Section 138 NI Act: If accused does not deny in the reply notice, delivery of cheque may be presumed [Read

Complainant filed a private complaint against the accused alleging offence punishable under Section 138 of the Negotiable Instruments Act (for short 'the N.I.Act'). His case is that accused, who is the wife of his friend, borrowed from him an amount of Rs.1,30,000/- for her personal needs by the end of November, 2003, agreeing to discharge the debt within a month. Since she failed in her promise, she issued Ext.P1 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 trial court after appreciating the contentions of both parties and analysing the evidence, circumstances and probabilities of the case held that complainant failed to prove that accused had any financial transaction with him and acquitted the accused. Complainant approached the High Court with an appeal. 

The case is titled as A.K.Bhaskaran vs K.G.Sheeba dated 18.12.2019.

In the course of discussion, the High Court of Kerala observed as under:

"It is trite law that drawing or execution of a cheque becomes complete only by delivery. Unless there is delivery of cheque, no liability could be fastened on the drawer.

This is what Section 46 of the N.I.Act signifies and is how definition of 'holder' in Section 8 of the said Act becomes significant.

So far as the question of delivery of cheque is concerned, there is ample evidence that accused delivered Ext.P1 to PW1. In Ext.D1 reply notice also, there is no specific denial of delivery of Ext.P1 cheque.

On the other hand, a different cheque bearing No.840577 which has no bearing in the case seems to have been denied in the reply notice.

In all probability, therefore what could be presumed from the totality of evidence and circumstances is that accused had drawn and issued Ext.P1 as a guarantor cheque in favour of PW1 in discharge of liability of her husband".

High Court then dismissed the appeal filed by the complainant and accepted the acquittal order passed by the trail court