Court’s Decision
The Bombay High Court allowed a revision application filed by a complainant in a cheque dishonour case under Section 138 of the Negotiable Instruments Act, 1881, challenging an order passed by the Magistrate that discharged the accused based on a private forensic report. The Court held that the trial court had committed a “manifest error” by accepting a private handwriting expert’s report without formal proof and using it to discharge the accused. The order of discharge was set aside and the complaint restored for trial. The Court directed the Magistrate to proceed with the matter afresh, uninfluenced by the earlier findings.
Facts
The complainant company, engaged in the business of travel accessories, entered into a commercial transaction with the accused, a company to which it had supplied goods. Pursuant to this transaction, the accused issued a cheque for ₹6,78,621.38 towards discharge of its liability. Upon presentation, the cheque was dishonoured with the endorsement “Payment Stopped by Drawer.” After a statutory notice was issued and no payment was received, the complainant filed a case under Section 138 of the Negotiable Instruments Act.
During the proceedings, the accused filed an application seeking discharge on the basis that the signature on the cheque was not theirs and furnished a private handwriting expert’s report in support. The Magistrate allowed the application and discharged the accused, relying solely on this report. The complainant, aggrieved by the discharge order, filed the present revision application before the High Court.
Issues
- Whether the discharge order passed by the Magistrate relying solely on a private handwriting expert’s opinion was legally sustainable.
- Whether the complainant’s statutory right to have the complaint tried under Section 138 could be defeated at the preliminary stage on a disputed factual question.
- Whether reliance on an unproven expert opinion could form the basis for discharge in a cheque dishonour case.
Petitioner’s Arguments
The complainant argued that the learned Magistrate had grossly erred in treating the private expert’s report as conclusive evidence without examining the expert or following due process of law. The complainant contended that the order violated fundamental principles of criminal procedure, as no opportunity was granted to cross-examine the handwriting expert. It was further argued that the proceedings under Section 138 of the Negotiable Instruments Act are summary in nature and any defence raised by the accused—including denial of signature—must be tested through trial and not at the threshold.
The complainant emphasized that once the cheque was issued and dishonoured, and statutory notice served, a prima facie offence was made out. Whether the signature was genuine was a matter for trial, not discharge.
Respondent’s Arguments
The accused submitted that the cheque in question was never signed by the authorized signatory of the company and relied on a private handwriting expert’s opinion comparing the admitted signatures with the disputed one. It was argued that the complainant had falsely fabricated the cheque and that continuing the trial would result in abuse of the process of law.
The accused also contended that under Section 245 of the Criminal Procedure Code, once the Magistrate finds that no offence is made out, discharge is permissible. They defended the trial court’s reliance on the expert report and argued that there was no compelling reason to proceed with a false case.
Analysis of the Law
The High Court emphasized that a complaint under Section 138 of the Negotiable Instruments Act is maintainable upon fulfilment of statutory ingredients: issuance of a cheque, dishonour, and non-payment within the statutory notice period. Once these are prima facie satisfied, the complaint must be taken to trial unless there is no legally enforceable debt or liability.
The Court underscored that the trial court’s acceptance of an unproven expert report was in contravention of Section 45 of the Indian Evidence Act, 1872. It held that expert opinions are only relevant when duly proved and supported by examination or cross-examination. A private forensic report, unless formally proven, cannot be the sole basis for discharge.
The Court also noted that handwriting disputes in cheque cases are not to be decided at the threshold but in trial, where the accused can summon experts and evidence.
Precedent Analysis
- T. Nagappa v. Y.R. Muralidhar, (2008) 5 SCC 633 – Held that the question of whether a cheque is issued for legally enforceable debt is a matter of trial, not discharge.
- C.C. Alavi Haji v. Palapetty Muhammed, (2007) 6 SCC 555 – Once cheque is issued and dishonoured, presumption under Section 139 of the NI Act applies.
- K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510 – Laid down the ingredients for offence under Section 138.
- S.P. Mani and Mohan Dairy v. Snehalatha Elangovan, (2021) 10 SCC 727 – Reiterated that private expert reports are not conclusive and must be tested in court.
These precedents supported the High Court’s view that a factual defence—such as denial of signature—cannot be decided summarily at the discharge stage, especially based on private expert opinion.
Court’s Reasoning
The Court held that the Magistrate’s reliance on the private handwriting expert’s opinion without proof was flawed. The expert was never summoned or examined, nor did the complainant get an opportunity to rebut the findings. The Court stressed that the “complaint under Section 138 is not to be quashed merely because the accused denies signing the cheque.”
It further held that whether the cheque was fabricated or not is a matter of evidence and not suitable for summary dismissal. The Court clarified that when statutory conditions are fulfilled, a complaint under Section 138 must proceed to trial, and it is during the trial that the accused may lead defence evidence.
Accordingly, the Court found that the Magistrate’s decision to discharge the accused had resulted in miscarriage of justice and undermined the complainant’s statutory right to prosecute.
Conclusion
The Bombay High Court set aside the discharge order passed by the Magistrate. It restored the complaint for trial and directed the lower court to proceed with the matter afresh, uninfluenced by the earlier findings. The Court cautioned that “a prima facie case under Section 138 was made out, and the trial ought to have been conducted to test the accused’s defence.”
The revision application was accordingly allowed.
Implications
This ruling reinforces the principle that cheque dishonour complaints cannot be dismissed on disputed factual defences raised prematurely. It strengthens complainants’ rights to trial and upholds procedural fairness. The judgment sends a message that expert opinions cannot be used as shortcuts to bypass due process, especially in commercial transactions involving statutory presumptions.
Cases Referred and Their Relevance
- T. Nagappa v. Y.R. Muralidhar (2008) – Signature denial must be tried in court, not decided at threshold.
- C.C. Alavi Haji v. Palapetty Muhammed (2007) – Presumption of legal liability arises once cheque is dishonoured.
- S.P. Mani and Mohan Dairy v. Snehalatha Elangovan (2021) – Private expert reports cannot override legal presumptions without proof.
FAQs
1. Can a private handwriting expert’s report be used to get discharge in cheque dishonour cases?
No. Such reports must be formally proved and cannot form the sole basis for discharge without trial. The complainant has a right to rebut such evidence in court.
2. What happens if the accused denies signing the cheque?
This is a defence that must be tested during trial. The presumption under Section 139 of the NI Act applies, and the burden is on the accused to rebut it.
3. Can a cheque dishonour complaint be dismissed before trial based on disputed facts?
No. The High Court held that disputed questions like signature denial cannot be decided at the discharge stage. The trial must proceed to adjudicate such defences.
