Section 138 NI Act | Signature Mismatch Cannot Override Insufficient Funds Dishonour : Delhi HC Rejects Forensic Examination Delay Tactics

The Delhi High Court has clarified that in cases under Section 138 of the Negotiable Instruments Act, a request for forensic examination of disputed cheque signatures may be denied when the dishonour is attributable to insufficient funds, and the accused has repeatedly failed to avail opportunities to cross-examine the complainant. The judgment underscores the importance of procedural diligence and the limits of judicial assistance in defence evidence.

Background & Facts

The Dispute

The respondent, Man Mohan Arora, filed a criminal complaint under Section 138 of the Negotiable Instruments Act, 1881 against the petitioner, Yasiv Zaidi, alleging that the petitioner had obtained a loan of ₹24,00,000 in September 2016, repayable within one month. To partially discharge this liability, the petitioner issued a cheque bearing no. 001929 dated 13.11.2016, drawn on ICICI Bank Ltd., Mohan Cooperative Industrial Estate Branch, New Delhi, for ₹6,00,000. The cheque was presented on 13.01.2017 and dishonoured with the reason "Insufficient Funds" as per the return memo dated 13.01.2017 issued by HDFC Bank. A legal notice dated 10.02.2017 was served on 11.02.2017, and upon non-payment, the complaint was filed.

Key Facts

• Cheque amount: ₹6,00,000
• Date of cheque issuance: 13.11.2016
• Date of presentation: 13.01.2017
• Date of dishonour: 13.01.2017
• Date of legal notice: 10.02.2017
• Date of service of notice: 11.02.2017
• Date of complaint filing: 2017
• Cheque return memo cited "Insufficient Funds" - no mention of signature mismatch
• Petitioner claimed the cheque was issued in blank and later misused
• Petitioner alleged five blank cheques were given to the complainant, four of which were misused
• DW-1, Branch Manager of ICICI Bank, produced specimen signatures of the petitioner on 08.04.2024
• No questions were put to DW-1 regarding authenticity of the disputed signatures

Procedural History

• 19.07.2017: Trial Court summoned the petitioner
• 11.10.2018: Petitioner appeared through counsel
• 25.02.2019: Notice under Section 251 Cr.P.C. framed; petitioner pleaded that signatures on cheque were not his and that the cheque was misused
• 04.07.2019: First date fixed for cross-examination of complainant
• 16.09.2019, 24.01.2020, 06.08.2020, 06.10.2020, 20.11.2020, 01.02.2021, 10.11.2021, 28.03.2022, 12.05.2022, 27.07.2022, 16.12.2022: Multiple adjournments sought by petitioner; no cross-examination conducted
• 12.05.2022: Cost of ₹5,000 imposed on petitioner for non-appearance
• 10.03.2023: Trial Court closed right to cross-examine complainant due to repeated non-appearance and failure to avail opportunities
• 26.07.2023: Sessions Court dismissed Criminal Revision No. 191/2023 challenging closure of cross-examination
• 08.04.2024: Defence evidence led; DW-1 examined; oral request made to send cheque to FSL for forensic comparison - rejected
• 07.09.2024: Sessions Court upheld Trial Court’s refusal to permit forensic examination
• 24.03.2026: Present petition dismissed by Delhi High Court

The Parties' Positions

For the Petitioner

• Contended that signatures on the cheque were forged
• Argued that specimen signatures produced by DW-1 were insufficient without forensic comparison
• Relied on T. Nagappa v. Y.R. Muralidhar and Kalyani Baskar v. M.S. Sampoornam to assert right to expert evidence under Section 243(2) Cr.P.C.
• Claimed denial of fair trial under Article 21
• Asserted that the Trial Court erred in rejecting the oral request for FSL examination

For the Respondent

• Argued that the cheque was dishonoured for "Insufficient Funds", not signature mismatch
• Highlighted petitioner’s prolonged delay: over 15 opportunities for cross-examination over four years, all declined
• Pointed out that no formal application under Section 243(2) Cr.P.C. was filed
• Noted that no questions were put to DW-1 regarding signature authenticity
• Cited L.G. Goyal v. Suresh Joshi and S. Minz v. Madhu Bala Gupta to argue that expert examination is unnecessary when dishonour is due to fund shortage
• Alleged deliberate delay tactics

Relief Sought

The petitioner sought quashing of the Sessions Court’s order dated 07.09.2024 and direction to the Trial Court to send the cheque and specimen signatures to the FSL for forensic comparison.

The Legal Issue

The central question was whether the Trial Court erred in refusing the petitioner’s oral request for forensic examination of the cheque signatures under Section 243(2) Cr.P.C., when the cheque was dishonoured for insufficient funds, the accused had failed to cross-examine the complainant over four years, and no formal application was filed.

Arguments Presented

For the Appellant/Petitioner

The petitioner’s counsel argued that the denial of forensic examination violated the principles of natural justice and fair trial under Article 21. Reliance was placed on T. Nagappa v. Y.R. Muralidhar and Kalyani Baskar v. M.S. Sampoornam, which held that courts must permit expert examination when signature authenticity is disputed. It was contended that Section 243(2) Cr.P.C. entitles the accused to seek process for production of documents, and the oral request, though informal, should have been considered. The counsel emphasized that the Trial Court had not conclusively determined the genuineness of the signatures and that a prima facie comparison revealed dissimilarities.

For the Respondent/State

The respondent’s counsel countered that the petitioner had engaged in deliberate delay, failing to cross-examine the complainant despite over 15 opportunities between 2019 and 2022. No formal application under Section 243(2) Cr.P.C. was filed; only an oral request was made at the eleventh hour. The cheque was dishonoured for insufficient funds, not signature mismatch, making expert examination irrelevant under L.G. Goyal v. Suresh Joshi. The counsel also noted that DW-1, though examined, was not questioned on the authenticity of the signatures, and the petitioner had not appeared for recording of his statement under Section 313 Cr.P.C., resulting in non-bailable warrants being issued.

The Court's Analysis

The Delhi High Court undertook a detailed analysis of the petitioner’s conduct, the nature of the dishonour, and the procedural requirements under the Cr.P.C. and the Indian Evidence Act. The Court observed that the cheque was returned with the remark "Insufficient Funds" - a fact not disputed by either party. This is critical because, as held in L.G. Goyal v. Suresh Joshi and reaffirmed in S. Minz v. Madhu Bala Gupta, when a cheque is dishonoured for insufficient funds, the bank does not verify the signature at the time of return. The Court noted:

"Had the signature on Ext. C-4 been different, the bank would have returned the same with the remark that the signature on Ext. C-4 was not tallying with the appellant's specimen signature kept with the bank. The memos Ext. C-6 and Ext. C-8 issued by the bank clearly show that signature of the appellant on Ext. C-4 was not objected to by the bank, but the same was returned with the remark “insufficient fund”. This circumstance shows that the signature on Ext. C-4 was that of the appellant."

The Court further emphasized that the petitioner had ample opportunity to challenge the complainant’s testimony under Section 145(2) of the NI Act, yet failed to do so over a period of nearly four years. The Trial Court’s order dated 10.03.2023 closing the cross-examination was upheld by the Sessions Court and not challenged further - thereby attaining finality.

The Court also noted that while DW-1, the bank manager, was examined and specimen signatures were produced, no question was put to him regarding the authenticity of the disputed signatures. The Supreme Court in Ajitsinh Chehuji Rathod v. State of Gujarat held that the burden to rebut statutory presumptions lies on the accused, and courts are not obligated to assist in collecting defence evidence. The petitioner, having chosen not to question DW-1, could not later claim deprivation of opportunity.

Regarding Section 243(2) Cr.P.C., the Court held that the provision requires a formal application, not an oral request. The absence of such an application rendered the petitioner’s reliance on T. Nagappa and Kalyani Baskar inapplicable, as those cases involved adjudicated applications. The Court further found that the belated oral request, made only after the defence evidence was closed and after years of delay, was clearly intended to prolong proceedings.

Finally, the Court held that under Section 73 of the Indian Evidence Act, the Trial Court is fully empowered to compare disputed signatures with admitted ones on record. Since both sets of signatures were available, the Court was not required to resort to expert opinion.

The Verdict

The petition was dismissed. The Delhi High Court upheld the orders dated 08.04.2024 of the Trial Court and 07.09.2024 of the Sessions Court, rejecting the request for forensic examination of the cheque signatures. The Court found no error in the refusal, given the dishonour was for insufficient funds, the petitioner’s prolonged delay in cross-examining the complainant, the absence of a formal application under Section 243(2) Cr.P.C., and the failure to question DW-1 on signature authenticity. The matter was directed to proceed to final arguments without further delay.

What This Means For Similar Cases

Forensic Examination Is Not Automatic in NI Act Cases

• Practitioners must not assume that a plea of forgery entitles the accused to FSL examination
• Expert evidence is discretionary and only warranted when signature mismatch is the stated reason for dishonour
• If the bank’s return memo cites "insufficient funds", courts may treat signature authenticity as irrelevant unless independently proven

Delay in Cross-Examination Forfeits Defence Rights

• Repeated adjournments and non-appearance in Section 138 cases will result in closure of cross-examination rights
• Courts will not permit belated attempts to introduce new evidence after years of inaction
• Failure to question a bank witness on signature authenticity waives the right to later claim prejudice

Formal Applications Under Section 243 Cr.P.C. Are Mandatory

• Oral requests for summoning witnesses or documents will be rejected
• All applications under Section 243(2) Cr.P.C. must be in writing, with reasons and supporting documents
• Courts are not obligated to assist accused in collecting evidence - the burden of rebuttal rests entirely on the accused

Section 73 Evidence Act Empowers Courts to Compare Signatures

• Courts may compare disputed and admitted signatures on record without expert assistance
• Certified bank specimen signatures are admissible under the Bankers’ Books Evidence Act, 1891
• Defence counsel must ensure questions are put to bank witnesses to preserve the right to challenge authenticity

Burden of Rebuttal Lies with the Accused

• Statutory presumptions under Section 139 NI Act operate in favour of the complainant
• Accused must lead credible, timely, and specific evidence to rebut these presumptions
• Judicial assistance is not a substitute for diligent defence preparation