2005 (1) TMI 752 - HC - Indian Laws

Summary

Issues Involved:
1. Validity of the conviction under Section 138 of the Negotiable Instruments Act, 1881.
2. Rebuttal of presumption under Section 139 of the Negotiable Instruments Act.
3. Alleged material alteration under Section 87 of the Negotiable Instruments Act.
4. Applicability of Section 20 of the Negotiable Instruments Act regarding inchoate instruments.
5. Role of the complainant in filling out the cheque details.

Detailed Analysis:

1. Validity of the Conviction under Section 138 of the Negotiable Instruments Act:
The accused was prosecuted under Section 138 of the Negotiable Instruments Act, 1881, for issuing a cheque that was dishonored due to insufficient funds. The conviction by the learned J.M.F.C., Canacona was upheld by the First Addl. Sessions Judge, Margao. The sentence was modified to imprisonment until the rising of the court and compensation of Rs.1,00,000/- under Section 357(3) of Cr.P.C., or in default, simple imprisonment for one month.

2. Rebuttal of Presumption under Section 139 of the Negotiable Instruments Act:
The accused argued that the cheque was stolen by the complainant's wife or lost. However, the court observed that the accused failed to provide evidence to support these claims and did not file a police complaint or notify the bank. The court held that the accused failed to rebut the presumption under Section 139 of the Act, which assumes that the cheque was issued for the discharge of debt.

3. Alleged Material Alteration under Section 87 of the Negotiable Instruments Act:
The accused contended that the complainant filled in the cheque details, amounting to material alteration under Section 87. The court, however, found that there was no evidence to suggest that the complainant filled in the details without the accused's consent. The court referred to the case of Lillykutty v. Lawrance, which held that filling in the date on a cheque with the drawer's implied consent does not constitute material alteration.

4. Applicability of Section 20 of the Negotiable Instruments Act regarding Inchoate Instruments:
The court discussed Section 20, which deals with inchoate stamped instruments, and concluded that while Section 20 is not directly applicable to cheques, the principle underlying it can be applied. The drawer of a cheque implicitly authorizes the holder to fill in the details and present it for payment. The court found no merit in the accused's argument that the cheque was altered without consent.

5. Role of the Complainant in Filling Out the Cheque Details:
The accused argued that the complainant, by filling in the cheque details, could not be considered a holder in due course. The court rejected this argument, noting that the accused did not provide evidence to prove that the details were filled in without consent. The court referred to precedents, including the case of Avon Organics, which supported the view that filling in the cheque details by the holder does not invalidate the cheque if it was issued with the drawer's consent.

Conclusion:
The court concluded that the accused failed to rebut the presumption under Section 139 of the Negotiable Instruments Act. The filling in of cheque details by the complainant did not amount to material alteration under Section 87, as there was implied consent from the accused. The revision petition was dismissed, and the conviction under Section 138 was upheld.