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2011(2) Bankmann 283 (Ker.)
KERALA HIGH COURT
K. Hema, J.
Santhi —Appellant
versus
Mary Sherly —Respondent
Crl. A. No. 996 of 2011
Decided on 30.6.2011
Counsel for the Parties:
For the Appellant: Mr. M. Sreekumar
For Respondents: Public Prosecutor (P.A. Salim).
IMPORTANT POINT
For successful prosecution of offence under Section 138 of N.I. Act, complainant must allege and prove that cheque was drawn or executed by accused.
Headnote:(i) Negotiable Instruments Act, 1881—Section 138—Dishonour of cheque— Contention raised by accused in prosecution under Section 138 that he issued a bland signed cheque will not amount to admission of execution of cheque—A signed bland cheque leaf is very often referred to as a blank cheque but strictly speaking it is not a cheque , as defined under N.I. Act—It can be treated only as a cheque leaf containing admitted signature of accused. (Para 4)
(ii) Negotiable Instruments Act, 1881—Section 138 read with Sections 5 and 6—Dishonour of cheque—Only overt act which makes a person liable for offence under Section 138 is drawing of cheque by him—Main factor to be proved by complainant to establish guilt of accused under Section 138 is that accused has drawn cheque—A person can be said to have drawn a cheque if he has made, prepared or created a cheque—If prosecution proves that accused has made or prepared or created a cheque which contains an order in writing under his signature, directing banker to pay a certain sum of money only to payee or bearer or to the order of a certain person, he can be said to have drawn the cheque—Absence of word “execution” in Section 138 is of no consequence—It is also not an excuse not to prove execution /drawing in a prosecution under Section 138. (Paras 6 to 9)
(iii) Negotiable Instruments Act, 1881—Section 138—Dishonour of cheque—Fact that accused has drawn cheque, can be proved by any known method recognized by law—Mere production of a cheque or marking the same as an exhibit in a case will not prove that cheque is drawn by accused—Factum of drawing or execution of cheque has to be proved by evidence of person or persons who can vouchsafe for truth of facts in issue—It can be proved by direct or circumstantial evidence, which is admissible in law. (Para 10)
(iv) Negotiable Instruments Act, 1881—Section 138—Evidence Act , 1872—Sections 45 and 73—Dishonour of cheque—Mere production and marking of cheque may only prove that a cheque which contains an order in writing and a signature has come into existence—But. it will not further prove that it is created drawn or executed by accused—In absence of direct evidence relating to writing and signature in document, execution may be proved by examination of a person who is qualified and competent to express his opinion, as to handwriting and signature, by acquaintance or otherwise—Evidence of a handwriting expert under Section 45 may be obtained to prove authorship of writing and signature in the document—Court may also reach a conclusion on authorship of handwriting and signature by comparison. (Paras 11 and 12)
(v) Negotiable Instruments Act, 1881—Section 138—Evidence Act , 1872—Sections 45 and 73—Dishonour of cheque—In cases in which only circumstances evidence is produced before court to prove drawing of cheque, court shall follow the mode adopted for appreciation of circumstantial evidence, to enter a finding whether cheque is drawn by accused—If any circumstance proved in the case can be explained on any hypothesis which is inconsistent with assertion of drawing of cheque by accused, accused cannot be said to have drawn cheque—For a successful prosecution of offence under Section 138, complainant must allege and prove that cheque was drawn or executed by accused—In absence of allegation in complaint that cheque was drawn by accused and in absence of proof of such fact, accused cannot be convicted for offence under Section 138. (Paras 17 and 18)
K. Hema, J.—On a complaint filed by appellant before Magistrate court, first respondent stood trial for offence under S.138 of the Negotiable Instruments Act (‘the Act’ for short). To prove complainant’s case, PW 1 was examined and Exts. P 1 to P6 were marked. The accused did not adduce any evidence, but took up a contention that he received only a lesser amount from complainant and as security, he handed over a cheque in blank form to complainant. The transaction took place on a different date and not any date alleged by complainant. The blank cheque was misused, to file a false complaint, it is contended.
2. Learned Magistrate, after consideration of evidence and materials on record, acquitted the accused, mainly on the following observations and findings in paras 11 and 12 of the impugned order:
“Accused is not admitting either the signature in Ext. P 1 or the execution of Ext.P1. So, it is the duty of the complainant to prove the execution of Ext.P1. Only when the execution of Ext. P 1 is proved the offence under Section 138 of the Negotiable Instruments Act will be attracted.
12. The mere allegation made by PW1 is to the effect that Ext. P1 cheque was given by the accused. It will not prove the execution of the Ext. P1 because issuance and execution are different. The term ‘issuance’ is not equivalent to ‘execution’. There is nothing in the testimony of PW 1 to the effect that Ext. P1 cheque was executed by the accused. There is absolutely no other evidence to prove the execution of Ext. P1. So the execution of Ext. P1 is not proved and the offence under Section 138 of the Negotiable Instruments Act is not admitted.”
3. Challenging the order of acquittal this appeal is filed. When the appeal came up for admission, I heard learned counsel for appellant and he strongly argued that accused admitted execution in the reply notice and hence, the order of acquittal passed on the premise that there is no proof for execution of cheque is illegal. He read out the reply notice in court but it is quite clear from the reply that accused denied execution and specifically contended that a signed blank cheque was handed over by him to appellant, in connection with another transaction.
4. On consideration of the various aspects and provisions of the Act, I am of view that the contention raised by an accused in a prosecution under Section 138 of the Act that he issued a blank signed cheque will not amount to admission of execution of cheque. A signed blank cheque leaf is very often referred to as a blank “cheque” but strictly speaking it is not a “cheque”, as defined under the Act. It can be treated only as a “cheque leaf” containing admitted signature of accused. The admission of signature in a cheque leaf alone will not constitute of execution of the cheque. The argument that accused admitted “execution” of the cheque in the reply notice etc. cannot therefore, be accepted.
5. Learned counsel for the appellant also argued that nowhere in the Negotiable Instruments Act, it is stated that execution is to be proved by complainant in a case involving offence under Section 138 of the Act. He also argued that what is meant by “execution” is not stated in the Act, but most of the courts insist that complainant must prove execution and accused are illegally acquitted, on the ground that “execution” is not proved. According to learned counsel for appellant, it is illegal to cast any burden on complainant to prove “execution”, in a prosecution for offence under Section 138 of the Act, since the said provision does not even refer to the word, “execution”.
6. True, the expression, “execution” is not used in Section138 of the Act. A reading of Section 138 of the Act however, shows that to prove the offence under the said section, prosecution shall inevitably prove that the cheque was “drawn” by accused. The only overt act which makes a person liable for the offence under Section 138 of the Act is “drawing” of cheque by him. So,. The main
