Himachal HC upholds cheque bounce acquittal: Rs 3 lakh cheque named a firm, complaint its owner

Justice Rakesh Kainthla held that the Bilaspur court was wrong on territorial jurisdiction, but refused to disturb a 2011 acquittal because the complainant never proved he was the proprietor of the payee firm.

A Rs 3,00,000 cheque issued for road-cutting work in Shimla bounced, and the complainant lost his case in 2011. On 5 November 2026 the Himachal Pradesh High Court upheld that acquittal, because the cheque was made out to Kuldeep Chand and Company while the complaint was filed by Kuldeep Chand in his own name.

On 5 November 2026 Justice Rakesh Kainthla dismissed Criminal Appeal No. 122 of 2012. The appeal challenged a 22 December 2011 judgment of the Chief Judicial Magistrate, Bilaspur, who had dismissed the Section 138 complaint against Piar Singh Kanwar.

A cheque for road-cutting work

The complainant said the accused held a contract from the Himachal Pradesh PWD to build a road from Chaura Maidan, Shimla, to Jalog-Chanawag. On 1 December 2005 they signed an agreement for the cutting work from RD 8/245 to 12/0, at Rs 28 per cubic metre.

The accused agreed to pay after the work was done. He handed over a cheque for Rs 3,00,000 drawn on Punjab National Bank, Ghanahati. The cheque was dishonoured with the endorsement “insufficient funds”.

The complainant served a notice demanding payment within 15 days. The accused did not pay, and the complaint followed. The complainant examined himself and two other witnesses, K.L. Sharma and Jaswant Sharma.

Why the trial court threw it out

In his statement under Section 313 of the CrPC, the accused admitted the 1 December 2005 agreement. He said he had issued the cheque only as security, in favour of Kuldeep Chand and Company.

The trial court accepted that the cheque bore the firm’s name and that nothing showed the complainant was its sole proprietor. It noted that he had admitted in cross-examination that the work was allotted to one Ashok Kumar, not to the accused.

It also held that Bilaspur had no jurisdiction, since the work was at Shimla and the cheque was dishonoured at Mandi. The notice, it found, had not been served at the correct address. It concluded that the ingredients of Section 138 were not met.

What the two sides told the High Court

Mr R.K. Bawa, Senior Advocate, with Mr Ajay Kumar, appeared for the complainant. He said the proof affidavit asserted proprietorship and was not challenged in cross-examination. He argued that the accused had admitted the agreement, and that the court where the payee lives has jurisdiction.

Mr Vishwas Kaushal, for the accused, said only the payee can file a Section 138 complaint. Kuldeep Chand had filed it in his own name, not in the name of the company. He also said the cheque was presented at Salapar, which falls in Mandi district.

The yardstick for an acquittal appeal

The judge began with the limits on interfering with an acquittal. Citing Sanjay Kumar v. State of Bihar, he said a court can disturb it only if the judgment is “impossible, perverse, wholly unsustainable, or manifestly illegal” (para 12).

He also set out the ingredients of the offence as laid down by the Supreme Court in Kuntegowda v. Thurubaiah, quoting from Kusum Ingots and Alloys. They run from the drawing of the cheque and presentation within its validity to the statutory notice and non-payment within 15 days.

Bilaspur did have jurisdiction

On jurisdiction the trial court was wrong, the High Court held. The Supreme Court ruled in Nishant Aggarwal v. Kailash Kumar Sharma that the court where the payee resides can hear a Section 138 complaint.

The complainant’s side relied on Dashrath Rupsingh Rathod, which fixed jurisdiction at the place of dishonour. That ruling was made prospective and applies only to cases where the accused had not been summoned. The judge held that it did not govern this one, and Nishant Aggarwal did.

The judge said the trial court’s conclusion that Sundernagar, not Bilaspur, was the proper forum could not be accepted. He therefore found it unnecessary to discuss the other jurisdiction rulings the complainant cited, including K. Bhaskaran and Ishar Alloy.

The payee was the firm, not the man

The cheque, Ext. C1/A, was issued in the name of Kuldeep Chand and Company. The complaint was filed in the name of Kuldeep Chand without saying how he was connected to that firm.

The complainant argued that a proprietorship and its owner are the same. He relied on Shankar Lal Aggarwal v. Balram Luthra. The judge rejected the submission and turned to the Supreme Court’s ruling in Shankar Finance and Investments v. State of A.P.

That ruling allows a complaint where the payee is a proprietary concern to be filed in the concern’s name, or by the proprietor describing himself as the sole proprietor of the payee, or through an attorney holder. Here, the judge said, the complaint was not filed in the payee’s name.

The High Court added that Shankar Lal Aggarwal does not refer to Shankar Finance and cannot be followed. On this point he held that the trial court rightly found the complaint not maintainable.

No papers to link him to the firm

The judge then turned to the complainant’s own admissions. He had produced no document showing the constitution of Kuldeep Chand and Company. He admitted the cheque was in the firm’s name and that the complaint did not mention it. He said only that he was its owner.

The High Court found no document in the record to support that statement. It relied on Milind Shripad Chandurkar v. Kalim M. Khan, where the Supreme Court refused a complaint by a man who gave no documentary proof of owning the payee firm.

That ruling said a bare statement in an affidavit was not enough to meet the requirement of law. Justice Kainthla noted that this High Court had followed it in S.P. Saklani v. Ravinder Singh Thakur and reached a similar result in Ram Chand v. Rafee Mohammad.

The judge said D. Vinod Shivappa, on service of notice, was not relevant. The judgment does not separately take up the trial court’s findings on the notice address or on who was allotted the work.

He concluded that the trial court had taken a reasonable view, and that “no interference is required with the reasonable view of the learned Trial Court” (para 30).

Order

The appeal was dismissed, and pending applications were disposed of. The court recorded that no other point was urged. The trial court record is to be sent back forthwith.

Under Section 437-A of the CrPC, the accused must furnish a personal bond of Rs 50,000 with one surety of the same amount. The bond remains effective for six months, so that he appears before the Supreme Court if a special leave petition is filed.