Reserved On: 12.09.2025 vs Baldev Chand

.

Sita Ram ...Petitioner

Versus

Baldev Chand ...Respondent

of Coram Hon'ble Mr Justice Rakesh Kainthla, Judge. Whether approved for reporting?1 No.

For the Petitioner rt : Mr G.R. Palsra, Advocate. For the Respondent : Mr H.S. Rangra, Advocate.

Rakesh Kainthla, Judge

The present revision is directed against the judgment

dated 08.11.2024, passed by learned Sessions Judge, Mandi,

District Mandi, H.P. (learned Appellate Court) vide which the

appeal filed by the petitioner (accused before learned Trial Court)

was dismissed and the judgment of conviction and order of

sentence dated 02.07.2024, passed by learned Additional Chief

Judicial Magistrate, Court No.1, Mandi, District Mandi, H.P.

(learned Trial Court), were upheld. (Parties shall hereinafter be

1 Whether reporters of Local Papers may be allowed to see the judgment? Yes.

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referred to in the same manner as they were arrayed before the

learned Trial Court for convenience.)

.

2. Briefly stated, the facts giving rise to the present

petition are that the complainant filed a complaint against the

accused before the learned Trial Court for the commission of an

offence punishable under Section 138 of the Negotiable

of Instruments Act (in short, 'NI Act'). It was asserted that the

accused had borrowed ₹2,50,000/- from the complainant for his rt domestic needs for six months. The complainant asked the

accused to return the money after the expiry of six months. The

accused issued a cheque No. 822112 drawn on State Bank of India

for ₹2,50,000/-. The complainant presented the cheque to his

bank on 18.06,2015; however, the cheque was dishonoured with an

endorsement 'funds insufficient'. Memo dated 22.06.2015 was

issued by the bank. The complainant sent a notice to the accused

asking him to repay the amount within fifteen days. The

registered cover containing the notice was returned with an

endorsement that "the addressee had refused to accept the

notice'. Hence, the complaint was filed before the learned Trial

Court against the accused for taking action as per the law.

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3. The learned Trial Court found sufficient reasons to

summon the accused. When the accused appeared, a notice of

.

accusation was put to him for the commission of an offence

punishable under Section 138 of the NI Act, to which he pleaded

not guilty and claimed to be tried.

4. The complainant examined himself (CW1) and Baldev

of Chand (CW-2) to prove his case.

5. The accused, in his statement recorded under Section rt 313 of CrPC, stated that he did not owe anything to the

complainant. A blank and signed cheque was issued to one Shyam

Lal. The accused had paid the money to Shyam Lal. He had no

dealings with the complainant, and the complainant misused the

cheque issued by the accused. He admitted that he had received the

notice. The accused examined himself (DW-1).

6. Learned Trial Court held that the accused had admitted

his signature on the cheque, and the presumption that the cheque

was issued in consideration for the discharge of liability would

arise. The burden would shift upon the accused to rebut the

presumption. The plea taken by the accused that he had issued a

blank cheque to Shyam Lal was not probable. The cheque was

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dishonoured with an endorsement 'funds insufficient'. The notice

was issued to the accused, and it was returned with an

.

endorsement, 'refused', which is deemed service. The accused

failed to repay the amount to the complainant. Hence, he was

convicted of the commission of an offence punishable under

Section 138 of the NI Act and sentenced to undergo simple

of imprisonment for four months, pay a fine of ₹5,00,000/-, and to

further undergo simple imprisonment for one month in default of rt payment of compensation.

7. Being aggrieved by the judgment and order passed by

the learned Trial Court, the accused preferred an appeal, which

was decided by the learned Appellate Court. Learned Appellate

concurred with the findings recorded by the learned Trial Court

that the accused had not disputed the issuance of the cheque, and a

presumption would arise that the cheque was issued for

consideration in discharge of the liability. The accused was

required to rebut the presumption by leading satisfactory

evidence; however, he did not examine Shyam Lal, to whom the

cheque was handed over. Hence, this version was not proved. The

cheque was dishonoured with an endorsement 'funds insufficient'.

The notice was issued to the accused, but it was returned with an

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endorsement 'refused', which is a deemed service of notice.

Hence, the accused was rightly convicted by the learned Trial

.

Court. The sentence of four months and compensation of

₹5,00,000/- was not excessive; therefore, the appeal was

dismissed.

8. Being aggrieved by the judgments and order passed by

of the learned Courts below, the accused has filed the present

revision asserting that the complaint filed by the complainant was rt time-barred. The memo of dishonour was returned on 22.06.2015,

and the legal notice was issued on 09.07.2015 beyond the period of

fifteen days. The complainant admitted that 3-4 cases of

dishonour of cheques were pending before the Court. The

statement of the accused established the plea taken by him, and

this defence was wrongly ignored. The compensation awarded by

the learned Trial Court is excessive. Therefore, it was prayed that

the present revision be allowed and the judgments and order

passed by the learned Courts below be set aside.

9. I have heard Mr G.R. Palsra, learned counsel for the

petitioner/accused, and Mr H.S. Rangra, learned counsel for the

respondent/complainant.

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10. Mr G.R. Palsra, learned counsel for the

petitioner/accused, submitted that the accused stepped into the

.

witness box to prove the plea taken by him that the cheque was

issued as security to Shyam Lal. Learned Courts below ignored this

statement because of the non-examination of Shyam Lal. Shyam

Lal had handed over the cheque to the complainant, and he would

of not have supported the version of the accused. This aspect was

ignored by the learned Courts below. The memo of dishonour was rt issued on 22.06.2015, and the demand notice was issued on

09.07.2025 beyond the period of fifteen days provided under

Section 138(c) of the N. I Act. The learned Trial Court had awarded

excessive compensation. These aspects were ignored by the

learned Courts below. Therefore, he prayed that the present

revision be allowed and the judgments and order passed by the

learned Courts below be set aside.

11. Mr H.S. Rangra, learned counsel for the respondent,

submitted that the accused admitted his signature on the cheque.

The learned Court below had rightly held that a presumption

would arise that the cheque was issued for consideration to

discharge the liability. The burden is upon the accused to rebut the

presumption. The plea taken by him that the cheque was handed

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over to Shyam Lal, who had handed it over to the complainant,

was not proved without the examination of Shyam Lal. Learned

.

Courts below had taken a reasonable view based on the material

produced before them, and this Court should not interfere with the

concurrent findings of fact. Therefore, he prayed that the present

petition be dismissed.

of

12. I have given considerable thought to the submissions

made at the bar and have gone through the records carefully.

13. rt It was laid down by the Hon'ble Supreme Court in

Malkeet Singh Gill v. State of Chhattisgarh, (2022) 8 SCC 204: (2022)

3 SCC (Cri) 348: 2022 SCC OnLine SC 786 that a revisional court is

not an appellate court and it can only rectify the patent defect,

errors of jurisdiction or the law. It was observed at page 207-

"10. Before adverting to the merits of the contentions, at the

outset, it is apt to mention that there are concurrent findings of conviction arrived at by two courts after a detailed appreciation of the material and evidence brought

on record. The High Court in criminal revision against conviction is not supposed to exercise the jurisdiction like the appellate court, and the scope of interference in revision is extremely narrow. Section 397 of the Criminal Procedure Code (in short "CrPC") vests jurisdiction to satisfy itself or himself as to the correctness, legality or propriety of any finding, sentence or order, recorded or passed, and as to the regularity of any proceedings of such inferior court. The object of the provision is to set right a patent defect or an

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error of jurisdiction or law. There has to be a well-founded error which is to be determined on the merits of individual cases. It is also well settled that while considering the same, the Revisional Court does not dwell at length upon the facts

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and evidence of the case to reverse those findings.

14. This position was reiterated in State of Gujarat v.

Dilipsinh Kishorsinh Rao, (2023) 17 SCC 688: 2023 SCC OnLine SC

1294, wherein it was observed at page 695:

of "14. The power and jurisdiction of the Higher Court under Section 397 CrPC, which vests the court with the power to call for and examine records of an inferior court, is for the purposes of satisfying itself as to the legality and rt regularities of any proceeding or order made in a case. The object of this provision is to set right a patent defect or an

error of jurisdiction or law or the perversity which has crept in such proceedings.

15. It would be apposite to refer to the judgment of this Court in Amit Kapoor v. Ramesh Chander [Amit Kapoor v.

Ramesh Chander, (2012) 9 SCC 460: (2012) 4 SCC (Civ) 687:

(2013) 1 SCC (Cri) 986], where scope of Section 397 has been considered and succinctly explained as under: (SCC p. 475,

paras 12-13) "12. Section 397 of the Code vests the court with

the power to call for and examine the records of an inferior court for the purposes of satisfying itself as to the legality and regularity of any proceedings

or order made in a case. The object of this provision is to set right a patent defect or an error of jurisdiction or law. There has to be a well-

founded error, and it may not be appropriate for the court to scrutinise the orders, which, upon the face of it, bear a token of careful consideration and appear to be in accordance with law. If one looks into the various judgments of this Court, it emerges that the revisional jurisdiction can be

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invoked where the decisions under challenge are grossly erroneous, there is no compliance with the provisions of law, the finding recorded is based on no evidence, material evidence is ignored, or

.

judicial discretion is exercised arbitrarily or

perversely. These are not exhaustive classes, but are merely indicative. Each case would have to be determined on its own merits.

13. Another well-accepted norm is that the revisional jurisdiction of the higher court is a very limited one and cannot be exercised in a routine

of manner. One of the inbuilt restrictions is that it should not be against an interim or interlocutory order. The Court has to keep in mind that the rt exercise of revisional jurisdiction itself should not lead to injustice ex facie. Where the Court is dealing with the question as to whether the charge

has been framed properly and in accordance with law in a given case, it may be reluctant to interfere in the exercise of its revisional jurisdiction unless the case substantially falls within the categories

aforestated. Even the framing of the charge is a much-advanced stage in the proceedings under CrPC."

15. It was held in Kishan Rao v. Shankargouda, (2018) 8 SCC

165: (2018) 3 SCC (Cri) 544: (2018) 4 SCC (Civ) 37: 2018 SCC OnLine

SC 651 that it is impermissible for the High Court to reappreciate

the evidence and come to its conclusions in the absence of any

perversity. It was observed at page 169:

"12. This Court has time and again examined the scope of Sections 397/401 CrPC and the grounds for exercising the revisional jurisdiction by the High Court. In State of Kerala v. Puttumana Illath Jathavedan Namboodiri, (1999) 2 SCC 452:

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1999 SCC (Cri) 275], while considering the scope of the revisional jurisdiction of the High Court, this Court has laid down the following: (SCC pp. 454-55, para 5)

5. ... In its revisional jurisdiction, the High Court

.

can call for and examine the record of any

proceedings to satisfy itself as to the correctness, legality or propriety of any finding, sentence or order. In other words, the jurisdiction is one of

supervisory jurisdiction exercised by the High Court for correcting a miscarriage of justice. But the said revisional power cannot be equated with

of the power of an appellate court, nor can it be treated even as a second appellate jurisdiction. Ordinarily, therefore, it would not be appropriate rt for the High Court to reappreciate the evidence and come to its conclusion on the same when the evidence has already been appreciated by the

Magistrate as well as the Sessions Judge in appeal, unless any glaring feature is brought to the notice of the High Court which would otherwise amount to a gross miscarriage of justice. On scrutinising

the impugned judgment of the High Court from the aforesaid standpoint, we have no hesitation in concluding that the High Court exceeded its

jurisdiction in interfering with the conviction of the respondent by reappreciating the oral

evidence. ..."

13. Another judgment which has also been referred to and relied on by the High Court is the judgment of this Court in

Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao Phalke, (2015) 3 SCC 123: (2015) 2 SCC (Cri) 19]. This Court held that the High Court, in the exercise of revisional jurisdiction, shall not interfere with the order of the Magistrate unless it is perverse or wholly unreasonable or there is non- consideration of any relevant material, the order cannot be set aside merely on the ground that another view is possible. The following has been laid down in para 14: (SCC p. 135)

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"14. ... Unless the order passed by the Magistrate is perverse or the view taken by the court is wholly unreasonable or there is non-consideration of any relevant material or there is palpable misreading of

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records, the Revisional Court is not justified in setting

aside the order, merely because another view is possible. The Revisional Court is not meant to act as an appellate court. The whole purpose of the revisional

jurisdiction is to preserve the power in the court to do justice in accordance with the principles of criminal jurisprudence. The revisional power of the court under

of Sections 397 to 401 CrPC is not to be equated with that of an appeal. Unless the finding of the court, whose decision is sought to be revised, is shown to be perverse or untenable in law or is grossly erroneous or glaringly rt unreasonable or where the decision is based on no material or where the material facts are wholly ignored or where the judicial discretion is exercised arbitrarily

or capriciously, the courts may not interfere with the decision in exercise of their revisional jurisdiction."

16. This position was reiterated in Bir Singh v. Mukesh

Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ)

309: 2019 SCC OnLine SC 13, wherein it was observed at page 205:

"16. It is well settled that in the exercise of revisional jurisdiction under Section 482 of the Criminal Procedure Code, the High Court does not, in the absence of perversity,

upset concurrent factual findings. It is not for the Revisional Court to re-analyse and re-interpret the evidence on record.

17. As held by this Court in Southern Sales & Services v. Sauermilch Design and Handels GmbH, (2008) 14 SCC 457, it is a well-established principle of law that the Revisional Court will not interfere even if a wrong order is passed by a court having jurisdiction, in the absence of a jurisdictional error. The answer to the first question is, therefore, in the negative."

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17. The present revision has to be decided as per the

parameters laid down by the Hon'ble Supreme Court

.

18. The ingredients of offence punishable under Section

138 of the NI Act were explained by the Hon'ble Supreme Court in

Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul, 2025 SCC

OnLine SC 2019 as under:-

of 5.1.1. In K.R. Indira v. Dr. G. Adinarayana(2003) 8 SCC 300, this Court enlisted the components, aspects and the acts, the concatenation of which would make the offence under rt Section 138 of the Act complete, to be these (i) drawing of the cheque by a person on an account maintained by him with a banker, for payment to another person from out of

that account for discharge in whole/in part of any debt or liability, (ii) presentation of the cheque by the payee or the holder in due course to the bank, (iii) returning the cheque unpaid by the drawee bank for want of sufficient funds to

the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque, (iv) giving notice in writing to the drawer of the cheque within 15 days of the

receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of

the cheque amount, and (v) failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the cheque within 15 days

of the receipt of the notice.

19. The accused admitted in his cross-examination that

the cheque bears his signature and the cheque book was issued to

him. He also stated in his statement recorded under Section 313 of

Cr.P.C. that he had issued a blank signed cheque to Shyam Lal.

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Thus, the accused did not dispute his signature on the cheque. It

was laid down by the Hon'ble Supreme Court in APS Forex Services

.

(P) Ltd. v. Shakti International Fashion Linkers (2020) 12 SCC 724,

that when the issuance of a cheque and signature on the cheque

are not disputed, a presumption would arise that the cheque was

issued in discharge of the legal liability. It was observed: -

of "7.2. What is emerging from the material on record is that the issuance of a cheque by the accused and the signature of the accused on the said cheque are not disputed by the accused. The accused has also not disputed that there were rt transactions between the parties. Even as per the statement of the accused, which was recorded at the time of the

framing of the charge, he has admitted that some amount was due and payable. However, it was the case on behalf of the accused that the cheque was given by way of security, and the same has been misused by the complainant.

However, nothing is on record that in the reply to the statutory notice, it was the case on behalf of the accused that the cheque was given by way of security. Be that as it

may, however, it is required to be noted that earlier the accused issued cheques which came to be dishonoured on

the ground of "insufficient funds" and thereafter a fresh consolidated cheque of ₹9,55,574 was given which has been returned unpaid on the ground of "STOP PAYMENT".

Therefore, the cheque in question was issued for the second time. Therefore, once the accused has admitted the issuance of a cheque which bears his signature, there is a presumption that there exists a legally enforceable debt or liability under Section 139 of the NI Act. However, such a presumption is rebuttable in nature, and the accused is required to lead evidence to rebut such a presumption. The accused was required to lead evidence that the entire amount due and payable to the complainant was paid.

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9. Coming back to the facts in the present case and considering the fact that the accused has admitted the issuance of the cheques and his signature on the cheque and that the cheque in question was issued for the second time

.

after the earlier cheques were dishonoured and that even

according to the accused some amount was due and payable, there is a presumption under Section 139 of the NI Act that there exists a legally enforceable debt or liability. Of course,

such a presumption is rebuttable. However, to rebut the presumption, the accused was required to lead evidence that the full amount due and payable to the complainant had

of been paid. In the present case, no such evidence has been led by the accused. The story put forward by the accused that the cheques were given by way of security is not believable in the absence of further evidence to rebut the presumption, rt and more particularly, the cheque in question was issued for the second time after the earlier cheques were dishonoured. Therefore, both the courts below have materially erred in

not properly appreciating and considering the presumption in favour of the complainant that there exists a legally enforceable debt or liability as per Section 139 of the NI Act. It appears that both the learned trial court as well as the

High Court have committed an error in shifting the burden upon the complainant to prove the debt or liability, without appreciating the presumption under Section 139 of the NI

Act. As observed above, Section 139 of the Act is an example of reverse onus clause and therefore, once the issuance of

the cheque has been admitted and even the signature on the cheque has been admitted, there is always a presumption in favour of the complainant that there exists legally

enforceable debt or liability and thereafter, it is for the accused to rebut such presumption by leading evidence."

20. The presumption under Section 139 of the NI Act was

explained by the Hon'ble Supreme Court in N. Vijay Kumar v.

Vishwanath Rao N., 2025 SCC OnLine SC 873 as under:

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"5. The NI Act raises two presumptions, one under Section 118 and the other in Section 139 thereof. The Sections read as under:

"118. Presumptions as to negotiable instruments.

.

-- Until the contrary is proved, the following

presumptions shall be made: --

(a) of consideration: --that every negotiable

instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed,

of negotiated or transferred for consideration;

x xx rt 139. Presumption in favour of the holder. -- It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of

the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability."

6. Section 118 (a) assumes that every negotiable instrument

is made or drawn for consideration, while Section 139 creates a presumption that the holder of a cheque has received the cheque in discharge of a debt or liability.

Presumptions under both are rebuttable, meaning they can be rebutted by the accused by raising a probable defence.

This Court, through various pronouncements, has consistently clarified the nature and extent of these presumptions and the standard of proof required by the

accused to rebut them. We may consider a few such pronouncements.

6.1. In Mallavarapu Kasivisweswara Rao v. Thadikonda Ramulu Firm (2008) 7 SCC 655, this Court observed as under:

"17. Under Section 118(a) of the Negotiable Instruments Act, the court is obliged to presume, until the contrary is proved, that the promissory note was made for consideration. It is also a settled position that

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the initial burden in this regard lies on the defendant to prove the non-existence of consideration by bringing on record such facts and circumstances which would lead the court to believe the non-existence of the

.

consideration either by direct evidence or by

preponderance of probabilities showing that the existence of consideration was improbable, doubtful or illegal. In this connection, reference may be made to a

decision of this Court in Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal [(1999) 3 SCC 35]. In para 12 of the said decision, this Court observed as under: (SCC

of pp. 50-51) "12. Upon consideration of various judgments as noted hereinabove, the position of law which rt emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is

supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is

proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the

onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its

failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the

non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case, including that of the plaintiff as well. In cases where the defendant fails to discharge the initial onus of proof by showing the nonexistence of the

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consideration, the plaintiff would invariably be held entitled to the benefit of the presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to

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disprove the existence of consideration by

leading direct evidence, as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with

a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has

of to be brought on record to get the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption, the defendant has to rt bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its nonexistence was so probable that a

prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist."

From the above decision of this Court, it is pellucid that if the defendant is proved to have discharged the initial onus of proof showing that the existence of

consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who

would be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable

instrument. It is also discernible from the above decision that if the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of the presumption arising under Section 118(a) in his favour." (Emphasis Supplied)

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6.2. In Kumar Exports v. Sharma Carpets (2009) 2 SCC 513, this Court examined the presumptions raised by the N.I. Act, and held as follows:

"18. Applying the definition of the word "proved" in

.

Section 3 of the Evidence Act to the provisions of

Sections 118 and 139 of the Act, it becomes evident that in a trial under Section 138 of the Act a presumption will have to be made that every negotiable instrument

was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or

of admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act help him shift the burden on rt the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the

accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists.

19. The use of the phrase "until the contrary is proved"

in Section 118 of the Act and use of the words "unless the contrary is proved" in Section 139 of the Act read

with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act,

makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the

party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over.

20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that, under the particular circumstances of the case, the non-existence of

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consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions, an accused is not expected to prove his defence beyond a reasonable

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doubt, as is expected of the complainant in a criminal trial.

The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to

be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading

of direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently, rt would not serve the purpose of the accused. Something which is probable has to be brought on record to shift the burden of proof to the complainant. To disprove the

presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a

prudent man would, under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question

was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely

upon circumstantial evidence, and if the circumstances so relied upon are compelling, the burden may likewise shift again onto the complainant. The accused may also rely

upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act, to rebut the presumptions arising under Sections 118 and 139 of the Act.

21. The accused also has an option to prove the nonexistence of consideration and debt or liability either by letting in evidence or, in some clear and exceptional cases, from the case set out by the

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complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court,

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having regard to all the circumstances of the case and

the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act

will not again come to the complainant's rescue." (Emphasis Supplied) 6.3. A three-Judge Bench of this Court in Rangappa (supra)

of had the occasion to consider Section 139 elaborately. The Court reiterated that where the signature on the cheque is acknowledged, a presumption has to be raised that the cheque pertained to a legally enforceable debt or liability; rt however, this presumption is of a rebuttable nature and the onus is then on the accused to raise a probable defence. It

was further stated that:

"27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of

negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption

under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be

remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the

nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses, and the defendant-accused cannot be expected to discharge an unduly high standard of proof.

28. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and

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not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of "preponderance of

.

probabilities". Therefore, if the accused is able to raise

a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the

accused can rely on the materials submitted by the complainant in order to raise such a defence, and it is conceivable that in some cases the accused may not

of need to adduce evidence of his/her own."

6.4. T.S. Thakur J., (as his lordship then was) in his supplementing opinion in Vijay v. Laxman (2013) 3 SCC 86, observed as under:

rt "20. The High Court has rightly accepted the version given by the respondent-accused herein. We say so for

more than one reason. In the first place, the story of the complainant that he advanced a loan to the respondent-accused is unsupported by any material, let alone any documentary evidence that any such loan

transaction had ever taken place. So much so, the complaint does not even indicate the date on which the loan was demanded and advanced. It is blissfully silent

about these aspects, thereby making the entire story suspect. We are not unmindful of the fact that there is a

presumption that the issue of a cheque is for consideration. Sections 118 and 139 of the Negotiable Instruments Act make that abundantly clear. That

presumption is, however, rebuttable in nature. What is most important is that the standard of proof required for rebutting any such presumption is not as high as that required of the prosecution. So long as the accused can make his version reasonably probable, the burden of rebutting the presumption would stand discharged.

Whether or not it is so in a given case depends upon the facts and circumstances of that case. It is trite that the courts can take into consideration the circumstances

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appearing in the evidence to determine whether the presumption should be held to be sufficiently rebutted. The legal position regarding the standard of proof required for rebutting a presumption is fairly well

.

settled by a long line of decisions of this Court."

6.5. This Court, in the case of Baslingappa v. Mudibasappa(2019) 5 SCC 418, summarised the principles on Sections 118(a) and 139 of the N.I. Act. The same is

reproduced with profit as under:

"25. We having noticed the ratio laid down by this Court in the above cases on Sections 118(a) and 139, we

of now summarise the principles enumerated by this Court in the following manner:

rt 25.1. Once the execution of a cheque is admitted, Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.

25.2. The presumption under Section 139 is a rebuttable presumption, and the onus is on the accused to raise the probable defence. The

standard of proof for rebutting the presumption is that of preponderance of probabilities. 25.3. To rebut the presumption, it is open for the

accused to rely on evidence led by him, or the accused can also rely on the materials submitted

by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the

materials brought on record by the parties but also by reference to the circumstances upon which they rely.

25.4. That it is not necessary for the accused to come into the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.

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25.5. It is not necessary for the accused to come into the witness box to support his defence." 6.6. Recently, a coordinate Bench of this Court in Rajaram v. Maruthachalam(2023) 16 SCC 125, through Gavai J., observed

.

as under:

"27. It can thus be seen that this Court has held that once the execution of a cheque is admitted, Section 139

of the N.I. Act mandates a presumption that the cheque was for the discharge of any debt or other liability. It has, however, been held that the presumption under Section 139 is a rebuttable presumption and the onus is

of on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. It has further been held that to rebut the presumption, it is open for the rt accused to rely on evidence led by him, or the accused can also rely on the materials submitted by the

complainant in order to raise a probable defence. It has been held that inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference

to the circumstances upon which they rely."

7. The position of law, as is evident from the above, is clear."

21. Thus, the learned Courts below were justified in raising

the presumption that the cheque was issued in discharge of the

liability for consideration.

22. The accused filed an affidavit (Ext.DW-1) by way of

evidence. This was impermissible. It was laid down by the

Hon'ble Supreme Court in M/S Mandvi Co-Op Bank Ltd vs. Nimesh

B Thakore 2010 (3) SCC 83 that only the complainant can lead

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evidence, and it is impermissible for the accused to lead evidence

by way of affidavit. It was observed: -

.

"46. On this issue, we are afraid that the High Court

overreached itself and took a course that amounts to taking over the legislative functions. On a bare reading of section 143, it is clear that the legislature provided for the

complainant to give his evidence on the affidavit and did not provide for the accused to similarly do so. But the High Court thought that not mentioning the accused along with

of the complainant in sub-section (1) of section 145 was merely an omission by the legislature that it could fill up without difficulty. Even though the legislature in its wisdom did not deem it proper to incorporate the word `accused' rt with the word `complainant' in section 145(1), it did not mean that the Magistrate could not allow the accused to

give his evidence on affidavit by applying the same analogy unless there was a just and reasonable ground to refuse such permission.

47. There are two errors apparent in the reasoning of the

High Court. First, if the legislature in their wisdom did not think "it proper to incorporate a word `accused' with the word `complainant' in section 145(1)......", it was not open to

the High Court to fill up the self-perceived blank. Secondly, the High Court was in error in drawing an analogy between

the evidence of the complainant and the accused in a case of a dishonoured cheque. The case of the complainant in a complaint under section 138 of the Act would be based

largely on documentary evidence.

48. The accused, on the other hand, in a large number of cases, may not lead any evidence at all and let the prosecution stand or fall on its evidence. In case the defence does lead any evidence, the nature of its evidence may not be necessarily documentary; in all likelihood, the defence would lead other kinds of evidence to rebut the presumption that the issuance of the cheque was not in the discharge of any debt or liability. This is the basic difference between the

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nature of the complainant's evidence and the evidence of the accused in a case of a dishonoured cheque. It is, therefore, wrong to equate the defence evidence with the complainant's evidence and to extend the same option to

.

the accused as well.

xxxx

52. In light of the above, we have no hesitation in holding

that the High Court was in error in taking the view, that on a request made by the accused the magistrate may allow him to tender his evidence on affidavit and consequently, we set aside the direction as contained in subparagraph (r) of

of paragraph 45 of the High Court judgment."

23. Therefore, it is impermissible for the accused to lead rt evidence by way of affidavit, and his affidavit could not have been

looked into.

24. In any case, the accused stated in his affidavit that he

never borrowed money from the complainant. A transaction of

money took place between the complainant and Shyam Lal, who

had borrowed some money from the complainant. The accused did

not know from where the complainant had received the cheque.

The accused never issued the cheque to the complainant, and the

complainant had filed a false complaint against the accused.

25. This statement was contrary to the plea taken by the

accused in his statement recorded under Section 313 of Cr.P.C., in

which he had stated that he owed money to Shyam Lal and had

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issued the cheque in his favour. He changed this version entirely

and stated on oath that Shyam Lal had taken money from the

.

complainant. The accused failed to provide any explanation as to

how his signed cheque was obtained by the complainant. The

accused had applied under Section 145 of the NI Act for cross-

examination of the complainant, claiming that he had neither

of received any amount nor issued any cheque. Therefore, he wanted

to cross-examine the witnesses. Thus, the accused had taken three rt different defences. Initially, he stated that he had not issued any

cheque. He stated in his statement recorded under Section 313 of

Cr.P.C. that he had issued a blank signed cheque in favour of

Shyam Lal, and finally, he stated on oath that the money was

taken by Shyam Lal, and he was not aware how the complainant

obtained the signed cheque of the accused. The accused can take as

many pleas as he likes, but the pleas taken in the present case are

contradictory and do not rebut the presumption contained under

Section 118(a) and 139 of the NI Act. Therefore, the learned Courts

below were justified in discarding the plea taken by the accused.

26. It was submitted that the learned Courts below erred in

drawing an adverse inference for not examining Shyam Lal. This

plea cannot be accepted. When the accused had stated on oath that

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Shyam Lal had borrowed money from the complainant, he should

have examined Shyam Lal to establish this plea. Shyam Lal had no

.

adversarial interest against the accused and could have stated how

the cheque came into the possession of the complainant. The

learned Courts below had rightly drawn an adverse inference for

the non-examination of Shyam Lal.

of

27. The complainant stated that the cheque was

dishonoured with an endorsement 'funds insufficient'. This is rt duly corroborated by the memo of dishonour (Ext CW-1/C),

wherein the reason for dishonour has been mentioned as 'funds

insufficient'. It was laid down by the Hon'ble Supreme Court in

Mandvi Cooperative Bank Ltd. v. Nimesh B. Thakore, (2010) 3 SCC 83:

(2010) 1 SCC (Civ) 625: (2010) 2 SCC (Cri) 1: 2010 SCC OnLine SC 155

that the memo issued by the Bank is presumed to be correct and

the burden is upon the accused to rebut the presumption. It was

observed at page 95:-

"24. Section 146, making a major departure from the principles of the Evidence Act, provides that the bank's slip or memo with the official mark showing that the cheque was dishonoured would, by itself, give rise to the presumption of dishonour of the cheque, unless and until that fact was disproved. Section 147 makes the offences punishable under the Act compoundable."

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28. In the present case, no evidence was produced to rebut

the presumption, and the learned Courts below had rightly held

.

that the cheque was dishonoured with an endorsement 'funds

insufficient'.

29. The accused stated that he had issued a notice

(Ext.CW-1/E) asking the accused to pay money within a period of

of fifteen days on receipt of notice. It was submitted that notice was

issued beyond the limitation provided under Section 138(c) of the rt NI Act. This submission is not acceptable. The memo of dishonour

was issued on 22.06.2015. Section 138(b) of the NI Act provides

that the payee or the holder in due course of the cheque should

make a demand for the amount by giving a notice in writing to the

drawer of the cheque within 30 days of the receipt of information

by him from the bank regarding the return of the cheque as

unpaid.

30. Thus, the limitation starts from the receipt of the

memo of dishonour and not from the date of the issuance of the

memo. Further, the notice has to be issued within thirty days and

even if it is assumed for argument's sake that the memo was

received by the complainant on 22.06.2015, he could have issued

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the notice within a period of thirty days, and the notice issued on

09.07.2015 was within the period of thirty days. The period of

.

fifteen days applies after the date of receipt of the notice by the

accused and is a period available to him to repay the amount;

therefore, the submission that the complaint is barred by

limitation cannot be accepted.

of

31. The notice was returned with an endorsement

'refused'. The accused admitted in his cross-examination that rt notice was sent to the correct address. It was laid down by the

Hon'ble Supreme Court of India in C.C. Allavi Haji vs. Pala Pelly

Mohd. 2007(6) SCC 555, that when a notice is returned with an

endorsement 'refused', it is deemed to be served. It was observed:

"8. Since in Bhaskaran's case (supra), the notice issued in terms of Clause (b) had been returned unclaimed and not as

refused, the Court, posed the question: "Will there be any significant difference between the two so far as the

presumption of service is concerned?" It was observed that though Section 138 of the Act does not require that the

notice should be given only by "post", yet in a case where the sender has dispatched the notice by post with the correct address written on it, the principle incorporated in Section 27 of the General Clauses Act, 1897 (for short 'G.C. Act') could profitably be imported in such a case. It was held that in this situation service of notice is deemed to have been effected on the sendee unless he proves that it was not really served and that he was not responsible for such non- service."

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32. A similar view was taken in Krishna Swaroop Agarwal v.

Arvind Kumar, 2025 SCC OnLine SC 1458, wherein it was observed:

.

"13. Section 27 of the General Clauses Act, 1887, deals with

service by post:

"27. Meaning of Service by post.- Where any [Central Act] or Regulation made after the commencement of this

Act authorizes or requires any document to be served by post, whether the expression "serve" or either of the expressions "give" or "send" or any other expression is

of used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and, unless the contrary rt is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post".

14. The concept of deemed service has been discussed by this Court on various occasions. It shall be useful to refer to some instances:

14.1 In Madan and Co. v. Wazir Jaivir Chand (1989) 1 SCC 264, which was a case concerned with the payment of arrears of rent under the J&K Houses and Shops Rent Control Act, 1966. The proviso to Section 11, which is

titled "Protection of a Tenant against Eviction", states that unless the landlord serves notice upon the rent

becoming due, through the Post Office under a registered cover, no amount shall be deemed to be in arrears.

Regarding service of notice by post, it was observed that

in order to comply with the proviso, all that is within the landlord's domain to do is to post a pre-paid registered letter containing the correct address and nothing further. It is then presumed to be delivered under Section 27 of the GC Act. Irrespective of whether the addressee accepts or rejects, "there is no difficulty, for the acceptance or refusal can be treated as a service on, and receipt by the addressee."

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14.2 In the context of Section 138 of the Negotiable Instruments Act, 1881it was held that when the payee dispatches the notice by registered post, the requirement under Clause (b) of the proviso of Section 138 of the NI

.

Act stands complied with and the cause of action to file a

complaint arises on the expiry of that period prescribed in Clause (c) thereof. [See: C.C. Alavi Haji v. Palapetty Mouhammed (2007) 6 SCC 555]

14.3 The findings in C.C. Alavi (supra) were followed in Vishwabandhu v. Srikrishna (2021) 19 SCC 549. In this case, the summons issued by the Registered AD post was

of received back with endorsement "refusal". In accordance with Sub-Rule (5) of Order V Rule 9 of CPC, refusal to accept delivery of the summons would be deemed to be due service in accordance with law. To rt substantiate this view, a reference was made to the judgment referred to supra.

14.4 A similar position as in C.C. Alavi (supra) stands adopted by this Court in various judgments of this Court in Greater Mohali Area Development Authority v. Manju Jain (2010) 9 SCC 157; Gujarat Electricity Board v. Atmaram

Sungomal Posani (1989) 2 SCC 602; CIT v. V. K. Gururaj (1996) 7 SCC 275; Poonam Verma v. DDA (2007) 13 SCC 154; Sarav Investment & Financial Consultancy (P) Ltd. v. Lloyds Register

of Shipping Indian Office Staff Provident Fund (2007) 14 SCC 753; Union of India v. S.P. Singh (2008) 5 SCC 438; Municipal

Corpn., Ludhiana v. Inderjit Singh (2008) 13 SCC 506; and V.N. Bharat v. DDA (2008) 17 SCC 321.

33. Therefore, the learned Courts below had rightly held

that notice was deemed to have been served upon the accused.

Hence, all the ingredients of the commission of an offence

punishable under Section 138 of the NI Act were duly satisfied.

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34. Learned Trial Court sentenced the accused to undergo

simple imprisonment for four months. It was laid down by the

.

Hon'ble Supreme Court in Bir Singh v. Mukesh Kumar, (2019) 4 SCC

197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ) 309: 2019 SCC OnLine

SC 138 that the penal provision of section 138 of the NI Act is a

deterrent in nature. It was observed at page 203:

of "6. The object of Section 138 of the Negotiable Instruments Act is to infuse credibility into negotiable instruments, including cheques, and to encourage and promote the use of negotiable instruments, including cheques, in financial rt transactions. The penal provision of Section 138 of the Negotiable Instruments Act is intended to be a deterrent to

callous issuance of negotiable instruments such as cheques without serious intention to honour the promise implicit in the issuance of the same."

35. Keeping in view the deterrent nature of the sentence to

be awarded, the sentence of four months of simple imprisonment

cannot be said to be excessive, and no interference is required

with it.

36. Learned Trial Court ordered the payment of

compensation of ₹5,00,000/-. The cheque was issued for

₹2,50,000/- on 15.06.2015. Thus, only a compensation of

₹ 2,50,000/- was awarded on 02.07.2024 after the lapse of more

than nine years. The complainant lost money that he would have

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gained by depositing the cheque amount in the bank or by

investing it somewhere else. He had to engage a counsel to

.

prosecute the complaint filed by him. Therefore, he was entitled to

be compensated for the same. It was laid down by the Hon'ble

Supreme Court in Kalamani Tex v. P. Balasubramanian, (2021) 5 SCC

283: (2021) 3 SCC (Civ) 25: (2021) 2 SCC (Cri) 555: 2021 SCC OnLine

of SC 75 that the Courts should uniformly levy a fine up to twice the

cheque amount along with simple interest at the rate of 9% per rt annum. It was observed at page 291: -

19. As regards the claim of compensation raised on behalf of the respondent, we are conscious of the settled principles that the object of Chapter XVII of NIA is not only punitive but also compensatory and restitutive. The provisions of

NIA envision a single window for criminal liability for the dishonour of a cheque as well as civil liability for the realisation of the cheque amount. It is also well settled that there needs to be a consistent approach towards awarding

compensation, and unless there exist special circumstances, the courts should uniformly levy fines up to twice the

cheque amount along with simple interest @ 9% p.a. [R. Vijayan v. Baby, (2012) 1 SCC 260, para 20: (2012) 1 SCC (Civ)

79: (2012) 1 SCC (Cri) 520]"

37. The interest @ 9% per annum for 9 years would be

₹2,02,500/-, and keeping in view the period spent in the

litigation, the compensation of ₹2,50,000/- is not excessive.

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38. The learned Trial Court ordered the accused to undergo

simple imprisonment for one month in default of payment of the

.

compensation amount. It was submitted that the learned Trial

Court could not have ordered imprisonment in default of the

payment of the compensation amount. This submission is not

acceptable. It was laid down by the Hon'ble Supreme Court in K.A.

of Abbas v. Sabu Joseph, (2010) 6 SCC 230: (2010) 3 SCC (Civ) 744:

(2010) 3 SCC (Cri) 127: 2010 SCC OnLine SC 612, that the Courts can rt impose a sentence of imprisonment in default of payment of

compensation. It was observed at page 237:

"20. Moving over to the question, whether a default sentence can be imposed on default of payment of

compensation, this Court in Hari Singh v. Sukhbir Singh [(1988) 4 SCC 551: 1988 SCC (Cri) 984: AIR 1988 SC 2127] and in Balraj v. State of U.P. [(1994) 4 SCC 29: 1994 SCC (Cri) 823: AIR 1995 SC 1935], has held that it was open to all the courts

in India to impose a sentence on default of payment of compensation under sub-section (3) of Section 357. In Hari

Singh v. Sukhbir Singh [(1988) 4 SCC 551: 1988 SCC (Cri) 984: AIR 1988 SC 2127], this Court has noticed certain factors which are required to be taken into consideration while

passing an order under the section: (SCC p. 558, para 11) "11. The payment by way of compensation must, however, be reasonable. What is reasonable may depend upon the facts and circumstances of each case. The quantum of compensation may be determined by taking into account the nature of the crime, the justness of the claim by the victim and the ability of the accused to pay. If there is more than one

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accused, they may be asked to pay on equal terms unless their capacity to pay varies considerably. The payment may also vary depending on the acts of each accused. A reasonable period for payment of

.

compensation, if necessary, by instalments, may also

be given. The court may enforce the order by imposing a sentence in default."

21. This position also finds support in R. v. Oliver John Huish

[(1985) 7 Cri App R (S) 272]. The Lord Justice Croom Johnson, speaking for the Bench, has observed:

"When compensation orders may be made, the most

of careful examination is required. Documents should be obtained, and evidence, either on affidavit or orally, should be given. The proceedings should, if necessary, be adjourned to arrive at the true state of rt the defendant's affairs.

Very often, a compensation order is made and a very

light sentence of imprisonment is imposed, because the court recognises that if the defendant is to have an opportunity of paying the compensation, he must be enabled to earn the money with which to do so. The

result is therefore an extremely light sentence of imprisonment. If the compensation order turns out to be virtually worthless, the defendant has got off with

a very light sentence of imprisonment, as well as no order of compensation. In other words, generally

speaking, he has got off with everything."

22. The law laid down in Hari Singh v. Sukhbir Singh [(1988)

4 SCC 551: 1988 SCC (Cri) 984: AIR 1988 SC 2127] was reiterated by this Court in Suganthi Suresh Kumar v. Jagdeeshan [(2002) 2 SCC 420: 2002 SCC (Cri) 344]. The Court observed: (SCC pp. 424-25, paras 5 & 10) "5. In the said decision, this Court reminded all concerned that it is well to remember the emphasis laid on the need for making liberal use of Section 357(3) of the Code. This was observed by reference to a decision of this Court in Hari Singh v. Sukhbir Singh

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[(1988) 4 SCC 551: 1988 SCC (Cri) 984: AIR 1988 SC 2127]. In the said decision, this Court held as follows:

(SCC p. 558, para 11) '11. ... The quantum of compensation may be

.

determined by taking into account the nature of the

crime, the justness of the claim by the victim and the ability of the accused to pay. If there is more than one accused, they may be asked to pay on equal terms

unless their capacity to pay varies considerably. The payment may also vary depending on the acts of each accused. A reasonable period for payment of

of compensation, if necessary, by instalments, may also be given. The court may enforce the order by imposing a sentence in default.' (emphasis in original) rt ***

10. That apart, Section 431 of the Code has only prescribed that any money (other than a fine) payable by an order made under the Code shall be recoverable 'as if it were a fine'. Two modes of recovery of the fine

have been indicated in Section 421(1) of the Code. The proviso to the sub-section says that if the sentence directs that in default of payment of the fine, the

offender shall be imprisoned, and if such offender has undergone the whole of such imprisonment in

default, no court shall issue such warrant for the levy of the amount."

The Court further held: (Jagdeeshan case [(2002) 2 SCC 420:

2002 SCC (Cri) 344], SCC p. 425, para 11) "11. When this Court pronounced in Hari Singh v.

Sukhbir Singh [(1988) 4 SCC 551: 1988 SCC (Cri) 984:

AIR 1988 SC 2127] that a court may enforce an order to pay compensation 'by imposing a sentence in default', it is open to all courts in India to follow the said course. The said legal position would continue to hold good until it is overruled by a larger Bench of this Court. Hence, the learned Single Judge of the

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High Court of Kerala has committed an impropriety by expressing that the said legal direction of this Court should not be followed by the subordinate courts in Kerala. We express our disapproval of the

.

course adopted by the said Judge in Rajendran v. Jose

[(2001) 3 KLT 431]. It is unfortunate that when the Sessions Judge has correctly done a course in accordance with the discipline, the Single Judge of the

High Court has incorrectly reversed it."

23. In order to set at rest the divergent opinion expressed in Ahammedkutty case [(2009) 6 SCC 660 : (2009) 3 SCC (Cri)

of 302], this Court in Vijayan v. Sadanandan K. [(2009) 6 SCC 652 : (2009) 3 SCC (Cri) 296], after noticing the provision of Sections 421 and 431 CrPC, which dealt with mode of recovery of fine and Section 64 IPC, which empowered the rt courts to provide for a sentence of imprisonment on default of payment of fine, the Court stated: (Vijayan case [(2009) 6

SCC 652 : (2009) 3 SCC (Cri) 296], SCC p. 658, para 24) "24. We have carefully considered the submissions made on behalf of the respective parties. Since a decision on the question raised in this petition is still

in a nebulous state, there appear to be two views as to whether a default sentence of imprisonment can be imposed in cases where compensation is awarded to

the complainant under Section 357(3) CrPC. As pointed out by Mr Basant in Dilip S. Dahanukar case

[(2007) 6 SCC 528 : (2007) 3 SCC (Cri) 209], the distinction between a fine and compensation as understood under Section 357(1)(b) and Section

357(3) CrPC had been explained, but the question as to whether a default sentence clause could be made in respect of compensation payable under Section 357(3) CrPC, which is central to the decision in this case, had not been considered."

The Court further held: (Vijayan case [(2009) 6 SCC 652:

(2009) 3 SCC (Cri) 296], SCC p. 659, paras 31-32)

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"31. The provisions of Sections 357(3) and 431 CrPC, when read with Section 64 IPC, empower the court, while making an order for payment of compensation, to also include a default sentence in case of non-

.

payment of the same.

32. The observations made by this Court in Hari Singh case [(1988) 4 SCC 551: 1988 SCC (Cri) 984: AIR 1988 SC 2127] are as important today as they were when they

were made and if, as submitted by Dr. Pillay, recourse can only be had to Section 421 CrPC for enforcing the same, the very object of sub-section (3) of Section 357

of would be frustrated and the relief contemplated therein would be rendered somewhat illusory."

24. In Shantilal v. State of M.P. [(2007) 11 SCC 243: (2008) 1 SCC (Cri) 1], it is stated that the sentence of imprisonment rt for default in payment of a fine or compensation is different from a normal sentence of imprisonment. The Court also

delved into the factors to be taken into consideration while passing an order under Section 357(3) CrPC. This Court stated: (SCC pp. 255-56, para 31) "31. ... The term of imprisonment in default of

payment of a fine is not a sentence. It is a penalty that a person incurs on account of non-payment of a fine. The sentence is something which an offender must

undergo unless it is set aside or remitted in part or in whole, either in appeal or in revision or other

appropriate judicial proceedings, or 'otherwise'. A term of imprisonment ordered in default of payment of a fine stands on a different footing. A person is

required to undergo imprisonment either because he is unable to pay the amount of fine or refuses to pay such amount. He, therefore, can always avoid undergoing imprisonment in default of payment of the fine by paying such amount. It is, therefore, not only the power but the duty of the court to keep in view the nature of the offence, circumstances under which it was committed, the position of the offender and other relevant considerations before ordering the

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offender to suffer imprisonment in default of payment of a fine." (emphasis in original)

25. In Kuldip Kaur v. Surinder Singh [(1989) 1 SCC 405: 1989 SCC (Cri) 171: AIR 1989 SC 232], in the context of Section 125

.

CrPC, it was observed that sentencing a person to jail is

sometimes a mode of enforcement. In this regard, the Court stated: (SCC p. 409, para 6)

"6. A distinction has to be drawn between a mode of enforcing recovery on the one hand and effecting actual recovery of the amount of the monthly allowance which has fallen in arrears on the other.

of Sentencing a person to jail is a 'mode of enforcement'. It is not a 'mode of satisfaction' of the liability. The liability can be satisfied only by making actual payment of the arrears. The whole purpose of sending rt to jail is to oblige a person liable to pay the monthly allowance who refuses to comply with the order

without sufficient cause, to obey the order and to make the payment. The purpose of sending him to jail is not to wipe out the liability which he has refused to discharge. It should also be realised that a person

ordered to pay a monthly allowance can be sent to jail only if he fails to pay the monthly allowance without sufficient cause to comply with the order. It would

indeed be strange to hold that a person who, without reasonable cause, refuses to comply with the order of

the court to maintain his neglected wife or child would be absolved of his liability merely because he prefers to go to jail. A sentence of jail is no substitute

for the recovery of the amount of the monthly allowance which has fallen in arrears."

26. From the above line of cases, it becomes very clear that a sentence of imprisonment can be granted for default in payment of compensation awarded under Section 357(3) CrPC. The whole purpose of the provision is to accommodate the interests of the victims in the criminal justice system. Sometimes the situation becomes such that there is no purpose served by keeping a person behind bars.

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Instead, directing the accused to pay an amount of compensation to the victim or affected party can ensure the delivery of total justice. Therefore, this grant of compensation is sometimes in lieu of sending a person to

.

bars or in addition to a very light sentence of imprisonment.

Hence, in default of payment of this compensation, there must be a just recourse. Not imposing a sentence of imprisonment would mean allowing the accused to get

away without paying the compensation, and imposing another fine would be impractical, as it would mean imposing a fine upon another fine and therefore would not

of ensure proper enforcement of the order of compensation. While passing an order under Section 357(3), it is imperative for the courts to look at the ability and the capacity of the accused to pay the same amount as has been rt laid down by the cases above; otherwise, the very purpose of granting an order of compensation would stand defeated."

39. This position was reiterated in R. Mohan v. A.K. Vijaya

Kumar, (2012) 8 SCC 721: (2012) 4 SCC (Civ) 585: (2012) 3 SCC (Cri)

1013: 2012 SCC OnLine SC 486, wherein it was observed at page 729:

"29. The idea behind directing the accused to pay compensation to the complainant is to give him immediate

relief so as to alleviate his grievance. In terms of Section 357(3), compensation is awarded for the loss or injury suffered

by the person due to the act of the accused for which he is sentenced. If merely an order directing compensation is passed, it would be totally ineffective. It could be an order

without any deterrence or apprehension of immediate adverse consequences in case of its non-observance. The whole purpose of giving relief to the complainant under Section 357(3) of the Code would be frustrated if he is driven to take recourse to Section 421 of the Code. An order under Section 357(3) must have the potential to secure its observance. Deterrence can only be infused into the order by providing for a default sentence. If Section 421 of the Code puts compensation ordered to be paid by the court on a par with the

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fine so far as the mode of recovery is concerned, then there is no reason why the court cannot impose a sentence in default of payment of compensation, as it can be done in case of default in payment of a fine under Section 64 IPC. It is obvious

.

that in view of this, in Vijayan [(2009) 6 SCC 652: (2009) 3 SCC

(Cri) 296], this Court stated that the abovementioned provisions enabled the court to impose a sentence in default of payment of compensation and rejected the submission that

the recourse can only be had to Section 421 of the Code for enforcing the order of compensation. Pertinently, it was made clear that observations made by this Court in Hari Singh [(1988) 4 SCC 551: 1988 SCC (Cri) 984] are as important today as

of they were when they were made. The conclusion, therefore, is that the order to pay compensation may be enforced by awarding a sentence in default.

30. In view of the above, we find no illegality in the order rt passed by the learned Magistrate and confirmed by the Sessions Court in awarding a sentence in default of payment of

compensation. The High Court was in error in setting aside the sentence imposed in default of payment of compensation.

40. Thus, there is no infirmity in imposing a sentence of

imprisonment in case of default in the payment of compensation.

41. No other point was urged.

42. In view of the above, the present revision fails, and the

same is dismissed.

43. Records of the learned Courts below be sent back

forthwith, along with a copy of this judgment.

(Rakesh Kainthla) Judge 12th November, 2025 (ravinder)

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