Execution of Cheque -- Signing Distinguished from Execution -- Signing of cheque by itself does not amount to execution or create liability
(i) Negotiable Instruments Act, 1881, S.138 -- Execution of Cheque -- Signing Distinguished from Execution -- Signing of a cheque is a physical act that does not by itself amount to issuance or execution. Liability under Section 138 does not arise from mere signing, since a signed cheque may remain undelivered and not intended to be acted upon. (ii) Negotiable Instruments Act, 1881, Ss.118(a), 139 -- Presumption Under NI Act -- Denial of Execution -- Presumption available to a holder of a cheque arises only where execution is admitted or proved. Where signature is denied, the complainant must first establish that the cheque was signed by the accused before the presumption can be invoked. (iii) Negotiable Instruments Act, 1881, Ss.118(a), 139 -- Presumption Under NI Act -- Dispute Confined to Underlying Debt -- Once signing and voluntary delivery of a cheque are admitted and the dispute is confined to the existence of the underlying debt, execution stands established. Presumption under Sections 118(a) and 139 applies, and the burden shifts to the accused to rebut the existence of a legally enforceable debt.
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