KEYWORDS:- Kerala High Court, Section 138 and 139 of NI Act, Cheque Bouncing, Supreme Court, Justice Sophy Thomas
The Kerala High Court lately held that the presumption that a cheque was issued to discharge the debt or liability will remain applicable even in the case of blank cheque issued voluntarily under Section 139 of the Negotiable Instrument Act. (PK Uthuppu v. NJ Varghese & Anr.)
While relying on the Supreme Court’s decision in Bir Singh v. Mukesh Kumar, in which it was held that a voluntarily signed cheque attracts the presumption under Section 139 of the NI Act unless there is evidence to prove otherwise.
The High Court by quoting Bir Singh’s Judgement said that even if a blank cheque is signed voluntarily and given by the accused, to make some payment, it would also attract the presumption under Section 139 of the NI Act, in the absence of any cogent evidence in order to show that cheque was not voluntarily signed in discharge of debt.
The High said that while they were considering a revision petition filed by a man convicted with the offence of cheque bouncing under Section 138 of NI Act.
The revision petitioner was accused of issuing a cheque without making sure that he had enough amount in his bank account, therefore, defaulting on a Rs. 4lakh loan.
The Cheque bounced due to non- availability of sufficient funds will lead to a lawyer’s notice from the lender and a complaint was filed under Section 138 of the NI Act as the borrowed amount was not repaid despite the notice.
The Accused- petitioner was held guilty by the trial court and an appellate court upheld the conviction but reduced the sentence period.
The revision-petitioner claimed that he had only issued cheque as security for a vehicle loan to the complainant’s financial institution.
HE further argued that the complainant later failed to return certain documents including the blank cheque by saying that they were misplaced. According to petitioner, the blank cheque was then missued by a complainant to file pseudo case against him.
However, the High Court rejected the arguments that made by the petitioner. It was observed that the petitioner has failed to present any documents to show that he had taken a vehicle loan from the complainant’s financial institution.
On the other hand, as claimed by the complainant, the Court found that there was evidence that he had taken personal loan of 4lakh rs.
The High Court said that the presumption under Section 139 of the NI Act favoured the complainant as he had accepted that he had voluntarily given a blank signed cheque to the complainant.
The Court also found that the revision petitioner failed to counter the presumption made that he had issued the cheque in order to discharge his debt.
The Court said that the revision petitioner failed to prove any cogent evidence and show that, the cheque given by him was not in intention towards discharging of any legally enforceable debt. The Court hold that since the presumption stands false, the appellate court upheld the conviction under Section 138 of the NI Act of the revision petitioner and sentenced him to jail till the court rising and to pay 4Lakh rupees.
Hence, the High Court dismissed the revision petition and suggested him to surrender in front of the trail court and to serve his sentence and pay the fine.
S Rajeev has represented the Petitioner and Advocate R Bindu Sastamangalam has represented the complainant and the State.
Written by:- Dolly Singh Gehlot ,Semester:- 5th an intern under legal vidhiya,College:- BM Law College
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