Shiny S. Nair v. State of Kerala & Ors., 2026
Typewritten Cheque Valid
Judgement Details
Court
Kerala High Court
Date of Decision
29 September 2026
Judges
Justice A. Badharudeen
Citation
Acts / Provisions
Facts of the Case
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Shiny S. Nair, the complainant, and the accused, Sreekala, were relatives.
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The accused borrowed ₹1.75 lakh on 14 June 2012.
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A further ₹3 lakh was advanced on 12 November 2012, even though the earlier amount had not been repaid.
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The accused allegedly issued a cheque for ₹4.75 lakh towards the combined liability.
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The cheque was presented for encashment but was dishonoured with the endorsement “Drawer's signature differs.”
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Despite the statutory demand notice, the amount was not paid.
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Proceedings were therefore initiated under Section 138 of the Negotiable Instruments Act.
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The Magistrate acquitted the accused, considering it improbable that the complainant would provide another substantial loan while the earlier loan remained unpaid. The complainant challenged that acquittal before the Kerala High Court.
Issues
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Whether the complainant had proved the underlying loan transaction and execution of the cheque.
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Whether advancing a second loan to a relative while an earlier liability remained unpaid made the complainant's case inherently improbable.
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Whether a typewritten cheque could, merely because it was typewritten, cast doubt on its genuineness or execution.
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Whether dishonour with the endorsement “Drawer's signature differs” could attract Section 138 of the Negotiable Instruments Act where the statutory requirements were otherwise satisfied.
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Whether the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act operated in favour of the complainant.
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Whether the Magistrate was justified in acquitting the accused on the reasoning adopted.
Judgement
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The Kerala High Court allowed the appeal and set aside the Magistrate's order of acquittal.
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Justice A. Badharudeen found that the evidence established the underlying transaction and execution of the cheque. Consequently, the complainant was entitled to rely upon the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act.
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The Court held that the fact that the parties were relatives and that a further loan was advanced despite the earlier liability did not, by itself, make the transaction unbelievable. The Court also rejected the argument that the cheque being typewritten was sufficient to discredit the complainant's case.
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The accused was consequently convicted under Section 138 of the Negotiable Instruments Act. The Court sentenced her to imprisonment till the rising of the Court and imposed a fine of ₹4.75 lakh, to be paid as compensation to the complainant, with six months' simple imprisonment in default.
Held
The High Court held that:
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A second loan given to a relative while an earlier loan remains unpaid does not by itself make the complainant's case improbable.
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Once the underlying transaction and execution of the cheque are proved, the statutory presumptions under Sections 118 and 139 of the NI Act become applicable.
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A typewritten cheque is not prohibited by law, and its being typewritten alone cannot invalidate the complainant's case.
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Dishonour of a cheque on the ground “Drawer's signature differs” can attract Section 138 where the other statutory requirements are satisfied and the account lacked sufficient funds.
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The Magistrate's acquittal was therefore set aside and the accused was convicted.
Analysis
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The judgment reinforces several important principles of cheque-dishonour law.
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Sections 118 and 139 of the NI Act create important presumptions in favour of the holder of a cheque. The Court considered that once Shiny Nair established the transaction and execution of the cheque, the presumptions could not be rejected merely on the basis of speculative doubts concerning why a further loan was given.
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The Court did not regard the existence of a family relationship as a reason to reject the transaction. According to the Court's reasoning, relatives may advance further money despite an earlier liability remaining outstanding. The approximately five-month gap between the two transactions was also considered in evaluating the circumstances.
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The judgment makes clear that there is no general legal prohibition against a typewritten cheque. Therefore, the physical manner in which the cheque was prepared cannot, standing alone, establish that the cheque was not genuine. The surrounding evidence and execution of the cheque remain important.
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The Court reaffirmed that dishonour bearing the endorsement “Drawer's signature differs” can fall within Section 138 where the relevant statutory conditions are fulfilled. The Court also considered the evidence concerning the insufficient balance in the accused's account.
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The decision demonstrates that a Section 138 prosecution should be evaluated on the entire evidentiary record, rather than rejected solely because a particular aspect of the transaction appears unusual. At the same time, the statutory presumptions under Sections 118 and 139 operate within the framework of the evidence concerning the transaction and execution of the cheque.