Section 138 NI Act: Alteration of Unfilled Signed Cheque Not an Alteration : Supreme Court

Team SoOLEGAL 8 Feb 2019 1:00pm

Section 138 NI Act: Alteration of Unfilled Signed Cheque Not an Alteration : Supreme Court

The Supreme Court decided on Bir Singh vs. Mukesh Kumar. The question before the Court was that if the payee of a cheque has a fiduciary relationship with the person who has drawn the cheque, whether he is dis entitled to the benefit of presumption under the Negotiable Instrument Act (Section 139).

The bench comprised of Justice R. Banumathi and Justice Indira Banerjee. It observed that when a fiduciary relationship exists between the parties to a cheque , the payee will not be disentitled to the benefits of presumption. He will be dis entitled only if thee exists coercion of undue influence.

The bench observed that under Section 139 the burden of proof to rebut the presumption that the cheque has been issued for discharging a liability or debt is completely on the accused. A post datedcheque does not absolve it’s drawer from being penalized. The observation of the bench in this regard was:

"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. 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 High Court had acquitted the accused holding that there was an alteration in the cheque. But the Apex Court set aside the High Court’s judgment and finally observed 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. 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." 

Tagged: supreme court   section 138   NI Act   Alteration of Unfilled Signed   Cheque Not an Alteration  
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