Authority: High Court of Himachal Pradesh, Shimla

Order Date: 10 July 2026

Case Overview

  • Parties: Petitioner/Accused – Naresh Vema; Respondents – Punjab National Bank (PNB) & Anr., and the State of Himachal Pradesh.
  • Nature of Proceeding: Criminal revision under Section 397 CrPC challenging the conviction and sentence for an offence under Section 138 of the Negotiable Instruments Act (NI Act).
  • Background: The complainant (PNB) alleged that the accused obtained a vehicle loan of ₹15,00,000 and issued a cheque of ₹2,23,000 on 12‑05‑2016 to repay the loan. The cheque was presented and returned unpaid with the endorsement "exceeds arrangement". A statutory notice was served on the accused, who failed to make payment within the prescribed 15‑day period.
  • Trial Court Findings: The trial court held that the issuance of the cheque and the signatures were undisputed, the presumption under Sections 118 and 139 NI Act that the cheque was drawn for consideration applied, and the accused failed to rebut it. Consequently, the accused was convicted under Section 138, sentenced to 6 months simple imprisonment, fined ₹3,00,000, and ordered to pay compensation of ₹3,00,000.
  • Appellate Court Findings: The Sessions Judge affirmed the trial court’s findings, reiterating that a cheque issued as security also attracts Section 138, and that the sentence was not excessive.
  • Revision Petition Arguments: The accused argued that the cheque was a blank‑signed security cheque, that the loan had been repaid, and that the vehicle sale proceeds should offset the liability. The counsel for PNB contended that the accused admitted the loan, failed to produce evidence of repayment, and that the presumption under the NI Act remained unrebutted.
  • Legal Principles Cited: The judgment extensively referenced Supreme Court precedents – Malkeet Singh Gill v. State of Chhattisgarh, State of Gujarat v. Dilipsinh Rao, Kishan Rao v. Shankargouda, Bir Singh v. Mukesh Kumar, APS Forex Services v. Shakti International, Sampelly Satyanarayana Rao v. IREDA, Sripati Singh v. State of Jharkhand, among others – to underscore that revisional jurisdiction is limited to correcting patent defects, errors of law or jurisdiction, and that the presumption under Sections 118/139 NI Act is rebuttable only by positive evidence, which the accused did not furnish.
  • Court’s Reasoning: The High Court held that:
  • No patent defect or jurisdictional error existed in the lower courts’ decisions.
  • The accused’s defence that the cheque was a security instrument was untenable, as security cheques are equally liable under Section 138.
  • The accused failed to produce any documentary evidence of loan repayment or of the amount realised from the vehicle sale.
  • The presumption of consideration and dishonour, supported by the bank’s memo, stood unrebutted.
  • The sentence of six months imprisonment and a fine of ₹3 lakh (approximately 1.34 times the cheque amount) aligns with established jurisprudence and is not excessive.

Final Outcome

  • The revision petition is dismissed in its entirety.
  • The conviction, sentence of 6 months simple imprisonment, fine of ₹3,00,000, and compensation of ₹3,00,000 imposed by the trial court are upheld.
  • All pending miscellaneous applications, if any, are also disposed of.
  • The record of the lower courts is to be returned with a copy of this judgment.

Topics: Cheque Bounce; Criminal Revision