HC: Presumption of consideration u/s.139 of N.I.Act accrues to Guarantor Cheques also (Read Judgement)

The bench of Justice T.V. Anil Kumar passed a judgement in the case titled as A.K.Bhaskaran v. K.G. Sheeba.

Facts of the case are accused, who is the wife of his friend, borrowed from him an amount of Rs.1,30,000/- for her personal needs in November, 2003, agreeing to discharge

the debt within a month. Since she failed to keep her promise, she issued cheque dated 13.2.2004 in his name drawn on her banker, South Malabar Gramina Bank for the amount borrowed. The cheque on presentment was dishonoured on the ground of want of sufficient funds at the credit of the accused. A notice sent to accused demanding discharge of debt was replied by her denying the whole transaction. Therefore, the complainant lodged prosecution against her invoking Section 138 of the N.I. Act.

The Kerala High Court stated that the question that arises is whether she could be charged with criminal liability if she could show by materials on record that the liability of husband undertaken by her was for a much lesser amount than what was shown in the cheque.

The Kerala High Court observed that what emerges from the entire materials on record is that a blank cheque came to the possession of prosecution witness which he filled up making it appear that it was delivered for discharge of liability larger than what the accused had undertaken for her husband. If this is the actual position, the presumption of consideration arising under Section 139 of the N.I. Act cannot attach to blank cheque nor can it help the complainant to contend that the issue of cheque was in discharge of entire amount of Rs.1,30,000/-.

The bench expounded that,

"A cheque issued by a guarantor is also a cheque regarded by Section 138 of the N.I.Act as one being issued in discharge of legally enforceable debt. Section 138 of the N.I.Act nowhere provides that cheque drawn should be in discharge of drawer's liability alone. It could be in discharge of “any debt or other liability”. In other words, the presumption of consideration under Section 139 of the N.I.Act accrues to guarantor cheques also."

It was further stated that, "I hold that the accused is entitled at least to the benefit of reasonable doubt and she is not guilty of an offence punishable under Section 139 of the N.I. Act."

The finding of the court is that accused was not proved to have issued cheque in discharge of liability for an amount of Rs.1,30,000/- is perfectly right. There is no reason to interfere with the same as it cannot be rejected as being perverse or absurd. Therefore, the impugned order of acquittal is only to be confirmed.

Read the Judgement: