ORIENTAL BANK OF COMMERCE versus PRABODH KUMAR TEWARI

[2022] 7 S.C.R.

AORIENTAL BANK OF COMMERCE

PRABODH KUMAR TEWARI

(Criminal Appeal No. 1260 of 2022)

BAUGUST 16, 2022

[DR DHANANJAYA Y CHANDRACHUD ANDA. S. BOPANNA, JJ.]

Negotiable Instruments Act 1881 – ss. 138, 139 – Engagementof hand-writing expert to determine the details filled in the chequeC– The respondent admits that he signed blank cheque and handedover to the appellant – The High Court permitted the respondent toengage hand-writing expert to determine whether the details thatwere filled in the cheque were in the handwriting of the respondent– Held: drawer who signs cheque and hands it over to theDpayee, is presumed to be liable unless the drawer adduces evidenceto rebut the presumption that the cheque has been issued towardspayment of debt or in discharge of liability – The presumptionarises u/s. 139 – The evidence of hand-writing expert on whetherthe respondent had filled in the details in the cheque would beimmaterial to determining the purpose for which the cheque wasEhanded over – Therefore, no purpose is served by allowing theapplication for adducing the evidence of the hand-writing expert.

Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197 : [2019]2 SCR 24; Rangappa v. Sri Mohan (2010) 11 SCC 441: [2010] 6 SCR 507 – relied on.F

Kalamani Tex v. P. Balasubramanian (2021) 5 SCC 283: 2021 (2) JT 519; Anss Rajashekar v. Augustus JebaAnanth (2020) 15 SCC 348 : [2019] 1 SCR 731 –referred to.

Case Law Reference

[2019] 2 SCR 24

relied onPara 14referred toPara 16relied onPara 16

[2019] 1 SCR 731[2010] 6 SCR 507

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.1260 of 2022.

From the Judgment and Orders dated 24.07.2019 of the HighCourt of Delhi at New Delhi in Crl. M.C. No. 1792 of 2019.

Ambar Qamaruddin, Tejasvi Kumar, Syed Sarfaraz Karim, Advs.Bfor the Appellant.

Madhav Khurana, Ms. Sakshi Kakkar, Advs. for the Respondent.

The Judgment of the Court was delivered by

DR DHANANJAYA Y CHANDRACHUD, J.

1. Leave granted.

2. This appeal arises from judgment dated 24 July 2019 of aSingle Judge of the High Court of Delhi.

3. The appellant is the complainant in proceedings under Section138 of the Negotiable Instruments Act 1881[1]. He seeks to question theorder of Single Judge by which the respondents were permitted toengage hand-writing expert to seek an opinion on whether “theauthorship on the questioned writings” (the disputed cheque) can beattributed to the respondents.

DEF

4. The respondent admits that he signed and handed over chequeto the appellant. According to the respondent signed blank chequewas handed over by him. The question which arises in the appeal iswhether the High Court was correct in permitting the respondent toengage hand-writing expert to determine whether the details that werefilled in the cheque were in the hand of the respondent. For the reasonsset out below, we have allowed this appeal against the order of the HighCourt for the reason that Section 139 of the NI Act raises presumptionthat drawer handing over cheque signed by him is liable unless it isproved by adducing evidence at the trial that the cheque was not indischarge of debt or liability. The evidence of hand-writing expert onwhether the respondent had filled in the details in the cheque would beimmaterial to determining the purpose for which the cheque was handedover. Therefore, no purpose is served by allowing the application foradducing the evidence of the hand-writing expert.

1 “NI Act”

A5. The appellant is body corporate constituted under theBanking Companies (Acquisition and Transfer of Undertakings) Act1980. According to the appellant, consortium of five companies, namely,(i) Century Communications Ltd, (ii) Pixion Media Pvt Ltd, (iii) PearlStudios Pvt Ltd, (iv) Pixion Vision Pvt Ltd and (v) Pearl Vision Pvt Ltdavailed of credit facilities from the appellant. The total outstanding duesBof the consortium are alleged to be in excess of Rs 1200 crores as on thedate of the institution of these proceedings. It has been alleged that thefirst respondent (A-2 before the Trial Court) handed over cheque -bearing number 387172 dated 26 December 2011 from the account ofCentury Communications Ltd in the amount of Rs 5.57 crores drawn onCIndian Overseas Bank, Defense Colony Branch, New Delhi - towardsthe dues of the above five companies. According to the appellant, thiswas accompanied by letter of the same date, bearing reference numberCCL/OBC/036/2011, with request to present the cheque at the end ofthe second week of January. The cheque was presented for encashment,but was returned on 25 May 2012 with the remarks “insufficient funds”.D

6. After issuing legal notice on 5 June 2012, the appellant instituteda criminal complaint, being CC No 3065 of 2012, before the Court of theAdditional Chief Metropolitan Magistrate, Dwarka Courts, New Delhifor an offence punishable under Section 138 of the NI Act. Noticeswere framed against the first and second respondent under Section 251Eof the Code of Criminal Procedure 1973[2].

7. During the course of the trial, on 12 February 2018, theMetropolitan Magistrate recorded the statements of the first and secondrespondents under Section 313 CrPC. The first respondent has statedthat he is director in all the five companies; he was an authorizedFsignatory; and blank signed cheque was given by him towards security.Therefore, there is no dispute that the cheque bears the signature of thefirst respondent.

8. The first and second respondents filed an application beforethe Trial Judge seeking to have the cheque in question, the specimenGsignature and handwriting of the first respondent examined by agovernment hand-writing expert. The application was dismissed by theTrial Judge on 21 February 2019.

9. The first and second respondents appealed to the High Court.The High Court by the impugned order dated 24 July 2019 held thatthere was no occasion to allow the examination of government hand-writing expert. However, the Single Judge nonetheless allowed the petitionfiled by the respondents to the extent that they have been permitted toengage hand-writing expert for the purpose of examining the disputed‘writings’.

10. We have heard Mr Amar Qamaruddin, counsel for the appellantand Mr Madhav Khuran, counsel for the respondents.

11. During the course of the hearing, it is not in dispute that thefirst respondent has admitted to having signed the cheque.

12. The submission which has been urged on behalf of theappellant is that even assuming, as the first respondent submits, that thedetails in the cheque were not filled in by the drawer, this would not makeany difference to the liability of the drawer.

13. Section 139 of the NI Act states:

139. Presumption in favour of holder. - It shall be presumed,unless the contrary is proved, that the holder of cheque receivedthe cheque of the nature referred to in section 138 for the discharge,in whole or in part, of any debt or other liability.

14. In Bir Singh v. Mukesh Kumar,[3] after discussing the settledline of precedent of this Court on this issue, two-Judge Bench held:

33. meaningful reading of the provisions of the NegotiableInstruments Act including, in particular, Sections 20, 87 and 139,makes it amply clear that person who signs cheque and makesit over to the payee remains liable unless he adduces evidence torebut the presumption that the cheque had been issued for paymentof debt or in discharge of liability. It is immaterial that thecheque may have been filled in by any person other thanthe drawer, if the cheque is duly signed by the drawer. Ifthe cheque is otherwise valid, the penal provisions of Section 138would be attracted.

34. If signed blank cheque is voluntarily presented to apayee, towards some payment, the payee may fill up the

76SUPREME COURT REPORTS

Aamount and other particulars. This in itself would notinvalidate the cheque. The onus would still be on the accusedto prove that the cheque was not in discharge of debt orliability by adducing evidence.

36. Even blank cheque leaf, voluntarily signed and handed overby the accused, which is towards some payment, would attractpresumption under Section 139 of the Negotiable Instruments Act,in the absence of any cogent evidence to show that the chequewas not issued in discharge of debt.

(emphasis supplied)

The above view was recently reiterated by three-Judge Benchof this Court in Kalamani Tex v. P. Balasubramanian.[4]

15. drawer who signs cheque and hands it over to the payee,Dis presumed to be liable unless the drawer adduces evidence to rebutthe presumption that the cheque has been issued towards payment of adebt or in discharge of liability. The presumption arises under Section139.

16. In Anss Rajashekar v. Augustus Jeba Ananth,[5] two Judge

Bench of this Court, of which one of us (D.Y. Chandrachud J.) was aEpart, reiterated the decision of the three-Judge Bench of this Court inRangappa v. Sri Mohan[6]on the presumption under Section 139 of theNI Act. The court held:

12. Section 139 of the Act mandates that it shall be presumed,unless the contrary is proved, that the holder of cheque receivedFit, in discharge, in whole or in part, of debt, or liability. Theexpression “unless the contrary is proved” indicates that thepresumption under Section 139 of the Act is rebuttable. Termingthis as an example of “reverse onus clause” the three-JudgeBench of this Court in Rangappa held that in determining whetherGthe presumption has been rebutted, the test of proportionality mustguide the determination. The standard of proof for rebuttal of thepresumption under Section 139 of the Act is guided by apreponderance of probabilities. This Court held thus:4 (2021) 5 SCC 2835 (2020) 15 SCC 348H6 (2010) 11 SCC 441

“28. In the absence of compelling justifications, reverse onusclauses usually impose an evidentiary burden and not apersuasive burden. Keeping this in view, it is settledposition that when an accused has to rebut thepresumption under Section 139, the standard of prooffor doing so is that of “preponderance of probabilities”.Therefore, if the accused is able to raise probabledefence which creates doubts about the existence of alegally enforceable debt or liability, the prosecution canfail. As clarified in the citations, the accused can rely on thematerials submitted by the complainant in order to raise such adefence and it is conceivable that in some cases the accusedmay not need to adduce evidence of his/her own.”

(emphasis supplied)

17. For such determination, the fact that the details in the chequehave been filled up not by the drawer, but by some other person wouldbe immaterial. The presumption which arises on the signing of the chequecannot be rebutted merely by the report of hand-writing expert. Evenif the details in the cheque have not been filled up by drawer but byanother person, this is not relevant to the defense whether cheque wasissued towards payment of debt or in discharge of liability.

18. Undoubtedly, it would be open to the respondents to raise allother defenses which they may legitimately be entitled to otherwiseraise in support of their plea that the cheque was not issued in pursuanceof pre-existing debt or outstanding liability.

19. In the circumstances, the appeal is allowed and the impugnedorder of the Single Judge of the Delhi High Court dated 24 July 2019 isset aside. The report which has been received in pursuance of theimpugned order dated 24 July 2019 shall not be taken into considerationduring the course of trial.

20. The application filed by the respondent for the examinationof hand-writing expert shall in the circumstances stand dismissed.The present order shall not affect the merits of the trial or the rights andcontentions of the respective parties during the course of the trial.

21. Pending applications, if any, stand disposed of.

Ankit Gyan(Assisted by : Rahul Rathi, LCRA)

Appeal allowed.