Presumption of legally enforceable debt upheld where accused admits loan but fails to provide documentary proof of repayment.

The applicant-accused was convicted by the Trial Court and the First Appellate Court for an offense under Section 138 of the Negotiable Instruments Act, receiving a sentence of one year of simple imprisonment and a fine

The applicant filed a revision petition challenging these concurrent findings, asserting that while he borrowed ₹4 lakhs, he had repaid a significant portion and the complainant had misused a security cheque by filling in an inflated amount of ₹5 lakhs

During the pendency of the revision, the applicant failed to appear and was eventually taken into judicial custody via a non-bailable warrant

It was later reported that the original complainant had died in 2021

1. Whether the concurrent findings of conviction by the lower courts suffered from any palpable error or perversity that warrants interference under revisional jurisdiction

2. Whether the offense could be compounded based on a subsequent undertaking by the applicant to deposit a settled amount despite the absence of the deceased complainant’s legal heirs

The court applied Section 138 of the Negotiable Instruments (N.I.) Act regarding the dishonor of cheques and the statutory presumptions under Section 118 and Section 139, which shift the burden of proof to the drawer once signature and issuance are established

Section 147 of the N.I. Act, which prescribes that every offense punishable under the Act shall be compoundable

The court exercised its discretionary powers under Section 397 read with Section 401 of the Code of Criminal Procedure to modify the sentence in the interest of justice

The High Court observed that the applicant admitted to the signature on the cheque and the existence of a debt, albeit for a lower amount than claimed

The court found that the applicant failed to provide documentary evidence to rebut the statutory presumption or prove the alleged repayments, leading to the conclusion that the lower courts committed no error in the conviction

The court took note of an undertaking filed by the applicant’s son, expressing a willingness to deposit ₹4 lakhs to settle the matter

Given the death of the complainant and the lengthy duration of the litigation, the court determined that compounding the offense upon the condition of this deposit was an appropriate resolution under the scheme of the Act

The offense was ordered to be compounded on the condition that the applicant deposits ₹4 lakhs with the Trial Court within two months

The sentence of imprisonment and fine was quashed, and the applicant was ordered to be released from custody upon furnishing a bail bond of ₹10,000

The Registry was directed to re-notify the matter if the deposit condition is not met