis
- Sections 118(a) and 139 of the Negotiable Instruments Act: Discussed presumption of consideration and liability attached to issued cheques; clarified that such presumption is rebuttable.
- Section 25 of the Partnership Act: Interpreted to mean that payment made to one partner discharges liability to the partnership.
- Section 378 of CrPC: Applied Supreme Court precedents regarding scope of appellate interference with acquittals.
Alert Indicators
- ✔ Precedent Followed – The judgment strictly follows established Supreme Court precedent on standards for appellate review of acquittals and the nature of presumptions under the NI Act.