Rajasab Vs Hulagappa (Supreme Court of India)
Supreme Court Acquits Accused under Section 138 NI Act; Patent Material Alteration of Cheque Invalidates Conviction
The Supreme Court set aside the conviction of the appellant under Section 138 of the Negotiable Instruments Act, 1881, holding that the cheque in question had undergone a patent material alteration which was evident on its face. The dispute centred on whether the cheque had originally been issued for ₹10,000 or had subsequently been altered to ₹1,10,000. On examining the cheque, the Court found that the words “One Lak” had been interpolated before the words “Ten Thousand only”, and the numeral “1” had been inserted before “10,000” in the amount box, clearly demonstrating a material alteration. The Court observed that when such alteration is apparent from the face of the instrument, the courts need not insist upon further evidence to establish it. Since the dishonoured cheque had been materially altered, it ceased to be a valid negotiable instrument for the altered amount, rendering the conviction under Section 138 unsustainable. Accordingly, the Supreme Court set aside the judgments of the Trial Court, the Appellate Court and the Karnataka High Court, acquitted the appellant, directed the respondent to refund the compensation amount of ₹1,10,000 received pursuant to the earlier orders within four weeks, and permitted the appellant to seek release of any balance amount lying deposited before the court along with accrued interest, if any.
