Under NI Act if cheque signed by drawer is given to payee ’reverse onus clause’ u/s 139 attracted. It is immaterial that particulars filled by someone else – Allahabad High Court
In a recent judgment, the Hon’ble High Court has held that Under NI Act if cheque signed by drawer is given to payee ’reverse onus clause’ u/s 139 attracted. It is immaterial that particulars filled by someone else. Presumption u/s 138 of NI Act arises when cheque is signed by the drawer and handed over to the payee and would not be rebutted even on the basis of an FSL report that the other details have not been filled up by the drawer but by some other person
ABCAUS Case Law Citation:
ABCAUS 3966 (2024) (04) HC
Important Case Laws relied upon:
Kumar Exports Vs. Sharma Carpets (2009) 2 SCC 513
Rangappa Vs. Srimohan (2010) 11 SCC 441
M/s Kalamani Tex and another Vs. P. Balasubramanian (2021) 5 SCC 283
Anss Raja Shekhar Vs. Augustus Jeba Ananth (2020) 15 SCC 348
Bir Singh Vs. Mukesh Kumar (2019) 4 SCC 197
In the instant case, the petitioner was facing a trial in a Cheque dishonour complaint case under Section 138 of the Negotiable Instruments Act, 1881.
By way of a Writ Petition, the petitioner had challenged the order passed by the Trial Court rejecting the application of the petitioner seeking a direction to get the hand writing in which the amount and the date had been filled up on the cheque, be referred for examination to the Forensic Science Laboratory.
It was the case of the Petitioner that the signature of the petitioner had been obtained on the cheque under coercion, and accordingly
It was contended that the Magistrate had erred in rejecting the aforesaid application moved by the petitioner and that the revisional court has also erred in dismissing the revision filed there against.
On the contrary, the Prosecution submitted that once the petitioner had admitted his signatures on the cheque, the hand writing in which the date and the amount had been filled up would not be material inasmuch as there is no requirement under law that the said particulars be filled up by the drawer of the cheque.
The Hon’ble High Court observed that the purpose of the presumptions under Sections 118 and 139 of the NI Act was examined by the Hon’ble Supreme Court and it was held that the presumptions under the aforesaid sections come into existence as soon as complainant proves that the negotiable instrument was executed by the accused; the said presumptions, were however, held to be rebuttable.
The Hon’ble High Court further noted that the purpose, scope and function of the presumption under Section 139 NI Act, was further explained by the Hon’ble Supreme Court and it was held that Section 139 is an example of a ‘reverse onus clause’ that has been included in furtherance of the legislative object of improving the credibility of negotiable instruments, and the rebuttable presumption created under Section 139 is a device to prevent undue delay in the course of litigation.
Again, it was noted by the Hon’ble High Court that the presumption of law under Section 139 that a cheque duly signed by the drawer and handed over to the payee, was in discharge of a debt or liability, and the drawer remains liable unless he adduces evidence to rebut the presumption, was again subject matter of consideration before the Hon’ble Supreme Court and it was held that if a cheque is duly signed by the drawer and is otherwise valid, the mere fact that the amount and other particulars have been filled up by the payee, would not invalidate the cheque.
The Hon’ble High Court further observed that the rebuttable nature of presumption under Section 139 was again considered by the Hon’ble Supreme Court and it was held that the standard of proof to rebut the said presumption is preponderance of probabilities, and in determining whether the presumption has been rebutted, the test of proportionality must guide the determination.
The Hon’ble High Court noted that the effect of an admission regarding signatures on a cheque was examined by the Hon’ble Supreme Court who and reiterating the view taken in the case of Bir Singh (supra), it was held that in such a case there would be a presumption that the cheque was issued as consideration for a legally enforceable debt.
In view of the judicial precedents, the Hon’ble High Court opined that it can be stated that a drawer who signs a cheque and hands it over to the payee, would be presumed to be liable unless he is able to adduce the evidence to rebut the presumption under Section 139 that the cheque had been issued towards the payment of a debt or discharge of liability.
The Hon’ble High Court stated that the provisions of Sections 118 and 139 of the NI Act create a presumption that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of a debt or liability, once the execution of the negotiable instrument is either proved or admitted. No sooner the complainant discharges the burden to prove that the instrument was executed by the accused, the rules of presumption under Sections 118 and 139 would shift the burden to the accused and it would be for the accused to prove that the cheque was not issued for consideration for discharge of any debt or liability.
According to the Hon’ble High Court, the use of expression ‘until the contrary is proved’ in Section 118, and the use of the phrase ‘unless the contrary is proved’ in Section 139, read with the definitions of ‘may presume’ and ‘shall presume’, under Section 4 of the Indian Evidence Act, 1872 , are clearly indicative that the presumptions raised under Sections 118 and 139 of the NI Act, are rebuttable.
The Hon’ble High Court stated that Section 139 has been held to be an example of a ‘reverse onus clause’ that has been included in furtherance of the legislative objective of improving credibility of negotiable instruments. ‘Reverse onus clauses’, in the absence of compelling justifications, usually have the effect of imposing an evidentiary burden, and the standard of proof for doing so would have to be guided by the ‘preponderance of probabilities’, and by applying the ‘test of proportionality.
In the instant case, the Hon’ble High Court observed that the petitioner had not disputed that the cheque bears his signature; rather there is a clear admission in this regard. The only contention which was sought to be put forward is that the date and the amount on the cheque had not been filled up by the petitioner.
The Hon’ble High Court held that the mere fact that the particulars in the cheque have not been filled up by the drawer but by some other person would not be material, and would not by itself invalidate the cheque. The presumption which arises upon the cheque having been signed by the drawer and handed over to the payee would not be rebutted on the basis of an FSL report, even if the same indicates that the other details in the cheque have not been filled up by the drawer but by some other person.
The Hon’ble High Court stated that the argument raised that only a blank signed cheque had been procured by the respondent, even if taken at face value, was not obliterate the statutory presumption under Section 139 of the NI Act, unless cogent evidence is adduced to rebut the presumption.
With respect to the contention that cheque having been obtained under coercion, the Hon’ble High Court stated that it would be a plea of defence regarding which it would be open to the petitioner to adduce evidence to support his contention before the trial court.
Accordingly, the petition thus was dismissed.
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