Date of Issuance of Cheque and its Effect on Acquittal in Section 138 of the Negotiable Instruments Act, 1881

Date of Issuance of Cheque and its Effect on Acquittal in Section 138 of the Negotiable Instruments Act, 1881  

In an interesting case [Ghanshyam D. Katira v. Sanjay J. Ganatra [2015] GCtR 6582 (Bombay)], the defence of the accused in case under Section 138 of Negotiable Instruments Act, 1881 is that he had not taken any loan of Rs.1,50,000 from the complainant. 

It was held that when cheque No.440855 had been issued in the year 1998, the possibility of the next cheque – bearing No. 440856 – having been issued in the year 2006 – i.e. after a gap of eight years – is rather remote; and this aspect is capable of rendering the version of the accused, plausible. The accused was acquitted.

The other issue noted was that there is also some confusion as to whether the loan in question was given by the complainant in his capacity as a 'money lender'.  It is not only because the same has been described as a 'friendly loan', but also because the money lenders business is being done by the complainant in the name of 'Harshal Money Lender'.   The cheque has not been issued in favour of 'Harshal Money Lender'. 

HC noted that the version of the complainant about the date, on which a loan was advanced to the accused, and the   date   on   which   the   accused   gave   a   cheque   towards   the purported repayment thereof, cannot be relied upon.   The story put forth by the complainant cannot be accepted as true.

Blank Cheque and Principles of Acquittal in Cheque Dishonour under S.138 of NI Act, 1881

Blank Cheque and Principles of Acquittal in Cheque Dishonour under S.138 of NI Act, 1881

In this case [K. Yashoda v. K. Venkatesh [2014] GCtR 6580 (Dharwad, Karnataka)], complainant was aggrieved. However, the acquittal of accused was found valid. In this case, complainant was having a blank cheque which was issued by accused ; cheque was issued as a security and cheque got dishonoured after which proceedings under S.138 of Negotiable Instruments Act, 1881 were initiated. After looking at the date of loan and the date of cheque, High Court found acquittal of accused justified. It was held that provision under Section 20 of the N.I. Act, 1881 also envisages that the cheque should not be filled up for any excess amount. Therefore, it goes without saying that when the accused disputes the contents of cheque, particularly the amount mentioned in the said cheque as excessive and mis-used by complainant, in that context, the presumption under Section 139 of the N.I. Act, 1881 cannot be drawn in favour of complainant, because of the simple reason that the liability or debt is disputed by accused and it is admitted by complainant in the course of cross examination that a blank cheque was given and actually she has filled up the contents of said cheque." When the complainant has nowhere stated that a blank cheque has been issued to complainant and thereafter she has filled up the amount for Rs.95,000/- ;  then it is incumbent upon the complainant to show that as on the date of issuance of cheque the amount of Rs.95,000/- was not known to the parties and with an intention to fill up the said cheque, the accused has given the blank cheque so as to enable the complainant to fill up the said cheque, in future, for the exact liability of the accused.