Section 138 does not apply where the cheque exceeds the legally enforceable debt.

The complainant, Florance Flora Farm, brought two proceedings under Section 138 of the Negotiable Instruments Act, 1881 (NI Act), concerning cheques for ₹50,00,000 and ₹30,00,000 issued by Ooty Flora and its partners.

The trial court convicted accused Nos. 1–4 in both cases and imposed fines, directing payment of the cheque amounts as compensation; it acquitted accused No. 5.

The accused appealed, as did the complainant, seeking enhanced compensation.

The appellate court dismissed all four appeals.

The accused challenged the convictions in Crl.R.P. Nos. 298/2025 and 300/2025, while the complainant sought enhanced compensation in Crl.R.P. Nos. 1884/2025 and 1885/2025.

The cheques were issued in substitution for seven earlier cheques totalling ₹70,25,400.

The complainant’s case attributed the difference between that amount and the replacement cheques’ combined value of ₹80,00,000 to lump-sum interest, but did not specify an agreed interest rate.

Whether the convictions and sentences in the two Section 138 cases disclosed a basis for interference in revision, including whether the accused had rebutted the presumption under Section 139 of the NI Act.

Whether the complainant was entitled to enhanced compensation and whether the appeals against inadequate compensation were maintainable.

Section 138 of the NI Act requires, among other things, a cheque drawn for discharge, in whole or in part, of a legally enforceable debt or liability; Sections 118 and 139 create rebuttable presumptions concerning the cheque and the existence of such liability.

If the accused raises material sufficient to rebut the presumption, the burden returns to the complainant to establish the debt; a cheque exceeding the debt due is not, to the extent of the excess, drawn for discharge of that debt.

Revisional jurisdiction is supervisory, not a second appeal: interference is warranted where the lower court’s decision is perverse, grossly erroneous or unreasonable, based on irrelevant or no material, or reflects non-consideration of relevant material or arbitrary exercise of discretion.

The proviso to Section 372 Cr.P.C. permits a victim to appeal against, among other things, an order imposing inadequate compensation; that appeal lies to the court to which an appeal ordinarily lies against the conviction.

The court held that the power of attorney authorised the complainant’s representative to take legal action to recover amounts due under the relevant transactions; its general clause covering acts incidental to recovery included issuing the statutory notice.

The authority was therefore not invalid merely because it pre-dated the dishonour of the replacement cheques.

The court also rejected the contention that the replacement cheques were issued to stifle prosecution, finding that they represented payment for the amounts covered by the earlier dishonoured cheques.

For the ₹50,00,000 cheque, the amount was within the liability attributed to the seven earlier cheques, and the accused had not rebutted the Section 139 presumption; the conviction therefore disclosed no basis for revisional interference.

For the ₹30,00,000 cheque, however, the complainant’s own figures showed that the balance after the ₹50,00,000 cheque was paid was ₹20,21,400.

The complainant gave no adequate evidential basis for the additional ₹9,74,600, so the presumption was rebutted and the complainant failed to prove that ₹30,00,000 was legally recoverable.

The court held that the complainant’s appeals against inadequate compensation were maintainable, but found that delay was attributable to both sides and that the pandemic accounted for about two years; it therefore declined to enhance compensation.

The court directed that the amount deposited by accused Nos. 1–4 and withdrawn by the complainant in connection with Crl.R.P. No. 298/2025 be refunded to the accused, with interest at the specified RBI bank rate, within 60 days.