DISCUSS TWO CASES EACH RELATING TO “HOLDER IN DUE

CASE” , “MATERIAL ALTERATION” AND “CHEQUE BOUNCING

“ DECIDED BY HIGH COURTS/ SUPREME COURT DURING THE
YEAR 2018

Submitted to:
Prof. Shivaram Bhat
PGDBF
AIMIT

Submitted by:
Milan Sojan K
20181913
PGDBF

Date of submission: 21-01-2019

CHEQUE BOUNCE CASES
CASE 1: Manju Devi & Anr vs The State Of Bihar on 12 December, 2018
IN THE HIGH COURT OF JUDICATURE AT PATNA
======================================================
1. Manju Devi, W/o Kishun Kumar
2. Navin Kumar S/o Kishun Kumar, Both R/o vill.-
Bhagwatipur
Bazar, P.S.- Pandaul, P.O. - Bhagwatipur,
District- Madhubani,
At present residing of Mohalla- Maharani Colony,
House of
Arbind Kumar (Shanti Niwas) P.S.- Agamkuan,
District-Patna.
... ... Petitioner/s
Versus
The State of Bihar
======================================================

The petitioners apprehend their arrest in connection with Gandhi Maidan P.S. Case no. 29 of
2018, registered under Sections 341, 323, 504, 506 and 420/34 of the Indian Penal Code
and Section 138 N.I. Act.

Husband of the petitioner Manju Devi namely Kishun Kumar @ Kishun Prasad is said to have
executed an agreement to sell out his property in Rs.10 lacs and after receiving the aforesaid
sale consideration did not execute the document rather furnished two cheques one of Rs.8 lacs
and another of Rs.2 lacs drawn by both the petitioner Manju Devi Patna High Court Cr.Misc.
No.53538 of 2018(3) dt.12-12-2018 and her husband having joint account in the bank which
on presentation in the bank was bounced and on demand of money by the informant they
extended threatening.

It is submitted by learned counsel for the petitioners that there is no allegation of either
executing any document or taking any money against the petitioners. The only allegation
against the petitioners is that on demand of money by the informant, they extended threatening
to him and besides it the allegation against the petitioner Manju Devi is that she had issued
cheque towards refund of money to the informant which was bounced. The aforesaid cheque
has been jointly issued by the petitioner Manju Devi and her husband having joint account in
the bank and account is operated by her husband. Moreover utmost offence under Section
138 N.I. Act is made out against this petitioner for which complaint petition ought to have been
filed after giving required notice within stipulated period of time and not the F.I.R. and F.I.R.
filed against this petitioner is not maintainable.
In the facts and circumstances of the case, let the above named petitioners, be released on bail,
in the event of their arrest or surrender before the learned Court below within a period of four
weeks from today, on furnishing bail bonds of Rs. Patna High Court Cr.Misc. No.53538 of
2018(3) dt.12-12-201810,000/- (Ten thousand) each with two sureties of the like amount each
to the satisfaction of the Learned Sub-Judge-XVII cum A.C.J.M., Patna in connection with
Gandhi Maidan P.S. Case no. 29 of 2018, subject to the condition as laid down under Section
438 (2) of the Cr.P.C.

Section 138 in The Negotiable Instruments Act, 1881

Where any cheque drawn by a person on an account maintained by him with a
banker for payment of any amount of money to another person from out of that account for
the discharge, in whole or in part, of any debt or other liability, is returned by the bank
unpaid, either because of the amount of money standing to the credit of that account is
insufficient to honour the cheque or that it exceeds the amount arranged to be paid from
that account by an agreement made with that bank, such person shall be deemed to have
committed an offence and shall, without prejudice to any other provisions of this Act, be
punished with imprisonment for 19 [a term which may be extended to two years], or with
fine which may extend to twice the amount of the cheque, or with both: Provided that
nothing contained in this section shall apply unless.

In this case Kishun Kumar & Manju Devi agreed to sell his property for 10 lakhs and he
received money but he didn’t complete the registration. So they furnished two cheques one of
8 lakhs and other of 2 lakh but due to insufficient fund in their joint account, both the cheques
bounced and both was arrested. They fought against the State govt for the bail and they were
granted bail.

Here the promises was not fulfilled and the amount taken has to be reimbursed to the buyer,
for this cheque was issued which bounced later due to insufficient fund. According to section
138 of NI act of 1881, if the cheque bounced due to insufficient fund there is an imprisonment
of 6 months.

CASE 2: Sarabjit Singh vs State Of Punjab on 29 November, 2018

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

Sarabjit Singh
....Petitioner

Versus
State of Punjab
....Respondent
Custody certificate filed in Court today is taken on record. Petitioner along with his co-accused
Manjit Singh, who was declared proclaimed offender, was held guilty under Section 420 IPC
and sentenced to undergo rigorous imprisonment for two years and pay fine of `5,000/-; in
default thereof to undergo rigorous imprisonment for 15 days by the trial Court vide judgment
of conviction and order of sentence dated 05.06.2014 in a case arising from FIR No.176 dated
25.06.2005 registered under Sections 420, 406 and 120-B IPC at Police Station Mohali, on the
allegations that they cheated complainant Bant Kaur for `5,00,000/- on the false pretext of
sending her son abroad, which she had arranged by selling his jewellery, some property and
obtaining loan on interest. When the petitioner and his aforesaid accomplice could not fulfil
their promise, 1 of 4 CRR-4562 of 2017 (O&M) complainant Bant Kaur asked them to return
her money, whereupon they threatened her with dire consequences, in case she demanded
money. Petitioner and his co-accused also handed over a cheque to the complainant for
`3,00,000/-, but the same on presentation got bounced. Being aggrieved, petitioner
approached First Appellate Court, but remained unsuccessful as his appeal too was dismissed
vide impugned judgment dated 26.10.2017.

Learned counsel for the petitioner inter alia contends that both the Courts below failed to
appreciate that no receipt qua taking amount by the petitioner or his accomplice from the
complainant was produced by the prosecution to support its contention that complainant was
cheated for `5,00,000/-. The alleged cheque of the cheated amount was issued by co- accused
of the petitioner Manjit Singh, who is still absconding. Prosecution also failed to prove that
the petitioner was working as travel agent. There were major contradictions in the statements
of the prosecution witnesses regarding quantum of cheated amount.

On the other hand, learned State counsel, refuting above submissions of learned counsel for
the petitioner, has pleaded legality and validity of the impugned judgments. Having given
anxious consideration to the rival submissions, this Court finds that instant revision is
completely devoid of any merit for the reasons to follow. No question of law, muchless
substantial, has been raised in this revision. This Court has a very limited scope to re-
appreciate the 2 of 4 CRR-4562 of 2017 (O&M) evidence, inasmuch as revisional Court can
exercise jurisdiction only when the Courts below have not exercised their jurisdiction properly
or have acted beyond their jurisdiction or have committed some material irregularity. Perusal
of the impugned judgments of both the Courts below shows that same are based on
appreciation of evidence having no illegality or perversity in the same. Minor contradictions
in the statements of prosecution witnesses, which are insignificant in nature, have rightly
been ignored by both the Courts below, inasmuch as it is well-settled that statement of a
witness has to be read as a whole and not in isolation. From the wholesome reading of the
statement of the complainant, who is an illiterate lady, the only irresistible conclusion which
can be drawn is that petitioner and his co- accused cheated her for `5,00,000/- on the false
pretext of sending her son abroad. If the petitioner or his accomplice had not cheated the
complainant, in that eventuality, there was no occasion for issuance of a cheque by co-
accused of the petitioner namely, Manjit Singh a proclaimed offender in favour of the
complainant for `3,00,000/-. This fact in itself favours allegations of the complainant against
the petitioner and his accomplice.

Production of any evidence that petitioner was working as a travel agent was not necessary,
in as much as he and his accomplice cheated the complainant in their individual capacity and
not propagating themselves as travel agents. I have gone through the impugned judgments
of both the 3 of 4 CRR-4562 of 2017 (O&M) Courts below and find no illegality or perversity
in the same.
In this case the lady was cheated by getting five lakhs offering her son a bright future abroad.
She pledged her jewellery for setting up five lakhs. When they failed to meet up the promise
she complained and she was threatened by them. They gave three lakh cheque to her, which
bounced due to insufficient fund in account. The lower court judgement was in favour of her
and they were sentenced to two and half year imprisonment. They applied in high court but
high court also concurred the views of the lower court.

Section 420 in The Indian Penal Code

Cheating and dishonestly inducing delivery of property.

Section 120B in The Indian Penal Code

Punishment of criminal conspiracy. Whoever is a party to a criminal conspiracy to
commit an offence punishable with death, [imprisonment for life] or rigorous
imprisonment for a term of two years or upwards, shall, where no express provision is
made in this Code for the punishment of such a conspiracy, be punished in the same
manner as if he had abetted such offence.
HOLDER IN DUE CASE

CASE 1: Arumai Jebathurai vs T.K.Anitha on 1 August, 2018

THE MADURAI BENCH OF MADRAS HIGH COURT

Dated: 01.08.2018
C.Arumai Jebathurai - Petitioner
vs.
T.K.Anitha - Respondent

Heard Mr.R.J.Karthick, learned counsel appearing for the petitioner and

Mr.K.Sreekumaran Nair, learned counsel appearing for the respondent.This petition is filed
to set aside the the order dated 05.12.2015 passed in Crl.M.P.No.1884 of 2015 in C.C.No.22
of 2011 on the file of the District Munsif cum Judicial Magistrate, Boothapandi.

The petitioner is the accused in C.C.No.22 of 2011. The petitioner has approached the
respondent on 05.09.2010 and borrowed a sum of Rs.10,00,000/- (Rupees Ten Lakhs only)
and gave a cheque for the amount. Hence, the respondent has filed a case against the
petitioner under Section 138 of Negotiable Instruments Act.

On the side of the petitioner, it is stated that the petitioner has not obtained any loan from
the respondent and the writings in the cheque are not that of the petitioner. It is stated that
the notes of lesson book and the signature in the cheque should be sent for expert opinion.
On the side of the respondent, it is stated that the signature in the cheque leaf was not denied
by the petitioner and subsequently, the petitioner came up with this case and the petition is
to be dismissed. Records perused. The petitioner has examined one Sri Kumar as P.W.1
and has marked 3 documents, viz., Ex.P1 to Ex.P3 which are notes of lesson. It is seen that
the petitioner has filed Cr.M.P.Nos.7792 and 7793 of 2014 for appointment of Advocate
Commissioner and to send the disputed signature for expert opinion and the petition was
dismissed by the trial Court and in the revision, this Court has directed the petitioner to file
another petition before the lower Court.

On the side of the petitioner, it is stated that P.W.1 who was examined by the respondent
is the Headmaster and he has deposed that the documents Ex.P1 to Ex.P3 are maintained
by the petitioner herself. These documents are in the custody of the respondent. The school
in which the respondent is working is an Aided School run by her own family members.
P.W.1 has not signed those documents. Ex.P1 to Ex.P3 are not reliable and the impugned
order is liable to be set aside. On the side of the respondent, it is stated that the petitioner
has no authority to fill up the blank cheque. The petitioner is the Teacher and she has
prepared notes of lesson to the students and sent the same to the Headmaster and the same
cannot be tampered. The respondent is not having the capacity to lend such a huge amount.

On the side of the petitioner, it is stated that P.W.1 has deposed that writings were not made
in this presence and the documents are not reliable. The learned counsel appearing for the
petitioner relied on the Judgment passed by this Court in the case of Babu v.
Vinayagam reported in (2012) 4 MLJ (Crl.) 586, which reads as follows: As per Section
20 of Negotiable Instruments Act, a holder in due course is authorised or empowered to fill
up an instrument so as to make it a negotiable instrument. In this case, the petitioner had
admitted the entrustment of the cheques as well as promissory notes in blank and therefore,
the respondent/complainant as a holder in due course, is entitled to fill up the cheques and
that cannot be questioned by the petitioner/accused. The learned counsel appearing for the
respondents relied on the Judgment passed by this Court in the case of S.Gopal v.
D.Balachandran reported in AIR 2008 (NOC) 1300 (MAD.), which reads as follows:
Section 20 applies only to blank pronote and bill of exchange and not to blank cheques-
however, if drawer of cheque gives authority to payee or holder in due course to fill up
cheque signed by him- such a cheque is valid

The learned counsel appearing for the respondent relied on the Judgment passed by the
Lahore High Court in the case of A.R.Dower v. Sohan Lal Anand and others reported in
AIR 1937 Lahore 816, which reads as follows:Blank cheque drawn dishonoured by Bank-
Holder in due course of such cheque cannot hold drawer liable for amount of cheque on
dishonour. The learned counsel appearing for the respondent relied on the Judgment passed
by the Kerala Court in the case of C.T.Joseph v. I.V.Philip, in AIR 2001 Kerala 300, which
reads as follows: Section 20 not applicable because it applies only with regard to inchoate
negotiable instruments. The learned counsel for the respondent relied on the Judgment
passed by this Court in the case of T.K.Anitha v. Arumai Jebadurai in Crl.R.C.(MD)Nos.17
and 19 of 2015, which reads as follows: However, the revision petitioner/accused is at
liberty to file one more application under Section 45 of the Indian Evidence Act by
producing her Contemporaneous Signature' of the year, in which the cheque in question
was said to have been drawn.

Records perused. At this juncture, it is proper to note that the document produced by the
respondent before the trial Court is notes of lesson which have been prepared by the
petitioner during the course of teaching but the document is in her custody and the School
was run by her own family members and the notes of lesson have no other signature for
being inspected by the authorities. The petitioner has failed to comply with the order of this
Court by not producing the acceptable documents for verification of the handwriting. P.W.1
is the Headmaster in the School which was run by the family members of the respondent.
The evidence of P.W.1 and documents Ex.P1 to Ex.P3 cannot be wholly relied upon. In the
circumstances, the order of the trial Court is to be set aside and this Criminal Revision Case
is allowed. Consequently, Crl.M.P.(MD)No.2373 of 2016 is closed.

Section 20 N.I Act :

“ Where one person signs and delivers to another a paper stamped in accordance with the law
relating to negotiable instruments then in force in [India], and either wholly blank or having
written thereon an incomplete negotiable instrument, he thereby gives prima facie authority
to the holder thereof to make or complete, as the case may be, upon it a negotiable
instrument, for any amount specified therein and not exceeding the amount covered by the
stamp. The person so signing shall be liable upon such instrument, in the capacity in which he
signed the same, to any holder in due course for such amount: provided that no person other
than a holder in due course shall recover from the person delivering the instrument anything
in excess of the amount intended by him to be paid there under.”
This case in madras high court is a clear display of how a blank cheque can be misused.
In this case the petitioner has taken a loan of 10 lakhs rupees from the respondent and a gave
a blank cheque. But the petitioner denies and further says that cheque was not filled by him.
The respondent claims that she got the cheque signed and she filled up the cheque under
section 20 of the Negotiable instruments act 1881.

CASE 2 : Simeya Hariramani vs Bank Of Baroda on 20 February, 2018

HIGH COURT OF CHHATTISGARH, BILASPUR

1. Simeya Hariramani S/o Dilip Hariramani Aged About 23 Years
Patner M/s Global Packaging, R/o Baloda Bazar, Tahsil-
Baloda Bazar, District- Baloda Bazar-Bhatapara,
Chhattisgarh,

2. Dilip Hariramani S/o Khiyaldas Hariramani Aged About 48

Years Partner Global Pachaging, R/o Balodabazar, Tahsil-
Baloda Bazar, District- Baloda Bazar-Bhatapara,
Chhattisgarh, --- Petitioners

Versus

Bank of Baroda Branch Baloda Bazar, Baloda Bazar, District

Baloda Bazar-Bhatapara, Chhattisgarh, through Prashant
Kumar Gartia S/o Kartikeshwar Gartia, Branch Manager, Bank
of Baroda, Branch-Balodabazar, District- Balodabazar-
 Bhatapara, Chhattisgarh Details of Respodent Is Wrongly
Mentioned In The Cause Titile of Impugned Order Annexure-
A/1, --- Respondent

The present petition is against the order dated 28th June 2017 passed by the 3rd Additional
Sessions Judge, Balado Bazar in Criminal Revision No.H-23/2017 (Simeya Hariramani
and another Vs. Bank of Baroda) whereby the charge framed by the CJM, Baloda Bazar
vide order dated 10.02.2017 passed in Criminal Case no.54/2016 has been maintained. As
per the case of petitioner, on 07.02.2015 a complaint was filed by the Bank of Baroda
through its Branch Manager of Baloda Bazar u/s 138 of the Negotiable Instruments
Act, 1881 on 07.12.2015 when 3 cheques issued by the petitioner were dishonoured. The
details of cheques are as under

S.No Bank & A/c No. Drawer Drawee Cheq No. & Amount
Date of
date Rs.
dishonour
1 HDFC Bank Global Global 000502, 25
Lakhs 17.10.15
01528630000254 Packaging Packaging dt.17.10.15
2 HDFC Bank Global Global 00503 25
Lakhs 27.10.15
0152863000254 Packaging Packaging dt.27.10.15
3 HDFC Bank Global Global 000504 25
lakhs 31.10.15

After the complaint was filed, the same was subject of challenge about the maintainability.
Initially the objection was made before the JMFC by the petitioners/accused that the drawer
and drawee of the cheques being one and the same, the Branch Manager of the Bank cannot
maintain the complaint u/s 138 of the N.I. Act. The same having been over ruled and the
charges were framed on 10.02.2017, the same was subject of challenge before the revisional
Court. The revisional Court by impugned order dismissed the revision holding that
complaint filed u/s 138 of N.I. Act is tenable and the charges were rightly framed. Hence
this petition u/s 482 of Cr.P.C.

Learned counsel for the petitioner submits that in this case, certain cheques were issued by
the Company namely Global Packaging which were of the HDFC Bank and the drawer and
drawee were the same i.e., Global Packaging. He submits that in a case like nature when
the drawer and drawee are one and the same and when the cheques are presented for
encashment, if they are dishonoured, the provisions of section 138 of the NI Act cannot be
pressed into motion by third party. He submits that the Branch Manager without any right
or authority has filed the complaint u/s 138 of the N.I. Act, therefore, the same is
unsustainable under the law and the entire proceedings before the court below is liable to
be quashed. He further submits that the cognizance could not have been taken only on the
basis of photocopy of the cheques, therefore, the said cognizance is liable to be quashed
and no statement u/s 200 Cr.P.C. was recorded. Per contra, learned counsel for the
respondent vehemently opposes the arguments of the petitioners and submits that the said
cheques were issued for discharge of liability as against the loan which was availed by the
Company and the drawer was Global Packaging and the drawee was also Global Packaging
but the Bank inter-meddled as 'holder in due course'. It is stated that when the cheques were
presented for encashment for discharge of a debt owed to the complainant Bank they were
dishonoured, therefore, the bank has all the right or authority to maintain the complaint u/s
138 of the NI Act. He further submits that the affidavit of the complainant was enclosed
along-with complaint in terms of section 145 of NI Act, therefore, the cognizance cannot
be said to be bad in law. He further submits that all the objections can be gone into during
the course of evidence and if the original cheques are not produced then automatically the
complaint may fail. Therefore, the objection raised by the petitioner is premature.

Perused the document. The question which falls for consideration in this case is whether
the Bank was entitled for encashment of Cheque since the drawer and drawee were one and
the same. A perusal of the complaint which is placed shows that the complaint was filed by
Bank of Baroda through its Branch Manager against the petitioners u/s 138 of the N.I. Act.
As per the averments of the complaint, the petitioner respondent availed the credit loan
facility of Rs.6,73,80,000/- being a partnership firm i.e., Global Packaging and the
repayment of loan was to be made in 3 instalments. Pursuant to the promise of repayment,
3 cheques were issued in sum of Rs.25 lakhs each drawn on HDFC Bank by M/s. Global
Packaging wherein they were holding another account. The said cheques were given to the
Bank to liquidate the amount of loan which was outstanding against them. However, when
the cheques were presented in the Bank and were routed through the Bank wherein another
account of accused was maintained, the same got dishonoured and returned back with an
endorsement of "insufficient funds". Thereafter, according to the complaint, the statutory
notices were given to liquidate the amount but when the loan was not repaid, the complaint
u/s 138 of N.I. Act was filed. In the instant case, though the drawer and drawee were the
same, but the cheques which got dishonoured were handed over to the Bank for repayment
of the loan, therefore, the status of the complainant Bank under the circumstances would
be that of "Holder in Due Course".

8. Section 9 of the N.I. Act defines 'Holder in Due Course' as under:

"Holder in due course" means any person who for consideration became the possessor of
a promissory note, bill of exchange or cheque if payable to bearer, or the payee or
endorsee thereof, if (payable to order, before the amount mentioned in it became
payable, and without having sufficient cause to believe that any defect existed in the title
of the person from whom he derived his title. "The Supreme Court in similar nature of
case reported in (2001) 7 SCC 721 Punjab & Sind Bank Vs. Vinkar Sahakari Bank Ltd. , held
that so long as the instrument is in possession of a 'holder in due course' such instrument
would be operative as a bill of exchange even if the drawer and drawee are happened to
be the same person or banking institution. It was further held in paras 21 and 22 thus :

Section 142 of the Act envisages a complaint to be made in writing either by the payee or
the holder in due course of the cheque, as the case may be. Section 8 of the Act defines
"holder" as any person entitled in his own name to the possession of the cheque and to
receive or recover the amount due thereon from the parties thereto. We have no doubt that
the complainant Bank was well within its right to possess the cheque and to receive or
recover the amount covered by the instrument. "Holder in due course" means a person who
for consideration became the possessor of a cheque if payable to the bearer before the
amount became payable (vide Section 9).

In this context reference has to be made to section 118 (g) of the Act which contains a
mandate that until the contrary is proved the holder of a negotiable instrument shall be
presumed to be a holder in due course. Thus there is no escape for the court from drawing
such presumption."It is apparent from the definition of "holder in due course" that for being
a 'holder in due course' of a bill or a cheque, it was not necessary that there should be an
endorsement on the bill or cheque. Holder in due course has been defined as any person,
who for consideration, becomes the possessor of the promissory note or cheque. In the
instant case, according to the complainant the petitioners/accused had obtained the loan
from the complainant-Bank and handed over the cheques in repayment of loan and
therefore the cheques were held by the Bank in consideration of loan to liquidate the same.
A person whose banking account is overdrawn or his loan account is over due, if negotiates
with his banker a cheque to reduce the overdraft or to repay the loan the banker becomes a
holder for value of the cheque. The pre- existing debt of the loan or overdraft is a sufficient
consideration for the negotiation of a cheque to the banker. If a person hand-overs cheque
to the bank with the clear understanding to the bank that cheque is towards the debt payable
by the Company or Firm though the cheque remains in the name of the Company or Firm
but in such case the bank would become holder of the cheque in due course. The credit
given by the Bank to its customer can be discharged by cheque or payment in cash and if
the payment for liquidation of the loan is made by a cheque then the Bank would become
the 'holder in due course' irrespective of the fact that the cheque is not endorsed in favour
of the bank. The existing debt is always considered as valid consideration, therefore, in the
facts and circumstances of the present case though the drawer and drawee were the same,
the Bank was holder in due course.

Under the facts and circumstances of the case, the orders passed by the Courts below cannot
be held to be illegal and it shall always be open to the petitioners to rebut the presumption
during the course of evidence that the Bank was not a 'holder in due course' and it was not
for any consideration of liquidation of the loan. Prima facie, the complaint having been
registered on the basis of section 145of the N.I. Act upon the affidavit, the same cannot be
quashed at the threshold and the petitioners are liable to face the trial of complaint
under Section 138 of the N.I. Act. For the foregoing reasons, I do not find any reason to
interfere in the in the orders of the courts below. Accordingly, the petition is dismissed.

Section 9 in The Negotiable Instruments Act, 1881

“Holder in due course” means any person who for consideration became the possessor of
a promissory note, bill of exchange or cheque if payable to bearer, or the payee or
endorsee thereof, if 1[payable to order], before the amount mentioned in it became
payable, and without having sufficient cause to believe that any defect existed in the title
of the person from whom he derived his title.
In this case, judgment stated the customers of the bank cannot hold the view that a cheque
delivered to bank is just for clearing. The bank will automatically become a holder while
processing or clearing the cheque and bank can take action against the drawer in case of
insufficient funds.
MATERIAL ALTERATION

CASE 1 : Kaisar T.Johar vs v. Ayyappen

The complainant in C.C.No.3788 of 2001 on the file of the learned XV Metropolitan

Magistrate, George Town, Chennai, is the appellant herein. By a judgment dated 18.10.2006,
the learned Magistrate convicted the respondents /accused under Section 138 of the Negotiable
Instruments Act, 1881 [hereinafter referred to as N.I. Act] and sentenced the second respondent
to undergo simple imprisonment for 6 months with a fine of Rs.5,000/- each, in default to
undergo further period of 2 months simple imprisonment. Aggrieved over the said conviction,
the accused prepared an Appeal [in Crl.A.No.301 of 2006] before the learned V Additional
Sessions Judge, Chennai, wherein he reversed the verdict of conviction and acquitted the
respondents/accused. As against the order of acquittal dated 24.10.2009, the complainant has
preferred the present Appeal.

The facts leading to the present Appeal may be stated briefly: The appellant [complainant] is a
partnership firm carrying on the business in Galvanized Steel Tubes, Pipes, Pipe Fittings and
other allied products. On behalf of the first accused firm [first respondent], the second accused
[second respondent] in the capacity, as its partner approached the complainant and on the basis
of the orders placed by the accused, the complainant supplied the materials to the accused. The
last supply was made and the balance outstanding in this regard is Rs.2,00,000/-. In order to
discharge the liability, the accused issued a cheque bearing serial No.119234 dated 31.12.2000
for a sum of Rs.2,00,000/- drawn on Lakshmi Vilas Bank Limited, Chennai.

On receiving the said cheque, the complainant presented the same through his bankers for
realisation on 17.05.2001 and the same was returned on 18.05.2001 with an endorsement
exceeds arrangement. The fact of the dishonour was intimated to the complainant by his
bankers. Therefore, on 24.05.2001, the complainant issued a statutory notice to the respondents
through his counsel under Section 138 of N.I. Act. Having received the said notice, both the
accused have failed and neglected to pay the cheque amount. Hence, the complainant filed a
private complaint for the offence under Section 138 of N.I. Act.

In the business community, it is the common practice to receive the blank cheque or filled
cheque immediately after sending the materials. But in this case, the evidence of P.W.1 shows
such practice is not adopted in this case. In the light of the above discussions, the case of the
appellant suffers through two reasons; [i] the material alteration stated by the respondents has
not been properly explained, and [ii] the respondents raised a reasonable doubt in respect of his
liability. Hence, there is no need to interfere with the findings arrived at by the trial Judge.

In the light of the above discussion, this Court finds that the Criminal Appeal filed by the
appellant deserves no merits and accordingly, the same is dismissed. The order of acquittal
dated 24.10.2009 passed by the learned V Additional Sessions Court, Chennai, in Crl.A.No.301
of 2006 is hereby confirmed. 11.09.2018 Speaking order / Non-speaking order Index : Yes /
No Internet : Yes 1.The V Additional Sessions Court, Chennai. 2.The XV Metropolitan
Magistrate, George Town, Chennai 3.The Section Officer,
V.R. Section, Madras High Court, Chennai.

In this case date in the cheque is altered which turned to be a material alteration. It is the
common practice to receive the blank cheque or filled cheque immediately after sending the
materials. Year 1999 was altered to 2000, the cheque was presented with in 5 months. The
learned counsel appearing for the complainant contended that the Lower Appellate Court has
erred in finding the respondents guilty of the offence under Section 138 of N.I.

Section 87 in The Negotiable Instruments Act, 1881

Effect of material alteration. Any material alteration of a negotiable instrument renders
the same void as against any one 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; Alteration by indorsee. And any such alteration,
if made by an indorsee, discharges his indorser from all liability to him in respect of the
consideration thereof. The provisions of this section are subject to those of sections 20,
49, 86 and 125.

CASE 2 : Jagpal Singh vs Joginder Singh on 18 September, 2018

IN THE HIGH COURT OF PUNJAB AND HARYANA AT

CHANDIGARH
Date of decision: September 18, 2018
Jagpal Singh

...Applicant
Versus
Joginder Singh

...Respondent

Applicant-Jagpal Singh has filed this application under Section 378(4) Cr.P.C. seeking
permission for leave to appeal against respondent Joginder Singh, challenging the
impugned judgment dated 22.07.2015 passed by learned Judicial Magistrate Ist Class,
Gohana, vide which the accused-respondent was acquitted.

It is mainly stated in the application that accompanying appeal is being filed which is likely
to succeed on the grounds taken therein. It is, therefore, prayed that leave to appeal be
granted. As per the record, complainant Jagpal Singh filed a complaint against accused
Joginder Singh under Sections 138/142 of the Negotiable Instruments Act. As per
complainant's version, he and accused have friendly relations with each other and due to
said relation, both of them used to lend money to each other as and when required. In the
month of 1 of 4 December 2010, accused contacted the complainant and asked him to lend
`3,50,000/- as he was in immediate need. Keeping in view the friendly relations,
complainant gave said amount to accused with the condition that accused would repay the
same within two months along with interest. On 25.02.2011, accused handed over a cheque
bearing No.611023 dated 25.02.2011 of `3,50,000/- to the complainant, which on
presentation for encashment, was returned back dishonoured with the remarks 'Alternation
not allowed'. Legal notice was served. When the amount was not paid, then the complaint
was filed within time.

The complainant examined himself as CW-1 and CW-2 Lal Sahab Mishra and CW-3 Ved
Singh. At the close of the complainant evidence, accused was examined under Section
313 Cr.P.C. He was confronted with the evidence of the complainant. He denied all the
incriminating evidence against him and pleaded his innocence. The case of the accused is
that complainant has taken security cheque bearing No.611023 of `3,50,000/- from him
when he borrowed `3,50,000/- from the complainant. Later on, he returned the amount to
the complainant. When he asked the complainant to return the security cheque, he misused
the same and filed the complaint. It is also stated that cheque was returned unpaid for the
reason 'Alteration not allowed' and not for insufficient funds. In defence, accused examined
DW-1 Rameshwar and DW-2 Dalel Singh.

Learned JMIC, Gohana, after appreciating the evidence, acquitted the accused-respondent
vide impugned judgment dated 22.07.2015. Aggrieved from the above-said judgment,
present appeal along with application for grant of leave to appeal has been filed. 2 of
4 Lower Court record was also requisitioned. I have heard learned counsel for the applicant
and have gone through the record. The perusal of the findings given by learned Magistrate
shows that these have been given as per evidence and law. In no way, the findings can be
held as perverse or against the evidence and law. At the time of arguments, nothing has
been pointed out as to which material evidence has been misread and which material
evidence has not been considered by the Court below. Nothing has been pointed out as to
how the findings are perverse or against the law and what illegality has been committed by
learned Court below.

The cheque in question has been placed on the lower Court record. It shows that amount of
`3,50,000/- has been written in figure but in the words, amount is written as 'three lakh &
fifty rupees only'. The perusal of the cheque itself shows that it has been tampered with and
where the amount has been written in words, the cheque has been erased with some
material, which is clear on the face of it. Otherwise also, in the words, the amount is written
as 'three lakh & fifty rupees only', which shows that this blank signed cheque was misused
and it was not given in the present condition by the accused to the complainant. No ordinary
person will take such type of cheque, which from the face of it, looks tampered with,
meaning thereby, the complainant has tried to rub the figure etc. and has tampered with the
cheque. The cheque was also returned by the bank with the remarks 'Alteration not allowed'.
As there is alteration in the cheque in question and it is tampered with, therefore,
complainant is not entitled to any relief.

3 of 4 From the perusal of the judgment passed by the Court below, I find that the findings
have been given by correctly appreciating the evidence in right perspective and accused-
respondent has been rightly acquitted. In no way, the judgment can be held as perverse or
against the evidence. In view of the above discussion, I find that the impugned judgment
dated 22.07.2015 passed by learned JMIC, Gohana, is correct, as per law and evidence and
does not require any interference from this Court. No ground is made out for grant of leave
to appeal and therefore, the present application stands dismissed.
In this case between two friends who lend money each other. This time the cheque
presented was amounted to Rs. 3,50,000/- but in writing words it was only three lakhs fifty
rupees and there was tampering in this case to change the value. So the bank returned the
cheque by the explanation of material alteration not allowed.

Section 142 in The Negotiable Instruments Act, 1881

Cognizance of offences. —Notwithstanding anything contained in the Code of Criminal
Procedure,
“no court shall take cognizance of any offence punishable under section 138 except
upon a complaint, in writing, made by the payee or, as the case may be, the holder in
due course of the cheque”
The lower court dismissed the original case on the ground that the material alteration
was deliberate and bank had every right to return the cheque. Here the petitioner
wanted to leave of appeal, but the high court observed that there is no valid case in his
argument. So this petitioner was dismissed.