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.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. Leave granted.
2. The appellant, Rajasab, is aggrieved by the judgment and order dated 25.04.2025 passed by a learned Judge of the High Court of Karnataka, Dharwad Bench, in his Criminal Revision Petition No. 100116/2019.
3. By the said judgment and order, the learned Judge allowed the revision in part. While maintaining the conviction of the appellant for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881, the learned Judge reduced the fine amount from T1,15,000/- (Rupees one lakh fifteen thousand only) to T1,10,000/- (Rupees one lakh ten thousand only). This amount was directed to be paid as compensation to the complainant within the extended period of time. We are informed that the appellant paid the same pursuant to the aforestated order.
4. The question for consideration is whether the cheque in question was made out for a sum of T10,000/- (Rupees ten thousand) or whether it was materially altered so as to make it for a sum of T1,10,000/- (Rupees one lakh ten thousand).
5. The trial Court, vide judgment dated 11.08.2014, convicted the appellant, accepting the plea of the complainant that the cheque was made out for a sum of T1,10,000/- (Rupees one lakh ten thousand only). The learned District & Sessions Judge, Koppal, dismissed the appeal filed by the appellant, vide judgment dated 25.03.2019. The High Court was also not inclined to accept the plea of the appellant that the cheque in question had been materially altered.
6. A copy of the cheque in question is placed on record at page 30 Bare perusal of the said cheque clearly demonstrates that the words ‘One Lak’ were interjected before the words ‘Ten Thousand only’, and the numerical ‘1’ was inserted in the box, before ‘10,000/-‘.
7. When the alteration of the cheque is patently clear on the face of it, the Courts below ought not to have insisted on any further evidence in that regard. The material alteration of the cheque was manifest. We are, therefore, of the opinion that the conviction of the appellant, Rajasab, on the ground that the aforestated cheque was dishonoured, upon presentation, cannot be sustained.
8. All the judgments in question are, accordingly, set aside.
The amount received by the respondent pursuant to the aforestated orders shall be reimbursed to the appellant within a period of four weeks from today.
9. In the event any part of the amount deposited by the appellant is still lying to the credit of the case before the Court concerned, the appellant is at liberty to move an appropriate application for release of the said amount along with interest accrued thereon, if any.
10. The appeal is allowed in the aforestated terms.
11. Pending application(s), if any, stand disposed of.
Leave granted.
The appeal is allowed, in terms of the signed order.
Pending application(s), if any, stand disposed of
