Cheque Altered Without Drawer’s Consent Is Void, No Offence Under Section 138 NI Act Can Be Made Out: Himachal Pradesh High Court Acquits Accused

“Presumption Under NI Act Disappears Once Material Alteration Is Proved……Material Alteration in a Negotiable Instrument Renders It Void—Presumption of Legality Falls Flat When Document Itself Is Unlawful” - High Court of Himachal Pradesh set aside concurrent convictions of the petitioner under Section 138 of the Negotiable Instruments Act, 1881 (NI Act). Justice Rakesh Kainthla held that a cheque altered without the consent of the drawer amounts to a material alteration under Section 87 of the NI Act and becomes void, thereby extinguishing the liability it was meant to discharge.

The court found that there was a clear alteration in the loan account number on the face of the cheque which was never authenticated or consented to by the accused. As such, the cheque was void, and the petitioner could not be held guilty under Section 138 of the NI Act.

Loan Granted, Cheque Issued, But Legal Deficiencies Overwhelm the Claim

The case stemmed from a complaint filed by Bhagat Urban Cooperative Bank alleging that Rajinder Sharma had availed a consumer durable loan and issued a cheque for ₹7 lakhs towards repayment. The cheque, when presented, was dishonoured due to ‘insufficient funds’. A legal notice was issued but remained ‘unclaimed’. A criminal complaint under Section 138 of the NI Act followed.

Rajinder Sharma, however, claimed that the cheque was one of several taken by the bank as security and was misused. He further contended that the cheque had been tampered with—specifically, the account number was altered from CD-5956 to CD-6033 in different ink and without his initials or consent.

“Even If There Is Liability, Alteration Voids the Instrument”—High Court Rules Form Cannot Be Ignored for Substance in NI Act Cases

The Trial Court and the Appellate Court had both convicted the accused, relying on the admitted issuance of the cheque and the presumption under Sections 118 and 139 of the NI Act. They downplayed the alteration as immaterial, finding that some liability existed. However, the High Court found this approach fundamentally flawed.

Justice Kainthla noted:
“Even if the liability was proved, it will not take away the effect of Section 87 of the NI Act, which renders an instrument void by a material alteration.”

The Court emphasized that material alteration changes the legal character of a negotiable instrument and renders it unenforceable unless consented to by all parties. The onus to prove that the alteration was either made by the drawer or with his consent lies squarely on the complainant. In this case, no such evidence was led.

Court Relies on Supreme Court Precedents: Revisional Power Is Limited but Cannot Ignore Legal Errors

Justice Kainthla invoked the Supreme Court’s decision in Malkeet Singh Gill v. State of Chhattisgarh (2022) 8 SCC 204 and Amit Kapoor v. Ramesh Chander (2012) 9 SCC 460 to reiterate that “revisional jurisdiction under Section 397 CrPC is not appellate but exists to correct glaring legal defects.”

He clarified that both the Trial Court and Appellate Court failed to appreciate the crucial legal implications of a materially altered cheque, and that their judgments suffered from a patent error of law, thereby justifying interference.

“Cheque With Altered Account Number Becomes Void—Holder Must Explain the Change”

The court delved into the principle laid down in Geemol Joseph v. Kousthubhan (Kerala HC), where it was held that even alteration in the name of the payee is material. In this case, the alteration was in the loan account number, which was scored off and rewritten in different ink without authentication.

“K.C. Sharma (CW1), the bank’s witness, admitted the alteration in his cross-examination but failed to explain it or show that it was made with the accused’s consent,” the court observed. “Therefore, the cheque would become void, and no liability would arise by its dishonour.”

“Burden to Prove Validity of Altered Cheque Lies on the Complainant”—Court Reiterates Doctrine from Jayantilal Goel Case

Citing Jayantilal Goel v. Zubeda Khanum (AIR 1986 AP 120), the Court reaffirmed that where a negotiable instrument appears materially altered, “the burden lies on the party presenting the instrument to show that the alteration was not improperly made.”

Justice Kainthla underlined:
“When a party relies on an instrument which shows signs of alteration, and fails to explain how and why it was altered, such a party must fail.”

“Presumption Under NI Act Is Rebuttable—Once Defence Evidence Is Led, The Burden Shifts Back”

The Court also rejected the argument that once issuance of the cheque is admitted, a conclusive presumption arises. Citing Rajesh Jain v. Ajay Singh (2023) 10 SCC 148, it was clarified that:

“The presumption disappears once evidence is led. It does not override substantive legal defects like voidness due to material alteration.”

Further, the Court noted that even the bank's witness (CW1) had admitted that only ₹1.92 lakhs was due in May 2015, which failed to explain the issuance of a cheque for ₹7 lakhs.

 “Instrument Void, Conviction Unsustainable—Trial Court and Appellate Court Erred in Law”

The High Court concluded:
“Both the learned Courts below failed to advert to the material aspect of the case, and the judgments and order passed by them cannot be sustained.”

The revision was allowed. The conviction dated 14.10.2022 and sentence dated 17.10.2022 passed by the Trial Court, and affirmed by the Appellate Court, were set aside. The accused was acquitted of the charge under Section 138 NI Act.

Date of Decision: 9 September 2025