CRL.M.C. Nos. 5211, 5217 & 5291/2006 Page 1 of 20 IN THE HIGH COURT OF DELHI AT NEW DELHI CRL.M.C. 5211/2006, CRL.M.C. 5217/2006 CRL.M.C. 5291/2006 21. CRL.M.C. 5211/2006 & CRL. M.A. No.8864/2006 Date of order : 13th March, 2008 RAVI CHOPRA ..... Petitioner Through:Mr. Sudhir Nandrajog, Advocate with Mr. Ujjwal K. Jha, Advocate versus STATE & ANOTHER ..... Respondents Through: Ms. Amrit Kaur Oberoi, Advocate for respondent No.2. Mr. Pawan Behl, APP WITH 22. CRL.M.C. 5217/2006 & CRL. M.A. No.8877/2006 RAVI CHOPRA ..... Petitioner Through:Mr. Sudhir Nandrajog, Advocate with Mr. Ujjwal K. Jha, Advocate versus STATE & ANOTHER ..... Respondents Through: Ms. Amrit Kaur Oberoi, Advocate for respondent No.2. Mr. Pawan Behl, APP AND 23. CRL.M.C. 5291/2006 & CRL. M.A. No.8961/2006 RAVI CHOPRA ..... Petitioner Through:Mr. Sudhir Nandrajog, Advocate with Mr. Ujjwal K. Jha, Advocate versus STATE & ANOTHER ..... Respondents Through: Ms. Amrit Kaur Oberoi, Advocate for respondent No.2. Mr. Pawan Behl, APP CRL.M.C. Nos. 5211, 5217 & 5291/2006 Page 2 of 20 O R D E R CORAM: HON'BLE DR. JUSTICE S. MURALIDHAR 1. Whether Reporters of local papers may be allowed to see the judgment? Yes 2. To be referred to the Reporter or not? Yes 3. Whether the judgment should be reported Yes in Digest? Dr. S. Muralidhar, J (open court) 1. These petitions under Section 482 of the Code of Criminal Procedure, 1973 („CrPC‟) seek to challenge an order dated 18th July, 2006 passed by the learned Metropolitan Magistrate („MM‟) rejecting an application filed by the Petitioner for sending the dishonoured cheques, in respect of which the complaint cases were filed against the Petitioner for the offences under Section 138 of the Negotiable Instruments Act, 1881 („NI Act‟), to the Central Forensic Science Laboratory („CFSL‟) for its opinion on the handwriting on the cheques. 2. The cheques in question are Nos. 836720, 445534 and 752076 all dated 1st May, 2004 for a sum of Rs. 1 lakh each in respect of which Complaint Case No. 339 of 2004 was filed, Nos. 328114 dated 11th May, 2004 for a sum of Rs.2 lakhs and No. 520660 dated 11th May, 2004 for a sum of Rs.1 lakh in respect of which Complaint Case No. 340 of 2004 was filed, and Nos. 752064 and 555267 both dated 7th May, 2004 for a sum of Rs.1 lakh each in respect of which Complaint Case No. 341 of 2004 was filed. The aggregate sum of all these cheques is Rs.8 lakhs. The case of the complainant is that on different dates from 2000 to 2003 the Petitioner accused took a loan of CRL.M.C. Nos. 5211, 5217 & 5291/2006 Page 3 of 20 Rs.8 lakhs and issued the aforementioned cheques towards his liability for repayment of the loans. All the cheques were drawn on Punjab National Bank („PNB‟), Tolstoy House, New Delhi. Some of the cheques when presented returned dishonoured with the remarks “account closed” and some others on the ground “funds insufficient”. Despite the complainant sending notices demanding payment, the Petitioner did not make payment within the statutory period. 3. At the trial after the complainant‟s evidence was recorded the petitioner examined himself as a defence witness and filed an affidavit by way of examination-in-chief. The stand taken in his affidavit was that the Petitioner was working as an officer in PNB. He was introduced to the complainant in the year 1997 by the brother-in-law of the complainant who was a colleague of the Petitioner at PNB. It is stated that Petitioner‟s brother Mr. Rajesh Chopra was in a real estate business at that point in time. The complainant, on coming to know this, expressed his desire to invest money in the real estate business. Therefore the petitioner introduced the complainant to his brother Mr.Rajesh Chopra. It is stated that during the period 1997-98 the complainant invested the aforementioned sum in the real estate business of his brother and it was agreed that the invested money would be repaid shortly. The complainant then insisted upon the Petitioner here standing surety for his brother. It is stated that pursuant to this request, the Petitioner issued the aforementioned cheques from his staff account at the PNB leaving blanks in the material particulars i.e. “without filling name, date and crossing”. It is also the case of the Petitioner here that “the complainant also obtained 3 letters from the deponent having the dates left blank for receiving CRL.M.C. Nos. 5211, 5217 & 5291/2006 Page 4 of 20 the said amount of these loans and cheques were issued on the assurance that the cheques and loans would be returned once the amount is paid to the complainant.” It is claimed by the Petitioner that a sum of Rs.4 lakhs was repaid in the last week of October 2000 to the complainant and when he was asked to return the cheques and letters he was assured that it would be sent to the Petitioner in due course and that the Petitioner trusted him to do so. A further sum of Rs.1 lakh was repaid in January 2001 after the Petitioner took a voluntary retirement from PNB in December 2000. It is stated that despite several efforts the Petitioner was unable to get the complainant to return the blank cheques. 4. It is claimed by the petitioner that the complainant had filed the aforementioned three complaints after filling the name of the payee, the date and crossing the cheques. It is alleged that the complainant also filled the date of the cheques in the letters with malafide and dishonest intentions. The Petitioner claimed that after taking voluntary retirement, he closed his staff account with the PNB on 21st March 2001. Further he changed his signature in his saving bank account with Bank of Baroda, Mayur Vihar Phase-III Branch. 5. On the basis of these allegations the accused filed an application in each of the aforementioned complaints on 3rd April, 2006 seeking reference of the cheques to the CFSL for opinion on the handwriting therein claiming that “the report of CFSL experts will falsify the entire case of the complainant filed to harass the deponent to extort money from him.” The prayer in the application was that the cheques and letters in question should be sent to the CRL.M.C. Nos. 5211, 5217 & 5291/2006 Page 5 of 20 CFSL “to seek scientific report and on insertion of name and address”. 6. By an order dated 31st August 2006 the learned MM dismissed the application holding as under: “Even if it is presumed that the name and date in the cheque was filed by the complainant himself even in that case also there is no need for sending the cheque in dispute to CFSL for expert opinion as the signature on the cheques is admitted by the applicant/accused and he has further admitted that these cheques were issued to the complainant in discharge of his liability. In view of the discussion made above, I am of the view that there is no need for sending the cheques in question to CFSL for expert opinion as no cogent and sufficient ground has been shown by the applicant/accused. Accordingly the application moved by the applicant is dismissed being without any merit.” 7. By an order dated 29th August 2006 this Court, while directing notice to issue in these petitions, ordered that the trial court will not pass a final order. That interim order has continued till date. 8. The submission of Mr. Sudhir Nandrajog, learned counsel for the Petitioners is that the purpose of seeking the reference of the cheques in question to the CFSL for expert opinion on the handwriting was mainly to probablise the Petitioner‟s defence in the trial which was to the effect that by the time the cheques were presented for payment, the petitioner had discharged the liability. While the petitioner does not dispute his signatures on the cheques, it is claimed that the material particulars i.e. the date, the name of the payee and the amount in words and figures have all been subsequently filled up by the complainant before presenting the cheques for payment. In other words it could be shown that the cheques were filled up on CRL.M.C. Nos. 5211, 5217 & 5291/2006 Page 6 of 20 a date subsequent to the period between 1997 and 2001 by which time the entire liability had been extinguished. This could be shown by testing the ink to ascertain the time when the signatures were appended and the material particulars were filled up. Also, it could be shown that the handwriting of both was different. In turn, it would show that what was handed over to the complainant by the petitioner was not a „cheque‟ within the meaning of Section 138 NI Act, i.e. a complete cheque with no blanks. 9. Mr. Nandrajog implores the Court to appreciate that the entire evidence was in the control of the complainant and there was no way, without the assistance of the court, the petitioner can expect to bring on record evidence by way of defence. It was finally urged that with a view to dispelling the impression that the petitioner was seeking to delay the completion of the trial and in order to demonstrate his bonafides, the petitioner was willing to deposit in this Court the entire sum of Rs.8 lakhs and was willing to let the money be paid to complainant if the opinion of the handwriting expert did not substantiate the defence of the petitioner. 10. Reliance is placed by counsel for the petitioner upon the judgment of this Court in BPDL Investments (Pvt.) Ltd. v. Maple Leaf Trading International (Pvt.) Ltd. 129 (2006) DLT 94 to contend that if there are material alterations in the cheque then such an instrument is rendered void and could not have been presented for payment to the bank. Reliance is also placed on the decision of the Supreme Court in Kalyani Baskar v. M.S.Sampoornam (2007) 2 SCC 258 to contend that every possible assistance should be offered by the court when an accused in a complaint CRL.M.C. Nos. 5211, 5217 & 5291/2006 Page 7 of 20 case seeks directions to refer a disputed cheque for the opinion of a handwriting expert. It is submitted that in the said case the Supreme Court held that where a cheque was doubted as to its authenticity, the trial court ought not to refuse the request of the accused sending it for the opinion of the expert. 11. Ms. Amrit Kaur Oberoi, learned counsel appearing for the Respondent No.2 points out that these proceedings are an attempt to somehow delay the matter after the entire evidence has been recorded by the trial court. She further points out that the accused himself has been examined and in his reply he admitted that he has issued the cheques in favour of the Respondents and also sent the covering letters enclosing the cheques in question. She further points out that for the purposes of Section 138 NI Act all that is to be seen is that the cheque was validly signed by the drawer. According to her that Section imposes a „no fault liability‟ on the drawer if it is shown that the drawer had signed the cheque and if other conditions indicated in that Section were fulfilled. She supports the impugned order of the learned MM as being justified in the facts and circumstances. 12. The first part of Section 138 NI Act indicates that there are two essential ingredients that have to be present in order to attract the offence under Section 138 NI Act. The first is that the cheque ought to have been „drawn‟ by the drawer in favour of the payee on an account with a bank. As regards this ingredient, the petitioner submits that the cheques were signed by him but they were incomplete instruments since they did not contain the material particulars. In fact, in the form they were handed over to the complainant, CRL.M.C. Nos. 5211, 5217 & 5291/2006 Page 8 of 20 they were not cheques in the sense of the term as contemplated by the NI Act. 13. The second ingredient is that the issuance of the cheque must be in total or partial discharge of the liability owed by the drawer to the payee. This has to be seen also in the light of Section 139 NI Act which states that “it shall be presumed unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138, for the discharge, in whole or in part, of any debt or other liability.” As regards this ingredient, the complainant contends that the cheques were issued towards the repayment of the loan borrowed by the Petitioner. The Petitioner however disputes that and states that there was no liability to be discharged by the Petitioner by the time the cheques were presented for payment. What requires to be noticed in addition is that even according to the Petitioner, although he purports to have closed his account with the PNB in March 2001 itself, he admittedly did not inform the complainant of this fact or that he had ceased to be in service with the PNB since March 2001. The question of referring, disputed cheques for the opinion of the CFSL has to be understood in the above background. 14. The word “cheque” has been inclusively defined under Section 6 NI Act to include a „bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand…”. The words “bill of exchange” have been defined in Section 5 NI Act as “an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain CRL.M.C. Nos. 5211, 5217 & 5291/2006 Page 9 of 20 person or to the bearer of the instrument.” The expression „negotiable instrument‟ has been defined in Section 13 NI Act as meaning a “promissory note, bill of exchange or cheque payable either to order or to bearer.” 15. What appears to be clear from the above definitions that an essential feature of a cheque is that it has to be signed by the maker. This signing of the cheque need not be by hand alone. After the amendment to Section 6 in 2002, the NI Act acknowledges that there can be an electronic cheque which can be “generated, written and signed in a secure system.” Nevertheless, the signing of the cheque is indeed an essential feature. But what about the other material particulars? Can the word “cheque” occurring in Section 138 NI Act include a blank cheque which is signed by the drawer but the material particulars of which are left unfilled at the time it was handed over to the payee? While on the one hand Section 138 NI Act which contemplates a „no fault liability‟ has to be strictly construed as regard the basic ingredients which have to be shown to exist, it requires examination of the other provisions of the NI Act in order to ascertain if a cheque that was signed but left blank can, if the material particulars are subsequently filled up and presented for payment, still attract the same liability. 16. The counsel for the petitioner contended that a cheque which is signed but left blank at the time of such signing, will be materially altered if it is subsequently filled up without the consent of the drawer, which according to him is what has happened in the present case. Such cheque would be void in terms of Section 87 of the NI Act and therefore cannot be presented for payment or honoured even if it is. Section 87 NI Act reads as under: CRL.M.C. Nos. 5211, 5217 & 5291/2006 Page 10 of 20 “Section 87 - Effect of material alteration Any material alteration of a negotiable instrument renders the same void as against anyone who is a party thereto at the time of making such alteration and does not consent thereto, unless it was made in order to carry out the common intention of the original parties; Alteration by indorsee.--And any such alteration, if made by an indorsee, discharges his indorser from all liability to him in respect of the consideration thereof. The provisions of this section are subject to those of sections 20, 49, 86 and 125.” 17. While it is correct that in terms of the above provision, any material alteration to a cheque without the consent of the drawer unless it is made to carry out the common intention of the original parties thereto renders the cheque void, the expression “material alteration” has not been defined. Significantly, Section 87 has been made subject to Sections 20, 49, 86 and 125 NI Act. These provisions help us to understand what are not considered „material alterations‟ for the purpose of Section 87. 18. Section 20 NI Act talks of “inchoate stamped instruments” and states that if a person signs and delivers a paper stamped in accordance with the law and “either wholly blank or have written thereon an incomplete negotiable instrument” such person thereby gives prima facie authority to the holder thereof “to make or complete as the case may be upon it, a negotiable instrument for any amount specified therein and not exceeding the amount covered by the stamp.” Section 49 permits the holder of a negotiable instrument endorsed in blank to fill up the said instrument “by writing upon the endorsement, a direction to pay any other person as CRL.M.C. Nos. 5211, 5217 & 5291/2006 Page 11 of 20 endorsee and to complete the endorsement into a blank cheque, it makes it clear that by doing that the holder does not thereby incurred the responsibility of an endorser.” Likewise Section 86 states that where the holder acquiesces in a qualified acceptance, or one limited to part of the sum mentioned in the bill, or which substitutes a different place or time for payment, or which, where the drawees are not partners, is not signed by all the drawees, all previous parties whose consent has not been obtained to such acceptance would stand discharged as against the holder and those claiming under him, unless on notice given by the holder they assent to such acceptance. Section 125 NI Act permits the holder of an uncrossed cheque to cross it and that would not render the cheque invalid for the purposes of presentation for payment. These provisions indicate that under the scheme of the NI Act an incomplete cheque which is subsequently filled up as to the name, date and amount is not rendered void only because it was so done after the cheque was signed and delivered to the holder in due course. 19. The above provisions have to be read together with Section 118 NI Act which sets out various presumptions as to negotiable instruments. The presumption is of consideration, as to date, as to time of acceptance, as to transfer, as to endorsement, as to stamp. The only exception to this is provided in proviso to Section 118 which reads as under: “Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.” 20. A collective reading of the above provisions shows that even under the CRL.M.C. Nos. 5211, 5217 & 5291/2006 Page 12 of 20 scheme of the NI Act it is possible for the drawer of a cheque to give a blank cheque signed by him to the payee and consent either impliedly or expressly to the said cheque being filled up at a subsequent point in time and presented for payment by the drawee. There is no provision in the NI Act which either defines the difference in the handwriting or the ink pertaining to the material particulars filled up in comparison with the signature thereon as constituting a „material alteration‟ for the purposes of Section 87 NI Act. What however is essential is that the cheque must have been signed by the drawer. If the signature is altered or does not tally with the normal signature of the maker, that would be a material alteration. Therefore as long as the cheque has been signed by the drawer, the fact that the ink in which the name and figures are written or the date is filled up is different from the ink of the signature is not a material alteration for the purposes of Section 87 NI Act. . 21. The position in law has been explained in the judgment of the Division Bench of the Kerala High Court in Lillykutty v. Lawrance 2003 (2) DCR 610 in the following words: “In the instant case, signature is admitted. According to the drawer of the cheque, amount and the name has been written not by the drawer but by somebody else or by the payee and tried to get it encashed. We are of the view, by putting the amount and the name there is no material alteration on the cheque under S. 87 of the Negotiable Instruments Act. In fact there is no alteration but only adding the amount and the date. There is no rule in banking business that payee’s name as well as the amount should be written by drawer himself. In the instant case Bank has never found that the cheque was tampered with or forged or there is material alteration or that the CRL.M.C. Nos. 5211, 5217 & 5291/2006 Page 13 of 20 handwriting by which the payee’s name and the amount was written was differed. The Bank was willing to honour the cheques if sufficient funds were there in the account of the drawer even if the payee’s name and the amount was written by somebody else other than the holder of the account or the drawer of the cheque. The mere fact that the payee’s name and the amount shown are not in the handwriting of the drawer does not invalidate the cheque. No law provides in the case of cheques the entire body has to be written by the drawer only. What is material is the signature of the drawer and not the body of the instrument. Therefore when the drawer has issued the cheque whether the entire body was written by the drawer written beyond the instructions of the drawer, whether the amount is due or not, those and such matters are defences which drawer has to raise and prove it. Therefore the mere fact that the payee’s name and the amount shown in the cheque are in different handwriting is not a reason for not honouring the cheque by the Bank. Banks would normally see whether the instrument is that of the drawer and the cheque has been signed by the drawer himself. The burden is therefore entirely on the drawer of the cheque to establish that the date, amount and the payee’s name are written by somebody else without the knowledge and consent of the drawer. In the instant case, the drawer of the cheque has not discharged and burden. Apart from the interested testimony of the drawer, no independent evidence was adduced to discharge the burden. 7. Defendant had set up a case that the two cheques were taken away from her establishment. Burden is on here to show that the two cheques were taken away from her business premises. Apart from the intested testimony of the defendant there is no other independent evidence adduced to establish the story that cheques were stolen from her business premises. Defend ant CRL.M.C. Nos. 5211, 5217 & 5291/2006 Page 14 of 20 has not cared to examine