While clearing the air on a very significant issue, the Supreme Court has in an extremely laudable, learned, landmark and latest judgment titled Oriental Bank of Commerce vs Prabodh Kumar Tewari in Criminal Appeal No 1260 of 2022 (Arising out of SLP (Crl) No 9836 of 2019) in exercise of its criminal appellate jurisdiction pronounced recently on August 16, 2022 has observed that a drawer who signs a cheque is presumed to be liable unless the drawer adduces evidence to rebut the presumption that the cheque has been issued towards payment of a debt or in discharge of a liability. It is crucial to note that the Court further observed that the presumption which arises on the signing of the cheque cannot be rebutted merely by the report of a hand-writing expert. The Bench of Justice Dr Dhananjaya Yashwant Chandrachud and Justice AS Bopanna was adjudicating upon an appeal challenging the order of a Single Judge by which the respondents were permitted to engage a hand-writing expert to seek an opinion on whether "the authorship on the questioned writings" (the disputed cheque) can be attributed to the respondents."
At the outset, this brief, brilliant, bold and balanced judgment authored by Dr Justice Dhananjaya Yashwant Chandrachud for a Bench of Apex Court comprising of himself and Justice AS Bopanna sets the ball rolling by first and foremost putting forth in para 2 that, "This appeal arises from a judgment dated 24 July 2019 of a Single Judge of the High Court of Delhi."
As we see, the Bench then states in para 3 that, "The appellant is the complainant in proceedings under Section 138 of the Negotiable Instruments Act 1881 ("NI Act"). He seeks to question the order of a Single Judge by which the respondents were permitted to engage a hand-writing expert to seek an opinion on whether "the authorship on the questioned writings" (the disputed cheque) can be attributed to the respondents."
To put things in perspective, the Bench then envisages in para 4 that, "The respondent admits that he signed and handed over a cheque to the appellant. According to the respondent a signed blank cheque was handed over by him. The question which arises in the appeal is whether the High Court was correct in permitting the respondent to engage a hand-writing expert to determine whether the details that were filled in the cheque were in the hand of the respondent. For the reasons set out below, we have allowed this appeal against the order of the High Court for the reason that Section 139 of the NI Act raises a presumption that a drawer handing over a cheque signed by him is liable unless it is proved by adducing evidence at the trial that the cheque was not in discharge of a debt or liability. The evidence of a hand-writing expert on whether the respondent had filled in the details in the cheque would be immaterial to determining the purpose for which the cheque was handed over. Therefore, no purpose is served by allowing the application for adducing the evidence of the hand-writing expert."
While elaborating, the Bench then specifies in para 5 that, "The appellant is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act 1980. According to the appellant, a consortium of five companies, namely, (i) Century Communications Ltd, (ii) Pixion Media Pvt Ltd, (iii) Pearl Studios Pvt Ltd, (iv) Pixion Vision Pvt Ltd and (v) Pearl Vision Pvt Ltd availed of credit facilities from the appellant. The total outstanding dues of the consortium are alleged to be in excess of Rs 1200 crores as on the date of the institution of these proceedings. It has been alleged that the first respondent (A-2 before the Trial Court) handed over a cheque - bearing number 387172 dated 26 December 2011 from the account of Century Communications Ltd in the amount of Rs 5.57 crores drawn on Indian Overseas Bank, Defense Colony Branch, New Delhi - towards the dues of the above five companies. According to the appellant, this was accompanied by a letter of the same date, bearing reference number CCL/OBC/036/2011, with a request to present the cheque at the end of the second week of January. The cheque was presented for encashment, but was returned on 25 May 2012 with the remarks "insufficient funds"."
As it turned out, the Bench then observes in para 6 that, "After issuing a legal notice on 5 June 2012, the appellant instituted a criminal complaint, being CC No 3065 of 2012, before the Court of the Additional Chief Metropolitan Magistrate, Dwarka Courts, New Delhi for an offence punishable under Section 138 of the NI Act. Notices were framed against the first and second respondent under Section 251 of the Code of Criminal Procedure 1973 ("CrPC")."
Simply put, the Bench then mentions in para 7 that, "During the course of the trial, on 12 February 2018, the Metropolitan Magistrate recorded the statements of the first and second respondents under Section 313 CrPC. The first respondent has stated that he is a director in all the five companies; he was an authorized signatory; and a blank signed cheque was given by him towards security. Therefore, there is no dispute that the cheque bears the signature of the first respondent."
Needless to say, the Bench then mentions in para 8 that, "The first and second respondents filed an application before the Trial Judge seeking to have the cheque in question, the specimen signature and handwriting of the first respondent examined by a government hand-writing expert. The application was dismissed by the Trial Judge on 21 February 2019."
Furthermore, the Bench then lays bare in para 9 stating that, "The first and second respondents appealed to the High Court. The High Court by the impugned order dated 24 July 2019 held that there was no occasion to allow the examination of a government hand-writing expert. However, the Single Judge nonetheless allowed the petition filed by the respondents to the extent that they have been permitted to engage a hand-writing expert for the purpose of examining the disputed 'writings'."
No doubt, the Bench rightly mentions in para 11 that, "During the course of the hearing, it is not in dispute that the first respondent has admitted to having signed the cheque."
Be it noted, the Bench then holds in para 15 that, "A drawer who signs a cheque and hands it over to the payee, is presumed to be liable unless the drawer adduces evidence to rebut the presumption that the cheque has been issued towards payment of a debt or in discharge of a liability. The presumption arises under Section 139."
Most significantly, the Bench then minces no words to hold clearly, cogently and convincingly in para 17 that, "For such a determination, the fact that the details in the cheque have been filled up not by the drawer, but by some other person would be immaterial. The presumption which arises on the signing of the cheque cannot be rebutted merely by the report of a hand-writing expert. Even if the details in the cheque have not been filled up by drawer but by another person, this is not relevant to the defense whether cheque was issued towards payment of a debt or in discharge of a liability."
Quite naturally, the Bench then clarifies in para 18 that, "Undoubtedly, it would be open to the respondents to raise all other defenses which they may legitimately be entitled to otherwise raise in support of their plea that the cheque was not issued in pursuance of a pre-existing debt or outstanding liability."
As a corollary, the Bench then mandates in para 19 that, "In the circumstances, the appeal is allowed and the impugned order of the Single Judge of the Delhi High Court dated 24 July 2019 is set aside. The report which has been received in pursuance of the impugned order dated 24 July 2019 shall not be taken into consideration during the course of trial."
It is a no-brainer that the Bench then finds no difficulty in holding in para 20 that, "The application filed by the respondent for the examination of a hand-writing expert shall in the circumstances stand dismissed. The present order shall not affect the merits of the trial or the rights and contentions of the respective parties during the course of the trial."
Finally, the Bench then concludes by holding in para 21 that, "Pending applications, if any, stand disposed of."
In a nutshell, we can thus easily infer after having a bare cursory look through this learned judgment by the Apex Court that the bottom-line is that presumption which arises on signing of cheque cannot be rebutted merely by the report of hand-writing expert. It merits no reiteration that all the courts must definitely pay heed to what the Apex Court has laid down so explicitly, elegantly, eloquently and effectively in this leading case! There can be just no denying or disputing it!