Different Inks On Cheque Do Not Make It Invalid, Cast Doubt On Execution: Kerala High Court

The Kerala High Court has held that a cheque cannot be treated as invalid merely because its signature and other particulars were written in different inks.

Justice A. Badharudeen observed that there is no legal requirement for the date, amount, and signature on a cheque to be written in the same ink.

“Merely because the signature was put by using one ink and entries were made by using another ink by itself would not make the negotiable instrument as an invalid document or a document to doubt its probable execution.” it held

The court made the observations while allowing an appeal filed by D. Chandran, who had complained of the dishonour of a ₹7 lakh cheque issued by S. Anilkumar.

The cheque was dishonoured with the endorsement “payment stopped by drawer.”

The Magistrate subsequently acquitted the accused, holding that the complainant had failed to prove that he was the holder of the cheque entitled to receive the amount and therefore could not claim the presumptions under Sections 118 and 139 of the NI Act.

The accused's defence was that he had borrowed ₹2.35 lakh from the complainant in 2011, issued two signed blank cheques as security, and had subsequently discharged the liability. The complainant challenged the acquittal before the High Court.

The Court noted that the accused had admitted borrowing ₹2.35 lakh from the complainant and also admitted issuing the cheque bearing his signature. It further noted that while the accused claimed to have discharged the entire liability, apart from evidence showing payment of ₹35,000, there was no other evidence establishing repayment of the remaining ₹2 lakh.

“It is well settled law that when a party asserts discharge of a liability, he must prove the same with the aid of cogent and convincing evidence.” it reiterated

It also rejected the argument that the complainant's version was improbable merely because he stated that he had kept the money at his residence before lending the accused.

"It is true that, he had evidence that he had kept the money at his house. But no improbability could be found because of this, as keeping money in the house by itself is not an improbability, unless the improbability to be established by evidence.” it added

The bench further held that merely raising a probable defence is insufficient to rebut the presumptions under Sections 118 and 139.

The court also found that the complainant had successfully discharged his initial burden and was entitled to the statutory presumptions under Sections 118 and 139 of the NI Act. It accordingly held that the magistrate had erred in finding that the complainant failed to prove his case.

Accordingly, the court allowed the appeal, set aside the order of acquittal and convicted the accused under Section 138 of the NI Act. The accused was sentenced to undergo simple imprisonment for a day till the rising of the court and directed to pay a fine of ₹8.15 lakh. In default of payment, he would undergo six months' simple imprisonment.

For Appellant: Senior Advocate M.R Hariraj, Advocates Alina Anna Kose, Vidya A.K, Viswajith C.K, Gisha G Raj and Rejivue K.C

For Respondents: Advocate K.P Madhu