What is the consequence of complainant’s failure to explain the occasion for issuance of cheque in his favour? How does it affect S. 138 NI Act complaint? Del Court answers

South-West, Dwarka, Delhi: Mridul Gupta, Metropolitan Magistrate –09, on noting a very weak case of the complainant and not being able to produce sufficient evidence, dismissed his complaint filed for the dishonour of cheque under Section 138 of Negotiable Instruments Act, 1881.

Complainant alleged that the accused who had been purchasing iron plates/ sheets/ other forms of irons from the complainant was supplied the said material to the tune of Rs 8,00,000.

In the discharge of said liability, accused issued the cheques in question i.e. two postdated cheques. Complainant presented the said cheques but they were both returned with the remarks “Drawers Signature Differs”.

In view of the above, legal notice was issued but no response was received from the accused, hence the present complaint was filed.

Following issues for consideration arose:

  1. Whether the accused had any legal debt or liability towards complainant?
  2. Whether cheques in question were issued by accused?
  3. Whether the legal demand notice was duly served upon the accused?

Bench noted that the complainant could not produce any reliable document regarding the alleged business transactions with the accused. Not even a single date of the transaction with the accused was mentioned by the complainant.

In Vijay v. Laxman, (2013) 3 SCC 86, the Supreme Court observed that:

“the absence of any details of the date on which the loan was advanced as also the absence of any documentary or other evidence to show that any such loan transaction had indeed taken place between the parties is a significant circumstance.” 

As per the complainant his whole trading business was being carried out without any paper trail whatsoever, which appeared implausible. The said testimony of the complainant raised serious doubts on the credibility of the witness and suspicion was cast on the existence of any such business of complainant and supply of goods to accused.

Trite Position of Law

Dishonor of cheque due to signature of accused not matching with specimen signature could also constitute dishonour under Section 138 of the Act, and said fact, in itself, is not sufficient to escape prosecution under the said provision.

In the instant matter, it is pertinent to note that the accused denied his signatures on the cheques in question right from the stage of framing of notice and throughout the trial. Secondly, the said defence of accused was duly corroborated by the bank memos as per which both the cheques in question were each dishonored twice for the same reason i.e. ‘Drawers Signature Differs’.

Complainant could not explain the occasion for issuance of cheques in question in his favour by the accused.

Legal notice was sent to the correct address of the accused. Once the legal notice is proved to be sent by post to correct address of accused then the presumption under Section 27 of General Clauses Act, 1897 arose and it shall be presumed unless proved contrary, that legal notice sent to the address of accused was delivered to him.

Court held that,

The case of the complainant is inherently very weak as he has not been able to sufficiently prove in his evidence, the existence of any business of iron trading and the supply of such goods to accused. The lack of any business document whatsoever casts grave suspicion on case of complainant.

Concluding the matter, the bench stated that the complainant failed to prove beyond reasonable doubt the fundamental requirements of the offence that the cheque in question was issued by the accused and in discharge of legally enforceable debt or liability. [Rishi Pal v. Sunil Kumar Sharma, CC No. 32700 of 2019, decided on 23-11-2021]

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One comment

  • A thought provoking judgement sir. More then 50 percent cheqs are received blank and amount is entered by the complainent at his whims.

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