The High Court of Kerala in case concerning Section 138 of the NI Act has made it clear that the burden to prove that alteration in a cheque apppear to be overwritten was done by accused and not him/her to escape allegation of material alteration and make Section 138 NI Act enforcable on the accused.
The case the Court was put up with goes around wherein the accused borrowed an amount of ₹65,000/- from her on the promise that he would repay it after three months. After the expiry of the aforesaid period, the complainant demanded the amount from the accused. Then, the accused signed and delivered a cheque for ₹70,000/- to her. The complainant presented the cheque in the bank. It was dishonoured for the reason that there was no sufficient amount in the account of the accused. The complainant then sent a lawyer notice to the accused demanding payment of the amount of the cheque. The accused didn't accept the notice though he received intimation regarding the notice from the postal authorities. The accused did n't pay the amount.
The case was initially disposed of by the trial court by convicting and sentencing the accused for the offence punishable under Section 138 of the Act. The accused though challenged the said judgment in appeal before the Court of Session wherein Court set aside the order of conviction and sentence and remanded the case to the trial court to enable the complainant to adduce further evidence in the case.
During the trial, many evidences and documental proves marked on the side of the complainant. The accussed produced no further eveidence and he exmained himself again.
The complainant was later instituted by PW1, the power of attorney holder of the complainant to which the accussed raised question to PW1s competancy to institute the complaint.
The High Court found that PW1 had the authority to institute the complaint on behalf of the complainant.
It stated, that the power of attorney holder is the agent of the grantor. When the grantor authorises the attorney holder to initiate legal proceedings and the attorney holder accordingly initiates such legal proceedings, he does so as the agent of the grantor and the initiation is by the grantor represented by his power of attorney holder and not by the attorney holder in his personal capacity. True, the power of attorney holder cannot file a complaint in his own name as if he is the complainant. He can initiate criminal proceedings on behalf of the principal. Filing of a complaint under Section 138 of the Act through the power of attorney holder is perfectly legal and competent (See A.C Narayanan v. State of Maharashtra : AIR 2014 SC 630).
The accused had also alleged in the trial court that Ext.P1 cheque is void on account of material alteration. The trial court accepted this plea and found that material alteration of Ext.P1 cheque was effected by the complainant. Consequently, the trial court found the accused not guilty of the offence punishable under Section 138 of the Act and acquitted him.
The High Court took notice of the allegation made for material alteration and found,
On a perusal of Ext.P1 cheque, it is seen that the name “Kousthubhan” (the name of the accused) was initially written as the name of the payee. It is seen that the name of the payee written as “Kousthubhan” is struck off and the name of the complainant is written in the cheque as the payee. Therefore, it is evident that there was alteration made in the Crl.A.No.2535/2008 8 cheque with regard to the name of the payee. The question is whether it is a material alteration or not.
The High court declared alteration of the payee's name in a cheque as material as it affects the character of the instrument, and so also the relationship of the parties and their legal position as originally expressed. It so concluded that material alteration of Ext.P1 cheque was effected with regard to the name of the payee.
The High Court further stated that party who consents to the alteration as well as the party who made the alteration are not entitled to complain against such alteration. If the drawer of the cheque himself altered the cheque, he cannot take advantage of it later by saying that the cheque became void as there is material alteration thereto. Even if the payee or the holder of the cheque made the alteration with the consent of the drawer thereof, such alteration also cannot be used as a ground to resist the right of the payee or the holder thereof. It is always a question of fact whether the alteration was made by the drawer himself or whether it was made with the consent of the drawer. It requires evidence to prove the aforesaid question whenever it is disputed (See Veera Exports v. Kalavathy: AIR 2002 SC 38).
On observing the past happening in the case the High Court came across the fact that the power of attorney holder of the complainant, does not throw any light with regard to the circumstances under which alteration was made in the cheque with regard to the name of the payee. In his cross-examination he hasn't mentioned correcting.
The High Court highlighted that complainant was examined before the court below after the remand of the case. Even then, in examination-in-chief (proof affidavit), the complainant has not stated anything about the correction seen or made in the cheque with regard to the name of the payee and even the evidences given by her are silent on this aspect of the story. But when in cross-examination she was confronted with the correction seen in the cheque, she admitted that the name of the payee written in the cheque is seen corrected and would then say that she received the cheque in the same condition as shown to her in the court. She also stated that there is difference in the ink with which the name of the payee is written and the ink with which the date in the cheque is written.
The High Court concluded that it is her version that when the accused gave the cheque to her, there was already correction in it with regard to the name of the payee and at the cheque is not attested or countersigned by the accused this juncture, it is to be noted that the correction in.
The High Court further said that when the cheque contained a correction with regard to the name of the payee, which was not even attested by the signature of the accused, it is highly improbable that the complainant would have accepted it. The complainant is not a rustic and illiterate lady. She is the director of a book publishing company. In such a situation, the plea of the complainant that she accepted the cheque given by the accused which contained a correction of the name of the payee, cannot be believed.
It stated that when there is an alteration in the cheque with regard to the name of the payee, the burden is upon the complainant to prove that such alteration was made by the accused himself or that it was made with the consent of the accused.
In the particualar case, the Court said that the evidence of PW1 and PW2 does not prove that the alteration in the cheque with regard to the name of the payee was made by the accused himself or that it was made with his consent.
The High Court on this aspect clearly stated that the effect of making a material alteration on a negotiable instrument without the consent of the party bound under it is exactly the same as that of cancelling the instrument. By alteration, the identity of the instrument is destroyed. If there is any material alteration in the cheque which renders it void, no criminal prosecution can be launched based on such a cheque (See Ramachandran v. Dinesan: 2005 (1) KLT 353).
The High Court on the basis of fact that material alteration has been done to the cheque upholds the Trial Court's order of acquital of the accussed.
It said, "Material alteration of the cheque, without the consent of the drawer, makes the instrument void and no criminal action would lie on the basis of such an instrument."
The order has been passeb by Judge R.NARAYANA PISHARADI on 26-07-2019.
Read Order Here:
