Case BriefsSupreme Court

Supreme Court: In the case where the Supreme Court was called upon to decide whether the offence under Section 138 of the Negotiable Instruments Act 1881 would deem to be committed if the cheque that is dishonoured does not represent the enforceable debt at the time of encashment, the bench of Dr. DY Chandrachud* and Hima Kohli, JJ has held that for the commission of an offence under Section 138, the cheque that is dishonoured must represent a legally enforceable debt on the date of maturity or presentation.

The Court has further explained that if the drawer of the cheque pays a part or whole of the sum between the period when the cheque is drawn and when it is encashed upon maturity, then the legally enforceable debt on the date of maturity would not be the sum represented on the cheque.

When a part or whole of the sum represented on the cheque is paid by the drawer of the cheque, it must be endorsed on the cheque as prescribed in Section 56 of the Act. The cheque endorsed with the payment made may be used to negotiate the balance, if any. If the cheque that is endorsed is dishonoured when it is sought to be encashed upon maturity, then the offence under Section 138 will stand attracted.

Under Section 56 read with Section 15 of the Act, an endorsement may be made by recording the part-payment of the debt in the cheque or in a note appended to the cheque. When such an endorsement is made, the instrument could still be used to negotiate the balance amount. If the endorsed cheque when presented for encashment of the balance amount is dishonoured, then the drawee can take recourse to the provisions of Section 138. Thus, when a part- payment of the debt is made after the cheque was drawn but before the cheque is encashed, such payment must be endorsed on the cheque under Section 56 of the Act. The cheque cannot be presented for encashment without recording the part payment. If the unendorsed cheque is dishonoured on presentation, the offence under Section 138 would not be attracted since the cheque does not represent a legally enforceable debt at the time of encashment.

The Court was deciding the case where the respondent had made part-payments after the debt was incurred and before the cheque was encashed upon maturity. The sum of rupees twenty lakhs represented on the cheque was not the ‘legally enforceable debt’ on the date of maturity. Thus, it was held that the respondent cannot be deemed to have committed an offence under Section 138 of the Act when the cheque was dishonoured for insufficient funds.

[Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel, 2022 SCC OnLine SC 1376, decided on 11.10.2022]


*Judgment by: Justice Dr DY Chandrachud


For appellant: Advocate Mehmood Umar Faruqui

For Respondent: Senior Advocate Nakul Dewan

Case BriefsSupreme Court

Supreme Court:   The 3-judge bench of NV Ramana, CJ and AS Bopanna* and Hima Kohli, JJ has held that when the complainant/payee for a complaint filed under Section 138 of NI Act is a company, an authorized employee can represent the company. Such averment need not be in any particular manner and prima facie material is sufficient for the Magistrate to take cognizance and issue process.

In the case at hand the complaint was filed in the name of the company i.e., “the   payee”, through it’s General Manager (Accounting). The authorisation by the Managing Director in his favour disclosed that the Managing Director of the appellant company had authorised the General Manager (Accounting) to institute criminal proceedings, including proceedings under the provisions of the N.I. Act and civil proceedings on behalf of the company against SMS Asia Private Limited, to represent the company and take all necessary actions in the matter in learned SDJM’s. Court.

The Managing Director apart from himself being the key managerial personnel of the appellant company, has also been delegated the power by the Board of Directors, for the management and operation of the company and it has been specified among others, to exercise the power relating to important issues affecting the company’s land and property. The Managing Director was also empowered to delegate where necessary and to the extent required, any of the powers delegated to him, to his subordinate officers.

In such circumstances, observing that company having authorized the General Manager (Accounting) who had personal knowledge being clearly averred, the Court explained that,

“What can be treated as an explicit averment, cannot be put in a straitjacket but will have to be gathered from the circumstance and the manner in which it has been averred and conveyed, based on the facts   of each case. The manner in which a complaint is drafted may vary from case to case and would also depend on the skills of the person drafting the same which by itself, cannot defeat a substantive right.”

However, what is necessary to be taken note of is as to whether the contents as available in the pleading would convey the meaning to the effect that the person who has filed the complaint, is stated to be authorized and claims to have knowledge of the same. In addition, the supporting documents which were available on the record by themselves demonstrate the fact that an authorized person, being a witness to the transaction and having knowledge of the case had instituted the complaint on behalf of the “payee” company and therefore, the requirement of Section 142 of NI Act was satisfied.

Further, when a company is the payee of the cheque based on which a complaint is filed under Section 138 of NI Act, the complainant necessarily should be the Company which would be represented by an employee who is authorized. Prima¬facie, in such a situation the indication in the complaint and the sworn statement (either orally or by affidavit) to the effect that the complainant (Company) is represented by an authorized person who has knowledge, would be sufficient.

The Court made clear that the employment of the terms “specific assertion as to the knowledge of the power of attorney holder” and such assertion about knowledge should be “said explicitly” as stated in A.C. Narayanan v. State of Maharashtra, 2014) 11 SCC 790 cannot be understood to mean that the assertion should be in any particular manner, much less only in the manner understood by the accused in the case.

“All that is necessary is to demonstrate before the learned Magistrate that the complaint filed is in the name of the “payee” and if the person who is prosecuting the complaint is different from the payee, the authorisation therefor and that the contents of the complaint are within his knowledge.

If at all, there is any serious dispute with regard to the person prosecuting the complaint not being authorized or if it is to be demonstrated that the person who filed the complaint has no knowledge of the transaction and, as such that person could not have instituted and prosecuted the complaint, it would be open for the accused to dispute the position and establish the same during the course of the trial.

The Court, hence, held that dismissal of a complaint at the threshold by the Magistrate on the question of authorisation, would not be justified. Also, entertaining a petition under Section 482 to quash the order taking cognizance by the Magistrate would be unjustified when the issue of proper authorization and knowledge can only be an issue for trial.

[TRL Krosaki Refractories Ltd. v. SMS Asia Private Limited, 2022 SCC OnLine SC 217, decided on 22.02.2022]


*Judgment by: Justice AS Bopanna


Counsels

For appellant: Senior Advocate Ashok K. Parija

For respondent: Advocate Santosh Kumar

Case BriefsSupreme Court

Supreme Court: In a case relating to dishonour of cheques where it was alleged that the complaint was filed by the managing director in his personal capacity and not on behalf of the Company, the bench of Sanjay Kishan Kaul* and MM Sundresh, JJ has held that there could be a format where the Company’s name is described first, suing through the Managing Director but there cannot be a fundamental defect merely because the name of the Managing Director is stated first followed by the post held in the Company. It was further held that it would be too technical a view to take to defeat the complaint merely because the body of the complaint does not elaborate upon the authorisation.

Facts

The respondent had issued 8 cheques totalling to Rs.1,60,000/- in favour of Bell Marshall Telesystems Limited, however, all the cheques got dishonoured on account of “funds insufficient” after which legal notices were issued by the beneficiary under Section 138(b) of the Negotiable Instruments Act, 1881. The demand was, however not met within fifteen days of the receipt of the notice nor was any reply sent which resulted in the complaint being filed by the Company’s Managing Director Bhupesh Rathod before the Special Metropolitan Magistrate, Mumbai. The Company also filed an affidavit through its Managing Director, i.e., Bhupesh Rathod, stating that it had authorised to file a complaint case against the respondent. A copy of the Board Resolution was also presented.

The respondent took an objection that the complaint was filed in the personal capacity of Bhupesh Rathod and not on behalf of the Company. On the other hand it was contended by the appellant that the complaint was in the name of the Company and in the cause title of the complaint he had described himself as the Managing Director. The Company was a registered company under the Companies Act, 1956. On this, the respondent contended that it is only in the aforesaid title description that the complainant is described as the Managing Director of the Company but in the body of the complaint it is not so mentioned.

Analysis

The Court took note of the facts that the description of the complainant with its full registered office address is given at the inception itself except that the Managing Director’s name appears first as acting on behalf of the Company. The affidavit and the cross-examination in respect of the same during trial supports the finding that the complaint had been filed by the Managing Director on behalf of the Company.

It, hence, noticed that the format itself cannot be said to be defective though it may not be perfect.

“The body of the complaint need not be required to contain anything more in view of what has been set out at the inception coupled with the copy of the Board Resolution. There is no reason to otherwise annex a copy of the Board Resolution if the complaint was not being filed by the appellant on behalf of the Company.”

It further explained that a Manager or a Managing Director ordinarily by the very nomenclature can be taken to be the person in-charge of the affairs Company for its day-to-day management and within the activity would certainly be calling the act of approaching the court either under civil law or criminal law for setting the trial in motion.

“It would be too technical a view to take to defeat the complaint merely because the body of the complaint does not elaborate upon the authorisation. The artificial person being the Company had to act through a person/official, which logically would include the Chairman or Managing Director. Only the existence of authorisation could be verified.”

The Court considered the governing principles in respect of a  corporate entity which seeks to file the complaint, as laid down in Associated Cement Co. Ltd. v. Keshavanand, (1998) 1 SCC 687, and said that,

“If a complaint was made in the name of the Company, it is necessary that a natural person represents such juristic person in the court and the court looks upon the natural person for all practical purposes. It is in this context that observations were made that the body corporate is a de jure complainant while the human being is a de facto complainant to represent the former in the court proceedings. Thus, no Magistrate could insist that the particular person whose statement was taken on oath alone can continue to represent the Company till the end of the proceedings. Not only that, even if there was initially no authority the Company can at any stage rectify that defect by sending a competent person.”

Further, the Court noticed that the signatures on the cheques were not denied. Neither was it explained by way of an alternative story as to why the duly signed cheques were handed over to the Company. There was no plea of any fraud or misrepresentation.

“It does, thus, appear that faced with the aforesaid position, the respondent only sought to take a technical plea arising from the format of the complaint to evade his liability.”

Ruling

The Court held that the complaint was properly instituted and also that the respondent failed to disclose why he did not meet the financial liability arising to a payee, who is a holder of a cheque in due course.

The Court was of the view that the respondent should be sentenced with imprisonment for a term of one year and with fine twice the amount of the cheque, i.e., Rs.3,20,000/-. However, since 15 years have elapsed since the complaint was filed, the Court directed if the respondent pays a further sum of Rs.1,60,000/- to the appellant, then the sentence would stand suspended.

[Bhupesh Rathod v. Dayashankar Prasad Chaurasiya, 2021 SCC OnLine SC 1031, decided on 10.11.2021]


*Judgment by: Justice Sanjay Kishan Kaul

Case BriefsSupreme Court

Supreme Court: The 3-judge bench of RF Nariman*, Navin Sinha and KM Joseph, JJ has, analysing various provisions under the Negotiable Instruments Act, the Court concluded that the proceedings under Section 138 are “quasi-criminal” in nature.

The Court held that

“a Section 138/141 proceeding against a corporate debtor is covered by Section 14(1)(a) of the IBC.”

In a 120-pages long verdict, the Supreme Court tackled the following issues to reach at the aforementioned conclusion:

OBJECT AND INTERPRETATION OF SECTION 14 OF THE IBC

The expression “institution of suits or continuation of pending suits” is to be read as one category, and the disjunctive “or” before the word “proceedings” would make it clear that proceedings against the corporate debtor would be a separate category.

“What throws light on the width of the expression “proceedings” is the expression “any judgment, decree or order” and “any court of law, tribunal, arbitration panel or other authority”. Since criminal proceedings under the Code of Criminal Procedure, 1973 are conducted before the courts mentioned in Section 6, CrPC, it is clear that a Section 138 proceeding being conducted before a Magistrate would certainly be a proceeding in a court of law in respect of a transaction which relates to a debt owed by the corporate debtor.”

A quasi-criminal proceeding which would result in the assets of the corporate debtor being depleted as a result of having to pay compensation which can amount to twice the amount of the cheque that has bounced would directly impact the corporate insolvency resolution process in the same manner as the institution, continuation, or execution of a decree in such suit in a civil court for the amount of debt or other liability.

“Judged from the point of view of this objective, it is impossible to discern any difference between the impact of a suit and a Section 138 proceeding, insofar as the corporate debtor is concerned, on its getting the necessary breathing space to get back on its feet during the corporate insolvency resolution process.”

Hence, the width of the expression “proceedings” cannot be cut down so as to make such proceedings analogous to civil suits.

THE INTERPLAY BETWEEN SECTION 14 AND SECTION 32A OF THE IBC

“A section which has been introduced by an amendment into an Act with its focus on cesser of liability for offences committed by the corporate debtor prior to the commencement of the corporate insolvency resolution process cannot be so construed so as to limit, by a sidewind as it were, the moratorium provision contained in Section 14, with which it is not at all concerned.”

If the expression “prosecution” in the first proviso of Section 32A(1) refers to criminal proceedings properly so-called either through the medium of a First Information Report or complaint filed by an investigating authority or complaint and not to quasi-criminal proceedings that are instituted under Sections 138/141 of the Negotiable Instruments Act against the corporate debtor, the object of Section 14(1) of the IBC gets subserved, as does the object of Section 32A, which does away with criminal prosecutions in all cases against the corporate debtor, thus absolving the corporate debtor from the same after a new management comes in.

NATURE OF PROCEEDINGS UNDER CHAPTER XVII OF THE NEGOTIABLE INSTRUMENTS ACT

“Section 138 contains within it the ingredients of the offence made out. The deeming provision is important in that the legislature is cognizant of the fact that what is otherwise a civil liability is now also deemed to be an offence, since this liability is made punishable by law.”

It is important to note that the transaction spoken of is a commercial transaction between two parties which involves payment of money for a debt or liability. The explanation to Section 138 makes it clear that such debt or other liability means a legally enforceable debt or other liability. Thus, a debt or other liability barred by the law of limitation would be outside the scope of Section 138. This, coupled with fine that may extend to twice the amount of the cheque that is payable as compensation to the aggrieved party to cover both the amount of the cheque and the interest and costs thereupon, would show that it is really a hybrid provision to enforce payment under a bounced cheque if it is otherwise enforceable in civil law.

Further, as the proviso gives an opportunity to the drawer of the cheque, stating that the drawer must fail to make payment of the amount within 15 days of the receipt of a notice, it becomes clear that the real object of the provision is not to penalise the wrongdoer for an offence that is already made out, but to compensate the victim.

Under Section 139, a presumption is raised that the holder of a cheque received the cheque for the discharge, in whole or in part, of any debt or other liability. To rebut this presumption, facts must be adduced which, on a preponderance of probability (not beyond reasonable doubt as in the case of criminal offences), must then be proved.

Section 140 states that it shall not be a defence in a prosecution for an offence under Section 138 that the drawer had no reason to believe when he issued the cheque that the cheque may be dishonoured on presentment for the reasons stated in that Section, thus making it clear that strict liability will attach, mens rea being no ingredient of the offence.

Section 141 makes Directors and other persons statutorily liable, provided the ingredients of the section are met. Interestingly, for the purposes of this Section, explanation (a) defines “company” as meaning any body corporate and includes a firm or other association of individuals.

A cursory reading of Section 142 makes clear that the procedure under the CrPC has been departed from. First and foremost, no court is to take cognizance of an offence punishable under Section 138 except on a complaint made in writing by the payee or the holder in due course of the cheque – the victim. Further, the language of Section 142(1) (b) would again show the hybrid nature of these provisions inasmuch as a complaint must be made within one month of the date on which the “cause of action” under clause (c) of the proviso to Section 138 arises.

“The expression “cause of action” is a foreigner to criminal jurisprudence, and would apply only in civil cases to recover money. Chapter XIII of the CrPC, consisting of Sections 177 to 189, is a chapter dealing with the jurisdiction of the criminal courts in inquiries and trials. When the jurisdiction of a criminal court is spoken of by these Sections, the expression “cause of action” is conspicuous by its absence.”

Under Section 143, it is lawful for a Magistrate to pass a sentence of imprisonment for a term not exceeding one year and a fine exceeding INR 5,000/- summarily. Hence,

“… the payment of compensation is at the heart of the provision in that a fine exceeding INR 5000/-, the sky being the limit, can be imposed by way of a summary trial which, after application of Section 357 of the CrPC, results in compensating the victim up to twice the amount of the bounced cheque.”

Under Section 144, the mode of service of summons is done as in civil cases, eschewing the mode contained in Sections 62 to 64 of the CrPC. Likewise, under Section 145, evidence is to be given by the complainant on affidavit, as it is given in civil proceedings, notwithstanding anything contained in the CrPC. Most importantly, by Section 147, offences under this Act are compoundable without any intervention of the court, as is required by Section 320(2) of the CrPC.

CONCLUSION

“The gravamen of a proceeding under Section 138, though couched in language making the act complained of an offence, is really in order to get back through a summary proceeding, the amount contained in the dishonoured cheque together with interest and costs, expeditiously and cheaply.”

The Court, hence, concluded that a quasi-criminal proceeding that is contained in Chapter XVII of the Negotiable Instruments Act would, given the object and context of Section 14 of the IBC, amount to a “proceeding” within the meaning of Section 14(1)(a), the moratorium therefore attaching to such proceeding.

[P. Mohanraj v. Shah Brother Ispat Pvt. Ltd., 2021 SCC OnLine SC 152, decided on 01.03.2021]


*Judgment by: Justice RF Nariman

Know Thy Judge| Justice Rohinton F. Nariman

Appearances before the Court by:

For Appellants: Senior Advocate Jayanth Muth Raj

For Respondent: Advocate Jayant Mehta

Case BriefsTribunals/Commissions/Regulatory Bodies

National Company Law Appellate Tribunal (NCLAT): A Two-Member Bench comprising of S.J. Mukhopadhaya (Chairperson) and Bansi Lal Bhat (Member-Judicial), JJ. dismissed an appeal filed against the order of National Company Law Tribunal (New Delhi).

NCLT had admitted the application filed by the respondent (operational creditor) under Section 9 of the Insolvency and Bankruptcy Code, 2016 and passed order of moratorium. The appellant (promoter of the corporate debtor) submitted that there were cases under Section 138 and 141 of the Negotiable Instruments Act, 1881 pending before the competent court of jurisdiction. The appellant relied on R. Vijayan v. Baby, (2012) 1 SCC 260 for the proposition that proceedings under Section 138 arena of recovery of money. Therefore, according to the appellant, there existed a dispute between the parties and hence the said application could not be admitted.

The Appellate Tribunal was not inclined to accept the submissions of the appellant. It referred to Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407 and was of the opinion that “pendency of the case under Sections 138 and 141, even if accepted as recovery proceeding, cannot be held to be a dispute pending before a court of law.” Therefore, the Appellate Tribunal held that the pendency of the case as aforementioned actually amounted to admission of debt endnote existence of dispute. The appeal was, thus, dismissed. [Sudhi Sachdev v. APPL Industries Ltd., 2018 SCC OnLine NCLAT 775, dated 13-11-2018]

Case BriefsHigh Courts

Delhi High Court: A Single Judge Bench comprising of Jayant Nath, J., admitted a petition filed for winding up of respondent company. The petition was filed under Section 433(e) and 434(a) of the Companies Act, 1956.

The petitioner company had business dealings with the respondent company. The respondent was indebted to pay outstanding dues to the petitioner which amounted to Rs 13,58,000. Proceedings under Section 138 of the Negotiable Instruments Act were also pending before the competent court. The respondent took a plea that the claim was time-barred.

The High Court, reading the provision of Section 19 of the Limitation Act into the facts of the present case, rejected the plea of the respondent. The said section provides that if there is a part payment on account of a debt before the expiry of the prescribed period of limitation, a fresh period is to be computed. In the present case, admittedly, there was a part payment by the respondent. Thus, the claim of the petitioner was well within time. The Court noted the fact that there was clearly an outstanding liability, and the respondent failed to raise any bona fide defence for non-payment of the said dues. In such circumstances, the High Court appointed the Official Liquidator attached to the Court as Provisional Liquidator for the respondent company. The petition filed by the petitioner under the Companies Act, 1956 was thus admitted. [Tigers Worldwide (P) Ltd. v. MAL Cargo (P) Ltd.,2018 SCC OnLine Del 10106, dated 17-07-2018]

Case BriefsHigh Courts

Madras High Court: In a Single Judge Bench decision comprising of P. Kalaiyarasan, J., accused was acquitted of the charges under Section 138 of Negotiable Instruments Act, 1881, confirming the decision of the first appellate court.

The brief facts of the case states that the complainant/ appellant had given an amount of Rs. 3, 50,000 to the accused for meeting his family expenses for which the accused had issued a cheque to the complainant. On the deposit of the said cheque it was returned with an endorsement “insufficient funds”. For the same stated contention a legal notice was issued in the name of the accused.

The trial court had convicted the accused under Section 138 of the Negotiable Instruments Act, 1881, which further was reversed in the decision of the first appellate court; therefore, the complainant filed the criminal appeal. The contention of the accused was that the cheque was stolen and the same was misused in the year 2007 with some other cheques contained in a bag.

The Hon’ble High Court, on perusal of the records, in which exhibits were attached in regard to the complaint filed for the lost bag containing the cheques, held it as established that the criminal appeal stands dismissed as no evidence has been recorded against the accused and the decision of the first appellate court was confirmed. [Arul Mari Joseph v. Edward Raj, 2018 SCC OnLine Mad 1322, dated 11-04-2018]

Case BriefsHigh Courts

Allahabad High Court: A Single Judge Bench comprising of Karuna Nand Bajpayee, J. declined to quash the order passed by the Judicial Magistrate summoning the applicant in a case arising under Section 138 of the Negotiable Instruments Act.

The applicant prayed for quashing the summoning order passed by the Magistrate, and all his contentions related to disputed questions of facts. The veracity and credibility of the evidence furnished on behalf of the prosecution was questioned and false implication was alleged.

The Court referred to various decisions of the Supreme Court and observed that

“the law regarding sufficiency of evidence is well settled. The court has to eschew itself from embarking upon a roving enquiry into the last details of the case. It is also not advisable to adjudge whether the case shall ultimately end in conviction or not. Only a prima facie satisfaction of the court about the sufficient ground to proceed in the matter is required.”

The Court held that the submissions made by the appellant calls for adjudication on pure questions of facts, an exercise that has to be extensively undertaken by the trial court. The High Court could not be persuaded to have a pre-trial before the actual trial commences. Further, the material placed on record made out a prima facie case against the applicant. In such a case, the instant application filed under Section 482 of CrPC praying for quashing the summoning order passed by the Magistrate, was dismissed while allowing the applicant to file an application before the trial court for compounding of offence. [Manoj Kumar v. State of U.P., 2018 SCC OnLine All 559, order dated 05-03-2018]

Case BriefsHigh Courts

Karnataka High Court: A Single Judge Bench comprising of K. Somashekar, J., decided a criminal appeal filed under Section 378(4) CrPC, wherein the order of acquittal under Section 138 of Negotiable Instruments Act, passed in favour of the respondent by the trial court was upheld.

The respondent took a loan from the complainant Bank and issued a blank cheque as a security for the said loan. The respondent defaulted in re-payment of the loan and when the bank presented the said cheque for collection, they were returned with the endorsement ‘insufficient funds in the account’. Subsequently, the bank initiated proceedings under Section 138 of NI Act. However, the respondent was acquitted by the trial court holding that there was no liability existing at the time of issuing the cheque. The appellant Bank assailed the order of the trial court.

After evaluating the material on record, the High Court was of the view that there was no illegality committed by the trial court. The Court observed that the said cheque was not issued by the respondent towards a legally recoverable debt; it was only issued as a security for the loan which he had borrowed from the complainant. The Court relied on the Supreme Court decision in Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd., (2016) 10 SCC 458 wherein it was held that “if on the date of the cheque, liability or debt exists or the amount has become legally enforceable, the section is attracted and not otherwise”. In the facts and circumstances of the instant case, the Court found that at the time of issuance of the blank cheque, there was no legal liability of the respondent to pay any amount to the complainant; it was a security for a loan, the re-payment of which was to arise in future.

Accordingly, the Court dismissed the appeal finding it sans merit. [PCA and RD Bank Ltd. v. Suresh Das,  2018 SCC OnLine Kar 492, dated 27.2.2018]

Case BriefsHigh Courts

Orissa High Court: A petition under Section 482 of CrPC was decided by a Single Judge Bench comprising of S.K. Sahoo, J., wherein it was held that in order to provide a better opportunity to the accused to prove his case, it was necessary to send the documents concerned to handwriting expert for his opinion as prayed for by the petitioners-accused before the Trial Magistrate.

The matter related to Section 138 of Negotiable Instruments Act, 1881. The petitioners were prosecuted under the said section. They filed a petition before the Trial Magistrate to send the cheques in question to a hand writing expert. They denied the filling of details in the cheque although they did not deny their signatures on the same. Petitioners’ case was that they gave the blank cheques in question to the complainant to keep them in safe custody and use them as and when required and directed by the petitioners. However, the complainant misused the said cheques by filling up the blank entries in the cheques. In the said factual scenario as claimed by them, the petitioners prayed to send the cheques to a handwriting expert for comparison of the handwriting on the cheques with the one admitted by the petitioners. However, such prayer of the petitioners was rejected by the Trial Magistrate. Hence, the instant petition was filed.

The High Court perused the record and held that in view of the specific stand taken by the accused during trial, it was necessary in the interest of justice that there should have been a direction for examination of the entries other than the signatures appearing in the cheques with the admitted handwritings of the accused persons as well as the complainant in order to ascertain the truth. The Court also observed that the observation of the learned Magistrate that sending of the exhibits to the handwriting expert would in no way be helpful to the Court for proper adjudication of the dispute was a pre-determination of the issues involved.

Accordingly the order of the Trial Magistrate mentioned above was set aside and he was directed to send the cheques in question for opinion of handwriting expert and proceed with the case in accordance with law after receiving such report. [Survika Distributors (P) Ltd. v. S.R. Retail Zone (P) Ltd., 2018 SCC OnLine Ori 92, dated 05-02-2018]