1. Dishonour of cheque — Complaint under Section 138, Negotiable Instruments Act — Dispute over whether details in a signed blank cheque were filled by the drawer. (Para 3 , 4 , 5 , 6 , 7 , 8 , 9 , 11 )
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2022 Supreme(SC) 837
SUPREME COURT OF INDIA
Dhananjaya Y Chandrachud, A S Bopanna, JJ.
Oriental Bank of Commerce - Appellant
Versus
Prabodh Kumar Tewari - Respondent
Criminal Appeal No 1260 of 2022 (Arising out of SLP (Crl) No 9836 of 2019
Decided On : 16-08-2022
Important Points
IMPORTANT POINT
Dishonour of cheque – Presumption which arises on signing of cheque cannot be rebutted merely by report of a hand-writing expert.
Dishonour of cheque – Presumption which arises on signing of cheque cannot be rebutted merely by report of a hand-writing expert.
Subject
Negotiable Instruments Act - Presumption of Liability
Act Referred
Headnote
Negotiable Instruments Act 1881 – Sections 138 and 139 – Indian Evidence Act, 1872 – Section 45 – Dishonour of cheque – Engagement of hand-writing expert for determination of authorship of writings on disputed cheque – Section 139 of NI Act raises a presumption that a drawer handing over a cheque signed by him is liable unless it is proved by adducing evidence at the trial that cheque was not in discharge of a debt or liability – Evidence of a hand-writing expert on whether respondent had filled in details in cheque would be immaterial to determining the purpose for which cheque was handed over – No purpose is served by allowing application for adducing evidence of hand-writing expert – Presumption which arises on signing of cheque cannot be rebutted merely by report of a hand-writing expert – Impugned order of Single Judge of Delhi High Court set aside – Application filed by respondent for examination of a hand-writing expert shall in circumstances stand dismissed – Present order shall not affect merits of trial or rights and contentions of respective parties during course of trial. (Paras 4, 17, 19 and 20)
Facts of the case:
Present appeal arises from a judgment dated 24 July 2019 of a Single Judge of High Court of Delhi. The appellant is the complainant in proceedings under Section 138 of Negotiable Instruments Act 1881. He seeks to question the order of a Single Judge by which the respondents were permitted to engage a hand-writing expert to seek an opinion on whether “the authorship on questioned writings” (the disputed cheque) can be attributed to the respondents.
Question which arises in the appeal is whether the High Court was correct in permitting respondent to engage a hand-writing expert to determine whether details that were filled in the cheque were in the hand of the respondent.
Findings of Court:
It would be open to the respondents to raise all other defences which they may legitimately be entitled to otherwise raise in support of their plea that cheque was not issued in pursuance of a pre-existing debt or outstanding liability.
Result : Appeal allowed.
Legal Category Hierarchy
Advocates appeared:
For the Petitioner(s): Mr. Ambar Qamaruddin, AOR Mr. Tejasvi Kumar, Adv. Mr. Syed Sarfaraz Karim, Adv.
For the Respondent(s): Mr. Madhav Khurana, Adv. Ms. Sakshi Kakkar, AOR
For the Petitioner(s): Mr. Ambar Qamaruddin, AOR Mr. Tejasvi Kumar, Adv. Mr. Syed Sarfaraz Karim, Adv.
For the Respondent(s): Mr. Madhav Khurana, Adv. Ms. Sakshi Kakkar, AOR
Table of Contents
2. Whether the drawer's liability under the Negotiable Instruments Act is affected if the details of a signed blank cheque were filled by someone other than the drawer. (Para 3 , 4 , 12 )
3. The presumption under Section 139, NI Act, applies to signed cheques regardless of who filled the details; handwriting evidence on authorship of details is immaterial to the debt's existence. (Para 4 , 13 , 14 , 15 , 16 , 17 , 18 )
4. A drawer who signs and delivers a cheque is presumed liable under Section 139, NI Act, regardless of whether the cheque's details were filled by the drawer. (Para 4 , 14 , 15 , 17 )
5. Appeal allowed — High Court order set aside — Application for handwriting expert dismissed — Report received pursuant to the impugned order excluded from trial. (Para 19 , 20 , 21 )
6. Does filling in the details of a signed blank cheque by someone other than the drawer invalidate the cheque or the liability?
No. A person who signs a cheque and hands it over remains liable unless they prove it was not issued for payment of a debt. It is immaterial if the cheque was filled in by someone other than the drawer. (Para 14 , 15 , 17 )
7. What is the legal presumption under Section 139 of the Negotiable Instruments Act?
It is presumed, unless the contrary is proved, that the holder of a cheque received it for the discharge, in whole or in part, of any debt or other liability. (Para 4 , 13 , 15 )
8. What is the standard of proof required for an accused to rebut the presumption under Section 139 of the NI Act?
The presumption is rebuttable based on a preponderance of probabilities. The accused must raise a probable defence that creates doubt about the existence of a legally enforceable debt or liability. (Para 16 )
JUDGMENT :
Dhananjaya Y Chandrachud, J.
1. Leave granted.
2. This appeal arises from a judgment dated 24 July 2019 of a Single Judge of the High Court of Delhi.
3. The appellant is the complainant in proceedings under Section 138 of the Negotiable Instruments Act 18811[“NI Act”]. He seeks to question the order of a Single Judge by which the respondents were permitted to engage a hand-writing expert to seek an opinion on whether “the authorship on the questioned writings” (the disputed cheque) can be attributed to the respondents.
4. The respondent admits that he signed and handed over a cheque to the appellant. According to the respondent a signed blank cheque was handed over by him. The question which arises in the appeal is whether the High Court was correct in permitting the respondent to engage a hand-writing expert to determine whether the details that were filled in the cheque were in the hand of the respondent. For the reasons set out below, we have allowed this appeal against the order of the High Court for the reason that Section 139 of the NI Act raises a presumption that a drawer handing over a cheque signed by him is liable unless it is proved by adducing evidence at the trial that the cheque was not in discharge of a debt or liability. The evidence of a hand-writing expert on whether the respondent had filled in the details in the cheque would be immaterial to determining the purpose for which the cheque was handed over. Therefore, no purpose is served by allowing the application for adducing the evidence of the hand-writing expert.
5. The appellant is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act 1980. According to the appellant, a consortium of five companies, namely, (i) Century Communications Ltd, (ii) Pixion Media Pvt Ltd, (iii) Pearl Studios Pvt Ltd, (iv) Pixion Vision Pvt Ltd and (v) Pearl Vision Pvt Ltd availed of credit facilities from the appellant. The total outstanding dues of the consortium are alleged to be in excess of Rs 1200 crores as on the date of the institution of these proceedings. It has been alleged that the first respondent (A-2 before the Trial Court) handed over a cheque - bearing number 387172 dated 26 December 2011 from the account of Century Communications Ltd in the amount of Rs 5.57 crores drawn on Indian Overseas Bank, Defense Colony Branch, New Delhi - towards the dues of the above five companies. According to the appellant, this was accompanied by a letter of the same date, bearing reference number CCL/OBC/036/2011, with a request to present the cheque at the end of the second week of January. The cheque was presented for encashment, but was returned on 25 May 2012 with the remarks “insufficient funds”.
6. After issuing a legal notice on 5 June 2012, the appellant instituted a criminal complaint, being CC No 3065 of 2012, before the Court of the Additional Chief Metropolitan Magistrate, Dwarka Courts, New Delhi for an offence punishable under Section 138 of the NI Act. Notices were framed against the first and second respondent under Section 251 of the Code of Criminal Procedure 19732[“CrPC”].
7. During the course of the trial, on 12 February 2018, the Metropolitan Magistrate recorded the statements of the first and second respondents under Section 313 CrPC. The first respondent has stated that he is a director in all the five companies; he was an authorized signatory; and a blank signed cheque was given by him towards security. Therefore, there is no dispute that the cheque bears the signature of the first respondent.
8. The first and second respondents filed an application before the Trial Judge seeking to have the cheque in question, the specimen signature and handwriting of the first respondent examined by a government hand-writing expert. The application was dismissed by the Trial Judge on 21 February 2019.
9. The first and second respondents appealed to the High Court. The High Court by the impugned order dated 24 July 2019 he
