The Himachal Pradesh High Court has refused to interfere with the conviction of a man sentenced in a cheque bounce case, holding that a person who signs a cheque cannot escape liability merely by claiming to be an agent. The court made it clear that unless the cheque itself discloses that it was issued on behalf of a principal, the signatory remains personally liable.
Justice Rakesh Kainthla delivered the verdict while dismissing a criminal revision petition challenging concurrent findings of guilt recorded by the trial court and the appellate court.
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Background of the Case
The case arose from a land transaction between the complainant and Ravinder Kumar. According to the complaint, an agreement to sell was executed in August 2017 for a total consideration of ₹2.50 lakh. An advance amount of ₹2 lakh was paid, with a clear clause that if the sale deed was not executed, the accused would return double the amount.
When the sale did not materialise, the accused issued a cheque for ₹2.50 lakh in October 2020. The cheque, however, was returned unpaid with the remark “account blocked.” Despite receiving a legal notice, the accused failed to make payment, prompting prosecution under Section 138 of the Negotiable Instruments Act.
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The trial court convicted the accused and sentenced him to six months’ simple imprisonment along with a fine of ₹4 lakh. The appellate court later upheld both the conviction and sentence.
Before the High Court, the accused argued that he had acted only as an agent holding a General Power of Attorney for another person. Relying on Section 230 of the Indian Contract Act, he claimed that an agent cannot be personally liable for acts done on behalf of a disclosed principal.
It was also contended that the cheque was issued merely as a security instrument and not towards a legally enforceable debt.
Court’s Observations
Justice Kainthla rejected these arguments after examining the law governing negotiable instruments. The court noted that once the accused admitted his signature on the cheque, a legal presumption arose that it was issued to discharge a debt.
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“The cheque itself does not disclose that it was signed on behalf of any principal,” the bench observed, adding that knowledge of agency outside the instrument is irrelevant under the Negotiable Instruments Act.
The court referred to settled legal principles holding that an agent remains personally liable if the cheque does not clearly mention the principal’s name or indicate that the signatory is acting in a representative capacity.
On the argument that the cheque was issued as security, the court held that even a security cheque attracts liability under Section 138 if a legally enforceable debt exists on the date of presentation.
“The cheque cannot be treated as a worthless piece of paper merely because it is described as security,” the court remarked.
The High Court also emphasised that its revisional powers are limited. Since both the trial court and appellate court had returned concurrent findings based on evidence, interference was not warranted unless there was perversity or a glaring legal error.
“No such defect has been pointed out in the present case,” the court noted.
Final Decision
Dismissing the revision petition, the High Court upheld the conviction and sentence awarded to the accused. The court confirmed that the offence under Section 138 of the Negotiable Instruments Act was fully established and that the accused failed to rebut the statutory presumption.
Case Title: Ravinder Kumar vs State of Himachal Pradesh & Another
Case No.: Criminal Revision No. 129 of 2024
Case Type: Criminal Revision – Cheque Bounce
Decision Date: 01 January 2026
