Dishonour Of Cheques- Blank Cheque Would Attract Presumption U/s 139 NI Act If Signatures Are Admitted: Supreme Court

The Supreme Court observed that even a blank cheque leaf would attract presumption under Section 139 of the Negotiable Instruments Act when signatures are admitted by the accused.The bench comprising Justices NV Ramana, Surya Kant and Aniruddha Bose observed that 'reverse onus' clauses under Section 118 and Section 139 of the Negotiable Instruments Act become operative once the signature(s) of an accused on the cheque are established. Though the presumptions raised under Section 118 and Section 139 are rebuttable in nature, a probable defence needs to be raised, which must meet the standard of "preponderance of probability", and not mere possibility, the bench observed. In this case, the High Court had reversed the order of acquittal of the Judicial Magistrate and convicted the accused under Section 138 of the Negotiable Instruments Act after noticing that the accused had admitted his signatures on both the Cheque and the Deed of Undertaking and had thus acknowledged the liability.Agreeing with the view taken by High Court, the Apex Court bench observed that the trial Court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA.The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him...Once the 2nd Appellant had admitted his signatures on the cheque and the Deed, the trial Court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt. The trial Court fell in error when it called upon the Complainant Respondent to explain the circumstances under which the appellants were liable to pay. Such approach of the trial Court was directly in the teeth of the established legal position as discussed above, and amounts to a patent error of law.The bench observed that the defence raised by the accused in this case does not inspire confidence or meet the standard of 'preponderance of probability'. The bench observed:Even if we take the arguments raised by the appellants at face value that only a blank cheque and signed blank stamp papers were given to the respondent, yet the statutory presumption cannot be obliterated. It is useful to cite Bir Singh v. Mukesh Kumar, where this court held that: "Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."Another contention raised by the accused was that the trial Court view was a possible view, and the High Court committed patent illegality and exceeded its jurisdiction in reversing the acquittal. In this context, the bench observed:"It is true that the High Court would not reverse an order of acquittal merely on formation of an opinion different than that of the trial Court. It is also trite in law that the High Court ought to have compelling reasons to tinker with an order of acquittal and no such interference would be warranted when there were to be two possible conclusions.5 Nonetheless, there are numerous decisions of this Court, justifying the invocation of powers by the High Court under Section 378 CrPC, if the trial Court had, inter alia, committed a patent error of law or grave miscarriage of justice or it arrived at a perverse finding of fact "There needs to be a consistent approach towards awarding compensation The bench rejected the plea of the complainant seeking enhanced compensation. "The record indicates that neither did the respondent ask for compensation before the High Court nor has he chosen to challenge the High Court's judgment. Since, he has accepted the High Court's verdict, his claim for compensation stands impliedly overturned.", the court said. The bench made these observations regarding adjudication of compensation claims:"we are conscious of the settled principles that the object of Chapter XVII of the NIA is not only punitive but also compensatory and restitutive. The provisions of NIA envision a single window for criminal liability for dishonour of cheque as well as civil liability for realization of the cheque amount. It is also well settled that there needs to be a consistent approach towards awarding compensation and unless there exist special circumstances, the Courts should uniformly levy fine up to twice the cheque amount along with simple interest at the rate of 9% per annum."Case: M/s. Kalamani Tex vs. P. Balasubramanian [CRIMINAL APPEAL NO. 123 of 2021]Coram: Justices NV Ramana, Surya Kant and Aniruddha BoseCitation: LL 2021 SC 75Click here to Read/Download JudgmentRead...

Dishonour Of Cheques- Blank Cheque Would Attract Presumption U/s 139 NI Act If Signatures Are Admitted: Supreme Court

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Dishonour Of Cheques- Blank Cheque Would Attract Presumption U/s 139 NI Act If Signatures Are Admitted: Supreme Court

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