The respondent issued certain blank cheques in favour of the respondent and also signed a letter of intent to pay the respondent in lieu of the appellant`s initial expenses.1 If the defendant presented the cheques to the bank for payment, the cheques were cashed due to insufficient funds. According to the law, the defendant set a time limit of 15 days to pay the amount, but the defendant refused to pay and stated that the blank checks and letter of intent were issued to assist the defendant in a collection proceeding and not on the basis of a legally enforceable act. A blank cheque is a cheque that is not limited in the amount to be paid. Can a person who issues a blank cheque be held liable under section 138 of the IRB Act? Something essential to accomplishment or completeness is missing; Unrestricted or open. Blank space to insert one or more words or characters into a written document that gives it meaning or makes it legally effective. A printed legal form in which standard words or required words are printed in the correct order with open spaces filled with names, dates, numbers and additional clauses. 38. When a signed blank cheque is voluntarily presented to a beneficiary, the beneficiary may complete the amount and other information. That alone would not invalidate control. It would still be up to the defendant to prove by evidence that the cheque was not free from guilt or liability.
The decision contributes to the objective of the IRB Act to lend credibility to negotiable instruments, including cheques, and to promote and encourage the use of negotiable instruments in financial transactions. Affected by the order of the trial court, the applicant appealed to the High Court, which held that the person who had signed the blank cheque could be tried under section 138 of the NI Act. The case was then taken to the Supreme Court and the Supreme Court upheld the High Court`s decision. With respect to the presumption in favour of the cheque holder under section 139 of the NI Act, the court found that the High Court had misinterpreted the provisions of section 139 that, in the absence of evidence to the contrary, the cheque holder was deemed to have received the cheque referred to in section 138 of the NI Act. The presumption in section 139 is a legal presumption. Relying on Hiten P. Dalal v. Bratindranath Banerjee,2 Laxmi Dyechem v. State of Gujarat & Ors.3, Kumar Exports v. Sharma Carpets4 and K.
N. Beena v. Muniyappan and Anr.5, the Court considered established law that the burden of proving that the cheque issued was not culpable or otherwise liable rests with the defendant. The courts are required to invoke the presumption under section 139 of the NI Act. This presumption is rebuttable and can be rebutted by the defendant by proving the contrary with solid evidence that there was no fault or liability. More recently, in its judgment of 6 February 2019 in Bir Singh v. Mukesh Kumar [Criminal Appeal No. 230-231 of 2019 in SLP (Criminal) No. 9334-35 of 2018], in considering the purpose of section 138 of the Negotiable Instruments Act, 1881 (“NI Act”) and the presumption in favour of the cheque holder under section 139 of the NI Act, that the existence of a fiduciary relationship between the beneficiary of a cheque and its subscriber does not exclude the beneficiary from the presumption provided for in section 139 of the IRB Act in the absence of evidence of undue influence or coercion.
The Court also discussed the applicability of section 139 of the IRB Act to blank cheques voluntarily presented to a payee and the subsequent filling of the amount and other information by a beneficiary. In addition, the Court reiterated the established principle that a court cannot subsequently interfere with the concurring findings of fact of criminal courts in its jurisdiction to appeal a point of law. Therefore, on the second point, the Court held that the existence of a fiduciary relationship between the beneficiary and the subscriber to the cheque does not exclude the beneficiary from the presumption under section 139 of the IRB Act in the absence of evidence of undue influence or coercion. The only suggestion that was made was that a blank cheque be issued by the respondent to the plaintiff, since it had been agreed in Panchayat that the defendant and his brother would hand over the cheque in question and that the plaintiff`s son would take back the defendant`s niece. Thus, no discrepancy emerged from the cross-examination that could even refute the appellant`s version, even on the criterion of the probability of being overweight. `37. A meaningful interpretation of the provisions of the Law on negotiable instruments, in particular Articles 20, 87 and 139, makes it clear that a person who signs a cheque and delivers it to the beneficiary remains liable unless he adduces evidence to rebut the presumption that the cheque was made for the purpose of paying a debt or paying a debt.
