Blank cheque would attract presumption under section 139 NI Act

by | 10 Feb, 2021 | Latest Advice Online

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Even a blank cheque would attract presumption under section 139 of the Negotiable Instrument Act. Section 139 of NI Act, raises presumption in favor of holder of cheque that it was issued in discharge of debt or other liability. The accused cannot rebut this presumption merely on the ground that he has given a blank cheque for the purpose other than discharge of debt.

The holder of cheque can file a complaint under section 138 NI Act if drawer dishonours the cheque. When holder of cheque produces duly signed cheque the law presumes that accused issued the cheque in discharge of debt or other liability. The drawer of cheque cannot take plea that it was blank a cheque and not given to complainant in discharge of debt.

In Rohitbhai Jivanlal Patel v. State of Gujarat (2019) 18 SCC 106 the Supreme Court has held that accused can rebut the presumption by bringing on record such facts and circumstances as to show the preponderance of probabilities towards absence of debt and other financial liability.

Court cannot demand evidence from the complainant

When the accused takes plea that dishonoured cheque was a blank cheque the court cannot demand evidence from the complainant to prove that cheque was issued in discharge of financial liability. In M/s. Kalamani Tex & Anr vs P. Balasubramanian Criminal Appeal no. 123 of 2021 the Supreme Court has held that accused cannot rebut the statutory presumption under section 139 NI Act merely saying that alleged cheque was a blank cheque particularly when he admitted his signature bearing on the cheque.

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

M/s. Kalamani Tex & Anr vs P. Balasubramanian Criminal Appeal no. 123 of 2021

The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these ‘reverse onus’ clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him.

M/s. Kalamani Tex & Anr vs P. Balasubramanian Criminal Appeal no. 123 of 2021

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.

M/s. Kalamani Tex & Anr vs P. Balasubramanian Criminal Appeal no. 123 of 2021

Blank cheque would attract presumption under section 139

In Bir Singh v. Mukesh Kumar (2019) 4 SCC 197 the Supreme Court holds 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.

Therefore, court cannot seek evidence from the complainant to prove that alleged cheque was issued in discharge of debt or other liability. The complainant is entitled to take the benefit of section 139 NI Act. Presumption will attract in favour of complainant that cheque was issued in discharge of debt or other liability. It is liability of accused to prove that there was no debt or liability existed at the time of issuance of cheque. The accused has to prove that the said cheque was not issued in discharge of debt or other liability.

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