Recently, the Jammu & Kashmir and Ladakh High Court examined whether alleged alterations in a cheque, claimed to be forged by the payee, can short circuit criminal proceedings under the Negotiable Instruments Act, stepping in to scrutinise an accused’s attempt to halt a Rs.14 lakh cheque bounce trial at the threshold.
The controversy arose after a complainant accused the petitioner of defaulting on repayment of Rs.14 lakh and issuing a cheque that was dishonoured by the bank due to unauthenticated alterations. A statutory demand notice followed, but payment was not made, prompting criminal proceedings under Sections 138 and 142 of the Negotiable Instruments Act. The trial court took cognisance and issued process, which the accused challenged before the High Court, alleging that the cheque had been forged by the complainant, claiming the original amount was merely Rs.14,000 and that the figures had been manipulated to read Rs.14 lakh. The petitioner also asserted that sufficient funds were available in his account, and that the dishonour was a direct consequence of the alleged tampering.
Rejecting the plea to derail the prosecution at the pre-trial stage, the Court held that dishonour resulting from deliberate alterations meant to prevent encashment could still attract criminal liability under Section 138. Relying on binding Supreme Court precedent, the Court observed that dishonour reasons such as unauthenticated overwriting fall within the statutory mischief when intended to defeat payment, noting that “so long as an act or omission on the part of the drawer is intended to prevent the cheque being honoured, the dishonour would become an offence under Section 138.”
Crucially, the Court emphasised that the dispute over who made the alteration, drawer or payee, is a pure question of fact requiring evidence, and cannot be decided in a quashing petition. It also flagged the petitioner’s failure to reply to the statutory demand notice as a factor strengthening the case for trial. Consequently, the Court dismissed the petition, leaving all defences open to be raised before the trial Magistrate.
Case Title: Abdul Hamid Wani vs. Abdul Hamid Lone
Case No.: CRM (M) No.264/2022
Coram: Justice Sanjay Dhar
Advocate for Petitioner: Adv. Mudasir Bin Hassan
Advocate for Respondent: None
Read Judgment @Lateslaws.com
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