Manual signatures or seals are not mandatory for computer-generated bank return memos under the NI Act.

In brief

The question

1. Whether a computer-generated bank return memo (Ex.P2) lacking a manual seal or signature is valid evidence of dishonor under Section 146 of the NI Act

The court held

The High Court dismissed the revision petition, holding that the Accused failed to provide sufficient rebuttal evidence to displace the Section 139 presumption

It also directed

The Court affirmed that in the absence of perversity or jurisdictional error, concurrent factual findings cannot be upset in revisional jurisdiction

The conviction and sentence passed by the Trial Court and confirmed by the First Appellate Court were upheld

01Facts

The Complainant alleged that the Accused (Petitioner) borrowed a hand loan of Rs. 3,00,000/- on 24.10.2014 for financial assistance, agreeing to repay it within two months with 16% interest

pp. 3-4, para 4-5

To discharge this liability, the Accused issued a post-dated cheque (Ex.P1) dated 24.11.2014, which was dishonored on 26.11.2014 due to "funds insufficient" as per the bank endorsement (Ex.P2)

p. 4, para 6

Despite a legal notice, the Accused failed to pay, leading to a complaint under Section 138 of the Negotiable Instruments (NI) Act.

The Trial Court convicted the Accused on 21.09.2016, sentencing him to a fine of Rs. 4,00,000/-; this was confirmed by the First Appellate Court on 09.08.2018

pp. 6, para 12-14

The Accused challenged these concurrent findings via this revision petition, primarily arguing that the bank memo (Ex.P2) lacked a seal and signature, and that the cheque was a misused security document given to a society

pp. 6-7, para 12(c) · p. 24, para 41

02Issues

i.1. Whether a computer-generated bank return memo (Ex.P2) lacking a manual seal or signature is valid evidence of dishonor under Section 146 of the NI Act

p. 10, para 16 · p. 16, para 26

ii.2. Whether the Accused successfully rebutted the statutory presumption under Section 139 of the NI Act regarding the existence of a legally enforceable debt

p. 19, para 35 · p. 25, para 44

03Law Applied

Section 139 mandates a rebuttable presumption that the holder of a cheque received it for the discharge of a debt

pp. 19-21

Section 146 provides that a bank's slip/memo is prima facie evidence of the fact of dishonor

p. 10

The court relied on Rangappa v. Sri Mohan, confirming that once execution is admitted, the presumption of debt arises

pp. 20-21

Guneet Bhasin v. State (NCT of Delhi) held that Section 138 does not mandate a specific form for return memos, and the absence of an official stamp does not render them invalid

pp. 18-19, para 32

Provisions in the judgment · 13 · Linked ones open on LawLens

Negotiable Instruments Act, 1881 Section 118 Section 138 Section 139 Section 146

Code of Criminal Procedure, 1973 Section 200 Section 255 Section 313 Section 357 Section 378 Section 397 Section 401

Bharatiya Nagarik Suraksha Sanhita, 2023 Section 438

Bankers Books Evidence Act, 1891 Section 4

04Reasoning

The Court noted that the Accused admitted the cheque (Ex.P1) belonged to him and bore his signature, thereby triggering the presumption under Section 139

p. 16, para 24 · p. 19, para 35

Regarding the validity of the bank memo (Ex.P2), the Court held that with the introduction of the Electronic Clearance System (ECS), manual intervention, seals, and signatures are no longer mandatory for electronically generated endorsements

p. 15, para 21 · p. 16, para 27

The Accused's challenge to Ex.P2 was deemed an "afterthought" because he admitted in cross-examination that the memo related to the dishonor of Ex.P1 and had not initiated any action against the bank for a "wrongful" endorsement

pp. 17-18, para 30

The Court found the defense of "security cheque" weak, as the Accused admitted he did not demand the return of the cheques even after clearing the underlying loan with the society (Ex.D-6) and took no criminal action for the alleged misuse

pp. 24-25, para 42-43

Furthermore, the financial capacity of the Complainant was upheld because the Accused himself suggested during cross-examination that he had borrowed at least Rs. 50,000/-, thereby admitting the Complainant's capacity to lend

p. 8, para 12(f)

05Holding

The High Court dismissed the revision petition, holding that the Accused failed to provide sufficient rebuttal evidence to displace the Section 139 presumption

pp. 25, para 44-45

The Court affirmed that in the absence of perversity or jurisdictional error, concurrent factual findings cannot be upset in revisional jurisdiction

p. 23, para 37

The conviction and sentence passed by the Trial Court and confirmed by the First Appellate Court were upheld

p. 25, para 45

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