Madras HC | Cheque returned with endorsement “drawers signature differs”. If complainant fails to prove accused was not stranger, can he still be prosecuted under S. 138 NI Act? Court answers

Madras High Court: P. Velmurugan, J., addressed a matter revolving around the offence under Section 138 of the Negotiable Instruments Act.

A complaint was filed for an alleged offence under Section 138 of the Negotiable Instruments Act, 1881. Judicial Magistrate found the respondent guilty of offence under Section 138 NI Act.

The appellate Judge while allowing the respondent’s appeal set aside the conviction and acquitted the respondent for the offence punishable under Section 138 NI Act, for which he was prosecuted before the trial court.

Appellant’s case was that the respondent had borrowed a sum of Rs 90,000 from the appellant and in order to discharge the debt issued a cheque which returned when presented to the bank with endorsement “drawers signatures differs”.

Analysis, Law and Decision

Bench noted that on statutory notice sent by appellant, respondent responded stating that he had denied the execution of the cheque.

Another significant fact was that the appellant did not prove that there was a transaction between the appellant and the respondent.

High Court remarked that,

When the cheque was returned for the reason that the signature differs, and the respondent/accused has taken a stand that the complainant is a stranger to the accused, it is for the appellant/complainant to establish the case and the appellant has not proved the same, and if once, execution of cheque is proved, the presumption under Sections 118 and 139 of the Negotiable Instruments Act can be drawn and the accused has to rebut the presumption that there is no legally enforceable debt and cheque has not been issued for legally enforceable debt.

 Hence, in the present matter, complainant could not establish the execution of the cheque and borrowal of money by the respondent.

Therefore, in Court’s opinion the appellate Court’s decision had no perversity and Bench found no compelled circumstances or reason to interfere with the Judgment of acquittal.

In view of the above-stated facts and circumstances, criminal appeal was dismissed. [S. Ashok Kumar v. S. Boopal,  2021 SCC OnLine Mad 2325, decided on 22-04-2021]


Advocates before the Court:

For Appellant : Mr. M. Marudhachalam

For Respondent: Mr. L.Mouli

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