Discussion
A person (payee) signs a blank cheque and gives the same to another person (holder) and the holder fills up the blank space pertaining to amount and date and presents the same in his bank account and it is dishonoured. In such a situation, which of the following statement would be correct?
Answer: D
The correct statement is that the holder will be entitled to maintain a complaint upon the cheque being dishonoured.
A person who signs a blank cheque and hands it over (the paper calls him the payee, though he is the drawer) gives the holder authority to complete it. Section 20 of the Negotiable Instruments Act, 1881 makes a signed, inchoate instrument good for the amount filled in, and in Bir Singh v. Mukesh Kumar (2019) the Supreme Court held that the presumption under Section 139 applies to a voluntarily signed blank cheque even if someone else filled in the details.
Filling in an authorised blank is not forgery, the cheque is not invalid, and the bank's acceptance for collection is not in question, so the holder can prosecute under Section 138 on dishonour.
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