In business transactions, cheques change hands constantly. Most of the time they are honoured. When they are not, Section 138 of the Negotiable Instruments Act, 1881 provides a powerful remedy. But what happens when the cheque itself has been tampered with — when the amount written on it has been changed after it was signed?
The Hon'ble Supreme Court has addressed this directly, setting aside a conviction under Section 138 NI Act where the cheque presented for encashment had been visibly and materially altered — the amount changed from Rs 10,000 to Rs 1,10,000 through the addition of digits and words. The Court held that a materially altered cheque is void under Section 87 of the NI Act and cannot support a valid prosecution.
What Happened in This Case
The complainant presented a cheque for encashment. The cheque was dishonoured. A complaint under Section 138 was filed. Both the Trial Court and the Karnataka High Court convicted the accused-drawer, reasoning that since the accused admitted his signature on the cheque, the statutory presumption under Section 139 NI Act applied — and that the accused had not produced a handwriting expert to prove the alteration.
The Supreme Court disagreed with both courts and set aside the conviction.
The Legal Principle — Section 87 NI Act
Section 87 of the Negotiable Instruments Act provides that any material alteration of a negotiable instrument — made without the consent of all parties liable on it — renders the instrument void as against any party who has not consented to the alteration. A material alteration is one that changes the amount, the date, the payee's name, or any other essential term of the instrument.
The key ruling from the Supreme Court in this case is that:
- Where an alteration is patently clear on the face of the cheque — visible to the naked eye — courts do not need expert handwriting evidence to establish the alteration
- The alteration itself is manifest and sufficient to render the cheque void
- A void cheque cannot form the basis of a valid Section 138 prosecution — because Section 138 requires the cheque to be legally valid when presented
- The complainant was directed to reimburse to the accused the entire amount that had been paid pursuant to the conviction
The Trial Court and High Court had penalised the accused for not sending the cheque to a handwriting expert. The Supreme Court corrected this: when an alteration is visually obvious — such as extra digits or words inserted into the amount box — the court can assess it directly. Demanding expert evidence for what is plainly visible on the face of the document is an error of approach.
Types of Material Alteration That Void a Cheque
- Amount: Adding digits to the numerical field (e.g., turning 10,000 into 1,10,000) or inserting additional words in the amount written in words
- Date: Overwriting the date or year to extend the cheque's validity or make a stale cheque appear valid
- Payee name: Altering, erasing, or adding to the payee's name
- Account number or bank branch: Changes that redirect payment
- Signature: Any unauthorised modification to the signature line
Practical Implications — For Both Sides
If You Are the Drawer (Accused)
Examine the cheque carefully as soon as you receive the dishonour memo. If you can see a visible alteration — mismatched ink, inserted digits, overwriting — document it immediately with photographs before the original cheque leaves your sight. Apply to the court for production and inspection of the original cheque early in the proceedings.
If You Are the Payee (Complainant)
Never accept a cheque that has visible corrections, overwriting, or alterations — even if the drawer assures you it is valid. An altered cheque may be void regardless of what the drawer intended. If you accept such a cheque and the drawer denies having made the alteration, your Section 138 complaint may fail for this very reason.
Key Takeaways
A materially altered cheque is void under Section 87 NI Act and cannot sustain a Section 138 conviction — regardless of whether the drawer's signature on it is genuine.
Expert evidence is not always required to prove an alteration — where the change is visually obvious to the court, the court can assess it directly from the instrument.
In business transactions — always issue cheques using permanent ink, with amounts written in a way that leaves no space for additions (e.g., draw a line after the amount in words and numbers). Retain a photocopy of every cheque you issue or receive.
If you are facing a Section 138 prosecution based on an altered cheque — raise the alteration defence at the earliest stage, preserve the original cheque for court inspection, and apply for comparison with the issuing bank's records of the account.