Law Is Good But Justice Is Better | Himachal Pradesh High Court Reduces Sentence U/S 138 NI Act To Till Rising Of Court On Full Payment Of Cheque Amount
Kiran Raj
The High Court of Himachal Pradesh Single Bench of Justice Virender Singh upheld the conviction but modified the sentence to imprisonment 'till the rising of the Court', observing that the punishment initially awarded was "on the higher side," given the circumstances and full compensation deposited by the accused.
The complaint originated when Sahil Sood alleged that Dinesh Negi issued cheque No. 897915 dated September 18, 2012, for ₹5,20,000 as partial payment towards an outstanding liability. The cheque was presented to Syndicate Bank, Solan Branch, but dishonored by Punjab National Bank, Balag, due to insufficient funds, as notified by memo dated September 20, 2012.
Upon receiving this dishonor notice, the complainant issued a statutory demand notice asking for payment within fifteen days. Negi neither responded nor paid the demanded amount. Consequently, Sood initiated a complaint under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) before Judicial Magistrate First Class, Court No. 1, Solan.
After initial procedures, including service of notice on Negi, charges were formally framed on February 12, 2014. Negi pleaded not guilty. Complainant Sahil Sood testified on May 21, 2014, maintaining the accused’s liability and compliance with statutory requirements. The accused’s statement under Section 313 CrPC was recorded on May 29, 2014, and he presented no immediate defence evidence. Due to his subsequent non-appearance, Negi was declared a proclaimed offender on June 21, 2017.
An application under Section 311 CrPC was subsequently allowed on August 2, 2018, permitting the complainant to introduce additional evidence, notably an agreement dated June 5, 2012, documenting Negi’s acknowledgment of a liability of ₹5,20,000, and another document indicating a liability of ₹3,98,970. Additional witness examinations and another Section 313 statement ensued, followed by Negi producing one defence witness.
The Judicial Magistrate, after detailed evaluation, found Negi guilty under Section 138 NI Act, sentencing him to two months' simple imprisonment and ordering ₹5,50,000 in compensation on February 29, 2020. The Sessions Court, Solan dismissed Negi’s subsequent appeal on December 29, 2021, affirming the trial court’s judgment.
Negi approached the High Court challenging the lower courts’ interpretation of evidence, specifically objecting that two key documents were never mentioned in the statutory notice, initial complaint, or examination-in-chief. He further argued that the complainant himself admitted under cross-examination that any liability, if existent, was towards his father, suggesting he was not the lawful holder of the cheque.
Justice Virender Singh observed meticulously from the evidence that the accused’s admission of signing the cheque significantly shifted the evidentiary burden onto him. The Court observed: “Once, the cheque has been issued, the complainant is entitled to draw the presumption, in his favour, as per Section 142 of the NI Act. By examining DW-1, the accused has not rebutted the presumption, which is in favour of the complainant.”
It was further recorded: “The issuance of the cheque has not been disputed by the accused, as, in his statement, under Section 313 CrPC, he has admitted his signatures over the cheque in question.”
Justice Singh also noted the limits of the Court's revisional jurisdiction by stating: “This Court, while exercising the revisional jurisdiction, cannot re-appreciate the evidence, until or unless the findings recorded by the learned trial Court, as upheld by the learned Appellate Court, have been held to be perverse.”
Citing the Supreme Court’s precedent in State of Maharashtra versus Jagmohan Singh Kuldip Singh Anand and others, the High Court concluded that: “The findings so recorded by the learned trial Court, as upheld by the learned Appellate Court, do not fall within the definition of ‘perverse findings’. As such, the same do not require any interference.”
However, considering the particular facts of full compensation deposit, Justice Singh observed: “Law is good, but justice is better.”
Referring to the Supreme Court judgment in P. Mohanraj and others versus Shah Brothers Ispat Private Limited, he emphasized the nature of Section 138 as compensatory rather than purely punitive, noting: “The real object of the provision is not to penalise the wrongdoer for an offence that is already made out, but to compensate the victim.”
The High Court determined the original sentence excessive, especially in absence of a defined sentencing policy and minimum statutory punishment under Section 138 NI Act.
Justice Singh upheld Negi’s conviction but significantly modified the sentence, ordering:
The judgment of conviction passed by the learned trial Court is upheld. However, the appeal is partly allowed to the extent of quantum of sentence. Considering the complete compensation has been deposited and the complainant has not initiated any appeal or proceedings for compensation enhancement, the sentence is modified, limiting imprisonment to a nominal period, specifically "till the rising of the Court."
The High Court disposed of all pending miscellaneous applications and ordered the case record to be sent back to the trial court.
Advocates Representing the Parties
For the Petitioners: Mr. Anirudh Sharma, Advocate.
For the Respondents: Mr. Sudhir Thakur, Senior Advocate, with Mr. Somesh Sharma, Advocate.
Case Title: Dinesh Negi v. Sahil Sood
Neutral Citation: 2025:HHC:14229
Case Number: Cr. Revision No. 54 of 2022
Bench: Justice Virender Singh
[Read/Download order]
