Drawer’s Alleged Material Alteration Of Cheque To Defeat Payment Attracts S. 138 NI Act; Who Made the Alterations Is a Matter Of Trial: J&K&L High Court
Isabella Mariam
The High Court of Jammu and Kashmir and Ladakh Single Bench of Justice Sanjay Dhar has dismissed a plea to quash a cheque dishonour complaint, leaving the issues for trial. The complaint alleged that the accused issued a cheque for ₹14 lakh, but it was returned unpaid with the remark that alterations required the drawer’s authentication. The accused alleged that the payee forged the cheque by changing the amount. The Court held that a material alteration does not, by itself, end criminal liability; the decisive question is who made the change. It said that if the drawer altered the cheque to defeat payment and frustrate proceedings, the case cannot be stopped at the threshold because responsibility for the alteration is a factual issue to be tried.
The case arose from a petition seeking quashing of a criminal complaint filed under the Negotiable Instruments Act alleging dishonour of a cheque. The complaint was pending before the court of the Additional Mobile Magistrate, Shopian, where cognizance had already been taken and process issued against the accused. The complainant alleged that the accused had issued a cheque towards discharge of a monetary liability, which was returned unpaid by the bank with the endorsement that alterations required authentication.
The accused challenged both the complaint and the order taking cognizance, contending that the cheque had been materially altered by the complainant. It was asserted that the actual liability was substantially lower and that the amount on the cheque had been altered without consent, rendering the instrument void. The accused further claimed that sufficient funds were available in the account and that the dishonour occurred solely due to forgery and alteration.
The complainant relied on the statutory scheme governing cheque dishonour and the issuance of a demand notice, alleging failure of the accused to make payment within the prescribed period. The dispute centered on whether dishonour due to unauthenticated alteration of the cheque amount could attract criminal liability and whether such issues could be examined at the stage of quashing proceedings.
The Court identified the core issue as “whether dishonour of a cheque on account of alteration made in the cheque amount would constitute an offence under Section 138 of the Negotiable Instruments Act.” It referred to the legal position governing cheque dishonour and noted that the scope of Section 138 is not confined to insufficiency of funds alone.
Relying on precedent, the Court recorded that “so long as an act or omission on the part of the drawer of the cheque is intended to prevent the cheque being honoured, the dishonour would become an offence under Section 138.” It further observed that intentional acts such as alteration of signatures or overwriting of material particulars without authentication could fall within the mischief of the provision.
On the effect of alteration, the Court noted that “an alteration in the amount mentioned in the cheque qualifies to be a material alteration within the meaning of Section 87 of the Negotiable Instruments Act.” However, it clarified that the legal consequence would depend on who was responsible for making such alteration. The Court stated that “if the said alteration has been made by the accused-drawer of the cheque… he cannot be absolved of his liability,” whereas a different consideration would arise if the alteration was attributable to the payee.
The Court categorically held that “the issue as to which of the parties has made alteration in the cheque, is a question of fact which can be determined only during trial.” It further recorded that such disputed factual questions could not be examined in proceedings seeking quashing of the complaint.
The Court also took note of the accused’s failure to respond to the statutory demand notice and observed that “once the petitioner has failed to respond to the demand notice, the determination of the issue as to at whose instance the alterations were made becomes a matter of trial.”
The Court concluded that the petition did not warrant interference at the pre-trial stage. It directed that “the petition is dismissed leaving it open to the petitioner to project the contentions raised by him… before the learned trial Magistrate at the appropriate stage during trial of the case.”
Advocates Representing the Parties
For the Petitioners: Mr. Mudasir Bin Hassan, Advocate
For the Respondents: None appeared
Case Title: Abdul Hamid Wani v. Abdul Hamid Lone
Case Number: Case Number: CRM(M) No. 264/2022
Bench: Justice Sanjay Dhar
