The High Court clarifies that while the admission of signature on a cheque raises a presumption under Section 139 of the Negotiable Instruments Act, this presumption is rebuttable by evidence to the contrary. Once such evidence is produced, the burden shifts back to the complainant. The ruling upholds prevailing Supreme Court precedents and sets a binding clarification on the limits of revisional jurisdiction in matters involving concurrent findings.
Summary
| Category | Data |
|---|---|
| Case Name | CR.R/621/2024 of KIRAN KUMAR Vs NARESH KUMAR AND ANOTHER |
| CNR | HPHC010480432024 |
| Date of Registration | 24-09-2024 |
| Decision Date | 31-10-2025 |
| Disposal Nature | Allowed |
| Judgment Author | HON’BLE MR. JUSTICE RAKESH KAINTHLA |
| Court | High Court of Himachal Pradesh |
| Precedent Value | Clarificatory and binding on subordinate courts in Himachal Pradesh |
| Overrules / Affirms | Affirms and applies Supreme Court precedent; sets aside lower courts’ concurrent findings in this case |
| Type of Law | Criminal, Negotiable Instruments Act (Section 138) |
| Questions of Law |
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| Ratio Decidendi | The High Court held that the presumption arising from the admission of signature on a cheque under Section 139 of the NI Act is rebuttable. Once the accused produces evidence that casts doubt on the existence of a legally enforceable debt or liability, the initial presumption disappears. The burden then shifts to the complainant to prove his case beyond a reasonable doubt. The judgment also reiterates that the scope of revisional jurisdiction is limited and does not permit reappreciation of evidence except in cases of perversity or glaring legal error. The High Court, on examining the facts, found inconsistencies in the complainant’s version and accepted the defence evidence, thus setting aside the convictions of the courts below. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court | The Court relied on clear Supreme Court authority establishing that the presumption under Section 139 is rebuttable and vanishes once evidence to the contrary is presented, at which point the burden reconstructs onto the complainant. The Court also cited established jurisprudence restricting the revisional jurisdiction to cases of patent illegality, perversity, or miscarriage of justice. |
| Facts as Summarised by the Court | The complainant alleged he purchased an earth mover from the accused, and after issues regarding delivery, the accused issued a cheque for ₹27,00,000/-, which was dishonoured. Both the trial and appellate courts convicted the accused under Section 138 NI Act. The accused’s defence was that the cheque was given as a blank security cheque unrelated to the alleged transaction and that the debt had been repaid. Defence witnesses supported this narrative, including bank transfer evidence. The High Court found material inconsistencies in the complainant’s case and accepted the defence evidence rebutting the presumption under Section 139. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within Himachal Pradesh |
| Persuasive For | Other High Courts, particularly in reviewing matters involving Section 138 NI Act and revisional powers |
| Follows |
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What’s New / What Lawyers Should Note
- Reiterates that the Section 139 NI Act presumption (cheque issued for liability) is rebuttable; once evidence is produced by the accused suggesting doubt, the presumption vanishes.
- Clarifies that after rebuttal, the burden of proof returns to the complainant, who must establish the debt beyond reasonable doubt.
- Provides a detailed application of Supreme Court precedent to factual inconsistencies and evidentiary gaps at the trial level.
- Reaffirms limited scope for revisional interference: the revisional court is not to reappreciate evidence unless clear perversity or miscarriage of justice is demonstrated.
- Trial and appellate courts must not rely mechanically on the statutory presumption if credible defence evidence is available.
Summary of Legal Reasoning
- The High Court examined Supreme Court precedents clarifying that a signature on a cheque raises a statutory presumption under Section 139 of the NI Act, but this may be rebutted by the accused through evidence that casts doubt on the existence of any enforceable liability.
- The court cited Rajesh Jain v. Ajay Singh and N. Vijay Kumar v. Vishwanath Rao N. to hold that when defence evidence is produced, the presumption “disappears” and the complainant must prove his case beyond reasonable doubt.
- It highlighted inconsistencies in the complainant’s statements, non-production of documents, unexplained payment transactions, and failure to prove the alleged debt.
- The Court determined on the facts that the accused’s evidence (including witness testimony and proof of repayment) rebutted the presumption, and the complainant failed to discharge his resultant burden.
- Cited Malkeet Singh Gill, State of Gujarat v. Dilipsinh Kishorsinh Rao, Kishan Rao v. Shankargouda, and Bir Singh v. Mukesh Kumar in support of the limited scope of revisional jurisdiction, disallowing reappreciation of evidence unless findings are perverse or grossly erroneous.
- Ultimately, the High Court set aside the conviction, acquitted the accused, and ordered refund of the fine.
Arguments by the Parties
Petitioner
- The complainant failed to prove his version beyond a reasonable doubt.
- Defence evidence, including repayment and the use of a blank security cheque, was ignored by the lower courts.
- No credible case of liability was proven by the complainant.
Respondent No. 1 (Complainant)
- Issuance of the cheque was not disputed.
- Lower courts correctly relied on the statutory presumption under Section 139.
- Accused failed to rebut the presumption with satisfactory evidence.
Respondent No. 2 (State)
- Supported the findings and sentences of the lower courts.
- Submitted that no interference was required by the High Court.
Factual Background
The complainant alleged that he purchased a Mahindra earth mover from the accused in March 2012, with a payment of margin money and a bank loan. The accused supplied an old machine instead of a new one and assured replacement. After some time, the accused took back the old machine and issued a cheque for ₹27,00,000 to the complainant, which was dishonoured for insufficient funds. A complaint under Section 138 NI Act was filed when the legal notice went undelivered. The defence argued the cheque was a security instrument for a loan that had been repaid. Both trial and appellate courts convicted the accused before the matter reached revision.
Statutory Analysis
- Section 138 of the Negotiable Instruments Act: Penalises dishonour of cheques for insufficiency of funds.
- Section 139 of the NI Act: Raises a rebuttable presumption that a cheque was issued for discharge of liability; the presumption is lost upon the accused producing sufficient evidence to raise doubt.
- Section 397 CrPC: Limits revisional jurisdiction to correction of patent illegality, not reappreciation of concurrent factual findings except in egregious cases.
- Section 437-A CrPC: Addresses bonds to be furnished at the conclusion of proceedings.
Dissenting / Concurring Opinion Summary
No dissenting or concurring opinions are recorded in the judgment.
Procedural Innovations
- Directions given for refund of fine deposited by the accused, conditional on further appeal outcomes.
- Directions regarding bonds in accordance with Section 437-A CrPC (and reference to corresponding provision in BNSS, 2023).
Alert Indicators
- ✔ Precedent Followed – Existing Supreme Court law on rebuttable presumption under Section 139 and limits on revisional jurisdiction is applied and clarified.