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

It was held by the Supreme Court that if a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars at a later date. The same would not dispel the presumption under Section 139 of Negotiable Instruments Act, 1881.

The above judgment was passed by the Apex Court in the matter of Bir Singh vs. Mukesh Kumar, Criminal Appeal Nos.230-231 OF 2019 decided on 06.02.2019.

Challenge

It was the case of the appellant/complainant that the respondent/accused had issued the subject cheque in favour of the appellant towards repayment of a friendly loan. Upon presentation of the subject cheque by the appellant-complainant, the cheque was returned unpaid with the endorsement “Insufficient Fund”. The complainant re-presented the cheque on the assurance of the accused, however, it was again returned unpaid with the remark “Insufficient Fund”. The appellant-complainant was therefore constrained to issue a legal notice and thereafter institute a criminal complaint against the respondent-accused before the Judicial Magistrate under Section 138 of the Negotiable Instruments Act.

The Judicial Magistrate convicted the respondent-accused under Section 138 of the Negotiable Instruments Act. Being aggrieved, the respondent-accused filed a criminal appeal in the court of Additional Sessions Judge, wherein the conviction of the respondent-accused under Section 138 of the Negotiable Instruments Act was upheld. The respondent-accused filed a Criminal Revision Petition in the High Court challenging the Judgment and order of the Appellate Court. The High Court went on to reverse the concurrent factual findings of the Trial Court and the Appellate Court and acquitted the respondent of the charge under Section 138 of the Negotiable Instruments Act, observing that there was a fiduciary relationship between the appellant complainant, an Income Tax practitioner, and the respondent accused who was his client. The High Court held that owing to the fiduciary relationship between to the parties, heavy burden rested on the complainant to prove that he had advanced the loan and that blank cheque for the same was given to him. In the given circumstances, the accused petitioner was successful in raising reasonable doubts that the complainant might have misused one of the blank cheques given to him for payment of income tax for depositing the same in the Treasury. Therefore, no presumption under Section 138 of the Negotiable Instruments Act, 1881 could have be raised. Therefore, the question of law posed before the Supreme Court was whether the payee of a cheque is disentitled to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, of a cheque duly drawn, having been issued in discharge of a debt or other liability, only because he is in a fiduciary relationship with the person who has drawn the cheque.

Held

The Apex Court referred to various judgments of the same court to analyse the import of Section 139 of the Negotiable Instruments Act, 1881 and reiterated that Section 139 introduces an exception to the general rule as to the burden of proof and shifts the onus on the accused. The presumption under Section 139 of the Negotiable Instruments Act is a presumption of law, which discharges the obligation on the prosecution unless the accused adduces evidence showing the reasonable possibility of the nonexistence of the presumed fact.

It was held that the onus to rebut the presumption under Section 139 that the cheque has been issued in discharge of a debt or liability is on the accused and the fact that the cheque might be post dated does not absolve the drawer of a cheque of the penal consequences of Section 138 of the Negotiable Instruments Act. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence. The existence of a fiduciary relationship between the payee of a cheque and its drawer, would not disentitle the payee to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, in the absence of evidence of exercise of undue influence or coercion. Therefore, the Court held that in the absence of any finding that the cheque in question was not signed by the respondent-accused or not voluntarily made over to the payee and in the absence of any evidence with regard to the circumstances in which a blank signed cheque had been given to the appellant-complainant, it may reasonably be presumed that the cheque was filled in by the appellant-complainant being the payee in the presence of the respondent-accused being the drawer, at his request and/or with his acquiescence.