Whether presumption U/S 139 of NI Act is attracted if accused hands over blank signed cheque?

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.

18. 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 (2019) 4 SCC 197, ¶ 36., 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.”

 REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 123 of 2021

M/s. Kalamani Tex & Anr  Vs P. Balasubramanian 

Author: Surya Kant, J:

DATED :10.02.2021

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How to appreciate evidence in cheque dishonour case if there is allegation that cheque is materially altered?

 If a signed blank cheque is voluntarily presented to a payee,
towards some payment, the payee may fill up the amount and
other particulars. This in itself would not invalidate the cheque.
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.
39. It is not the case of the respondent-accused that he either
signed the cheque or parted with it under any threat or coercion.

Nor is it the case of the respondent-accused that the unfilled
signed cheque had been stolen. 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. The second
question is also answered in the negative.
40. 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.
41. The fact that the appellant-complainant might have been an
Income Tax practitioner conversant with knowledge of law does not
make any difference to the law relating to the dishonour of a
cheque. The fact that the loan may not have been advanced by a
cheque or demand draft or a receipt might not have been obtained
would make no difference. In this context, it would, perhaps, not
be out of context to note that the fact that the respondent-accused
should have given or signed blank cheque to the appellantcomplainant,
as claimed by the respondent-accused, shows that
initially there was mutual trust and faith between them.
42. 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. The
subsequent filling in of an unfilled signed cheque is not an
alteration. There was no change in the amount of the cheque, its
date or the name of the payee. The High Court ought not to have
acquitted the respondent-accused of the charge under Section 138
of the Negotiable Instruments Act.
REPORTABLE
THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NOS.230-231 OF 2019

Bir Singh  Vs Mukesh Kumar 

Indira Banerjee, J.
Dated:FEBRUARY 06, 2019.

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When filling up of blank Cheque will not amounts to Material Alteration in case of dishonour of cheque?

 With regard to the instruments other than a cheque, an implied
authority is given to the holder at the time of entrusting it to fill up the
same. There may be instances where an implied authority is given to the
person, at the time of entrusting a signed blank cheque containing the
signature of the drawer of the cheque, to fill the columns therein.
 If   a   principal   or   employer   deputes   his   agent   or   employee   to
purchase an article and if the dealer fills up that signed blank cheque
leaf showing the exact amount covered by the bill showing the price of
the article sold then it cannot be said that what was handed over by the
drawer of the cheque is only a signed blank cheque leaf. In such cases an
implied authority to the trader/seller of the article to fill up the cheque
leaf can certainly be inferred. Similarly, there may also be cases where at
the time of settlement of the accounts, a particular amount was found
payable by the drawer of the cheque to the other party and if a signed
blank cheque entrusted to be filled up later is filled up in tune with the
accounts,   showing   the   actual   amount   payable   by   the   drawer   of   the
cheque to the other party, then also it can be said that there was the
implied authority to fill up the signed blank cheque leaf. There may be
such instances where the sum is ascertainable and the signed blank
cheque leaf is given to fill up the same after ascertaining the same. In
such cases there would be no difficulty to infer an implied authority
given by the drawer. Simply because the cheque is seen filled up or
written   in   the   hand   writing   of   another   person   it   cannot   lead   to   a
conclusion that only a signed blank cheque leaf was given. The person
signing the cheque may have difficulty due to many reasons to write the
cheque and it might have been filled up by the payee or by another. In
such cases it cannot be said that what was handed over was only a
signed blank cheque leaf. In all such cases the ultimate conclusion may
depend   upon   the   proof   of   the   transaction   and   execution   of   the
instrument. It must also be held that when it is a case that only a signed
blank   leaf   was   handed   over   by   the   accused,   then   he   must   offer
satisfactory explanation as to the circumstances under which the signed
blank cheque happened to be handed over. Considering the totality of

the evidence and circumstances, it is for the court to draw the inference
as to whether it was given with an implied authority to fill up the same
showing the amount ascertained or ascertainable to discharge the debt
or liability. Therefore, there may be such cases where implied authority
can be inferred. But the contention that when a signed blank cheque leaf
is handed over, it can never be filled up and that if it is filled up it would
amount to a material alteration within the meaning of using Section 87
of   the   N.I.   Act,   does   not   stand   to   rhyme   or   reason.   Similarly,   the
contention that  Section 20 of the N.I. Act is applicable to an unfilled or
blank cheque leaf also cannot be accepted. It would depend upon the
facts of each case. Therefore, it is neither a case which attracts Section
87 of the N.I. Act nor is it a case where the complainant can rely upon
Section 20 of the N.I. Act and contend that as a signed blank cheque leaf
is given it gives an authority to fill up the same according to the whim
and fancy of the payee. [See : P. Purushothaman Nair v. K. Sreekantan
Nair, 2013 (4) ILR (Ker) 115]
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE FIR/ORDER)
NO. 968 of 2014


NIKHIL P GANDHI.
Versus
STATE OF GUJARAT & 2.
CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA
Date : 15/06/2016
Citation:2016 CRLJ4338 Guj

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Dishonour of cheque-defence of issue of blank cheque as security for loan

That is how the cheque was issued and accepted. It is an afterthought to urge that the accused signed blank cheques and they were handed over to the agent as a security.

This is sought to be suggested only relying upon the endorsement "not above Rs.20 crores" on the cheque. If that was so, then there is no explanation forthcoming as to why there has been no grievance or complaint made disputing the liability or the correctness of the entries in the statement of account or questioning the act of selling the pledged securities. All this would not have taken place had the cheque handed over at the time of the issuance of the sanction letter or disbursal of the loan amount. In such circumstances, there is no question of blank cheque being handed over as that fact is belied by the line of cross-examination adopted by the accused himself. The suggestions given by him to the complainant's witnesses and their answers thereto would show that the cheque was handed over in December, 2010 and all the details therein were filled in by the applicant accused. In these circumstances, the trial Court did not commit any error in holding that the offence u/s 138 of the N.I. Act has been committed by the applicant accused.

Bombay High Court

 Mr.Vyomesh Jitendra Trivedi v  State of Maharashtra on 23 September, 2013

Bench: S.C. Dharmadhikari

Citation : 2013 ALL M R(cri)3783

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