Delhi District Court
Vijay Prakash vs . Surinder Kumar 1 /9 on 17 August, 2011
IN THE COURT OF CHANDER MOHAN, METROPOLITAN
MAGISTRATE(C02), COURT ROOM NO. 292, TIS HAZARI
COURTS, DELHI
CC No. 1518/1/11
Vijay Prakash
s/o Sh Roop Narayan
r/o A16, Green, Park, New Delhi16 .... Complainant
Versus
Surinder Kumar
s/o D.C. Gupta,
R/o B78, 1st Floor,
Preet Vihar, New Delhi ... Respondents/Accused
Date of institution of the complaint : 28.06.2007
Date on which order was reserved : 17.08.2011
Date of decision : 17.08.2011
J U D G M E N T :
Version/ Case of the complainant It is the case of the complainant that accused Surinder Kumar had taken a friendly loan of Rs. 6,00,000/ from complainant vide cheque no.
Vijay Prakash Vs. Surinder Kumar 1 /9 207549 dated 02.04.2004 amounting to Rs. 4,00,000/ and cheque no.
601303 dated 22.07.2004 amounting to Rs. 2,00,000/ both drawn on Punjab National Bank, Green Park Branch, New Delhi. To discharge his liability accused issued a cheque(s) bearing no. 210162 dated 19.03.2007, cheque no. 210163 dated 26.03.2007 and cheque no. 210164 dated 23.06.2007 for Rs. 2,00,000/ each all drawn on Cooperative Bank Ltd. New Delhi which was dishonoured and accused has not paid the payment of the cheque amount despite receipt of legal notice.
Version/Defence of the accused 2 Accused has taken the defence that he had issued the blank signed cheque(s) in business dealing for security purpose and complainant has misused the cheque in question after filling the name, amount etc. and filed false complaint against the accused. To support the above version that he is not liable to pay since subsequent filling of amount, name of the payee without consent of the drawer amounts to material alternation. He has placed on record judgments of various courts in support of the above defence. He has further pointed out some contradictions and discrepancies in the evidence of the complainant.
Vijay Prakash Vs. Surinder Kumar 2 /9
Brief Reasons for the Judgment.
3 I have considered the rival submissions of Ld. counsels
for the parties and have travelled through the record with their assistance.
4 Admittedly, accused has signed the cheque in question.
The observations of Delhi High Court in case titled Ravi Chopra Vs. State CRL. M.C. 5211/2006, 5217/2006 and 5291/2006 following paragraphs are relevant to appreciate the defence of the accused.
14 "The word "Cheque" has been inclusively defined under section 6 NI Act to include a bill of exchange drawn on specified banker and not expressed to be payable otherwise than on demand..." The words "bill of exchange" have been defined in section 5 NI Act as "
an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to order of, a certain person or to the bearer of the instrument."
The expression 'negotiable instrument' has been defined in Section 31 NI Act as meaning a "promissory note, bill of exchange or cheque either to order or to bearer.
15 What appears to be clear from the above definitions that an essential feature of a cheque is that it has to be signed by the maker. This signing of the cheque need not be by hand alone. After the amendment to section 6 in 2002, the NI Act acknowledges that there can be an electronic cheque which can be "generated" written and signed in a secure system." Nevertheless, the signing of the cheque is indeed an Vijay Prakash Vs. Surinder Kumar 3 /9 essential feature. But what about the other material particulars? Can the word "Cheque" occurring in section 138 NI Act include a blank cheque which is signed by the drawer but the material particulars of which are left unfilled at the time it was handed over to the payee ? While on the one hand section 138 NI Act which contemplates a 'no fault liability' has to be strictly construed as regard the basic ingredients which have to be shown to exist, it requires examination of the other provisions of the NI Act in order to ascertain if a cheque that was signed but left blank can, if the material particulars are subsequently filled up and presented for payment, still attract the same liability.
16 The counsel for the petitioner contended that a cheque which is signed but left blank at the time of such signing, will be materially altered if it is subsequently filled up without the consent of the drawer, which according to him is what has happened in the present case. Such cheque would be void in terms of section 87 of the NI Act and therefore, cannot be presented for payment or honoured even if it is. Section 87 NI Act reads as under: Section 87 Effect of material alteration.
Any material alteration of a negotiable instrument renders the same void as against anyone who is a party thereto at the time of making such alteration and does not consent thereto, unless it was made in order to carry out the common intention of the original parties.
17 Alteration by indorsee And any such alteration, if made by an indorsee, discharges his indorser from all liability to him in Vijay Prakash Vs. Surinder Kumar 4 /9 respect of the consideration thereof.
18 The provisions of the section are subject to those of section 20, 49, 86 and 125."
19 While it is correct that in terms of the above provision, any material alteration to a cheque without the consent of the drawer unless it is made to carry out the common intention of the original parties thereto renders the cheque void, the expression "material alteration" has not been defined. Significantly, section 87 has been made subject to sections 20,49, 86 and 125 NI Act. These provisions help us to understand what are not considered 'material alterations' for the purpose of section 87."
20 Section 20 NI Act talks of "inchoate stamped instrument' and states that if a person signs and delivers a paper stamped in accordance with the law and "either wholly blank or have written thereon and incomplete negotiable instrument' such person thereby gives prima facie authority to the holder thereof " to make or complete as the case may be upon it, a negotiable instrument for any amount specified therein and not exceeding the amount covered by the stamp." Section 49 permits the holder of a negotiable instrument endorsed in blank to fill up the said instrument "by writing upon the endorsement, a direction to pay any other person as endorsee and to complete the endorsement into a blank cheque, it makes it clear that by doing that the holder does not thereby incurred the responsibility of an endorser." Likewise section 86 states that where the holder acquiesces in a qualified acceptance, or one limited to part of the sum mentioned in Vijay Prakash Vs. Surinder Kumar 5 /9 the bill, or which substitutes, a different place or time for payment, or which, where the drawees are not partners, is not signed by all the drawers, all previous parties whose consent has not been obtained to such acceptance would stand discharged as against the holder and those claiming under him, unless on notice given by the holder they assent to such acceptance. Section 125 NI Act permits the holder of an uncrossed cheque to cross it and that would not render the cheque invalid for the purposes of presentation for payment. These provisions indicates that under the scheme of the NI Act an incomplete cheque which is subsequently filled up as to the name, date and amount is not rendered void only because it was so done after the cheque was signed and delivered to the holder in due course.
21 The above provisions have to be read together with Section 118 NI Act which sets out various presumptions as to negotiable instruments. The presumption is of consideration, as to date, as to time of acceptance, as to transfer, as to endorsement, as a stamp. The only exception to this is provided in proviso to section 118 which reads as under:
"Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or accept or thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him."
22 A collective reading of the above provisions shows that even under the scheme of the NI Act it is possible for the drawer of a Vijay Prakash Vs. Surinder Kumar 6 /9 cheque to give a blank cheque signed by him to the payee and consent either impliedly or expressly to the said cheque being filled up at a subsequent point in time and presented for payment by the drawee. There is no provision in the NI Act which either defines the difference in the handwriting or the ink pertaining to the material particulars filled up in comparison with the signature thereon as constituting a material alteration for the purposes of section 87 NI Act. What however is essential is that the cheque must have been signed by the drawer. If the signature is altered or does not tally with the normal signature of the maker, that would be a material alteration. Therefore, as long as the cheque has been signed by the drawer, the fact that the ink in which the name and figures are written or the date is filled up is different from the ink of the signature is not a material alteration for the purpose of section 87 NI Act.
23 The position in law has been explained in the judgment of the Division Bench of the Kerala High Court in Lillykutty V. Lawarance 2003 (2) DCR 610 the following words:
"In the instant case, signature is admitted. According to the drawer of the cheque, amount and the name has been written not by the drawer but by somebody else or by the payee and tried to get it encashed. We are of the view, by putting the amount and the name there is no material alteration on the cheque under section 87 of the Negotiable Instrument Act. In fact there is no alteration but only adding the amount and the date. There is no rule in banking business that payee's name as well as the amount should be written by drawer himself..........."
5 Hence, from the above reading it is clear that accused Vijay Prakash Vs. Surinder Kumar 7 /9 cannot escape liability on the ground that except signatures other material particulars have been filled by the complainant. Further simply stating in statement of 281/313 that blank cheque for security was given for business purpose shall not rebut the presumption under section 139 NI Act.
6 Hon'ble High Court in case titled as V.S. Yadav Vs. Reena (CRL.A. No. 1136 of 2010) held that:
"It must be borne in mind that the statement of accused under Section 281 Cr. P.C. or under Section 313 Cr. P.C. is not the evidence of the accused and it cannot be read as part of evidence. The accused has an option to examine himself as a witness. Where the accused does not examine himself as a witness, his statement under Section 281 Cr. P.C. or 313 Cr. P.C. cannot be read as evidence of the accused and it has to be looked into only as an explanation of the incriminating circumstance and not as evidence. There is no presumption of law that explanation given by the accused was truthful. In the present case, the accused in his statement stated that he had given cheques as security. If the accused wanted to prove this, he was supposed to appear in the witness box and testify and get himself subjected to cross examination. His explanation that he had the cheques as security for taking loan from the complainant but no loan was given should not have been considered by the Trial Court as his evidence and this was liable to be rejected since the accused did not appear in the witness box to dispel the presumption that the cheques were issued as security. Mere suggestion to the witness that cheques were issued as Vijay Prakash Vs. Surinder Kumar 8 /9 security or mere explanation given in the statement of accused under Section 281 Cr. P.C., that the cheques were issued as security, does not amount to proof. Moreover, the Trial Court seemed to be obsessed with idea of proof beyond reasonable doubt forgetting that offence under Section 138 of N.I. Act was a technical offence and the complainant is only supposed to prove that the cheques issued by the respondent were dishonoured, his statement that cheques were issued against liability or debt is sufficient proof of the debt or liability and the onus shifts to the respondent/ accused to show the circumstances under which the cheques came to be issued and this could be proved by the respondent only by way of evidence and not by leading no evidence."
7 As a sequel of the above discussion, this Court is constrained to hold the accused guilty for commission of an offence under section 138 of the Negotiable Instrument Act. Let the convict be heard on the quantum of sentence.
Pronounced in the open court.
ON 17.08.2011
(CHANDER MOHAN)
METROPOLITAN MAGISTRATE,
TIS HAZARI COURTS, DELHI
Vijay Prakash Vs. Surinder Kumar 9 /9
Vijay Prakash Vs. Surinder Kumar 10 /9