2021 (9) TMI 88 - HC - Indian Laws

Dishonor of Cheque - material alteration in the cheque or not - change of date for revalidation without the consent and knowledge of the petitioners - void cheque as per Section 87 of NI Act or not - ingredients of the offence under Section 138 NI Act present or not - HELD THAT - Section 87 NI Act consists of two parts. The first part indicates that in case the alteration is made with the consent of both the parties, they would be disentitled to complain against such alteration. Only when a cheque is altered by the payee or holder without the consent of the drawer, the issue of cheque becoming void would arise. In the present case, it is contended that the material alteration was done in the cheque by the complainant without the consent of the petitioners. On the other hand, in the complaint, it has been alleged that it was petitioner No. 1 who re-handed over the cheque containing the material alteration. It is apparent that the factum of who carried out the material alteration is disputed and a disputed question of fact cannot be gone into by this Court while exercising its powers under Section 482 Cr.P.C. The petitioners would need to adduce evidence in trial in support of their assertion and to rebut the presumption. The contention of petitioners that initially on presentation, the cheque in question was encashed and the amount was credited and as such no offence under Section 138 NI Act is made out - HELD THAT - The same is found fallacious and therefore rejected. The complainant has alleged that initially when the cheque in question was presented, the amount was credited to his account. However, in pursuance of an email dated 12.03.2020 sent by petitioner No. 1 to the Bank threatening legal action and a further police complaint, the transaction entry was reversed in favour of the petitioners and money was debited from the complainant s account with the net effect that the amount under the cheque remained unpaid - this Court is of the opinion that the ingredients of the offence under Section 138 NI Act are made out. The last contention raised on behalf of the petitioners that no proceedings are maintainable against petitioner No. 1 as he is not a signatory to the cheque in question and the complaint lacks material particulars - HELD THAT - The cheque was issued from an account that was jointly held by both the petitioners. As per the complainant s stance, it was petitioner No. 1 who had re-handed over the altered cheque signed by petitioner No. 2. In the complaint, it has been stated that all the dealings had taken place with petitioner No. 1. In view of the above, there are no merit in the contention and the same is rejected. Petition dismissed.

Summary

Issues involved:
Applicability of Section 87 of the Negotiable Instruments Act, 1881 to the present case and whether the proceedings before the Trial Court should be quashed.

Analysis:

1. The petitioners sought the quashing of a complaint under Section 138 of the NI Act and the summoning order. The petitioners argued that the cheque in question was altered without their consent, rendering it void under Section 87 of the NI Act. They also contended that since the cheque was initially honored and later reversed due to a protest, the offense under Section 138 was not made out. Furthermore, they argued that since petitioner No. 1 was not specifically implicated, summoning them was improper.

2. The court examined the facts, including the rental dispute between the parties and the altered cheque presented by the complainant. The key issue was the applicability of Section 87 of the NI Act to determine the validity of the altered cheque and the liability of the parties. The court noted that disputed questions of fact, such as who made the alteration, should be resolved during trial with evidence.

3. Referring to previous judgments, the court emphasized that statutory presumptions under the NI Act and the Indian Evidence Act could be rebutted with evidence. It was highlighted that the High Court should not interfere in quashing proceedings involving disputed facts that require evidence. The court cited cases where the Supreme Court reiterated the importance of evidence in determining liability under Section 138 of the NI Act.

4. The court dismissed the petitioners' reliance on a previous case, emphasizing that consent to alterations affects the parties' rights. The court rejected the argument that the offense under Section 138 was not established due to the initial crediting of the cheque amount, noting subsequent actions by the petitioners. Additionally, the court found no merit in the contention that petitioner No. 1 should not be held liable, considering the circumstances of the lease agreement and the joint account from which the altered cheque was issued.

5. Ultimately, the court upheld the impugned order, dismissing the petition and instructing the communication of the order to the Trial Court. The court clarified that its observations were specific to the petition and would not impact the trial's merits.

This detailed analysis of the judgment highlights the court's thorough examination of the issues raised by the petitioners, the legal principles governing negotiable instruments, and the importance of evidence in determining liability under the NI Act.