Presumption of Legal Liability Stands Firm Once Signature on Cheque Is Admitted: Himachal Pradesh High Court Upholds Conviction in ₹6.5 Lakh Cheque Bounce Case

“You Can't Just Deny Liability Without Proof — Once the Cheque Is Signed, Burden Shifts on You”, -  In a ruling reaffirming the principles underpinning cheque dishonour prosecutions under the Negotiable Instruments Act, 1881, the Himachal Pradesh High Court dismissed a criminal revision plea filed by Gopal Singh, upholding his conviction and sentence for the offence under Section 138 of the NI Act.
Justice Rakesh Kainthla ruled that once the signature on the cheque was admitted, a statutory presumption of liability arose under Sections 118 and 139 of the Act, and mere assertions or suggestions during cross-examination were not sufficient to rebut that presumption.
“Denied suggestions do not amount to proof. The accused did not step into the witness box nor examine any witness to support his version… the learned Courts below rightly held that the accused failed to rebut the presumption.”
“Cheque Signed, Business Excuse Unsubstantiated — Presumption Must Prevail”
The case arose out of a cheque for ₹6,50,000, issued by the petitioner in favor of the complainant (now represented by legal heirs), which was dishonoured due to insufficient funds. After a statutory notice was issued — and returned unclaimed — a complaint under Section 138 was filed.
While the accused admitted to the cheque being his, he claimed it was issued in relation to a proposed garment business, and not for discharging any legally enforceable debt. However, he failed to lead any evidence to support this narrative and didn’t even testify in his own defence.
Justice Kainthla stressed: “Once the execution of the cheque is admitted, a presumption under Section 139 of the Act mandates that it was issued in discharge of debt or liability… The accused must rebut this presumption by leading cogent evidence.”
The Court quoted extensively from Supreme Court rulings including Basalingappa v. Mudibasappa, Triyambak S. Hegde v. Sripad, and APS Forex Services v. Shakti International, emphasizing that the presumption is a legal mandate, and cannot be brushed aside by vague claims of business partnerships or friendly dealings.
“Revision Jurisdiction Is Not a Second Appeal — No Case Made Out for Interference”
The revision petitioner had also challenged the trial court’s decision to close his defence evidence and the appellate court’s rejection of his application under Section 311 CrPC. But the High Court found no procedural illegality or violation of natural justice.
“The accused had three opportunities to lead evidence after recording his statement under Section 313 CrPC. He failed to do so, offered no reason, and did not summon any witness. The Courts below committed no error in closing the defence.”
Referring to Malkeet Singh Gill v. State of Chhattisgarh and State of Gujarat v. Dilipsinh Kishorsinh Rao, the Court reiterated that revisional powers cannot be invoked to re-appreciate evidence unless there’s a patent illegality or jurisdictional error.
“Unclaimed Notice Is Deemed Served — You Cannot Evade Legal Consequences by Avoiding Delivery”
The petitioner also argued that the mandatory notice under Section 138(b) was never served upon him. But the Court, relying on C.C. Alavi Haji v. Palapetty Mohd. and K. Bhaskaran v. Sankaran Vaidhyan Balan, held:
“A notice returned as ‘unclaimed’ at the correct address is deemed to be served. The accused did not prove that he was not responsible for the non-service. Therefore, deemed service stands.”
Further, the Court emphasized that even if one claims non-receipt of notice, payment of cheque amount within 15 days of receiving court summons would cure the lapse — something the petitioner also failed to do.
“Compensation and Sentence Justified — Delay, Cost, and Litigation Deserve Recompense”
The Court also upheld the sentence of two months’ simple imprisonment and compensation of ₹8 lakh imposed by the Trial Court. The cheque had been issued in 2014, while conviction came only in 2022 — a delay of nearly eight years.
Quoting Kalamani Tex v. P. Balasubramanian, the Court remarked: “The compensation awarded is not excessive. The complainant suffered the delay, lost interest on the amount, and incurred litigation expenses.”
It noted that the deterrent object of Section 138 would be defeated if paltry or symbolic punishment is awarded, especially where dishonour is proven and liability is not rebutted.
Final Word: “Presumption Once Triggered, Must Be Lawfully Rebutted — Mere Allegations Are Not Enough”
In a final observation, the Court noted: “This is not a case of error or perversity. The accused had the opportunity, the law gave him the presumption to rebut — he simply failed to use it. No ground for interference is made out.”

Date of Decision: 10 April 2025