1

IN THE HON’BLE HIGH COURT OF HIMACHAL PRADESH

IN ITS CRIMINAL APPELLATE JURISDICTION

CRIMINAL REVISION NO. OF 2018

IN THE MATTER OF:

Devinder Sharma

… PETITIONER
(ORIGINAL ACCUSED)
Versus

Balbir Singh
…RESPONDENT

THE HUMBLE PETITION OF THE

PETITIONER (ORIGINAL ACCUSED)
ABOVE NAMED U/S. 401 READ WITH
SECTION 397 OF Cr.P.C. FOR REVISING
AND SETTING ASIDE THE JUDGMENT
AND ORDER DATED 26.06.2014/29.06.2015
PASSED BY THE LD. ADDITIONAL CHIEF
JUDICIAL MAGISTRATE NADAUN,
HAMIRPUR, IN CRIMINAL COMLAINT
NO. 43-1-2011 AND THE JUDGMENT AND
ORDER DATED 26.02.2018, PASSED BY
THE Ld. ADIITIONAL SESSIONS JUDGE,
HAMIRPUR, IN CRIMINAL APPEAL NO. 24
OF 2015.

Dated this 18th JANUARY, 2022

Shimla PETITIONER

Through Counsel
Arun Raj
ADVOCATE FOR THE PETITIONER
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MOST RESPECTFULLY SHEWETH:

1) The Petitioner (Original Accused) is a permanent resident of District

Hamirpur, Himachal Pradesh. The Petitioner is a peace loving and
law abiding citizen having no previous criminal antecedents to his
discredit. The Respondent (Original Complainant) is a private
person having his place of residence at the address mentioned in the
cause title.

2. Pursuant to the private complaint filed by the Respondent in the

Court of Ld. Additional Chief Judicial Magistrate on 04.05.2011 for
an offence u/s. 138 of the Negotiable Instruments Act, the Ld. Trial
Court was pleased to record the verification statement by way of
affidavit of Krishan Kumar Shastri and was pleased to issue process
against the Petitioner for an offence vide C.C. No. 43-1-2011.
Annexed hereto and marked as Exhibit A is the copy of the
complaint filed by the Respondent. The alleged offence u/s. 138 of
the Negotiable Instruments Act is non-cognizable, bailable and
summary triable in nature. The particulars of charge were explained
to the Petitioner and he pleaded not guilty to the charge.

3) The prosecution case in brief as can be seen from the copy of

complaint furnished to the Petitioner is as follows:

a) The Respondent/complainant in the month of June 2008

on being requested by the accused/petitioner, advanced
the accused a loan of Rs.3,57,000/-. The accused to this
effect issued cheque No.309045 dated 31.12.2009
amounting to Rs.3,57,000/- drawn against his account
no.65047406639 with State Bank of Patiala Barsar,
Hamipur District Hamirpur and when it was presented for
encashment, was returned with endorsement "funds
insufficient". The complainant informed the accused and
asked him to return his amount but he again issued cheque
No.309046 dated 27.01.2010 for Rs.3,57,000/- drawn
against his said account and assured that this time cheque
will be encashed but on presentation, the same also met
with same fate.
 3

b) The complainant contacted the accused and asked him to

return money but this time the accused entered into an
agreement dated 22.02.2010 undertaking to return the
amount by 15.06.2010. The accused again failed to abide
by the understanding and again issued a cheque bearing
No.794952 dated 19.02.2011 for Rs.3,57,000/-against the
same account which was accepted by complainant being
close friend and co villager of the accused. On
presentation to his banker, cheque again came to be
dishonoured for want of sufficient funds vide memo dated
04.03.2011.
c) A legal registered notice dated 15.03.2011 was issued
which was duly received on 21.03.2011. As accused
failed to make the payment within 15 days time i.e till
5.4.2011, hence this complaint was filed under section 138
of NI Act on 4.5.2011.
4) The Petitioner states the complainant in addition to his own
statement examined two more witnesses. Following are the
evidences led by the complainant to establish his case:
a) The complainant as CW3 in his examination-in-chief has
filed affidavit Ext.CW3/A wherein reiterated the facts as
mentioned in the complaint. In support has examined CW1
Munshi Ram and CW2 Jagdish Chand.
b) That CW1 is a petition writer and stated that agreements
dated 22.02.2010 as Ext.CW1/A and dated 13.12.2010 as
Ext.CW1/B were executed in between the parties and have
been scribed by him. CW2 has signed agreement Ext.CW
1/A as an identifier. Further stated that one Shri Banku
Ram was witness and he also signed in his presence.
Ext.C1 is cheque No.794952 dated 19.02.2011 amounting
to Rs.3.57.000/- alleged to be issued by accused against his
account with State Bank of Patiala, Barsar, District
Hamirpur Ext.C2 is memorandum dated 0403.2011 of said
bank showing that the cheque came to be dishonoured for
want of sufficient funds in the account of the accused. The
cheque and memo were returned vide reference letter
Ext.C3. Ext CA is legal notice dated 15.03.2011.
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c) ExtC5 is the postal receipt and Ext.C6 is the

acknowledgement showing that legal notice was received.
Ext.CW1/A is agreement dated 22.02.2010 executed in
between the parties As per this document, the accused on
admining the fact of availing of an advance amounting to
Rs 3,57,000/- from complainant in June 2008 undertook to
return the same by 15.06.2010. This document has been
signed by the parties, Banku Ram as witness and CW2
Jagdish as an identifier. CW1 stated that being petition
writer he has scribed this document. Ext.CW1/B is
agreement dated 13.12.2010 executed in between the
parties. As per this document, the accused on admitting his
above said liability undertook to return the amount in
installments as first installment by 31.12.2010, second by
1502.2011 and the balance by 31.03.2011. In addition to
signatures of the parties, it has been signed by Krishan
Chand as witness and Om Parkash Lambardar as an
identifier.
5) The Petitioner further states that while recording his aforesaid
statement u/s. 313 of Cr.P.C, the Ld. Magistrate did not show any
of the documents produced on record by the C.W.No.1 along with
his affidavit evidence, so as to record the explanation of the
Petitioner. Thus, the Petitioner had no opportunity to offer his
explanation with regard to the contents of the documents produced
on record by the C.W.No.1 along with his affidavit evidence when
the Petitioner was questioned by the Ld. Magistrate u/s. 313 of
Cr.P.C.
6) The Petitioner states that on close of evidence of complainant, he
was examined under section 313 of Cr.PC where while admitting
the facts of issuance of cheque in question alleged that it had been
issued as a security and in support of his said defence, he himself
stepped into the witness box as DW1.
.
8) The Petitioner states that after hearing the arguments of both the
parties, Ld. Additional Chief Judicial Magistrate Nadaun, Hamirpur
vide his judgment and order dated 26.06.2014/29.06.2015 in
Complaint no. 43-1-2011 was pleased to convict the Petitioner for an
offence u/s. 138 of the Negotiable Instruments Act and was further
 5

pleased to sentence the Petitioner to suffer S.I. for 6 months and

directed him to pay compensation of Rs.3,92,700/-. Annexed hereto
and marked as Exhibit B is the copy of the said judgment and order
dated 26.06.2014/29.06.2015 passed by the Ld. Additional Chief
Judicial Magistrate Nadaun, Hamirpur in the said in Complaint no.
43-1-2011.
9) The Petitioner states that against the aforesaid judgment and order
dated 26.06.2014/29.06.2015 passed by the Ld. Additional Chief
Judicial Magistrate Nadaun, Hamirpur in the said in Complaint no.
43-1-2011. convicting the Petitioner for an offence u/s. 138 of the
Negotiable Instruments Act and sentencing him to suffer S.I. for 6
months and to pay compensation of Rs. 3,92,700/- , the Petitioner
preferred a Criminal Appeal before the Hon’ble Sessions Court at
Hamirpur, vide Criminal Appeal no 24 of 2015.The Hon’ble
sessions court was pleased to admit the said appeal, call for the
records and proceedings of the said case from the Ld. Trial Court,
suspend the sentence imposed upon the Petitioner and was further
pleased to enlarge the Petitioner on bail pending the hearing and
final disposal of the said appeal.

10) The Petitioner states that after hearing the submissions of both the
parties, the Hon’ble Sessions Court vide his judgment and order
dated 26.02.2018 was pleased to dismiss the said Criminal Appeal
no. 24 of 2015 and grant time up to 23th March, 2018, to the
Petitioner, for surrendering before the Ld. Trial Court in the said
case. Annexed here to and marked Exhibit C is the certified copy of
the judgment and order dated 26.02.2018 passed by the Ld.
Additional Sessions Judge, Hamirpur in the said Criminal Appeal
no 24 of 2015.

11) Being aggrieved and dissatisfied with the (i) judgment and order
dated 26.06.2014/29.06.2015 passed by the Ld. Additional Chief
Judicial Magistrate Nadaun, Hamirpur in the Complaint no. 43-1-
2011. convicting the Petitioner for an offence u/s. 138 of the
Negotiable Instruments Act and sentencing him to suffer S.I. for 6
months and directing him to pay compensation of Rs. Rs. 3,92,700/-,
and the (ii) judgment and order dated 26.02.2018 passed by the Ld.
Additional Sessions Judge, Hamirpur in the Criminal Appeal no 24
 6

of 2015, the Petitioner most respectfully approaches this Hon’ble

Court in its jurisdiction u/s. 401 of Cr.P.C read with section 397
Cr.PC. and prays that the records and proceedings of the case be
called for and after examining the legality, validity, propriety and
correctness of the (i) judgment and order dated
26.06.2014/29.06.2015 passed by the Ld. Additional Chief Judicial
Magistrate Nadaun, Hamirpur in the Complaint no. 43-1-2011and
(ii) the judgment and order dated 26.02.2018 passed by the Ld.
Additional Sessions Judge, Hamirpur in the Criminal Appeal no 24
of 2015, the same be revised and set aside on following amongst the
other grounds.

GROUNDS

a) The Ld. Magistrate erred in law in recording the finding of

guilt against the Petitioner for an offence u/s. 138 of the
Negotiable Instruments Act. The Ld. Magistrate ought to
have appreciated and held that the Respondent had failed to
establish the ingredients contemplated u/s. 138 of the
Negotiable Instruments Act to bring home the charge against
the Petitioner. The Ld. Magistrate therefore ought to have
held and recorded that the Respondent had failed to prove its
case against the Petitioner beyond reasonable doubt.

b) The Ld. Magistrate committed a serious error of law as he

lost sight of the fact that it was not enough for the cheque to
have been issued and the same to have been dishonored, it
was also for all its intents and purposes mandatory to
establish that cheque was issued for discharge, in whole or in
part for any legally enforceable debt or liability.
Complainant had not examined any witness before whom
loan was advanced. The mode of payment has been not
disclosed, neither the source from which alleged money
arranged to be advanced has been disclosed. The complainant
in his affidavit and complaint specifically stated that he had
advanced the loan of Rs 3,57,000/- to the accused in the
month of June, 2008 and the said amount was withdrawn
from his saving account in the bank, Post office saving
 7

account and GPF and as such for proof of the same, the
account statements were placed on record under section 311
of Cr.P.C. Interestingly, the evidence regarding the
withdrawals of money in the month of June, 2008 is contrary
to the claim of the complainant as only amount of Rs
61,400/- was withdrawn from different accounts in the month
of June,2008 i.e Rs.36,400 was withdrawn from his Post
office savings account on 6.6.2008 and on 24.6.2008 Rs
25,000 was withdrawn from his another Post office savings
account, it is further pertinent to mention here that the other
account statement of savings account in the bank did not have
any entry of withdrawal in the month of June, 2008.
Therefore, under such circumstance it is quite indigestible and
implausible to believe that complainant would advance loan
to the tune of Rs. 3,57,000/ and hence he has failed to prove
that he had required funds for having advanced the amount to
the accused in the month of June,2008 without having any
written contracts or receipt for the same. These facts along
with the attending circumstances make way for the entire case
set out by the complainant to get enveloped and enamored
into the inscrutable smokes of doubt
The Complainant admitted of having not in possession of any
receipt against the alleged advancement of loan in question
except the cheque. In complaint, complainant has stated to
have received cheque dated 31.12.2009 from accused after
the one year and six months of advancement of loan in
question against which was alleged to be dishonored and
against which no complaint was made under section138 of NI
Act.
Thus, it is plainly clear that complainant did not take any
security against the alleged loan in question. It appears quite
unbelievable that a person earning meager income and having
family to support would venture out in advancing such a huge
amount of Rs. 3,57,000/- without securing any receipts and
without any interest on the loan amount. The incredulity and
indigestibility gets deeper further in circumstances of the
admission of the complainant that he even did not know as to
 8

on which date he has advanced him the money. The claim

appears to be highly doubtful.

In John K. Abraham v. Simon C. Abraham And

Another (2014) 2 Supreme Court Cases 236, It has been held
as follows:

" It has to be stated that in order to draw

presumption under Section 118 along with section
139 of Negotiable instrument Act, the burden was
heavily upon the complainant to have shown that he
had the required funds for having advanced the
amount to the accused ; that the issuance of the
cheque in support of the said payment advanced was
true and that the accused was bound to make the
payment as had been agreed while issuing the cheque
in favor of the complainant"

It's quite normal for ordinary prudent person to remain

assiduous and watchful while humoring into financial
transactions. In ordinary course of human nature, money
matters are considered sensitive enough to demand alert and
attentive attendance of human psyche. The degree of alertness
and attentiveness gets bigger and sharper with the increase in
the amount and the fragile financial status of the lender which
are inversely proportional to each other. Here in the present
case, when a huge amount of money has been alleged to be
advanced, it's all natural for the complainant to come forth
with reliable and credible evidence. But, accused has
remained questionably inert and indolent in bringing forth any
plausible evidence to win over the confidence of the court.

Hon'ble High Court of Delhi in the matter titled as Satish

Kumar v. State NCT of Delhi& Anr. 2013 VIII AD (Delhi)
465. , has held as follows:

"The Court finds some merit in the observation made

by the learned ASJ that the petitioner had not been able
to prove any of the three sources of money though he
had specifically mentioned the same in his
deposition .In fact, failure on his part to prove any
entry in his bank account showing withdrawal of any
amount during the relevant period created a
reasonable doubt about the consideration for the
cheque in question........." " .....However once burden
of proof had shifted back to petitioner/complainant, he
was unable to prove his case beyond reasonable doubt
by establishing the source of alleged friendly loan
extended to respondent No.2 ,thus disentitling him to
 9

grant of relief on basis of the negotiable

instruments....."

In K. Subramani Vs. K. Damodar Naidu 2015 Civil court

cases 001 (S.C), Hon'ble Supreme Court Of India found the
requirement of the complainant to establish his financial
capacity to lend money relevant in cases u/s 138 of N.I Act.

Thus, in view of the totality of circumstances and the settled

legal positions as discussed above, the case attempted to be
built by the complainant, is prima facie suffering from fatal
infirmities so much so that it goes directly to the root of the
case and shakes the very edifice on which the case of the
complainant rests. It is also relevant to mention here that the
criminal conviction entails enigmatic and stigmatic exposures
and experiences and thus it becomes of paramount importance
to demand evidence of unimpeachable character and of
unambiguous nature.

d) The Ld. Magistrate also erred in law in holding that in the

absence of any sort of payment made by the said cheque in
question which was issued by way of a security came to be
vanished for getting converted into liability. The Ld.
Magistrate ought to have appreciated and held that since
Ex.C1 was given by way of security, the same could not have
been misused by the Respondent in a wrongful manner so as
to fasten any criminal liability upon the Petitioner.
The Ld. Magistrate ought to have followed and taken in to account
the principles laid down by the Hon'ble Supreme Court of India, in
case titled as M.S. Narayana Menon & Mani v.State of Kerala &
another 2006 (3) R.C.R. (Criminal) 504 : 2006 (3) CCC 468
(SC) wherein it has held that:
"in case of dishonour of a cheque(alleged to be
issued towards outstanding dues) in business dealing,
if account books not produced by the complainant, the
contention of accused that cheque was issued as security
can be believed and the conviction can be set aside." Last
but not the least, the complainant did not furnish the Income
Tax Returns of the relevant years i.e. 2004-05 onwards for
the reasons best known to him. Had the
complainant furnished his income tax returns then it could
have been very easily ascertained if the total amount of
` 1,94,050/- was due towards the accused or not. All these
facts and circumstances clubbed together to create
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more than a reasonable doubt over the version of the

complainant and lends reasonable support to the version of
the accused that the cheque in question was a blank cheque
and it was not issued in discharge of any legally
enforceable debt/liability. The onus was shifted upon the
complainant and he was required to prove his case beyond
all shadows of reasonable doubt but, as discussed above, in
absence of books of account maintained by him in ordinary
course of business and income tax returns, he could not
establish/prove his case beyond all shadows of reasonable
doubt. Hence, it has been clearly established that the
cheque was definitely not supported by a consideration of
` 1,50,000/- on the date of its issuance."

f) The Ld. Magistrate erred in law in holding that the testimony

of the C.W.No.1 was corroborated by the documentary
evidence. The Ld. Magistrate ought to have appreciated and
seen that the contents of Ex.CW1/A and Ex.CW2/B were
inconsistent and contrary to each other so as to provide any
corroboration to the testimony of the C.W.No.1.

g) The impugned order is illegal, incorrect, improper and

contrary to the weightage of oral and documentary evidence
on record. The Ld. Magistrate ought to have acquitted the
Petitioner for an offence u/s. 138 of the Negotiable
Instruments Act, since the Respondent had failed to prove the
case beyond reasonable doubt.

i) The Ld. Magistrate ought to have appreciated that the alleged

offence was merely of technical nature, which did not entail
any moral turpitude on the part of Petitioner. The Ld.
Magistrate ought to have therefore called for appropriate
report from the Probation Officer under Section 4(2) of the
above Act, to explore the possibility of granting or otherwise,
the benefit of the said Act to the Petitioner, before proceeding
to award the substantive sentence.

j) The Ld. Magistrate erred in law in complying with the

provisions of Sec.313 of Cr.P.C. The Ld. Magistrate has not
chosen to put the entire evidence of the prosecution, to the
mouth of the Petitioner while recording his statement u/s.313
of Cr.P.C. The Ld. Magistrate has failed to afford just, fair,
reasonable and adequate opportunity to the Petitioner, to
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explain the incriminating circumstances appearing in the

evidence of the C.W.No.1, while recording the statement of
the Petitioner u/s.313 of Cr.P.C. On account of non-
compliance of the provisions of Sec.313 of Cr.P.C., the
Petitioner has suffered grave prejudice and serious
miscarriage of justice, which has resulted into the conviction
of the Petitioner. The Ld. Magistrate was consequently
disentitled in law from using the various pieces of evidence,
to the detriment of the Petitioner, which were never put to the
mouth of the Petitioner, while recording his statement u/s 313
of Cr. P.C.

k) The Ld. Magistrate has not attempted to ascertain or find out

the financial means or capacity of the Petitioner, to satisfy
himself about the capacity or otherwise of Petitioner, for the
payment of alleged compensation of Rs.3,92000/- Lakhs
before proceeding to pass an order u/s. 357 (3) of Cr.P.C.
The Ld. Magistrate was bound and liable to ascertain and take
into account the financial capacity/competency of the
Petitioner, before exercising his jurisdiction u/s. 357 (3) of
Cr.P.C. for the payment of compensation.

l) The impugned judgment and order passed by the Ld.

Magistrate is absolutely illegal, incorrect, and improper and
against the well-settled interpretation governing the
provisions of Sec.138 of Negotiable Instruments Act. The
Ld. Magistrate ought to have appreciated and held that the
Respondent had indulged in suppressing true and correct facts
in the Complaint and Affidavit evidence of C. W. No.1.

m) The Ld. Magistrate ought to have followed and taken in to

account the principles laid down by the Hon’ble Supreme
Court in the case of Kali Ram v. State of Himachal Pradesh
reported in 1973 2 SCC 808, wherein it is held:

"One of the cardinal principles which has always to be

kept in view in our system of administration of justice
for criminal cases is that a person arraigned as an
accused is presumed to be innocent unless that
presumption is rebutted by the prosecution by
production of evidence as may show him to be guilty of
the offence with which he is charged. The burden of
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proving the guilt of the accused is upon the prosecution

and unless it relieves itself of that burden, the
courts cannot record a finding of the guilt of the accused.
There are certain cases in which statutory
presumptions arise regarding the guilt of the accused,
but the burden even in those cases is upon the
prosecution to prove the existence of facts, which have to
be present before the presumption can be drawn. Once
those facts are shown by the prosecution to exist, the
Court can raise the statutory presumption and it
would, in such an event, be for the accused to rebut
the presumption. The onus even in such cases upon the
accused is not as heavy as is normally upon the
prosecution to prove the guilt of the accused. If some
material is brought on the record consistent with the
innocence of the accused which may reasonably be true,
even though it is not positively proved to be true,
the accused would be entitled to acquittal."

n) The Ld. Magistrate further ought to have appreciated and

followed the principles laid down by the Hon’ble Supreme
Court in the case of Bharat Barrel & Drum Manufacturing
Company v. Amin Chand Payrelal reported in 1999 3 SCC
35 wherein it is held that:

"Upon consideration of various judgments as noted

hereinabove, the position of law which 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 defense. 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 case, where 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 presumption
arising under Section 118(a) in his favour. The court
may not insist upon the defendant to 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"

o) The Ld. Magistrate ought to have taken in to account and

consideration the principles laid down by the Hon’ble
Supreme Court in the case of M. Abbas Versus State of
 13

Kerala, reported in 2001 (4) JT 92 : 2001 (4) Supreme 405,

wherein it has been held that:
“Where an accused sets up a defence or offers an
explanation it is well settled that he is not required to
prove his defence beyond a reasonable doubt but only
by preponderance of probabilities”.

p) The Ld. Magistrate has failed to appreciate, follow and take

into account the ratio laid down by this Hon’ble Court, in the
case of Prabhakar D. Naik Versus Jerry S. Viegas &
another reported in 2002 Bom.C.R.(Cri.) 623, wherein it is
held that
“It is true that for rebutting the presumption under
section 139 of the Negotiable Instruments Act, 1881, it is
not necessary for the accused to rebut it by proof beyond
reasonable doubt. The accused can rebut the said
presumption either by leading evidence himself or by
relying upon admissions and circumstances as appearing
in the evidence of the prosecution. The accused is
required to rebut the presumption by preponderance of
probabilities. In other words, the accused is required to
probablise his defence”.
The ratio laid down by this Hon’ble Court, in the aforesaid
judgment is squarely applicable to the case of Petitioner, who
had successfully rebutted the presumption u/s. 139 of the
Negotiable Instruments Act.

q) The Ld Addl. Sessions judge further committed a serious error

of law in up-holding the judgment of conviction passed by the
Ld. Magistrate The ld. Addl. Sessions judge further erred in
law in holding that the trial court had properly reach to the
conclusion that the ingredients of Sec. 138 of the Negotiable
Instruments Act were properly established by the Respondent
and at the same time Petitioner had failed to rebut the
statutory presumption U/s. 138 of the Negotiable Instruments
Act. In fact, the Petitioner had successfully probablised and
established his defence in the said case and there was neither
any obligation nor necessity on the part of the Petitioner to
step in to the witness box, for adducing any evidence in
rebuttal.

r) The ld Addl. Sessions judge further committed a serious error of

law as he lost sight to the fact that by virtue of Section 138 of the
N.I. Act, the Criminal Court after convicting the accused has to
 14

impose punishment of imprisonment which is not mandatory, as

it is discretion vested with the Criminal Court either to impose
jail sentence or sentence of fine only.
It is further humbly submitted that Hon’ble Supreme Court in the
matter of The Assistant Commissioner, Assessment-II,
Bangalore and Others v. M/s. Velliappa Textiles Ltd. And
another 2003 (11) SCC 405 has held as under :-
“35........Where the legislature has granted discretion
to the court in the matter of sentencing, it is open to
the court to use its discretion. Where, however, the
legislature, for reasons of policy, has done away with
this discretion, it is not open to the court to impose
only a part of the sentence prescribed by the
legislature, for that would amount re-writing the
provisions of the statute.”

But, here in the instant case, in Section 138 of the N.I. Act the
word “or” has been employed and discretion has been conferred
to the Criminal Court sentencing the convicted person or offence
under Section 138 of the N.I. Act, Thus, there is a discretion left
with the Criminal Court either to sentence the accused with
imprisonment or to punish the accused with the sentence of fine
upon considering the facts and circumstances of the case.
In the matter of Damodar S. Prabhu v. Sayed Babalal (2010) 5
SCC 663 Their Lordships of the Supreme Court while
examining the object sought to be achieved by provisions of
Section 138 of the N. I. Act and purpose underlying the
punishment provided therein has held that Section 138 of the
N.I. Act cases are meant to secure payment of money by holding
as under:-
“17. Unlike that for other forms of crime, the punishment
here (insofar as the complainant is concerned) is not a
means of seeking retribution, but is more a means to
ensure payment of money. The complainant’s interest lies
primarily in recovering the money rather than seeing the
drawer of the cheque in jail. The threat of jail is only a
mode to ensure recovery. As against the accused who is
willing to undergo a jail term, there is little available as
remedy for the holder of the cheque.”

In the matter of Somnath Sarkar v. Utpal Basu Mallick and

another(2013) 16 SCC 465 , Hon’ble Supreme Court while
considering the punishment to be imposed under Section 138 of the
N.I. Act have held in no uncertain term that under Section 138 of the
 15

N.I. Act, only fine sentence can be imposed by the Criminal Court
and observed as under:-
“15.............Suffice it to say that the High Court was
competent on a plain reading of Section 138 to impose a
sentence of fine only upon the appellant. Inasmuch as the
High Court did so, it committed no jurisdictional
error...........”
Thus, from the provisions contained in Section 138 of the N.I. Act
and going by the law laid down by Their Lordships of the Supreme
Court in aforesaid judgments it is quite vivid that Criminal Court
sentencing the accused for commission of offence under Section 138
of the N.I. Act is competent to impose sentence of fine only as
imposition of jail sentence is not mandatory as it is discretion vested
with the Criminal Court either to impose jail sentence or sentence of
fine only depending on the facts and circumstances of particular
case.
s) That the trial Court as well as the Court of Session committed a
serious error of law in imposing compensation & imprisonment upon
the petitioner/accused under Section 357(3) of the Cr.P.C. In order to
consider legality of the order it would be appropriate to set out the
provisions contained in the aforesaid provision:-
“357. Order to pay compensation.- (1) When a court imposes
a sentence of fine or a sentence (including a sentence of death)
of which fine forms a part, the court may, when passing
judgment, order the whole or any part
of the fine recovered to be applied-
(a) in defraying the expenses properly incurred in the
prosecution;
(b) in the payment to any person of compensation for any
loss or injury caused by the offence, when compensation is,
in the opinion of the court, recoverable by such person in a
civil court;
(c)-(d) ** ** **
(2) ** ** **
(3) When a court imposes a sentence, of which fine does not
form a part, the court may, when passing judgment, order the
accused person to pay, by way of compensation, such amount
as may be specified in the order to the person who has
suffered any loss or injury by reason of the act for which the
accused person has been so sentenced.
(4) An order under this section may also be made by an
appellate court or by the High Court or Court of Sessions
when exercising its powers of revision.
(5) At the time of awarding compensation in any subsequent
civil suit relating to the same matter, the court shall take into
account any sum paid or recovered as compensation under this
section.”

The law with regard to grant of compensation under Section 357(3)

of the Cr.P.C. in cases arising from Section 138 of the N.I. Act is
 16

well settled. The object of Section 138 of the N.I. Act is punitive as
well as compensatory in nature as it provides a single forum and
single proceeding for enforcement in criminal liability (for
dishonouring the cheque) and for enforcement of civil liability (for
realization of cheque amount). In the matter of R. Vijayan v. Baby
and another (2012) 1 SCC 260, Their Lordships of the Supreme
Court culled out the following principle contained in provisions of
Chapter-XVII of the Act, which states as under:-
“ (i) The provision for levy of fine which is linked to the
cheque amount and may extent to twice the amount of
the cheque (Section 138) thereby rendering Section
357(3) virtually infructuous insofar as cheque dishonour
cases are concerned.”
Their Lordships in the later part of judgment while considering the
intention of legislature for enacting Section 138 of the N.I. Act has
held as under:-
“17. The apparent intention is to ensure that not only the
offender is punished, but also ensure that the complainant
invariably receives the amount of the cheque by way of
compensation under Section 357(1)(b) of the Code. Though a
complaint under Section 138 of the Act is in regard to
criminal liability for the offence of dishonouring the cheque
and not for the recovery of the cheque amount (which strictly
speaking, has to be enforced by a civil suit), in practice once
the criminal complaint is lodged under Section 138 of the
Act, a civil suit is seldom filed to recover the amount of the
cheque. This is because of the provision enabling the court to
levy a fine linked to the cheque amount and the usual
direction in such cases is for payment as compensation, the
cheque amount, as loss incurred by the complainant on
account of dishonour of cheque, under Section 357(1) (b) of
the Code and the provision for compounding the offences
under Section 138 of the Act. Most of the cases (except those
where liability is denied) get compounded at one stage or the
other by payment of the cheque amount with or without
interest. Even where the offence is not compounded, the
courts tend to direct payment of compensation equal to the
cheque amount (or even something more towards interest) by
levying a fine commensurate with the cheque amount. A stage
has reached when most of the complainants, in particular the
financing institutions (particularly private financiers) view
the proceedings under Section 138 of the Act, as a
proceeding for the recovery of the cheque amount, the
punishment of the drawer of the cheque for the offence of
dishonour, becoming secondary.
18. Having reached that stage, if some Magistrates go by the
traditional view that the criminal proceedings are for
imposing punishment on the accused, either imprisonment or
fine or both, and there is no need to compensate the
complainant, particularly if the complainant is not a “victim”
in the real sense, but is a well-to-do financier or financing
institution, difficulties and complications arise. In those cases
where the discretion to direct payment of compensation is not
exercised, it causes considerable difficulty to the
complainant, as invariably, by the time the criminal case is
 17

decided, the limitation for filing civil cases would have

expired. As the provisions of Chapter XVII of the Act strongly
lean towards grant of reimbursement of the loss by way of
compensation, the courts should, unless there are special
circumstances, in all cases of conviction, uniformly exercise
the power to levy fine up to twice the cheque amount (keeping
in view the cheque amount and the simple interest thereon at
9% per annum as the reasonable quantum of loss) and direct
payment of such amount as compensation. Direction to pay
compensation by way of restitution in regard to the loss on
account of dishonour of the cheque should be practical and
realistic, which would mean not only the payment of the
cheque amount but interest thereon at a reasonable rate.
Uniformity and consistency in deciding similar cases by
different courts, not only increase the credibility of cheque as
a negotiable instrument, but also the credibility of courts of
justice.
19. We are conscious of the fact that proceedings under
Section 138 of the Act cannot be treated as civil suits for
recovery of the cheque amount with interest. We are also
conscious of the fact that compensation awarded under
Section 357(1)(b) is not intended to be an elaborate exercise
taking note of interest, etc. Our observations are necessitated
due to the need to have uniformity and consistency in
decision making”.

Thus, it is quite vivid that under Section 138 of the N.I. Act Criminal
Court is competent to levy fine and direct payment of such amount
as compensation by way of restitution in regard to the loss on
account of dishonour of cheque under Section 357(1)(b) of the
Cr.P.C. and as such, the power under Section 357(3) of the Cr. P. C.
cannot be exercised by Criminal Court in the cheque dishonour
cases.
Turning back to the facts of the case it is apparent that the learned
trial Magistrate after convicting the petitioner for offence under
Section 138 of the N.I. Act sentenced him to undergo simple
imprisonment for six months and awarded compensation of
Rs.3,92,700/- under Section 357(3) of the Cr.P.C.
Taking into consideration the provisions contained in Section 138 of
the N.I. Act in which punishment imposable is two years
imprisonment or with fine which can be twice to the amount of
cheque and taking note of the law laid down in this behalf by Their
Lordships of the Supreme Court in the aforesaid cases that the
punishment to be awarded in Section 138 of the N.I. Act cases are
meant to ensure payment of money and threat of jail is only to
ensure recovery and as such, imposition of jail sentence is not
mandatory,
 18

t) The reasons assigned by the ld. Addl. Sessions judge for confirming
the impugned order of trial court and dismissing the appeal of the
Petitioner are illegal, incorrect, improper and contrary to the
weightage of oral and documentary evidence available on record.
The ld. Addl. Sessions judge has not appreciated and considered the
oral and documentary evidence of the said case, in their proper
perspective while exercising its appellate jurisdiction.

10) The Petitioner craves leave to add, amend, alter or modify the
grounds urged hereinabove.

11) The Petitioner has not filed any other application or petition
previously against the impugned judgment and orders before this
Hon’ble Court.

12) The Petitioner states that after the passing of the impugned judgment
and order, the Petitioner has deposited the compensation of
Rs.78,540/- i.e 20% of the compensation amount of Rs.3,92,700/- in
the Ld. Trial Court on 02.09.2015 as per the directions of the Ld.
Addl. Sessions Judge, Hamirpur vide order dated 03.08.2015. The
Petitioner had also furnished the bail bonds as per the directions
issued by the Hon’ble Sessions Court in the said Criminal Appeal
no. 24 of 2015.

13) The Petitioner states that after the conviction and punishment of the
Petitioner as stated hereinabove, the Ld. Addl. Chief Judicial
Magistrate, Nadaun was pleased to suspend the sentence imposed
upon the Petitioner u/s. 389 (3) of Cr.P.C vide his order_______. and
was further pleased to enlarge the Petitioner on bail. The Petitioner
has duly executed his fresh bail bond, during the pendency and
hearing of said criminal appeal. Thus, the Petitioner was on bail in
the above case throughout the trial and throughout the pendency of
said criminal appeal.

14) The Petitioner states that the impugned judgment and order has been
passed on 26.02.2018. The Petitioner has filed the present
application within the period of limitation.

PRAYER
 19

Under the circumstances mentioned hereinabove, the Petitioner most

respectfully prays that this Hon’ble Court be pleased to:

a) Call for the Records and Proceedings on the file of Ld.

Additional Chief Judicial Magistrate Nadaun, Hamirpur in the
Complaint no. 43-1-2011.
b) Revise and set aside the (i) judgment and order dated
26.06.2014/29.06.2015 passed by the Ld. Additional Chief
Judicial Magistrate Nadaun, Hamirpur in the Complaint no.
43-1-2011, (ii) the judgment and order dated 26.02.2018
passed by the Ld. Additional Sessions Judge, Hamirpur in
the Criminal Appeal no 24 of 2015, after examining the
legality validity propriety and correctness of the aforesaid two
judgments and orders.
c) Stay the execution and operation of the reasons and order
dated 26.06.2014/29.06.2015 passed by the Ld. Additional
Chief Judicial Magistrate Nadaun, Hamirpur in the Complaint
no. 43-1-2011, pending the hearing and final disposal of the
present revision Application.
d) Enlarge the Petitioner on same bail upon his executing fresh
bail bond before the Ld. Additional Chief Judicial Magistrate
Nadaun, Hamirpur in the Complaint no. 43-1-2011, pending
the hearing and disposal of the present appeal.
e) Pass such other and further orders as may be deemed just
proper and reasonable.

Dated this 16th May, 2018

Shimla PETITIONER

Through Counsel
Arun Raj
ADVOCATE FOR THE PETITIONER

IN THE HON’’BLE HIGH COURT OF HIMACHAL PRADESH

IN ITS CRIMINAL APPELLATE JURISDICTION

CRIMINAL REVISION NO. OF 2018

 20

IN THE MATTER OF:

Ashok Sharma
… PETITIONER
(ORIGINAL ACCUSED)
Versus

Krishan Kumar Shastri

…RESPONDENT

SYNOPSIS

I. LIST OF DATES AND EVENTS

NO. DATE EVENTS

1. June, 2008 The Respondent/complainant in the

month of June, 2008 advanced a loan to
the petitioner/accused to the tune of
Rs.3,57,000/-. The accused/petitioner to
this effect issued cheque No.309045
dated 31.12.2009
3. 22.02.2010 The complainant contacted the accused
and asked him to return money but this
time the accused entered into an
agreement dated 22.02.2010 undertaking
to return the amount by 15.06.2010. The
accused again failed to abide by the
understanding and again issued a cheque
bearing No.794952 dated 19.02.2011 for
Rs. 3,57,000/-
4 15.03.2011 A legal registered notice dated
15.03.2011 was issued which was
received on 21.03.2011. As accused
failed to make the payment within 15
days time i.e till 5.4.2011
5 4.5.2011 Complainint filed complaint under
section 138 of NI Act on 4.5.2011
 21

registered as CC.No. 43-1-2011

6. 26.06.2014/29.06.2015
after Ld. Additional Chief Judicial Magistrate
Nadaun, Hamirpur vide his judgment and
order dated 26.06.2014/29.06.2015 in
Complaint no. 43-1-2011 was pleased to
convict the Petitioner for an offence u/s.
138 of the Negotiable Instruments Act
and was further pleased to sentence the
Petitioner to suffer S.I. for 6 months and
directed him to pay compensation of
Rs.3,92,700/-.

7. 25.07.2015 The Petitioner preferred a Criminal

Appeal before the Hon’ble Sessions
Court at Hamirpur, vide Criminal Appeal
no 24 of 2015.

8 26.02.2018 Hon’ble Sessions Court vide its judgment

and order dated 26.02.2018 was pleased
to dismiss the said Criminal Appeal no.
24 of 2015 and grant time up to 23 th
March, 2018, to the Petitioner, for
surrendering before the Ld. Trial Court in
the said case..
Hence present Criminal Revision
Application.

II. POINTS TO BE URGED

 Whether the complainant has the initial burden to establish his

financial capacity to lend money or has to establish that he had
the required funds for having advanced the amount to the
accused relevant in cases u/s 138 of N.I Act?
 Whether a cheque issued by way of security can come within the
ambit and purview of Sec.138 of the Negotiable Instruments Act,
so as to render the drawer of such cheque liable, upon dishonour
thereof?
 22

 Whether under Section 138 of the N.I. Act Criminal Court is

competent to levy fine only and direct payment of such amount
as compensation by way of restitution in regard to the loss on
account of dishonour of cheque under Section 357(1)(b) of the
Cr.P.C. and as such, the power under Section 357(3) of the Cr.
P. C. cannot be exercised by Criminal Court in the cheque
dishonour cases?

III. LIST OF ACTS RELIED UPON BY THE PETITIONER

1. Criminal Procedure Code
2. Negotiable Instruments Act
3. Any other Act as may be found necessary
IV. JUDGEMENTS TO BE CITED :
1. John K. Abraham v. Simon C. Abraham and Another (2014) 2
Supreme Court Cases 236.
2. Satish Kumar v. State NCT of Delhi& Anr. 2013 VIII AD (Delhi)
465.
3. Subramani v. K. Damodar Naidu 2015 Civil Court Cases 001 (S.C)
4. M.S. Narayana Menon & Mani v.State of Kerala & another 2006 (3)
R.C.R. (Criminal) 504 : 2006 (3) CCC 468 (SC)
5. Kali Ram v. State of Himachal Pradesh 1973 2 SCC 808
6. M. Abbas v State of Kerala, reported in 2001 (4) JT 92 : 2001 (4)
Supreme 405
7. Prabhakar D. Naik v. Jerry S. Viegas & another reported in 2002
Bom.C.R.(Cri.) 623
8. The Assistant Commissioner, Assessment-II, Bangalore and Others
v. M/s. Velliappa Textiles Ltd. And another 2003 (11) SCC 405.
9. Damodar S. Prabhu v. Sayed Babalal (2010) 5 SCC 663.
10. Somnath Sarkar v. Utpal Basu Mallick and another(2013) 16 SCC
465.
11. R. Vijayan v. Baby and another (2012) 1 SCC 260.

Dated this 16th May, 2018

Shimla PETITIONER
Through Counsel
Arun Raj
ADVOCATE FOR THE PETITIONER

IN THE HON’’BLE HIGH COURT OF HIMACHAL PRADESH

IN ITS CRIMINAL APPELLATE JURISDICTION

CRIMINAL REVISION NO. OF 2018

 23

IN THE MATTER OF:

Ashok Sharma

… PETITIONER
(ORIGINAL ACCUSED)
Versus

Krishan Kumar Shastri

…RESPONDENT

INDEX
Sl.No. Particulars Page Exh
No.
1. Synopsis
2. Criminal Revision Application with
affidavit.
3. Copy of Complaint filed by the
Respondent.
4. Copy of the judgment and order dated B
26.06.2014/29.06.2015 passed by the Ld.
Additional Chief Judicial Magistrate
Nadaun, Hamirpur in the Complaint no.
43-1-2011.
5. Copy of the judgment and order dated C
26.02.2018 passed by the Ld. Additional
Sessions Judge, Hamirpur in the said
Criminal Appeal no 24 of 2015.
6. Power of Attorney
Dated this 16th May, 2018
Shimla PETITIONER
Through Counsel
Arun Raj
ADVOCATE FOR THE PETITIONER
24