27/07/2025
Introduction
A case of cheque bouncing with regard to Section 138 of the Negotiable Instruments Act, 1881 (NI) stands on a different footing than other criminal cases under the various laws in India. The fundamental principle of criminal jurisprudence is that an accused is presumed to be innocent and the burden of proof lies on the prosecution to prove the guilt of the accused beyond a reasonable doubt. However, in a case under Section 138 of the Negotiable Instruments Act, 1881, there is a presumption drawn by virtue of Section 118(a) and Section 139 of Negotiable Instruments Act, 1881 in favour of the complainant that a cheque, that could not be honoured upon presentment, was issued towards settlement and discharge of a legally enforceable debt owed by the accused to such complainant only. It is for the accused to rebut such presumption drawn against him under Section 118(a) and 139 of the NI Act and prove his innocence in accordance with the law before the trial court by adducing evidence to support his defence that no such legally enforceable debt ever existed in favour of the complainant and/or the complainant has misused such cheque to wrongfully extract money from him.
One of the common defences raised by an accused, when summoned by a trial court to face the proceedings u/s 138 NI Act has been handing over a blank security cheque or a half-filled cheque by such accused to the complainant, which was later filled up and misutilised by the complainant to wrongfully extract money from the accused person in the absence of a legally enforceable debt owed. In light of such averments made, it is not uncommon for such an accused person to request the trial court to compare the handwriting appearing on the subject cheque and move an application before the trial court to send a such cheque for the opinion of a handwriting expert to ascertain whether the complainant has filled the blanks in such half-filled or blank cheque or not and sometimes a further prayer is made to obtain an opinion with regard to the age of the contents of the subject cheque ie whether the subject cheque was filled on the same day or such subject cheque was filled in during different time periods.
WHICH IS THE APPROPRIATE STAGE FOR MOVING THE APPLICATION BY AN ACCUSED
It is advisable that an accused should move an application seeking the opinion of a government-approved handwriting expert before the trial court after completion of the evidence of the complainant that is after cross-examination and the witnesses sought to be examined by such complainant have been examined and closed by the trial court or else such application might be deemed to be premature by the trial court.
Is there any force in such an application seeking the opinion of a handwriting expert by the accused person or is it merely a delay tactic to prolong the trial proceedings under Section 138 NI Act before the trial court?
Two possible situations can arise in view of such defence of an accused:-
i. Where an accused has outrightly denied his signature on the subject cheque.
ii. Where an accused admits his signature but denies filling the remaining contents of the subject cheque or where the accused admits his signature and filling some contents of the cheque and denies filling the remaining contents of the said cheque
WHAT HAPPENS WHEN THE ACCUSED HAS OUTRIGHTLY DENIED HIS SIGNATURE ON THE SUBJECT CHEQUE
It is an entirely different situation where an accused outrightly denies having appended his signature on the subject cheque. The right of an accused in such a situation to defend himself and seek an opinion of an expert with respect to his signatures has been well recognized by the Apex Court as well as various high courts. Denying one's signature goes to the root of the case and the accused's right to have a handwriting expert's opinion has been well-founded and accepted.
In the case of G Someshwar Rao vs Samineni Nageshwar Rao & Another (2009), their Lordships of the Apex Court recognized the right of an accused to a fair trial, which is a part of his fundamental right guaranteed under Article 21 of the Constitution of India. In this matter, the accused had challenged the ex*****on of the cheque and even disputed his signature thereon. The Hon ble Supreme Court had directed the appellant to examine an expert at his own costs. Following this judgement of the Apex Court, various high courts have ruled in favour of the accused, where a challenge is sought with respect to the very signature appearing on the subject cheque and the opinion of a handwriting expert is prayed for to prove the same.
WHAT HAPPENS WHEN THE ACCUSED ADMITS HIS SIGNATURE BUT DENIES FILLING IN THE REMAINING CONTENTS OF THE SUBJECT CHEQUE
This is a tricky situation and the answer to this lies in the facts of each case. There have been a plethora of judicial decisions on this issue, the conspectus of which squarely shows that no straight jacket formula can be laid down to answer this issue and unanimously apply the same in all such cases, where the such defence has been taken by an accused person coupled with the request to refer the subject cheque for the opinion of a handwriting expert.
However, merely relying on judicial precedents should not be done by the trial court in a mechanical manner. It is for the trial court to see what defence and grounds have been taken by the accused in the application under Section 145(2) NI Act seeking cross-examination of the complainant. It ought to be seen if the accused has, right from the stage of moving an application u/s 145(2) of NI Act, taken any defence with respect to misuse of the cheque by the complainant or that an incomplete cheque was filled up completely by the complainant without the consent, knowledge and prior approval of the accused behind his back.
Whether, during the complainant's cross-examination, any questions and suggestions were put by the accused or his counsel about handing over a blank security cheque or half-filled cheque to the complainant and what was the answer given by the such complainant, or the complainant has himself admitted about filling the blanks in the subject cheque or he had authorised any person to fill the blanks in the such incomplete cheque is a vital factor to be noted down. The appreciation of the evidence of the complainant recorded before the trial court must play a crucial factor in such a situation rather than relying on the judicial precedents without appreciating the facts of the case in question before the trial court.
Only after appreciation of such facts, the trial court can ascertain whether the accused has moved an application seeking the opinion of a government-approved handwriting expert as a delay tactic or such an application forms a part of a valid defence, which must be granted in view of Section 243(2) of CrPC.
In the case of T Nagappa vs YR Muralidhar (2008), the Apex Court was faced with a similar situation, where the appellant-accused had contended about giving a signed cheque in the year 1999, which was later filled up in the year 2004 and the opinion of a handwriting expert was sought with respect for determining the age of his signature. The Apex Court ruled in favour of the appellant and held that it was necessary to have an expert opinion with respect to the age of the contents appearing on the said cheque in light of the finding that even though a presumption had been raised against the appellant-accused under Section 118(a) or Section 139 of the NI Act, an opportunity must be granted to the accused for adducing evidence in rebuttal thereof.
In Mohit Chaudhary vs Khatan Electricals Limited decided by the High Court of Calcutta on 17.07.2019, the petitioner claimed to have handed over a security cheque in the year 2007, which was misutilised in the year 2010. Moreover, as the impugned cheque number 59648 was admittedly issued in 2007, it was highly inconceivable that the next cheque bearing number 59649 i.e. the subject cheque was issued only in the year 2010 despite regular business transactions being continued between the parties. In light of the same, the application seeking the opinion of a handwriting expert was allowed by the Hon'ble High Court.
In the matter of Shashikant Shamaldas Patel vs State of Gujarat decided by the Hon'ble Gujarat High Court on 24.06.2022, it was urged before the Hon'ble Court that a blank cheque had been issued in 2011 to the complainant, which was later misused in 2018 and the complainant was not the holder in due course. The Hon'ble Court observed that should be the nature of evidence must not be left to the discretion of the court, as only an accused knows how to prove his defence. In light of such stand taken, the Hon'ble High Court was pleased to direct sending the disputed cheque to FSL for the opinion of the hand-writing expert qua the ageing and writing on the cheque.
In M/s. Survika Distributors Pvt. Ltd. & another vs. M/s. S.R. Retail Zone (CRLMC No 219 Of 2012) decided on 05.02.2018, the Hon'ble High Court of Calcutta had observed that the petitioners were not disputing the signatures appearing on the cheques but they disputed that the other entries in the cheques like date and amount, etc were not that of the accused. In view of the same, the Hon'ble High Court was pleased to decide in favour of the petitioner and allowed the opinion of a handwriting expert qua the subject cheques.
After obtaining the handwriting expert's opinion, the learned Magistrate could have assessed the oral evidence as well as documentary evidence coupled with the handwriting expert's opinion in order to find out the truth.
JUDICIAL PRECEDENTS AGAINST THE ACCUSED DENYING THE RIGHT TO TAKE A HANDWRITING EXPERT'S OPINION
While the aforementioned few judgments deal with a handful of situations, where the application seeking the opinion of a handwriting expert was allowed, there are a plethora of case laws against the said proposition as well like Manoj Sharma vs Anil Aggarwal (Cri MC No 1325 to 1333/2012) decided by the Hon'ble Delhi High Court on 20.04.2012, Rambir Sharma vs M/s HBN Housing Finance Ltd bearing Crl MC No 862/2017 decided on 11.10.2017 by the Hon'ble Delhi High Court, AR Banerjee vs State and Another bearing Crl MC No 3742/2013 decided on 08.08.2014 by the Hon'ble Delhi High Court, PSA Thamotharan vs Dalmia Cements P Ltd, 2005 (1) JCC (NI) 96 Madras, etc.
In Oriental Bank of Commerce vs Prabodh Kumar Tiwari decided by the Apex Court on 16.08.2022, in light of the Appellant's contention at the time of handing of the subject cheque, a letter was also given to the complainant with a request to present the cheque in the second week of January, it was held that no purpose would be achieved by sending the cheque to a handwriting expert to ascertain who filled the blanks therein. In essence, the facts of a case need to be properly appreciated by the Trial Courts to decide whether to rule in favour of an accused or dismiss such application on the ground of the same being arbitrary and a delay tactic.
WHAT HAPPENS WHEN NEITHER THE ACCUSED NOR THE COMPLAINANT COMES FORWARD TO TAKE RESPONSIBILITY FOR THE AUTHORSHIP OF THE DISHONOURED CHEQUE DURING THE TRIAL PROCEEDINGS
It would be an entirely different situation where during the complainant's cross-examination, the complainant has refused to fill up the incomplete cheque or deposed about not authorising any person on his behalf to fill the subject cheque or expresses his ignorance about the author of the subject cheque and on the other hand, even the accused denies having filled up the cheque in his handwriting or having authorised any person to fill up such blank cheque in his application under Section 145(2) of the NI Act. In such a rare situation, where the author of the cheque is unknown and no one has taken the responsibility of filling the cheque, the trial court ought to take note of such a vital fact and take the opinion of a government-approved handwriting expert to at least ascertain whether the subject cheque carries different handwritings or if so, whether the handwritings of the complainant and the accused appear on such cheque or not rather than believing the versions of the complainant and the accused persons.
In such a scenario, Section 20 of the NI Act, which provides authority to the holder of a blank or incomplete instrument to complete such incomplete instrument cannot come to the rescue of such complainant/holder of the cheque since the complainant/holder has also denied filling up an incomplete cheque. It is pertinent to note that Section 20 of the NI Act only authorises the holder of the cheque to complete an incomplete instrument and no one else. Thus, the complainant's lack of knowledge as to who has filled up the incomplete cheque, especially when the accused has also denied filling up the same goes to the root of the case thereby bringing such a case outside the ambit of Section 20 of the Negotiable Instruments Act.
The trial court cannot assume in this situation that since there is no authorship, the accused person gave implied authority to some person on his behalf or the complainant gave implied authority to some person to fill such blanks in a cheque. Depending on the facts of each case and the examination of the witnesses conducted, such an eventuality can fall within the four corners of Section 87 of the Negotiable Instruments Act, which deals with the material alteration of an instrument and its effect thereto without the consent and common intention of the parties involved in the transaction thereby making such instrument void.
PRESUMPTION UNDER SECITON 139 NI ACT CAN BE REBUTTED
Legal Analysis on the Presumption under Section 139 of the Negotiable Instruments Act, 1881 and its Rebuttal
Section 139 of the Negotiable Instruments Act, 1881, creates a statutory presumption in favour of the holder of the cheque, stipulating that unless the contrary is proved, it shall be presumed that the cheque was issued for the discharge in whole or in part of a legally enforceable debt or liability. However, this presumption arises only when the foundational ingredients under Section 138 of the Act are fulfilled namely that the cheque was drawn for discharging a legally enforceable debt or liability and that the cheque was dishonoured upon presentation. It is pertinent to note that this presumption under Section 139 operates as an exception to the general rule of criminal jurisprudence wherein the burden of proof ordinarily rests upon the complainant, who is required to prove the case beyond reasonable doubt. In contrast, Section 139 shifts the initial burden of proof onto the accused, thereby mandating the accused to rebut the presumption of a legally enforceable debt.
The term presumption in its legal context, refers to an inference drawn by law based on certain established facts. As per Black's Law Dictionary, a presumption is a legal inference or assumption that a fact exists based on the known or proven existence of some other fact or group of facts. Presumptions are classified broadly into two categories: presumption of fact and presumption of law.
• Presumption of Fact refers to inferences drawn by the court based on natural reasoning and logical deduction from the facts presented. Such presumptions are not binding and are rebuttable.
• Presumption of Law, on the other hand, may be rebuttable or irrebuttable. An irrebuttable presumption is conclusive and does not permit any evidence to the contrary, whereas a rebuttable presumption allows for the possibility of evidence that may disprove the presumption.
Under Section 4 of the Indian Evidence Act, 1872, three categories of presumptions are provided:
1. May presume – The court has the discretion to presume a fact or not.
2. Shall presume – The court is obliged to presume a fact, unless disproved.
3. Conclusive proof – The court must accept the fact as proved and no contrary evidence is admissible.
The presumption under Section 139 of the NI Act falls under the category of “shall presume”, which denotes a compulsory presumption. Consequently, once the issuance of the cheque and its dishonour are established, the court shall presume the existence of a legally enforceable debt or liability, unless rebutted by the accused.
The use of the phrase “until the contrary is proved” in Section 139 indicates that this presumption is rebuttable. The accused is not expected to discharge this burden beyond reasonable doubt rather the standard of proof is that of preponderance of probabilities. The accused may rebut the presumption by adducing direct evidence or by relying on circumstantial evidence that sufficiently raises doubt as to the existence of such debt or liability. Mere denial of the existence of liability would not suffice. The accused must bring forth such material or evidence which would either render the existence of the debt improbable or establish a defence that negates the presumption. This may include, inter alia:
• Documentary or oral evidence to show that no such liability existed at the time of issuance of the cheque,
• Circumstantial inconsistencies in the complainant’s version,
• Reply to the statutory demand notice issued under Section 138,
• The complainant’s own admissions or contradictions in pleadings or evidence.
Thus, the accused is provided with two principal avenues to rebut the presumption:
1. By leading cogent evidence to demonstrate that the cheque was not issued towards discharge of any legally enforceable debt or liability.
2. By raising a probable defence based on the surrounding facts and circumstances, so as to create a reasonable doubt as to the existence of such debt or liability. In conclusion, although Section 139 introduces a reverse burden on the accused, the presumption therein is not absolute. It is rebuttable and may be displaced by the accused on a balance of probabilities, thereby restoring the burden on the complainant to prove the case beyond reasonable doubt.
The Hon’ble High Court of Kerala in a recent judgment has held that a debt arising out of a cash transaction exceeding Rs 20,000/-, in contravention of the provisions of the Income Tax Act, 1961, cannot be deemed to be a legally enforceable debt for the purposes of Section 138 of the Negotiable Instruments Act, 1881, unless a valid and acceptable explanation is furnished in accordance with law.
The case arose out of a Criminal Revision Petition challenging the conviction of the petitioner under Section 138 of the Negotiable Instruments Act, based on the dishonour of a cheque issued for an alleged debt of Rs. 9,00,000/-, which had purportedly been advanced in cash. The principal question for determination before the Court was whether a debt or liability arising from a cash transaction exceeding Rs. 20,000/-, in violation of the statutory bar under the Income Tax Act can be construed as a legally enforceable debt under Section 138 of the Negotiable Instruments Act.
The Court examined the interplay between the statutory presumptions under Section 139 of the Negotiable Instruments Act and the limitations imposed by the Income Tax Act with respect to cash transactions. While Section 139 raises a presumption in favour of the holder of the cheque that it was issued in discharge of a legally enforceable debt or liability, the said presumption is rebuttable. The accused may rebut the presumption by raising a probable defence and demonstrating that the transaction was in contravention of statutory provisions and thus unenforceable in law.
In the present case, the accused successfully discharged the burden of rebutting the presumption under Section 139 by establishing that the purported debt arose from a cash transaction in violation of Section 269SS of the Income Tax Act, which prohibits acceptance of cash loans or deposits exceeding Rs. 20,000/-, except under circumstances falling within the scope of the exceptions provided under Section 273B of the said Act.
The Hon’ble Court observed that any debt arising from a transaction prohibited by law cannot be treated as legally enforceable. The rationale underlying such prohibition is to discourage unaccounted cash transactions and promote financial transparency in line with public policy and legislative intent. The Court emphasized that legal recognition of such illegal transactions would defeat the very objective of the law.
In conclusion, the Court held that the prosecution had failed to establish the existence of a legally enforceable debt, resulting in the setting aside of the conviction and the acquittal of the accused.
The judgment serves to reaffirm the principle that debts arising from transactions carried out in contravention of statutory provisions, particularly those intended to regulate financial discipline are not legally enforceable and cheques issued in such contexts cannot form the basis for a successful prosecution under Section 138 of the Negotiable Instruments Act.
CONCLUSION
In conclusion, the statutory presumption under Section 139 of the Negotiable Instruments Act, 1881 plays a pivotal role in upholding the reliability of cheque transactions by placing an initial burden on the accused to rebut the presumption of a legally enforceable debt or liability. However, this presumption is not conclusive and may be rebutted through cogent evidence or a probable defence. The legal position mandates that the accused must demonstrate on a preponderance of probabilities that the cheque was not issued in discharge of a lawful debt and thereby shift the burden back to the complainant. Courts have consistently held that mere denial is inadequate and the rebuttal must be supported by facts, documents or circumstantial inconsistencies.
Simultaneously, it is imperative to recognize that while judicial precedents provide valuable interpretative guidance, they should not be applied mechanically. Trial courts must evaluate each case on its own merits, considering the specific facts and circumstances before it. Particularly, when an application is made by the accused seeking the opinion of a handwriting expert, the trial court must exercise judicial discretion and not be swayed solely by the ratio decidendi of prior judgments. Instead, it must appreciate the context and factual matrix of both the present case and the cited precedents before forming its opinion.
To sum up, while the legislative presumptions under the NI Act are intended to facilitate swift justice in cheque dishonour cases, the procedural safeguards and the nuanced application of precedent underscore the importance of fact-based adjudication. A balanced approach, combining statutory presumptions with a careful appreciation of evidence and contextual judicial reasoning, ensures fairness and the integrity of the criminal justice process.
