Admission Of Accused Proves Dishonour Of Cheque U/S 138 NI Act Even If Returning Memo Is Unsigned And Unsealed: Himachal Pradesh High Court
The Bench noted that revisional jurisdiction under Sections 397/401 CrPC cannot be used to re-appreciate evidence in the absence of perversity or jurisdictional error.
Justice Rakesh Kainthla, Himachal Pradesh High Court
The Himachal Pradesh High Court has held that where an accused specifically admits during trial that a cheque was returned unpaid due to account closure, such an admission legally establishes the dishonour of the instrument under Section 138 of the Negotiable Instruments Act. The Court clarified that this holds true even if the cheque return memo lacks a signature or bank seal, rendering the non-application of statutory presumption under Section 146 NI Act immaterial.
The Court further reaffirmed the settled legal principle governing revisional powers under Sections 397 and 401 CrPC. The Court said that revisional jurisdiction is purely supervisory and narrow in scope, meaning Revisional Courts cannot act as courts of second appeal to re-analyse or re-appreciate evidence to overturn concurrent findings of lower courts unless gross perversity, patent illegality, or jurisdictional error is demonstrated.
A Bench comprising Justice Rakesh Kainthia while adjudicating a criminal revision petition filed by the accused against concurrent orders of conviction, observed, “The complainant stated that the cheque was dishonoured with an endorsement ‘account closed’. He filed the cheque returning memo (Ext.C2). It was admitted that this memo is not signed by any person and it does not bear the seal of the bank. Therefore, no presumption can be drawn under Section 146 of the NI Act. Reliance was placed upon Govind Ram (supra) in support of this submission. This submission will not help the accused because he admitted that the cheque was dishonoured with an endorsement, ‘account closed’. Therefore, even if the presumption is not applied to the memo, the admission of the accused still proves that the cheque was dishonoured with an endorsement ‘account closed’, and the learned Court had rightly held that the cheque was dishonoured with an endorsement ‘account closed’”.
Advocate K.S. Chandel appeared for the petitioner and Advocate Dinesh Bhanot appeared for the respondent.
The brief facts of the case are that the complainant initiated proceedings under Section 138 NI Act, asserting that the accused borrowed ₹1,40,000 for personal needs and issued a cheque towards repayment, which was returned unpaid with the endorsement "account closed". Despite service of statutory notice, the accused failed to repay the debt, prompting the criminal complaint.
The trial court found all statutory ingredients satisfied and convicted the accused under Section 138 NI Act, sentencing him to three months of simple imprisonment along with compensation of ₹1,70,000. The Additional Sessions Judge, Nalagarh, dismissed the appeal and affirmed the conviction. Aggrieved, the accused filed a revision petition before the High Court.
The Court observed that statutory presumptions under Sections 118(a) and 139 of the NI Act were fully attracted as the accused admitted borrowing the loan and issuing the signed cheque. Addressing the defence argument that the cheque return memo was unsealed and unsigned, the Court noted that while presumption under Section 146 NI Act could not be drawn, the admission of the accused under Section 313 CrPC corroborated the complainant's case and established dishonour due to account closure.
The Court reiterated that dishonour due to account closure falls within the ambit of Section 138 and that signing a blank cheque authorizes the payee to complete the particulars.
In its operative directions, the Court held that no jurisdictional defect or perversity existed in the concurrent findings of the lower courts, dismissed the revision petition, and upheld the conviction and sentence.
Cause Title: Khushinder Singh v. Ambal Khan (Neutral Citation: 2026:HHC:30732)
Appearances:
Petitioner: K.S. Chandel, Advocate.
Respondent: Dinesh Bhanot, Advocate.