Suresh Kumar vs Asha Ram

Headnote AI-drafted · Reviewed and approved

The petitioner/accused was convicted by the learned Judicial Magistrate First Class, Shillai, District Sirmour, H.P. for an offence punishable under Section 138 of the Negotiable Instruments Act and sentenced to undergo simple imprisonment for six months and pay compensation of ₹1,67,000/-. The complainant alleged that the accused had borrowed ₹1,60,000/- and issued a cheque for the said amount on 31.12.2018, which was dishonoured with the endorsement 'funds insufficient'. The accused contended that the cheque was issued merely as security and that he had borrowed only ₹50,000/-. The Trial Court, relying upon the promissory note executed by the accused admitting receipt of ₹1,60,000/- and the statutory presumption under the NI Act, held the accused guilty. The learned Additional Sessions Judge, Paonta Sahib, upheld the conviction and sentence on appeal.

The accused filed the present revision before the High Court asserting that the learned Courts below erred in appreciating the material on record, that the presumption attached to the cheque was rebutted by the complainant's own evidence showing only ₹1,00,000/- was advanced, and that the complainant was engaged in unlicensed money lending making the complaint not maintainable. The respondent/complainant contended that the promissory note executed by the accused conclusively proved the receipt of ₹1,60,000/-, and that even a cheque issued as security would attract liability under Section 138 of the NI Act.

The Himachal Pradesh High Court considered the rival submissions of the parties on the question of whether the learned Courts below had correctly appreciated the evidence and correctly applied the statutory presumption under the Negotiable Instruments Act in upholding the conviction of the accused.

Catchwords: Negotiable Instruments Act · Section 138 · dishonour of cheque · funds insufficient · promissory note · statutory presumption · rebuttal of presumption · cheque issued as security · money lending · criminal revision

Cheque dishonour (Section 138 NI Act) Promissory notes