Admission of signature triggers Section 139 NI Act presumption, even for cheques discharging a third party's liability.

The respondent-complainant, representing Shah Investors Home Ltd., filed a complaint under Section 138 of the Negotiable Instruments (NI) Act against the applicant and his father regarding an outstanding debt of Rs. 5,25,000 arising from share broking transactions.

The applicant issued three cheques to discharge his father’s liability, which were dishonored due to "insufficiency of funds" on July 30, 2007.

The trial court convicted the applicant on March 30, 2009, sentencing him to one year of simple imprisonment and a fine of Rs. 5,000.

The Sessions Court upheld this conviction on June 23, 2009.

The applicant moved the High Court in revision, contending that the cheques were issued as security for a franchise and not for a legally enforceable debt.

1. Whether the applicant successfully rebutted the statutory presumptions under Sections 118 and 139 of the NI Act regarding the existence of a legally enforceable debt.

2. Whether a cheque issued as security for future payment or to discharge a third party's liability (the father's) falls within the ambit of Section 138 of the NI Act.

3. Whether the High Court, in its revisional jurisdiction under Sections 397/401 of the CrPC, can reappreciate concurrent findings of fact in the absence of perversity.

The court primarily applied Sections 138 and 139 of the NI Act, which establish the criminal liability for cheque dishonor and the presumption that a holder receives a cheque for the discharge of a debt.

It relied on Section 118 of the NI Act, which presumes consideration for negotiable instruments.

The court invoked Sections 20 and 87 of the NI Act, which empower a holder to complete an inchoate (blank) instrument.

The court relied on Kalamani Tex v. P. Balasubramanian, stating that admission of signature triggers the statutory presumption of liability.

The court applied the principles from Amit Kapoor v. Ramesh Chander, which limits revisional jurisdiction to correcting patent defects or jurisdictional errors rather than reappreciating evidence.

The court reasoned that since the applicant did not dispute the issuance of the cheques or the signatures thereon, the statutory presumptions under Sections 118 and 139 were immediately attracted.

The applicant’s defense—that the cheques were merely "security"—was insufficient because the complainant produced account statements proving a debt of Rs. 7,77,000 owed by the applicant's father, which the applicant sought to partially discharge.

The court clarified that even if a cheque is issued as security, it remains a valuable instrument; once signed and delivered, the holder is authorized to fill the details to recover the debt.

Regarding the revisional scope, the court found no perversity or arbitrary exercise of discretion by the lower courts. It held that concurrent findings of fact cannot be substituted unless they are legally untenable.

The court held that the applicant failed to provide a "probable defense" to rebut the statutory presumptions and that a son issuing a cheque to discharge a father’s liability constitutes a legally enforceable debt.

The interim relief was vacated, and the applicant was ordered to surrender to the trial court to serve the remaining sentence.