LI Network
Published on: November 17, 2023 at 18:57 IST
The Kerala High Court has clarified that the presumption under Section 139 of the Negotiable Instruments Act (NI Act), which assumes a cheque has been issued to discharge a debt or liability, extends even to voluntarily signed blank cheques given as payment.
Justice Sophy Thomas, citing Bir Sing v. Mukesh Kumar (2019), emphasized that the onus to rebut this presumption lies with the accused, and the absence of evidence showing the cheque wasn’t issued for debt discharge maintains the presumption.
The case involved the respondent alleging a loan of Rs. 4 Lakhs to the revision petitioner, who issued a cheque towards repayment. Claiming insufficient funds, the 1st respondent initiated legal action.
The trial court found the revision petitioner guilty under Section 138 of the NI Act, sentencing imprisonment and compensation. The appellate court upheld the conviction but modified the sentence.
Challenging the appellate court’s decision, the revision petitioner argued that the cheque wasn’t for a legally enforceable debt.
He claimed the cheque, initially given as security during a vehicle loan, was misused. The revision petitioner asserted the blank cheque was filled in a different ink and handwriting by the respondent.
The court noted the absence of evidence supporting the revision petitioner’s claims. Dismissing the revision petition, it held that even if the cheque was voluntarily given as a blank, the revision petitioner couldn’t disown it without evidence of coercion or threat.
The court stressed the relevance of Section 139’s presumption, stating the revision petitioner failed to rebut it.
Addressing the mode of advancing money, the court deemed it irrelevant in a Section 138 complaint. It emphasized that discrepancies in witness statements did not undermine the genuineness of the cheque transaction.
The court upheld the appellate court’s decision, dismissing the revision petition.
Citation: P.K. Uthuppu v. N.J. Varghese & Anr.
