2022 (6) TMI 1173 - HC - Indian Laws

Dishonor of Cheque - material alteration in the cheque - acquittal of the accused - contention of the learned counsel for the petitioner (accused) is that, the cheque at Ex. P-1 has been materially altered, without the notice or consent of the drawer of the cheque, as such, the instrument has become invalid - HELD THAT - In the instant case, the alteration in the cheque at Ex. P-1 has been admitted by none else than the drawee Bank Manager in his evidence as DW-1. Though it was not elicited from him about the nature of the said alteration, however, he has identified the said alteration as an alteration in the date of the cheque. In the date column, the year appears to have been manipulated and appears to have been postponed the time of payment. Thus, undoubtedly, it is a material alteration in the cheque - Section 87 of the N.I. Act which speaks about the effect of material alteration, states that any material alteration of a Negotiable Instrument renders the same void as against anyone who is a party thereto at the time of making such alteration and does not consent thereto, unless it was made in order to carry out the common intention of the original parties. In the instant case, there is nothing on record to show that the alteration in the date of the cheque at Ex. P-1 was made in order to carry out the common intention of the original parties. Therefore, by virtue of the material alteration being made to the date of the cheque without any authentication thereto by the drawer of the cheque, the instrument becomes void. However, the banker, even there being a material alteration in the cheque, did not proceed to mention the same as one among the reasons for returning of the cheque, but only stated that the cheque was returned for the reason of closure of the account by the drawer. It is clear that since the account of the drawer of the cheque was closed with the drawee Bank as on the date of the presentation of the cheque at Ex. P-1, it confined the reason for returning of the cheque only to the reason of account closed . Thus, it cannot be deduced that, had there been any material alteration in the cheque at Ex. P-1, the banker should have necessarily mentioned about the same. At the cost of repetition, it is again observed that DW-1 as a Bank Manager of the drawee Bank himself has stated that there is alteration in the date column of the cheque at Ex. P-1. Surprisingly, neither the Trial Court nor the learned Sessions Judge's Court have noticed this aspect, on the contrary, merely because there was a cheque return memo and legal notice copy, they have proceeded to hold that the guilt against the accused has been proved beyond all reasonable doubts. Had they noticed the material alteration existing in the cheque at Ex. P-1, making the instrument at Ex. P-1 void, then, they would not have proceeded to hold the accused before it guilty of the alleged offence. Since the finding of both the Trial Court as well the learned Sessions Judge's Court holding the accused guilty of the alleged offence is now established to be a perverse and erroneous finding, the same warrants interference at the hands of this Court. Thus, without discussing the other aspect of the alleged allegation of financial incapacity of the complainant to lend such a huge sum of money to the accused, suffice it to hold that the impugned judgments of both the Courts deserve to be set aside and the accused deserves to be acquitted of the alleged offence. Criminal Revision Petition stands allowed.

Summary

Issues Involved:
1. Material alteration in the cheque.
2. Financial capacity of the complainant to lend the loan amount.
3. Legality of the judgments by the Trial Court and the Sessions Judge's Court.

Issue-wise Detailed Analysis:

1. Material Alteration in the Cheque:
The accused argued that the cheque was materially altered in its date, rendering the instrument void. The cheque initially had the year printed as '19', which was scored off and replaced with '20'. The subsequent figure appeared ambiguous, interpreted differently by both parties. The Bank Manager (DW-1) confirmed the alteration but could not specify who made it. The court found that the alteration in the date was substantial and not authenticated by the drawer, thus making the instrument void under Section 87 of the N.I. Act. The courts below failed to recognize this material alteration, leading to an erroneous conviction.

2. Financial Capacity of the Complainant:
The accused contended that the complainant lacked the financial capacity to lend Rs. 5,00,000/-. The complainant, a Medical Practitioner since 1984, argued that his income and his mother's savings enabled him to lend the amount. The Trial Court and Sessions Judge's Court did not adequately address this issue, focusing instead on the cheque and legal notice. The High Court, given the material alteration, found it unnecessary to delve into the financial capacity issue further.

3. Legality of the Judgments by the Trial Court and the Sessions Judge's Court:
Both lower courts convicted the accused based on the dishonoured cheque and the subsequent legal notice. However, the High Court found these judgments perverse and erroneous due to the overlooked material alteration. The High Court emphasized that the alteration made the cheque void, thus invalidating the basis for the conviction under Section 138 of the N.I. Act.

Conclusion:
The High Court allowed the revision petition, setting aside the judgments of the Trial Court and the Sessions Judge's Court. The accused was acquitted of the offence under Section 138 of the N.I. Act, and the case records were ordered to be transmitted back to the respective courts.