Failure to disclose a probable defense in cross-examination leads to rejection of an application under the Negotiable Instruments Act.

1. Heard Mr. Sardesai learned counsel for the Petitioner and Mr. Vaze learned Additional Public Prosecutor appears for the State.

2. The petition is filed challenging the order passed by the Trial Court rejecting application under S.145 (2) of the Negotiable Instruments Act (The N.I. Act for short).

3. Mr. Sardesai would submit that the Petitioner is an accused before the Trial Court and has a right to cross - examine the witness. Accordingly, he filed an application disclosing probable defence. However, learned Trial court vide impugned order, rejected such application on the ground that there is no probable defence since the accused admitted of signing the cheque and issuing the same as security.

4. The provision of S.145 (2) of the N.I. Act is discretionary in nature and it is well settled that unless probable defence is shown, application for cross examining the complainant and witnesses cannot be allowed only because some application is filed. The accused has to file such application after the substance of accusation is explained and by disclosing probable defence in support of his case.

5. The Complainant / Respondent No.2 is a society and complaint shows that the Petitioner / Accused obtained a loan being a member of the said society.

6. The application filed under S.145 (2) would go to show that the accused issued the cheque as a security. He admits that he has signed a blank cheque and handed over the same as a security to the society.

7. He claimed that the blank portion in the cheque, including the amount is filled by the Complainant without his knowledge and consent. It is also claimed that before depositing the said cheque no intimation was given to the Petitioner and that he disproves about the calculation of interest.

8. A reply is filed on behalf of Respondent No. 2 opposing the said application and thereafter, the learned Trial Court observed that once the accused admits that the cheque is issued, even though for security, the question of disclosing any probable defence cannot be accepted.

9. It is now well settled proposition of law that even a cheque issued for security is covered under S.138 and S.139 of the Negotiable Instruments Act . It is also well settled that a signed blank cheque issued and handed over to the society or the person in whose favour the cheque is issued, gives an authority to the said person to fill the contents of the cheque.

10. The application filed by the Petitioner / Accused is therefore not showing any probable defence and the only contention is that the cheque was signed as a security. This further shows that the loan was obtained and as a security, cheque was issued.

11. The observations of the Trial Court that the accused has to show some defence and more particularly, probable defence and that application is not disclosing such probable defence, cannot be faulted with. It is not requirement of law that the accused can take any sort of defence in the present matter. The proceedings under S.138 of the N.I. Act are quasi - civil and quasi - criminal in nature. The presumption under S.139 of the N.I. Act is required to be drawn once the accused admits his signature on the cheque. But the reverse burden is on the accused, which can be dislodged by producing evidence, either during cross - examination of the Complainant or by leading defence evidence.

12. Since proceedings under S.138 of N.I. Act are required to be conducted in a summary manner, the affidavit filed by the complainant at the time of verification of the complaint could be considered as evidence and has to be read as evidence during the trial. It is for the accused to satisfy the Court as to whether opportunity could be given to him to cross - examine the complainant and his witnesses