2004 (8) TMI 783 - HC - Indian Laws

2025 (4) TMI 946 - HC

ISSUES PRESENTED and CONSIDERED

The core legal issue considered was whether the accused committed an offence under Section 138 of the Negotiable Instruments Act due to the dishonor of a cheque issued to the complainant. The specific questions included:

Whether the cheque in question was materially altered, thus invalidating it under the provisions of the Negotiable Instruments Act.
Whether the presumption under Sections 118 and 139 of the Negotiable Instruments Act was applicable and if so, whether it was adequately rebutted by the accused.
Whether the acquittal of the accused by the trial court was justified based on the evidence and legal standards.

ISSUE-WISE DETAILED ANALYSIS

Material Alteration of the Cheque

Relevant Legal Framework and Precedents: Section 18 of the Negotiable Instruments Act specifies that a cheque must be honored based on the amount written in words. Material alterations to a cheque, such as changes to the amount, must be attested by the drawer's full signature to remain valid.
Court's Interpretation and Reasoning: The Court noted that the complainant admitted to writing the payee's name and the amount on the cheque. The cheque showed discrepancies between the figures and the words, with an insertion in the amount in words that was not attested by the drawer. This was deemed a substantial material alteration.
Key Evidence and Findings: Testimony from P.W.2, the Bank Manager, confirmed that the cheque would not have been honored even if funds were available due to the material alteration. The alteration involved inserting the words for "seven hundred" between "eleven thousand" and "seventy-five," creating a mismatch with the figures.
Application of Law to Facts: Given the alteration without attestation, the Court found that the cheque was materially altered, thus invalidating it under Section 18 of the N.I. Act.
Treatment of Competing Arguments: The appellant argued that the cheque was valid since the signature was admitted, and no independent evidence was provided by the accused. However, the Court focused on the material alteration, which was a sufficient ground for acquittal.
Conclusions: The Court upheld the trial court's decision that the material alteration justified the cheque's dishonor, leading to the accused's acquittal.

Presumption under Sections 118 and 139 of the N.I. Act

Relevant Legal Framework and Precedents: Sections 118 and 139 of the N.I. Act create a presumption in favor of the holder that the cheque was issued for consideration and the holder received it in due course.
Court's Interpretation and Reasoning: The Court acknowledged the presumption but noted that it can be rebutted by the accused by demonstrating the probability of an alternate scenario.
Key Evidence and Findings: The accused claimed the cheque was issued to Maman, a third party, and was blank when handed over. The evidence suggested the complainant filled in the details, leading to the material alteration.
Application of Law to Facts: The Court found the accused's explanation plausible, supported by the evidence of material alteration, which effectively rebutted the presumption under Sections 118 and 139.
Treatment of Competing Arguments: The appellant's reliance on the presumption was countered by the evidence of alteration, which the Court found more convincing.
Conclusions: The presumption under Sections 118 and 139 was effectively rebutted, supporting the acquittal.

SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "A mere filling of figures in the cheque will not amount to material alteration when the cheque is in the hands of the payee."
Core Principles Established: The validity of a cheque can be compromised by material alterations not attested by the drawer. The presumption of validity under Sections 118 and 139 can be rebutted by demonstrating plausible alternate scenarios.
Final Determinations on Each Issue: The Court determined that the material alteration of the cheque justified its dishonor, and the presumption of validity was adequately rebutted by the accused's evidence. Consequently, the acquittal was upheld.