Court rules that signature discrepancies do not absolve drawer from liability under Section 138 of the NI Act.
In a significant ruling, the Karnataka High Court, presided by Justice Ravi V Hosmani, has dismissed the revision petition filed by Smt. Safiya, thereby upholding the conviction under Section 138 of the Negotiable Instruments Act, 1881. The judgment was delivered on January 6, 2026, and it confirms the decisions of the lower courts that had found the petitioner guilty of issuing a dishonored cheque due to signature discrepancies.
The case stemmed from a complaint filed by Mr. M Hameed, alleging that Smt. Safiya had borrowed Rs. 4,30,000 and issued a cheque as repayment, which was dishonored due to insufficient funds and a signature mismatch. Safiya argued that she was illiterate and could only sign in Kannada, while the cheque bore an English signature. Despite these claims, both the trial and appellate courts found her guilty, prompting the revision petition.
In the court proceedings, Safiya's defense hinged on the argument that the cheque was not intended for Hameed but was issued as security for a previous transaction or for her daughter's association dues. However, Justice Hosmani noted inconsistencies in the defense and highlighted that the accused's admissions during cross-examination substantiated the issuance of the cheque to Hameed. The court emphasized that once the issuance and signature on a cheque are admitted, presumptions under Sections 118 and 139 of the NI Act arise, placing the burden of proof on the accused to establish a valid defense.
The High Court further referred to the Supreme Court's precedents, particularly in Laxmi Dyechem v. State of Gujarat and Bir Singh v. Mukesh Kumar, which affirm that even signature discrepancies do not exempt the drawer from liability under Section 138 if the cheque's issuance is admitted.
In dismissing the petition, the court also imposed an additional cost of Rs. 25,000 on Safiya, acknowledging the delay caused to the complainant in realizing the cheque amount due to prolonged legal proceedings.
Bottom Line:
Negotiable Instruments Act, 1881 - Cheque dishonour due to difference in signature also attracts penal consequences under Section 138 of NI Act - Presumption under Sections 118 and 139 of NI Act arises once issuance and signature on cheque are admitted, and the burden shifts to the accused to establish a probable defence.
Statutory provision(s): Sections 138, 118, and 139 of the Negotiable Instruments Act, 1881; Section 200 and 313 of the Code of Criminal Procedure, 1973.
Smt.Safiya v. Mr. M Hameed, (Karnataka) : Law Finder Doc Id # 2837978
