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Kerala High Court Rules Typewritten Cheque Does Not Defeat NI Act Presumptions, Reverses
In a significant ruling for cheque complaints, the has held that a typewritten cheque is not legally invalid and its use alone cannot defeat the available to a complainant under the . Justice A. Badharudeen set aside the of an accused in a Rs 4.75 lakh cheque bounce case and convicted her under Section 138 of the Act, imposing a fine equal to the cheque amount with .
The Disputed Cheque and the Family Loan
The case arose from a complaint filed by Shiny S. Nair against her relative, Sreekala. According to the complainant, she had lent Rs 1.75 lakh to Sreekala on and another Rs 3 lakh on , totalling Rs 4.75 lakh. Towards repayment, Sreekala issued a cheque (Ext.P1) dated for the entire sum. When the cheque was presented for encashment, it was returned with the endorsement “.” A was sent, but the amount remained unpaid, leading to a under .
Trial Court’s Skepticism: Implausible Second Loan and a Typewritten Cheque
The acquitted the accused after trial, raising two principal doubts. First, the magistrate found it improbable that the complainant would advance another substantial loan of Rs 3 lakh when an earlier loan of Rs 1.75 lakh was still outstanding. Second, the court viewed the typewritten nature of the cheque with suspicion, as both parties could write, and the complaint had originally stated the cheque was filled and signed in the complainant’s presence. The trial court also discredited PW4, a witness who testified to the second transaction, labeling him a “surprise witness.” On these factual premises, the magistrate declined to draw the presumptions under and held that the complainant had failed to prove the offence .
Arguments on Appeal: Implausibility vs. Presumptions
Arguing before the High Court, the complainant’s counsel contended that the evidence of PW1 to PW4 and Exts.P1 to P6 sufficiently discharged the initial burden of proving the transaction and the cheque’s execution. It was stressed that the parties were relatives, making a second loan during the subsistence of an earlier liability entirely plausible, especially since the gap between the two advances was only about five months. The counsel emphasized that once the was established, the court was bound to raise the presumptions that the cheque was issued for consideration and in discharge of a , shifting the onto the accused.
The accused’s counsel, opposing the appeal, submitted that the typewritten character of the cheque cast a serious shadow over its genuineness. The accused had also put up a defence during the examination that a blank cheque given in respect of a 2010 transaction was misused. During , a suggestion was made that only Rs 1 lakh remained outstanding from that earlier borrowing. The argument was that the complainant’s failure to explain the typewritten cheque, combined with the improbable scenario of a fresh loan, justified the .
High Court’s Analysis: Typewritten Cheques Are Not Illegal, Relative Loans Are Not Implausible
Justice Badharudeen dismantled the trial court’s reasoning point by point. On the typewritten cheque, the court stated unequivocally:
“Issuance of a typewritten cheque though not common, is not prohibited by law. Thus, in the case of a cheque issued as typewritten, when the complainant succeeds in establishing the transaction and , merely because the cheque was a typewritten one, shall not be a reason to disbelieve the case of the complainant.”
The High Court further clarified that on the ground of “” is squarely covered by Section 138 when the account lacks sufficient funds, a fact confirmed by the bank statement (Ext.X2) showing a balance of just Rs 554.55 on the relevant date.
Addressing the “implausibility” of a second loan, the court observed:
“Advancing a loan to a relative, even during subsistence of an earlier liability by itself is not a sufficient reason to disbelieve the complainant’s case … merely for the reason that the complainant, who is closely related to the accused given Rs 3,00,000 … while a liability to the tune of Rs 1,75,000 … was subsisting, would not make the evidence of PW1 … improbable.”
The judgment noted that the accused herself admitted to an outstanding liability of Rs 1 lakh from a 2010 borrowing, which fortified the complainant’s version. Because the complainant had proven the cheque’s execution and the underlying transaction, the court held that she was entitled to the under Section 118 and Section 139, and the defence had failed to rebut them with credible evidence.
Decision and Sentence
Allowing the criminal appeal, the High Court set aside the and convicted the second respondent under . The sentence imposed was for one day () and a fine of Rs 4,75,000. The entire fine, upon payment or realisation, is to be given as to the complainant under In default of payment, the accused must undergo imprisonment for six months. The convict was directed to appear before the trial court within two weeks to undergo the sentence.
The ruling reaffirms that —like a cheque being typewritten—cannot override the legislative mandate of presumptions under the NI Act, once the of a dishonoured cheque are proved. It also underscores that familial financial dealings, even when repeated loans are outstanding, are not inherently improbable in Indian social contexts.
