Inchoate instruments are also valid and legally enforceable

Once the execution of Cheque is admitted, it shall be taken that the cheque was issued by the accused in favour of the complainant towards the discharge of the liability. 

In the instant matter, revision petitions were preferred against the impugned order allowing applications of the accused filed under Section 45 of the Indian Evidence Act. It was the case of complainant that she had advanced a sum of money to the accused against which a cheque was issued as repayment, which after it was presented was dishonoured for want of sufficient fund in the bank account of accused. During the course of proceedings in the complaint filed by Complainant, the accused moved an application under Section 45 of the Evidence Act disputing the claimed amount and further stating that partial amount has already been paid and he was further ready to pay the balance amount. Accused even disputed to have issued the cheque in question against any debt and stated that the complainant had taken two blank cheques from him as a security, which were signed by him as account holder. 

Accused by moving the above application challenged the correctness of the alleged act of the complainant for seeking the relief to examine insertion of the entries in the cheque through Handwriting Expert. This application was rejected against which revision petition was preferred wherein prayer of the accused was allowed. The order allowing the prayer was challenged in the present matter before High Court. 

Complainant submitted that as per section 20 of the Negotiable Instruments Act, 1881 when incomplete cheque is issued by the accused, it would mean that accused has given prima facie authority to the holder thereof to make or complete the cheque and in such a situation if any further entry was made by the complainant then same cannot be examined through opinion by the Handwriting Expert. 

It was observed that that Section 20 of the NI Act gives a clear mandate that such an instrument can be negotiated by the maker thereof by simply signing and delivering the same to the holder in due course giving thereby ample authority to the latter to fill up the content of the instrument as intended by the maker thereof. Once the execution is admitted, it shall be taken that the cheque was issued by the accused in favour of the complainant towards the discharge of the liability. 

In the present case, it was an admitted position that the cheques were signed by the accused persons. Section 20 makes it clear that the instrument may be wholly blank or incomplete in any particular; in either case, the holder has the authority to make or complete the instrument as a negotiable one. The authority implied by a signature to a blank instrument is so wide that the party so signing is bound to a holder in due course even though the holder was authorised to fill for a certain amount. Section 20 of the Act declares that inchoate instruments are also valid and legally enforceable. In the case of a signed blank cheque, the drawer gives authority to the drawee to fill up the agreed liability.

Accordingly it was held that in the present case, though the accused had admitted that the signed cheque was issued by him but it was denied that the same was issued voluntarily by him in favour of the Complainant against due payment. On the other hand, it was sought to be contended that the cheque was issued for the security purposes but was misused by the complainant after having filled up the details by the Complainant. However, as per Section 20 of the NI Act, an individual is authorised to complete the inchoate instrument deliver to him by filling up the blanks. Moreover, a blank cheque could be filled up by the ‘Holder thereof’, which will be a valid instrument in the eye of Law, and thus there was no need to examine the Handwriting Expert to verify whether the contents of the cheques were written by the complainant or not.

[Sunita Dubey vs. Hukum Singh Ahirwar]
[MP HC, 01.12.2014]