BANKING LAW

CASE COMMENT-- E. DHANUSKODI VS. D. SREEDHAR

SUBMITTED TO: SUBMITTED BY:

Prof. ANISH DEY PRAKASH SHAW

SIGNATURE: SIGNATURE:

DATE: 30-11-2020 DATE: 30-11-2020

5TH SEM, 3RD YEAR

BA. LLB. (HONS.)

CMRU SOLS.
FACTS OF THE CASE:

The respondent (accused) borrowed a sum of Rs 1, 50,000 from the appellant (complainant)
and issued a cheque to the appellant towards his liability to repay the same.

When the complainant/appellant demanded the above amount, the respondent issued a
Cheque bearing No. 245837 dated 20.02.2008 drawn on ING Viyasa Bank towards his
liability. Accordingly as per respondent's instruction the cheque was presented for
encashment.

However, the cheque remained dishonoured with an endorsement account closed. Thereupon
a legal notice was issued to the respondent calling upon him to repay the amount. Even then
as there was no payment made by the respondent, the above complaint came to be lodged by
the appellant for an offence punishable under section 138 of N.I Act.

However, the cheque was dishonoured. Thereafter, the appellant initiated the process under
Section 138 of The Negotiable Instruments Act, 1881, and the trial court convicted the
respondent holding him guilty.

However, the Additional District Judge on appeal reversed the decision of the trial court and
acquitted the respondent. Thus, an appeal was filed in Madras High Court by the appellant.

ISSUE OF THE CASE:

Whether “the different ink, pen, and manipulation of the amount would show that the
complainant had failed to demonstrate due execution of the cheque.” Is a criminal
offence under negotiable instruments act?
Who will be held liable for such dishonor?
Whether the complainant was obliged to issue notice of demand under section 138 of
the act?

JUDGEMENT:

There can be no doubt those sections 118 and 139 contemplate presumption to be drawn in
favour of the complainant. However, the said presumption will come to play only on the

2
Court satisfying that the cheque was duly executed. It would be certainly unlawful if a
complainant is allowed to fill up details of cheque beyond the knowledge of the accused such
that filling up date and the amount in a blank cheque.

It was held that the appellant (complainant) cannot be justified in doing material alteration
beyond the knowledge of the accused and it would be certainly unlawful if a complainant is
allowed to fill up details of cheque such as date and amount in a blank cheque beyond the
knowledge of the accused. Thus, the petition in the present case was dismissed and the
acquittal of the respondent was upheld.

In the present case, figure denoting the amount was found to be written in different inks and
also the handwriting in as much as digits and words were concerned also differed. In such
view of the matter of the Court did not find any illegality in the impugned order. Thus, the
petition was dismissed.

It is immaterial that the cheque may have been filled in by any person other than the drawer,
if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal
provisions of Section 138 would be attracted.

If a signed blank cheque is voluntarily presented to a payee, towards some payment, the
payee may fill up the amount and other particulars. This in itself would not invalidate the
cheque. The onus would still be on the accused to prove that the cheque was not in discharge
of a debt or liability by adducing evidence."

Hence, it was held that the existence of a fiduciary relationship between the drawer and the
payee would not disentitle the payee to the benefit of the presumption under Section 139 of
the Negotiable Instrument Act, 1881, in the absence of the evidence of exercise of undue
influence or coercion.

......................................................................................................................................................