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2008 (3) TMI 745 - HC - Indian LawsDishonour of Cheque - discharge of legally enforceable debt or not - insufficiency of funds - rebuttal of presumption - offences u/s 138 of the Negotiable Instruments Act, 1881 ('NI Act') - Prayer for sending the cheque for examination to a handwriting expert - determination of the time when the signature was appended - HELD THAT - This Court is unable to accept the contention of the petitioner that if the signatures on the cheques are shown to be much prior to the date of filling up of the material particulars that would probablise the defense of the Petitioner. That the signature on the cheques is that of the petitioner is not disputed. The Petitioner has even in his cross-examination in fact admitted the fact that the cheques were issued by him and were handed over to the complainant along with a covering letter. For the reasons explained it matters little if the name of the payee, date and amount are filled up at a subsequent point in time, subject of course to what is stated in the proviso to Section 118 NI Act. It is also not possible to agree with the contention that the determination of the time when the signature was appended will somehow explain the fact that the Petitioner has discharged the entire liability even before the cheque was presented for payment. Here two factors need to be noticed. The first is that although the Petitioner claims that he has closed his account in 2001 itself and that these blank cheques were handed over to the complainant prior to that, he did not write to the complainant informing the complainant that the account had been closed. Secondly, although he claimed that he has discharged the liability, admittedly this is only an oral assertion of the Petitioner and no receipts evidencing the payment of ₹ 8 lakhs have been produced in the court. It is pointed out by learned Counsel for the Respondent No. 2 that at the stage of framing of charge, the Petitioner had claimed before the trial court that he had with him the receipts evidencing repayment. However, till date no such receipt has been produced. The burden will be on the accused to show that in fact he has discharged the liability even prior to the presentation of the cheques for payment. That cannot be proved by the report of a handwriting expert. Section 139 NI Act which raises a rebuttable presumption in this behalf, would require some other positive evidence to be led by the accused to show that he has repaid the amount to the complainant. In other words, merely because there is a CFSL report that shows that the handwriting, the ink and the time of filling the material particulars is different from that of the signatures, that by itself will not go to prove that the accused has discharged his liability towards the complainant even before the date of the presentation of the cheques. For these reasons, there is no merit in the prayer of the petitioner for sending the cheques to the CFSL for the opinion of the handwriting expert. An extensive reference was made to the judgment of this Court in BPDL Investments (Pvt.) Ltd. 2006 (2) TMI 691 - DELHI HIGH COURT which arose in the context of a summary suit in which an application for leave to defense was being considered. It was submitted in that case that two undated cheques had been issued by the defendant in favor of the plaintiff and before it was presented the date was filled up by the plaintiff and that this constituted a material alteration. Following the decision of the Andhra Pradesh High Court in Allampati Subba Reddy v. Neelapareddi 1965 (9) TMI 72 - ANDHRA PRADESH HIGH COURT , this Court held that there was no consent of the defendant to the alteration of the date and therefore in terms of Section 87 of the NI Act it was a material alteration. In the first place, this was not a case arising under Section 138 NI Act at all. Moreover, while adverting to Section 87 of the Act, the Court did not notice that the said Section was subject to Sections 20, 49, 86 and 125 NI Act. These provisions permit the holder in due course of a negotiable instrument to fill up the material particulars without the said instrument being rendered void. Therefore, this Court finds no infirmity in the order of the learned MM declining to refer to the cheques for the opinion of the handwriting expert. The petitions are accordingly dismissed but in the circumstances with no order as to costs. The pending applications are disposed of.
Issues Involved:
1. Challenge to the rejection of the application for sending dishonoured cheques to CFSL for handwriting analysis. 2. Validity of cheques under Section 138 of the NI Act when material particulars are filled in by the complainant. 3. Applicability of Section 87 of the NI Act concerning material alterations. 4. Burden of proof in cases involving dishonoured cheques. Detailed Analysis: 1. Challenge to the Rejection of Application for Handwriting Analysis: The petitioner challenged the order dated 18th July 2006 by the Metropolitan Magistrate rejecting the application to send dishonoured cheques to CFSL for handwriting analysis. The petitioner argued that the CFSL report would falsify the complainant's case and demonstrate that the cheques were filled in with malafide intentions after the petitioner had discharged his liability. 2. Validity of Cheques Under Section 138 of the NI Act: The court examined whether cheques signed by the drawer but with material particulars filled in later by the complainant still constituted valid cheques under Section 138 of the NI Act. The petitioner admitted to signing the cheques but claimed they were incomplete instruments handed over as security. The court held that as long as the cheques were signed by the drawer, the fact that other particulars were filled in later did not invalidate them under Section 138. 3. Applicability of Section 87 of the NI Act Concerning Material Alterations: The petitioner contended that the cheques were materially altered without his consent, rendering them void under Section 87 of the NI Act. However, the court clarified that Section 87 is subject to Sections 20, 49, 86, and 125 of the NI Act, which allow the holder to fill in material particulars without rendering the instrument void. The court found no material alteration as defined under Section 87, emphasizing that the essential feature was the drawer's signature. 4. Burden of Proof in Cases Involving Dishonoured Cheques: The court highlighted that under Section 139 of the NI Act, there is a presumption that the cheque was received for the discharge of debt unless proven otherwise. The petitioner failed to produce any receipts or independent evidence to prove that the liability was discharged before the cheques were presented. The court noted that the burden of proof lies on the accused to show that the debt was repaid, which cannot be established merely through a handwriting expert's report. Conclusion: The court dismissed the petitions, finding no merit in the request to send the cheques to CFSL for handwriting analysis. The court upheld the Metropolitan Magistrate's order, stating that the petitioner had not provided sufficient grounds to warrant such an examination. The court emphasized that the essential requirement under Section 138 was the drawer's signature, and the filling in of other particulars by the complainant did not constitute a material alteration under Section 87. The burden of proving the discharge of liability remained on the petitioner, which he failed to do.
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