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Legal Examination of Signature Forgery In Cheque Dishonor: Delhi High Court.

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Case Title: ISHWAR SINGH versus VIDYA SHRI DEVI

Case No.: CRL.L.P. 1/2024, CRL.M.A. 18/2024

Dated on: FEBRUARY 29, 2024

Coram: HON’BLE MR. JUSTICE MANOJ KUMAR OHRI

Facts:

In this case, Ishwar Singh filed a complaint under Section 138 of the Negotiable Instruments Act (NI Act) in 2016, alleging that Vidya Shri Devi, representing M/s Safemax Industries, issued a cheque for Rs. 3,26,729 as a refund for a failed construction project. The cheque was dishonored due to insufficient funds. Despite issuing a demand notice, no payment was made, leading to the filing of the complaint. The trial court convicted Vidya Shri Devi, but the appellate court acquitted her, accepting her defense that the cheque was stolen and her signature was forged, as supported by an FSL report. Ishwar Singh’s petition for leave to appeal the acquittal was dismissed by the High Court.

Issues framed by the Court:

  • Whether the delay of 54 days in filing the petition should be condoned.
  • Whether the respondent, Vidya Shri Devi, issued the cheque in question and whether the signatures on the cheque were genuine.
  • Whether the respondent successfully rebutted the presumption that the cheque was issued for discharge of a legally enforceable debt or liability.
  • Whether the evidence, including the FSL report and testimonies, sufficiently supports the respondent’s defense that the cheque was stolen and not issued by her.
  • Whether the petitioner, Ishwar Singh, provided adequate evidence to prove that the cheque was issued by the respondent and to counter the respondent’s claims and the FSL report.
  • Whether the appellate court’s decision to acquit the respondent was justified.

Legal Provisions:

Section 5 of the Limitation Act: Extension of prescribed period in certain cases.

Section 138 NI Act: It states about the offence of dishonoring a cheque for insufficiency of funds or exceeding the arranged amount.

Contentions of the Appellant:

The appellant, contended that the trial court had rightly convicted the respondent, Vidya Shri Devi, under Section 138 of the NI Act, as she had issued a cheque that was dishonored due to insufficient funds. He argued that the presumption under Section 139 of the NI Act, which assumes the cheque was issued for a discharge of liability and was not adequately rebutted by the respondent. Ishwar Singh challenged the respondent’s defense that the cheque was stolen and her signature was forged, asserting that this claim was not proven during the trial. He also contended that the FSL report, which indicated that the signatures on the cheque did not match the respondent’s specimen signatures, should not be considered conclusive. He emphasized that the respondent’s consistent denial and the corroborative testimonies were insufficient to outweigh the statutory presumption in his favor.

Contentions of the Respondent:

The respondent, Vidya Shri Devi, contended that she did not issue the cheque in question and that her signatures on the cheque were forged. She maintained that the cheque, along with several others, was stolen by an employee. To support her defense, she presented the testimony of her husband and a bank witness, as well as an FSL report which concluded that the signatures on the cheque did not match her specimen signatures. She argued that the cheque was dishonored due to insufficient funds rather than signature mismatch, and highlighted the lack of evidence from the petitioner to prove the cheque was issued by her.

Court’s Analysis & Judgement:

The court analyzed whether the respondent, Vidya Shri Devi, successfully rebutted the presumption under Section 139 of the NI Act that the cheque was issued for a valid liability. The court noted that the respondent consistently maintained that the cheque was stolen, supported by an FSL report indicating the signatures did not match her sample signatures. The petitioner, Ishwar Singh, failed to contest the FSL report or cross-examine the relevant witnesses. The court found that mere assertions by the petitioner were insufficient to override the respondent’s evidence and expert opinion. Citing the principle that an appellate court should be cautious in overturning an acquittal unless the trial court’s decision is perverse or irrational, the court upheld the appellate court’s acquittal of the respondent. Consequently, the petition for leave to appeal was dismissed.

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Judgement Reviewed By- Shramana Sengupta

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Delhi HC: Bounced cheques still count as acknowledging the debt, extending the time limit; Revision Petition dismissed.

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CASE TITLE – M/S VOIR INDIA ELECTRONICS PVT. LTD. v. M/S POLYBLENDS (INDIA) PVT. LTD.

CASE NUMBER – C.R.P. 69/2022 & CM APPL. 22206/2022

DATED ON – 20.05.2024

QUORUM – Justice Dharmesh Sharma

 

FACTS OF THE CASE

This is a revision petition filed in terms of Section 115 of the Civil Procedure Code, 19081 by the petitioner, who is the defendant in the main suit bearing No. 379/20182 instituted by the respondent/plaintiff before the learned Additional District Judge, assailing the impugned order dated 21.02.2022, whereby the learned Trial Court has dismissed the application under Order VII Rule 10 & 11 of the CPC filed by the petitioner/defendant. The respondent/plaintiff is a Private Limited company incorporated under the Companies Act, 1956, and is engaged in the business of manufacturing and trading of Plastic Dana of different colours, polypropylene etc., and supplying the same to its customers. The petitioner/defendant had business dealings with respondent/ plaintiff under which the petitioner purchased the materials of plastic dana of different colours/reinforced ABS etc. from time to time on a credit basis and made payments to the invoices raised. Due to the aforesaid business transactions, there arose a debit balance of Rs.10,25,916/-, which became payable by the petitioner/defendant along with interest @ 18% per annum as per the terms of the agreement between the two parties. The said amount was not paid despite a legal notice dated 16.01.2018, which was sent on 18.01.2018, and thus, a suit for recovery was filed on 03.04.2018 by the respondent/plaintiff against the petitioner/defendant before the learned Trial Court. The Learned Trial Court in the impugned order dated 21.02.2022, comprehensively dealt with the expression „cause of action‟. Further, insofar as the issue of territorial jurisdiction is concerned, it was observed that as per the Memorandum of Association (MoA), the registered office of the plaintiff i.e. M/S Polyblends India Pvt. Ltd. is situated in Delhi. However, as per the invoices, the address of the plaintiff is shown in Gurgaon, Haryana and that of the defendant in Greater Noida. Referring to Order VII Rule 10 of the CPC and because a plaint is to be taken at its face value, the learned Trial Court held that it had the jurisdiction to entertain the suit.

 

LEGAL PROVISIONS

Section 18 of the Limitation Act, 1963 deals with the effect of an acknowledgement in writing on the limitation period for a lawsuit or application.

 

CONTENTIONS BY THE PETITIONER

The petitioner in its written statement alleged that the last bill was raised on 31.01.2014 and thereafter, no goods were ever purchased by the petitioner from the respondent for the sole reason that the respondent started supplying defective and sub-standard quality of goods and there has been no dealing after 31.01.2014. It was further averred that in the suit filed before the learned Trial Court, the period of limitation of three years started from 02.03.2014, which would have ended on 01.03.2017 and the respondent had filed the suit on 03.04.2018, which is barred under Article 15 of the schedule under the Limitation Act, 1963.

CONTENTIONS BY THE RESPONDENT

The Learned Counsel for the respondent pointed out that the last part payment of Rs. 25,000/- was received by them from the petitioner on 12.03.2015 and thereafter, no payment was made and, in this regard, a reply was also filed by the respondent/plaintiff. They further referred to the ledger account starting from 1st April, 2015 to 31st March, 2016, and averred that the three cheques bearing No. 057043, 057044 and 057045 for a sum of Rs. 75,000/- each issued by the petitioner, were dishonoured by the Bank with the remark “Cheq Return‟, and stated that in previous precedents it was held that payment by cheque, which is dishonoured, would amount to an acknowledgement of debt and liability.

 

COURT ANALYSIS AND JUDGEMENT

The Hon’ble High Court of Delhi stated that the present revision petition is bereft of any merits. The last of the bill/invoice by which the delivery of goods was made to the petitioner/defendant, was on 31.01.2014. The plea that the limitation period started running from the due date i.e. 02.03.2014 and would have expired after 3 years, was said to be misconceived since, it was brought on the record that a payment of Rs. 25,000/- was made by the petitioner/defendant on 12.03.2015 towards the running account between the parties as prima facie brought out on appreciating the entries in the ledger of the respondent/plaintiff, which would have formed a part of the plaint. The Hon’ble High Court further stated, that the three cheques dated 07.05.2015 for a sum of Rs.75,000/- each had been issued by the petitioner/defendant towards part payment of the bills/invoices, which on their presentation were dishonoured. And that being the case, the payment made by the petitioner/defendant through cheques, which got dishonoured, would be tantamount to an acknowledgment of debt and liability and the period of limitation would stand extended by virtue of Section 18 of the Limitation Act, 1963. And held that in view of the foregoing discussion, the revision petition should be dismissed with cost of Rs. 25,000/-, which should be deposited with the Delhi High Legal Services Committee, New Delhi.

 

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Judgement Reviewed by – Gnaneswarran Beemarao

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“Merits of Case not necessary for Granting Delay in Condonation,” Principles For Condonation Of Delay Under Limitation Act laid down by Supreme Court.

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Case title: Pathapati Subba Reddy (Died) By L.Rs. & Ors. v. The Special Deputy Collector (LA)

Case no.: Special Leave Petition (Civil) No. 31248 Of 2018

Order on: 8th April 2024

Quorum: Justice Pankaj Mithal and Justice Bela M. Trivedi

FACTS OF THE CASE

In the village of Gandluru, District Guntur, Andhra Pradesh, certain lands were acquired for the Telugu Ganga Project in 1989. Dissatisfied with the compensation offered, 16 claimants filed a reference under Section 18 of the Land Acquisition Act. During the pendency of the reference, three of the claimants passed away, but their heirs were not substituted. Eventually, the reference was dismissed along with others, upholding the collector’s award.

Several years later, some heirs and legal representatives of one of the deceased claimants, Pathapati Subba Reddy, sought to file an appeal challenging the dismissal. However, they did so after an inordinate delay of 5659 days. They cited reasons such as lack of awareness of the reference due to living away from the ancestral home.

CONTENTIONS OF THE APPELLANT

The appellants, heirs of the deceased claimant No. 11, sought to explain the delay by citing lack of awareness of the reference due to living in a different household. They argued that they promptly filed the appeal upon discovering the reference.

CONTENTIONS OF THE RESPONDENTS

The respondent argued against condoning the delay, highlighting the lack of due diligence by the claimants in pursuing the reference earlier. They also emphasized that most claimants had accepted the reference court’s decision, implying acquiescence to the dismissal. Few Judgements which were relied on:

  • Bhag Mal alias Ram Bux and Ors. vs. Munshi (Dead) by LRs. and Ors. [1]:

it has been observed that different provisions of Limitation Act may require different construction, as for example, the court exercises its power in a given case liberally in condoning the delay in filing the appeal under Section 5 of the Limitation Act, however, the same may not be true while construing Section 3 of the Limitation Act. It, therefore, follows that though liberal interpretation has to be given in construing Section 5 of the Limitation Act but not in applying Section 3 of the Limitation Act, which has to be construed strictly.

  • Lanka Venkateswarlu vs. State of Andhra Pradesh & Ors.[2]:

where the High Court, despite unsatisfactory explanation for the delay of 3703 days, had allowed the applications for condonation of delay, this Court held that the High Court failed to exercise its discretion in a reasonable and objective manner. High Court should have exercised the discretion in a systematic and an informed manner. The liberal approach in considering sufficiency of cause for delay should not be allowed to override substantial law of limitation. The Court observed that the concepts such as ‘liberal approach’, ‘justice-oriented approach’ and ‘substantial justice’ cannot be employed to jettison the substantial law of limitation.

  • Imrat Lal & Ors. vs. Land Acquisition Collector & Ors.[3]:

In this case also the matter was regarding determination of compensation for the acquired land and there was a delay of 1110 days in filing the appeal for enhancement of compensation. Despite findings that no sufficient cause was shown in the application for condoning the delay, this Court condoned the delay in filing the appeal as a large number of similarly situate persons have been granted relief by this Court.

LEGAL PROVISIONS

Section 3 of the Limitation Act, in no uncertain terms lays down that no suit, appeal or application instituted, preferred or made after the period prescribed shall be entertained rather dismissed even though limitation has not been set up as a defence subject to the exceptions contained in Sections 4 to 24 (inclusive) of the Limitation Act.

Section 5 of the Limitation Act, Extension of prescribed period in certain cases. – Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908 (5 of 1908), may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.

ISSUE – The key issue was whether the High Court was justified in refusing to condone the inordinate delay in filing the appeal.

COURT’S ANALYSIS AND JUDGEMENT

The Court analysed the principles underlying the law of limitation, emphasizing the need for finality in litigation and the mandatory nature of Section 3. It discussed the discretionary power of courts to condone delay under Section 5, contingent upon the demonstration of “sufficient cause” by the appellant.

The Court cited precedents to underscore the necessity of exercising caution in condoning delays, particularly when negligence or lack of due diligence is apparent. It emphasized that while the court may adopt a liberal approach, it should not disregard the statutory provisions or the need for substantial cause for delay.

Ultimately, the Court upheld the decision of the High Court, reasoning that the claimants had failed to demonstrate sufficient cause for the delay. It highlighted their lack of diligence in pursuing the reference earlier and noted that most claimants had accepted the reference court’s decision. Consequently, the Special Leave Petition was dismissed.

The case underscores the importance of diligence and awareness in pursuing legal remedies and the stringent application of limitation laws. It reaffirms that while courts may exercise discretion in condoning delays, such discretion is not absolute and must be exercised judiciously.

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Judgement Reviewed by – Chiraag K A

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[1] (2007) 11 SCC 285

[2] (2011) 4 SCC 363

[3] (2014) 14 SCC 133

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Section 5 Of Limitation Act Applicable To Proceedings Under Railway Claim Tribunal Act, 1987: Allahabad High Court

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CASE TITLE: M/S Krishak Bharti Co-Operative Ltd.Kribhco Surat Gujarat v. Union Of India Thru G.M. Northern Eastern Railway Gorakhpur [FAFO No. – 236 of 2002]

DECIDED ON: 16.08.2023

CORAM: Hon’ble Ajay Bhanot,J

INTRODUCTION

The application of Section 5 of the Limitation Act, 1963 has been affirmed by the Allahabad High Court in relation to proceedings governed by the Railway Claim Tribunal Act, 1987 and the Railway Claim Tribunal (Procedure) Rules, 1989.

Justice Ajay Bhanot, presiding over the bench, was overseeing an appeal stemming from a claim application submitted before the Railway Claim Tribunal. The application was dismissed due to non-prosecution. Following this, the claimant submitted a request for the restoration of the claim application. However, this request was rejected due to being beyond the permissible time limit.

FACTS

The appellant submitted a compensation claim to the Railway Claims Tribunal’s Lucknow Bench (“Railway Tribunal”) following the demise of his son. However, due to a lack of prosecution, the claim was dismissed on 09.02.2000. Subsequently, eight months later, on 04.10.2000, the appellant lodged an application for restoration. Rule 18 of the Railway Claims Tribunal (Procedure) Rules, 1989 specifies a 30-day timeframe for submitting an application to reverse a default dismissal order. The Railway Tribunal declined the restoration application due to it being beyond the allowable time limit.

In response to the decisions made by the Railway Tribunal, the appellant initiated an appeal in the High Court.

CASE ANALYSIS AND DECISION

The court drew upon precedents from the Gujarat High Court, specifically the cases of Shyam Santaram Sali (Marathi) v. Union of India and Dharmesh Madhubhai Parmar v. Union of India. In these cases, it was established that Section 5 of the Limitation Act is applicable to proceedings governed by the Railway Claim Tribunal Act, 1987, in conjunction with the Railway Claim Tribunal (Procedure) Rules, 1989.

The court acknowledged that the case had been transferred from Gorakhpur to Lucknow, and due to an administrative oversight, this transfer was not communicated to the appellant. Consequently, his absence on the day of the case’s dismissal was beyond his control.

The court noted that the application for condonation of delay demonstrated a valid and sincere reason for the delay, with no intention to cause it. The court further recognized the appellant’s consistent diligence in pursuing his claim. The court emphasized that when substantive rights are at stake, the primary focus should be on ensuring justice rather than barring claimants on technical grounds.

The court held that given the presence of a valid reason for the delay, the Railway Tribunal should have granted condonation for the delay.

As a result, the court nullified the decision to reject the application for delay condonation and reinstated the case for a comprehensive review on its merits.

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Written by- Mansi Malpani

 

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Until the appellant gives the sufficient cause for condonation of delay under Section 5 of the Limitation Act, it cannot be condoned: Gujarat High Court

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State Of Gujarat vs Lajbarkhan Sherdalkhan Pathan on 12 April, 2023

Bench: Honourable Justice Sandeep N. Bhatt

R/SPECIAL CIVIL APPLICATION NO. 18903 of 2021

Facts

The respondent possessed a plot of land and his name was shown in the revenue record as a farmer. In the year 1989, the present petitioner – Government Authority came to the plaintiff’s place and issued notice for vacating the said land within seven days, without following any procedure, and removed some part of the hut. Therefore, the plaintiff filed a suit before the competent Civil Court for declaration and permanent injunction, along with an application for injunction. However, the Government Authority had chosen not to appear and contest the said suit. The trial Court therefore, allowed the suit ex-parte and granted permanent injunction and directed the Government Authority not to take possession of the land in question from the plaintiff, without following due process of law. There was no challenge by the State Authority against the same before any higher forum till date and hence the judgement attained finality

The respondent then filed another suit before the competent Civil Court to declare him the owner of the land in view of adverse possession as he was in its possession for the past 61 years as well as for permanent injunction. However, no appearance was made by the Government authority and therefore, the trial Court directed to hear the suit ex-parte. Ultimately, the trial Court passed the judgment in favour of the respondent and decreed the suit

After a delay of 3230 days, the State Authority then finally filed an application for condonation of delay and preferred an appeal against the judgment passed by the trial Court.

However, the Government Authority / Government Pleader  failed to appear and therefore, the rights of the State were closed at each stage of the proceeding, after giving ample opportunity and thus the appellate Court rejected the application made by the Government authority for condonation of the delay. It is this order impugned, which is challenged by the State Authority before the present Court in the petition after about 9 years.

The counsel for the Government authority submitted that there was a revenue distribution of territorial jurisdiction of Ahmedabad which bifurcated it into 4 zones due to which an urgent requirement of establishment of authorities for all 4 zones had arisen. The bifurcation of the zones consumed some time and only then did the authorities have a chance for the demarcation of the revenue jurisdiction. Hence, in the process of establishment of the offices, the records, documents and all the other connected things were either shifted or were in process of being shifted which took considerable time.

He contended that the appellate Court below had not rightly appreciated the facts and circumstances of the case and the reasons given by the Government authority in the application for condonation of delay and that the delay should be considered liberally

Judgement

The Court after going through the case held that despite sufficient opportunities having been given, theState Authorities had not appeared before the trial Court which compelled it to hear the matter exparte. Even after the verdict, the Government authority failed to challenge it and thus it attained finality which shows the marked incompetence of the authority to act in a timely manner.

The Court held that all these facts signify that there are wilful latches and negligence on the part of the state authority and for these reasons, the present petition is devoid of merits and therefore, the Court dismissed it accordingly.

JUDGEMENT REVIEWED BY AMIT ARAVIND

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