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Drawer will be responsible in 138 cheque bounce case: SC

Drawer will be responsible in 138 cheque bounce case: SC

The Supreme Court has observed that a cheque drawer is liable even when another person fills in the details. The observation of a two-judge bench of Justice DY Chandrachud and AS Bopanna came while allowing an appeal in a cheque bounce case, reported LiveLaw.

The court observed that the signing of a cheque could not be discredited by a handwriting expert's report that the drawer did not fill the cheque. 

The accused in the case admitted to giving a blank signed cheque to a payee and was granted permission by the Delhi High Court to engage a handwriting expert to determine whether the details were in his hand.

The top court noted that the drawer who signs the cheque and gives in to the payee is presumed liable unless it is proved that the cheque was issued for the payment of a debt or discharge of liability.

For such a determination, the fact that the details in the cheque have been filled up not by the drawer but by some other person would be immaterial," the court observed.

It added that the handwriting expert's report on whether the details were filled by the drawer or had no role to the defence whether the cheque was issued towards the payment of a debt or liability.

The Supreme Court, in May this year, directed the constitution of special courts with a retired judge in five states for speedy disposal of cheque bounce cases. 

Under the Negotiable Instruments Act (NI), the special courts were set up in the states of Maharashtra, Delhi, Gujarat, Uttar Pradesh and Rajasthan in view of a high number of pending cases in these states.

In light of the numerous cases that are pending in these states, a three-judge panel comprised of Justices L Nageswara Rao, BR Gavai, and S Ravindra Bhat announced that the states of Maharashtra, Delhi, Gujarat, Uttar Pradesh, and Rajasthan would establish special courts under the Negotiable Instruments Act (NI).

"We have incorporated the suggestions of the amicus with respect to the setting up of the pilot courts and we have given the timelines also. It is to begin on September 1, 2022 onwards. The secretary general of this court shall ensure that a copy of the present order is directly communicated to the registrar general of the said five high courts, which should put it before the chief justices for immediate action," the bench said.

The top court adopted the amicus curiae's recommendation that one court be established in each of the five districts where the number of cases brought under the NI Act is substantial.

The Supreme Court had previously issued a number of directives to ensure the swift resolution of cheque bounce cases across the nation.

The top court also requested that the Centre amend the law to ensure that trials in such cases are joined if they are brought against the same person within a year and are connected to the same transaction.

Drawer will be responsible in 138 cheque bounce case: SC

Drawer will be responsible in 138 cheque bounce case: SC

The Supreme Court has observed that a cheque drawer is liable even when another person fills in the details. The observation of a two-judge bench of Justice DY Chandrachud and AS Bopanna came while allowing an appeal in a cheque bounce case, reported LiveLaw.

The court observed that the signing of a cheque could not be discredited by a handwriting expert's report that the drawer did not fill the cheque. 

The accused in the case admitted to giving a blank signed cheque to a payee and was granted permission by the Delhi High Court to engage a handwriting expert to determine whether the details were in his hand.

The top court noted that the drawer who signs the cheque and gives in to the payee is presumed liable unless it is proved that the cheque was issued for the payment of a debt or discharge of liability.

For such a determination, the fact that the details in the cheque have been filled up not by the drawer but by some other person would be immaterial," the court observed.

It added that the handwriting expert's report on whether the details were filled by the drawer or had no role to the defence whether the cheque was issued towards the payment of a debt or liability.

The Supreme Court, in May this year, directed the constitution of special courts with a retired judge in five states for speedy disposal of cheque bounce cases. 

Under the Negotiable Instruments Act (NI), the special courts were set up in the states of Maharashtra, Delhi, Gujarat, Uttar Pradesh and Rajasthan in view of a high number of pending cases in these states.

In light of the numerous cases that are pending in these states, a three-judge panel comprised of Justices L Nageswara Rao, BR Gavai, and S Ravindra Bhat announced that the states of Maharashtra, Delhi, Gujarat, Uttar Pradesh, and Rajasthan would establish special courts under the Negotiable Instruments Act (NI).

"We have incorporated the suggestions of the amicus with respect to the setting up of the pilot courts and we have given the timelines also. It is to begin on September 1, 2022 onwards. The secretary general of this court shall ensure that a copy of the present order is directly communicated to the registrar general of the said five high courts, which should put it before the chief justices for immediate action," the bench said.

The top court adopted the amicus curiae's recommendation that one court be established in each of the five districts where the number of cases brought under the NI Act is substantial.

The Supreme Court had previously issued a number of directives to ensure the swift resolution of cheque bounce cases across the nation.

The top court also requested that the Centre amend the law to ensure that trials in such cases are joined if they are brought against the same person within a year and are connected to the same transaction.

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