Even A Blank Cheque Leaf Attracts Presumption Under S.139 NI Act If Voluntarily Signed & Given Towards Payment : Kerala High Court

The Kerala High Court recently laid down that the presumption under Section 139 of the Negotiable Instruments Act (NI Act) that cheque has been issued in discharge of a debt or liability, would be attracted, even if a blank cheque is voluntarily signed and handed over as payment. Relying upon the decision in Bir Sing v. Mukesh Kumar (2019), Justice Sophy Thomas observed:"The onus to rebut the presumption under Section 139 of the N.I Act that the cheque has been issued in discharge of a debt or liability, is on the revision petitioner. Even if a blank cheque leaf is voluntarily signed and handed over by the accused, towards some payment, it would attract the presumption under Section 139 of the N.I Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt". The 1st respondent alleged that the revision petitioner had borrowed Rs. 4Lakhs from him, and subsequently issued a cheque to the former towards the discharge of the amount. The 1st respondent however claimed that the said cheque was dishonoured due to insufficiency of funds. He added that the revision petitioner failed to repay the amount in spite of having sent notice to the latter. The trial court found the revision petitioner guilty under Section 138 of the NI Act, and sentenced him to undergo simple imprisonment for 6 months, and to pay compensation of Rs. 4Lakhs with interest at the rate of 9% per annum, from the date of dishonour of the cheque till the date of payment. The appellate court confirned the conviction, but reduced the period of imprisonment, and converted the compensation amount of Rs. 4 Lakhs to fine amount. It is against the above judgment of the appellate court that the present revision petition was filed. The revision petitioner averred that the cheque had not been issued for discharge of any legally enforceable debt. He claimed that he had availed a loan for his vehicle from the financial institution run by the 1st respondent, and some blank documents including a blank cheque signed by him, were given as security, and on closing that loan, those documents were returned, except the blank cheque, and thus submitted that the blank cheque was misused to foist a false case upon the former. The counsel for the revision petitioner contended that the cheque, although signed by the latter, had been given as a blank one, as a security for the vehicle loan availed by him, and that it was subsequently filled up by the 1st respondent in a different ink and handwriting. The revision petitioner also disputed that the amount of Rs. 4Lakhs had been given to him in cash, and asserted that the same had been given by way of cash cheque. The Court took note that in the present case, the revision petitioner had not adduced any evidence to prove that the 1st respondent was running a financial institution, or to show that at any point of time, he had availed a vehicle loan from such an institution, and had produced the cheque as a security for such loan. The Court was of the considered view that even if the cheque had been given as a blank one affixing his signature, the revision petitioner could not disown the same, since he had no case that, he had given that cheque under any threat or coercion. "The revision petitioner failed to adduce any cogent evidence to show that, the cheque given by him was not towards discharge of any legally enforceable debt. The contentions with regard to the vehicle loan, entrustment of blank cheque etc. are liable to be rejected, as no evidence is forthcoming to support the same. As he is admitting that, Ext.P1 cheque was signed by him and it was voluntarily given by him to the 1st respondent, not under any threat or coercion, the presumption under Section 139 of the N.I Act is very much available to the 1st respondent, and the revision petitioner failed to rebut that presumption," it observed. As regards the mode of advancing the money, the Court said that the same was irrelevant as far as a complaint under Section 138 of the NI Act was concerned. "The mode of advancing the amount to the revision petitioner, was not an incriminating material to be confronted with the revision petitioner during his 313 examination, as long as he was not disputing Ext.P1 cheque bearing his signature, and dishonour of that cheque for insufficiency of funds. The discrepancy if any in the statement of PW1 regarding the mode of payment of the amount to the revision petitioner, may be a circumstance, available to the revision petitioner, to challenge the genuineness of the transaction alleged by the 1st respondent. At any rate it cannot be treated as an incriminating circumstance brought out against the revision petitioner to be put, in his examination under Section 313 of Cr.P.C.," it held. The Court observed that the materials and evidence on record adduced from the side of the 1st respondent were not capable of rebutting the presumption, in favour of the revision petitioner even by preponderance of ...

Even A Blank Cheque Leaf Attracts Presumption Under S.139 NI Act If Voluntarily Signed & Given Towards Payment : Kerala High Court

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Even A Blank Cheque Leaf Attracts Presumption Under S.139 NI Act If Voluntarily Signed & Given Towards Payment : Kerala High Court

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