Summary
A voluntarily signed cheque attracted the rebuttable statutory presumption of discharge of debt even if its particulars were later filled by the payee. A professional fiduciary relationship alone did not remove that presumption without evidence of undue influence or coercion. The High Court wrongly reversed concurrent findings and shifted the burden to the complainant. Conviction was restored, with a fine of Rs.16 lakhs payable as compensation within eight weeks; the original one-year imprisonment would revive on default.
Issues
- Whether the High Court could reverse concurrent findings by treating the parties’ professional relationship and the alleged blank cheque as defeating the statutory presumption.
- What sentence and compensation should follow restoration of conviction.
Provisions considered
- Sections 138 and 139, Negotiable Instruments Act, 1881The duly signed and voluntarily delivered cheque raised a rebuttable presumption of discharge of debt, which the drawer bore the burden of rebutting. (¶¶ 8, 21–27, 36–43)
- Sections 20 and 87, read with Section 139, Negotiable Instruments Act, 1881Supported the conclusion that filling particulars in a voluntarily delivered signed blank cheque did not itself invalidate the instrument or constitute material alteration. (¶ 37–42)
Held
- The High Court exceeded the proper limits of revision by overturning concurrent factual findings without the requisite error or perversity and misconstruing the statutory presumption. Mere assertions about misuse did not transfer the burden back to the complainant. (¶¶ 17–23, 27, 43)
- A signed blank cheque voluntarily delivered towards payment could be completed by the payee. The drawer remained entitled to rebut liability by evidence; neither a different person filling the particulars nor a fiduciary relationship alone defeated Section 139 in the absence of coercion or undue influence. (¶ 36–42)
- Prosecution following a second or successive dishonour was not impermissible merely because no notice or prosecution followed the first default. (¶ 9–10)
- Conviction was confirmed but sentence limited to an enhanced fine of Rs.16 lakhs, to be paid as compensation and deposited in the trial court within eight weeks. Failure would revive the one-year imprisonment originally imposed by the trial court. (¶ 44)
Result
Appeals allowed; High Court acquittal set aside and Section 138 conviction confirmed, with the specified fine/compensation and default consequence. No costs.