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2012 Supreme(Mad) 3417

High Court of Judicature at Madras
R. MALA, J.
M. Palanisamy
Versus
K. Karvannan
Criminal Appeal No. 1204 of 2004
Decided On : 03-08-2012

Advocates:
Advocate Appeared:
For the Appellant:E.C. Ramesh, Advocate.
For the Respondent:K.V. Sundararajan, Advocate.

Ratios
a. Only the ’holder’ of the cheque could fill up the inchoate cheque and not everyone in possession of it.
b. Only the person to whom a cheque was issued for consideration with authorization to fill up the gaps could fill it up and not others.

Headnote:(A)Negotiable Instruments Act, 1881(26 of 1881)-Sec.20, 139-Cheque dishonour- Inchoate document -Prosecution-Presumption-Holder-Consideration-Burden of proof-For the dishonour of a cheque issued by the respondent to the appellant, appellant filed a complaint in which the trial Court had acquitted the respondent against which the appellant preferred appeal-While the appellant contended that as the cheque was issued on the account of the respondent, he was entitled to fill it up and presumption was in his favour, respondent resisted it by contending that mere possession of the cheque would not raise any presumption regarding consideration and the appellant was not having the source to pay the money claimed-Held, mere possession of the cheque by the complainant would not make him a ’holder’ to raise the benefit of presumption-As the appellant could not prove his capacity to pay the amount mentioned in the cheque and other factors created doubt on his capacity, his version of ’holder’ of the cheque was disbelieved-Benefit of Sec.20 was available only to the ’holder’ and not to others-Judgement of acquittal was confirmed and appeal was dismissed.

       (B)Negotiable Instruments Act, 1881(26 of 1881)-Sec.20-Cheque dishonour-Inchoate document-Presumption-Holder-Only the ’holder’ of the cheque could fill up the inchoate cheque and not everyone in possession of it.
       As per Section 20 of the Act, holder of the cheque alone is authorised to fill up the blanks. But here, the respondent disputed that he did not issue cheque to the appellant. So the initial burden is on the appellant to prove that the cheque is issued by the respondent for discharging his legally enforceable debt. Except the evidence of P.W.1/complainant, no other evidence was examined to prove that P.W.1 lent a sum of Rs.2,75,000/- to the respondent on 31.01.2002 and to discharge the same, the respondent had issued a post dated cheque, dated 31.01.2003. Para 8
       (C)Negotiable Instruments Act, 1881(26 of 1881)-Sec.20, 139-Cheque dishonour- Inchoate document-Prosecution-Holder-Consideration-Only the person to whom a cheque was issued for consideration with authorization to fill up the gaps could fill it up and not others.
       Even though in the grounds of appeal, the learned counsel for the appellant did not raise a plea that the appellant is entitled to invoke Section 20 of N.I. Act, during his reply argument, he stated that the appellant is entitled to invoke Section 20 of N.I. Act. On a perusal of Ex.P1 cheque, it would reveal that two different inks are used to put signature and used for other writings. As already stated that once cheque has been issued to the appellant for discharging the legally enforceable debt, he is authorised to fill up the endorsement. But there is no evidence to show that Ex.P1 cheque has been issued to the appellant with due authorisation to fill up the blanks in the cheque. Hence, I am of the view, the appellant is not entitled to invoke Section 20 of N.I. Act. Para 11

Judgment :-

1. The criminal appeal arises out of the judgment of acquittal dated 30.07.2004, made in C.C.No.250 of 2003 on the file of the Judicial Magistrate's Court, Rasipuram, Namakkal District.

2. The appellant as a complainant preferred a private complaint under Sections 138 and 142 of Negotiable Instruments Act, stating that on 31.01.2002, the respondent/accused borrowed a sum of Rs.2,75,000/-from the appellant/complainant for his business purpose and agreed to repay the same with interest at rate of 12% per annum and also paid one year interest in advance and issued a post-dated cheque bearing No.591852, dated 31.01.2003 for Rs.2,75,000/-. When Ex.P1 cheque was presented into the Salem Central Co-operative Bank for encashment on 31.01.2003, it has been returned as 'insufficient funds' on 04.02.2003 and the return memos were marked as Exs.P2 and P3. Hence, the appellant issued a statutory notice Ex.P4 under Section 138(b) of Negotiable Instruments Act on 18.02.2003. The postal receipt was marked as Ex.P5. The respondent received the same under Ex.P6 acknowledgment card and sent a reply under Ex.P7. But the respondent/accused did not repay the amount. The respondent knowing fully well that there was no sufficient funds in his account, issued a cheque and thereby committed offence under Section 138 of Negotiable Instruments Act.

3. The learned Magistrate after following the procedure framed necessary charges against the accused. Since the accused pleaded not guilty, the learned Magistrate examined P.W.1 to P.W.3 and marked Exs.P1 to P11 and placed the incriminating evidence before the accused and the accused denied the same. On his side, D.W.1 and D.W.2 were examined and Exs.D1 to D4 were marked. On considering oral and documentary evidence, the trial Court acquitted the accused/respondent stating that the cheque was not issued by the respondent for discharging his legally enforceable debt, since the appellant herein has no financial status to lend him money, against which, the present appeal has been preferred by the appellant/complainant.

4. Learned counsel for the appellant/complainant submitted that the respondent borrowed a sum of Rs.2,75,000/-from the appellant and he also paid one year interest in advance and he sought for one year time to repay the amount, hence he issued the post-dated cheque, dated 31.01.2003 for discharging his liability. But the trial Court held that the respondent has issued 25 cheques to one Lakshmi Saraswathi Finance Company, since he is availing vehicle loan and repaying the same in monthly installment. As soon as he paid the monthly installments, he received the respective cheques one by one. Likewise, the appellant, who was working as Collection boy, had also gone to the Finance Company and paid the amount and received the respective cheques on behalf of the respondent and one of the cheques has been utilised for this purpose. But the respondent did not examine any one as his witness from Lakshmi Saraswathi Finance Company to prove his contention raised in the defence. It is further submitted that since the signature in the cheque has been admitted by the respondent, he is entitled to rebut the presumption under Sections 118 and 139 of Negotiable Instruments Act, but the evidence let in by the respondent is not sufficient to rebut the presumption under Section 139 of Negotiable Instruments Act, which is not considered by the trial Court. He further submitted that there is a difference between legally subsisting liability and other liabilities in 138 N.I. Act, in which, it was specifically mentioned as " Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid." But it comes under liability. Hence, he prayed for setting aside the order passed by the learned Magistrate. To substantiate hi

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2012 Supreme(Mad) 3417

High Court of Judicature at Madras R. MALA, J. M. PalanisamyVersusK. Karvannan Criminal Appeal No. 1204 of 2004 Decided On : 03-08-2012

Ratiosa. Only the ’holder’ of the cheque could fill up the inchoate cheque and not everyone in possession of it.b. Only the person to whom a cheque was issued for consideration with authorization to fill up the gaps could fill it up and not others.

Cases Referred (1)

High Court of Judicature at Madras
R. MALA, J.
M. Palanisamy
Versus
K. Karvannan
Criminal Appeal No. 1204 of 2004
Decided On : 03-08-2012

Ratios
a. Only the ’holder’ of the cheque could fill up the inchoate cheque and not everyone in possession of it.
b. Only the person to whom a cheque was issued for consideration with authorization to fill up the gaps could fill it up and not others.