The Himachal Pradesh High Court reaffirms that, in the absence of proof of the date of service of the statutory notice under Section 138 NI Act, courts must presume service after 30 days of dispatch, and any complaint filed before expiry of 15 days from the deemed date is premature and must be dismissed. The court further clarifies that the presumption of legally enforceable debt is rebuttable, and if the accused raises serious doubt about the complainant’s financial capacity, the burden shifts back to the complainant. This judgment is binding within Himachal Pradesh and serves as a clarifying authority on procedural and evidentiary requirements under Section 138 NI Act.
Summary
| Category | Data |
|---|---|
| Case Name | CR.R/119/2020 of Dyal Negi @ Hardyal Vs ANIL KUMAR |
| CNR | HPHC010075882020 |
| Date of Registration | 29-02-2020 |
| Decision Date | 31-10-2025 |
| Disposal Nature | Allowed |
| Judgment Author | Hon’ble Mr. Justice Rakesh Kainthla |
| Court | High Court of Himachal Pradesh |
| Precedent Value | Binding within the State; persuasive elsewhere |
| Overrules / Affirms | Applies and affirms Supreme Court and High Court precedents |
| Type of Law | Criminal Law (Section 138, NI Act; CrPC revisional jurisdiction) |
| Questions of Law |
|
| Ratio Decidendi |
The complaint under Section 138 NI Act must be filed only after 15 days from service of statutory notice; if actual date of service is unproved, courts must deem service on the 30th day after dispatch. Filing a complaint before expiry of such period renders it premature and not maintainable. Further, the presumption of legally enforceable debt in favour of the complainant is rebuttable; if the accused raises serious doubts about financial capacity, failure to prove source and capacity can rebut such presumption, justifying acquittal. The revisional court’s jurisdiction is limited and cannot reappreciate evidence unless findings are perverse or manifestly erroneous. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court | Revisional jurisdiction is narrow, not appellate; service of statutory notice is presumed after 30 days if date is not proved; complaint before expiry of 15 days from deemed service is not maintainable; presumption under Sections 118/139 NI Act is rebuttable on serious challenge to complainant’s financial capacity. |
| Facts as Summarised by the Court | The accused issued a cheque to the complainant; cheque was dishonoured for funds insufficient; statutory notice was sent, but delivery date was unproven; complaint was filed before expiry of 15 days from presumed service; complainant’s financial capacity to advance the amount was challenged and remained unproven; trial and appellate courts convicted accused; revision was allowed, conviction set aside and accused acquitted. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts in the State of Himachal Pradesh |
| Persuasive For | High Courts in other States and Supreme Court |
| Follows |
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What’s New / What Lawyers Should Note
- Reaffirms that, where no date of service for Section 138 NI Act statutory notice is available, the court must presume service on the 30th day from dispatch.
- Complaints filed before the expiry of 15 days after the deemed (or real) date of service of notice are premature, and cognizance cannot be taken; such complaints are liable to be dismissed.
- If a complainant’s financial capacity to advance the loan/amount is seriously challenged, mere presumption under Sections 118/139 NI Act is insufficient—positive proof is required; cross-examination can suffice to rebut the presumption.
- Revisional courts cannot re-appreciate evidence or substitute their opinion unless findings are perverse or there is an error of law.
- Multiple Supreme Court and High Court precedents specifically followed and reinforced; this judgment consolidates and affirms those procedural and evidentiary mandates.
Summary of Legal Reasoning
- The court outlined the settled law, relying on Supreme Court judgments, that revisional jurisdiction is limited to patent defects, errors of law or jurisdiction, or perverse findings—not a reappreciation of factual evidence (Malkeet Singh Gill, Amit Kapoor, Bir Singh).
- Citing Kaveri Plastics and the classic five-step test, the court noted that the ingredients of Section 138 NI Act must all be strictly satisfied, including proper service and timing of complaint.
- Because the complainant failed to prove the actual date of service of statutory notice and only an undated acknowledgment was available, the court invoked Subodh S. Salaskar and related precedents to hold that service must be presumed after thirty days from dispatch.
- Complaint was filed before the expiry of fifteen days from the deemed date of service; as held in Gajanand Burange and Yogendra Pratap Singh, such a complaint is not just premature but invalid, and courts cannot take cognizance.
- The court then emphasized, following Tedhi Singh, Basalingappa, John K. Abraham, Dattatraya v. Sharanappa, that the statutory presumption in favour of the complainant is rebuttable. Where the accused raises serious questions about the complainant’s financial capacity and the complainant is unable to produce satisfactory proof, the presumption is displaced and acquittal must follow.
- Cross-examination in this case cast real doubt on source, means, and documentation of the loan. The complainant’s explanations were vague or unsubstantiated.
- Consequently, both on procedural (prematurity) and substantive (failure to prove financial capacity and rebutted presumption) grounds, conviction had to be set aside.
Arguments by the Parties
Petitioner (Accused):
- The complainant failed to establish the existence of any legally enforceable debt or liability.
- No evidence that complainant had financial capacity to advance ₹8,00,000/-.
- Statutory notice was undated; no proof of actual date of service.
- Without such date, the complaint was filed prematurely and is not maintainable.
Respondent (Complainant):
- Accused admitted receipt of notice.
- Accused did not raise plea of prematurity before lower courts; impermissible to raise in revision.
- Trial and appellate courts correctly appreciated evidence; should not be interfered.
Factual Background
The complainant and accused were known to each other. The accused borrowed ₹8,00,000/- and issued a post-dated cheque in discharge of liability. The cheque was dishonoured due to insufficient funds. Legal notice was sent to the accused, who replied but failed to pay. The complainant filed a complaint under Section 138 NI Act. During the trial, the accused denied liability and questioned the complainant’s financial capacity. Both the trial and appellate courts convicted the accused, leading to the present revision.
Statutory Analysis
- Section 138, Negotiable Instruments Act: Offence comprises (i) issuance of cheque, (ii) dishonour, (iii) receipt of due statutory notice, (iv) failure to pay within 15 days of receipt.
- Section 142, NI Act: Cognizance can be taken only upon a written complaint made by payee/holder in due course after the cause of action accrues (i.e., after statutory time).
- Sections 118 & 139, NI Act: Presumptions in favour of the holder, but such presumption is rebuttable and disappears upon sufficient evidence to the contrary.
- Section 397 CrPC: Revisional jurisdiction is to rectify errors of law, jurisdiction, or patent defects, not for full reconsideration of facts.
Procedural Innovations
- Expressly directs that, where the date of service of statutory notice is unproven, courts must presume service after 30 days from dispatch and calculate limitation accordingly.
- Clarifies evidentiary burden when financial capacity is challenged and cross-examined.
Alert Indicators
- ✔ Precedent Followed