Supreme Court Reiterates: Blank Cheque voluntarily signed by drawer Attracts Presumption under Section 139 of Negotiable Instruments Act

Supreme Court Reiterates: Blank Cheque voluntarily signed by drawer Attracts Presumption under Section 139 of Negotiable Instruments Act

The Supreme Court has reiterated that when a blank cheque leaf is voluntarily signed by the drawer and given to the payee for a payment, it will be presumed to have been issued to settle a legally enforceable debt under Section 139 of the Negotiable Instruments Act.

The Bench, consisting of Justices B.V. Nagarathna and A.G. Masih, overturned the High Court's decision, which permitted the accused-drawer to seek a forensic opinion on the signature on the blank cheque. Citing the precedent set in the case of Bir Singh v. Mukesh Kumar, the bench noted that when a blank cheque is issued for payment, a presumption regarding its validity arises against the accused. It is the responsibility of the accused to rebut this presumption.

In the case of Bir Singh, the Supreme Court noted that if an accused voluntarily signs and hands over a blank cheque leaf for payment, the presumption under Section 139 of the Negotiable Instruments Act would apply. In the absence of compelling evidence demonstrating that the cheque was not issued to discharge a debt, the presumption would stand against the accused drawer.

The supreme court in the case of Bir Singh v. Mukesh Kumar Observed that “A meaningful reading of the provisions of the Negotiable Instruments Act, including, in particular, Sections 20, 87, and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. 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.”

“Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt,"

The Supreme Court held that the application filed by the accused before the trial court was frivolous, and the trial court's decision to reject it was correct. However, the Supreme Court disagreed with the High Court's decision to allow the revision petition of the respondent. In light of these findings and relying on a previous judgment of the court, the Supreme Court allowed the appeal and set aside the impugned order.