Kalamani Tex and Ors. Vs. P. Balasubramanian - (Supreme Court) (10 Feb 2021)

Blank cheque leaf would attract presumption under Section 139 of the Negotiable Instruments Act, 1881, when signatures are admitted by the Accused

MANU/SC/0066/2021

Banking

Appellant No. 1 and its managing partner(Appellant No. 2) are in appeal challenging the judgment passed by the High Court, whereby the order of acquittal of the Judicial Magistrate, was reversed and the Appellants have been convicted under Section 138 of the Negotiable Instruments Act, 1881 ('NIA'). Consequently, Appellant No. 2 has been sentenced to undergo three months Simple Imprisonment and a fine of Rs. 5,000. The short question which falls for consideration is whether the High Court erred in reversing the findings of the trial Court in exercise of its powers under Section 378 of Code of Criminal Procedure, 1973 (CrPC).

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. There are numerous decisions of this Court, justifying the invocation of powers by the High Court under Section 378 Code of Criminal Procedure, if the trial Court had, committed a patent error of law or grave miscarriage of justice or it arrived at a perverse finding of fact.

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.

In case of Bir Singh v. Mukesh Kumar, 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.

There has been an admitted business relationship between the parties, the defence raised by the Appellants does not inspire confidence or meet the standard of 'preponderance of probability'. In the absence of any other relevant material, it appears that the High Court did not err in discarding the Appellants' defence and upholding the onus imposed upon them in terms of Section 118 and Section 139 of the NIA.

With regard to 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 Respondent, in any case, is entitled to receive the cheque amount of Rs. 11.20 lakhs which the Appellant has already deposited with the Registry of this Court. Appeal dismissed.

Tags : CHEQUE BOUNCE CONVICTION LEGALITY