If accused admit it’s signature on blank cheque leaf, would attract presumption u/s 139 of NIA : SC

In the case of M/s. Kalamani Tex vs. P. Balasubramanian (Crl. Appeal no. 123/2021), the Supreme Court observed that even a blank cheque leaf would attract presumption under Section 139 of the Negotiable Instruments Act when signatures are admitted by the accused.

After a plain reading of judgment of trial court, a three judge bench comprising of Justices NV Ramana, Surya Kant and Aniruddha Bose observe that the trial court completely overlooked the provisions and failed to appreciate the statutory presumptions drawn under sec 118 & sec 139 of NIA.

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, the SC observed.

In this case, after admitting and acknowledging the liability by the accused in regards to signatures on the cheque and deed of undertaking, the HC reversed the order of acquittal of trial court and convicted the accused u/s 138 of NIA.

Supreme Court also considered the facts that there has been an admitted business relationship between the parties and SC found that the defence raised by the appellants does not inspire confidence or meet the standard of ‘Preponderance of Probability’. The bench also observed that the HC did not err in discarding the appellants defence and uphold the onus imposed on them in terms of sec 118 & 139 of NIA.

The bench also pointed out in regards to claiming of compensation that it is a well settled that there needs to be a consistent approach towards awarding compensation and unless there exist special circumstances, the Courts should uniformly levy fine upto twice the cheque amount along with the SI @ 9% P.A., where the respondent had not take the advantage of this principal and accepted the verdict of HC, so their claim for compensation impliedly overturned.

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