LexM/S. LAXMI DYECHEM versus STATE OF GUJARAT & ORS.
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A B (2012] 11 S.C.R. 466 MIS. LAXMI DYECHEM v. STATE OF GUJARAT & ORS. (Criminal Appeal Nos. 1870-1909 of 2012 etc.) NOVEMBER 27, 2012 [T.S. THAKUR AND GYAN SUDHA MISRA, JJ.] Negotiable Instruments Act, 1881: c ss. 138 and 139 - Dishonour of cheques for mismatching of signatures - Held: Just as dishonour of a cheque on the ground that the account has been closed is a dishonour falling in the first contingency referred to in s. 138, so also dishonour on the ground that the "signatures do not 0 match" or that the "image is not found'; which too implies that the specimen signatures do not match the signatures on the cheque, would constitute a dishonour within the meaning of s. 138 - So long as the change is brought about with a view to preventing the cheque being honoured the dishonour would become an offence uls. 138 subject to other conditions E prescribed being satisfied - Allegations of fraud and the like are matters that cannot be investigated by a court uls 482 Cr.P. C. and s/1all have to be left to be determined at the trial after the evidence is adduced by the parties - Code of Criminal Procedure, 1973 - s.482. F ss. 138 and 139 - Dishonour of cheque - Presumption in favour of holder - Held: Is rebuttable - Return of cheque by bank on ground of 'stop payment' although has been held to constitute an offence, s. 138 cannot be applied in isolation G ignoring s. 139 - The category of cases of 'stop payment' instructions where the account holder has sufficient funds in his account to discharge the debt, would be subject to rebuttal and the accused can show that the stop payment instructions were not issued because of insufficiency or paucity of funds, H 466 LAXMI DYECHEM v. STATE OF GUJARAT & ORS. 467 but for other valid causes including the reason that there was A no existing debt or liability in view of bonafide dispute between the drawer and drawee of the cheque - If that be so, then offence u/s 138 although would be made out, the same will attract s.139 leaving the burden of proof of rebuttal on the drawer of the cheque - Thus, in cases arising out of 'stop B payment' situation, ss. 138 and 139 will have to be given a harmonious construction, otherwise s. 139 would be rendered nugatory. The instant appeals were filed by the payee firm, challenging the orders of the High Court whereby it C quashed the criminal proceeiiings holding that dishonour of a cheque on the ground that the signature of the drawer of the cheque did not match the specimen signatures available with the bank, would not attract the penal provisions of s.138 of the Negotiable Instruments D Act, 1881. The question for consideration before the Court was: "whether disho.nour of a cheque would constitute an offence only in one of the two contingencies envisaged uls 138 of the Act, namely, "either because of the amount of money standing to the credit of that E account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank"? Allowing the appeals, the Court F HELD: (Per T.S. Thakur. J.l 1.1. Chapter XVII comprising ss. 138 to 142 of the Negotiable Instruments Act, 1881 was introduced in the statute by Act 66 of 1988. The object underlying the G provision contained in the said Chapter was aimed at inculcating faith in the efficacy of banking operations and giving credibility to negotiable instruments in business and day to day transactions by making dishonour of such instruments an offence. A negotiable instrument H 468 SUPREME COURT REPORTS [2012] 11 S.C.R. A whether the same is in the form of a promissory note or a cheque is by its very nature a solemn document that carries with it not only a representation to the holder in due course of any such instrument but also a promise that the same shall be honoured for payment. To that end B s. 139 of the Act raises a statutory presumption that the cheque is issued in discharge of a lawfully recoverable debt or other liability. This presumption is no doubt rebuttable at trial but there is no gainsaying that the same favours the complainant and shifts the burden to the c drawer of the instrument (in case the same is dishonoured) to prove that the instrument was without any lawful consideration. It is also noteworthy that s.138 while making dishonour of a cheque an offence punishable with imprisonment and fine also provides for 0 sa
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