Material Alteration and Unsigned Interpolations in a Cheque Render the Instrument Void Under Section 87 of the N.I. Act

In brief

The question

1. Whether material alterations and lack of signature on a cheque attract the provisions of Section 87 of the N.I. Act, rendering the instrument void.

The court held

The High Court answered that a manipulated and unsigned cheque is hit by Section 87 of the N.I. Act and cannot form the basis of a conviction.

It also directed

The Court held that there was no merit in the appeal and no reason to interfere with the judgment of acquittal. The Acquittal Appeal was dismissed.

01Facts

The Appellant filed a complaint under Section 138 of the Negotiable Instruments (N.I.) Act, 1881, alleging she provided a friendly loan of ₹3,80,000 to Respondent No. 2.

¶ 4-5

To repay a portion, the Respondent issued a cheque for ₹1,25,000, which was returned unpaid on June 16, 2020, with the remark “Cheque not in order”.

¶ 4-5

The Trial Court convicted the Respondent, sentencing him to one year of imprisonment and a fine of ₹1,50,000.

¶ 2

On appeal, the Court of the Additional Judicial Commissioner No. VII, Ranchi, set aside the conviction and acquitted the Respondent, citing material alterations in the cheque.

¶ 2, 8

The Appellant moved the High Court, arguing that the Appellate Court's judgment contained clerical errors regarding cheque dates and numbers.

¶ 9

02Issues

i.1. Whether material alterations and lack of signature on a cheque attract the provisions of Section 87 of the N.I. Act, rendering the instrument void.

¶ 8, 11

ii.2. Whether clerical discrepancies in a judgment regarding the description of exhibits (cheque number and date) are sufficient grounds to set aside a judgment of acquittal when the underlying evidence shows interpolation.

¶ 9-11

03Law Applied

The court primarily applied Section 87 of the Negotiable Instruments Act, 1881, which dictates that any material alteration of a negotiable instrument renders the same void as against anyone who is a party thereto at the time of making such alteration and does not consent thereto.

¶ 8, 11

It also considered the evidentiary weight of Section 138 of the N.I. Act regarding the dishonor of cheques and the standards for interfering with a judgment of acquittal.

¶ 10-12

Provisions in the judgment · 2 · Linked ones open on LawLens

Negotiable Instruments Act, 1881 Section 138 Section 87

04Reasoning

The High Court observed that while the Appellant pointed out clerical errors in the Appellate Court's judgment—specifically the misrecording of the cheque number and date—these errors did not override the fundamental defect in the evidence.

¶ 9-10

Upon physical inspection of the scanned cheque (Exhibit-1), the Court found visible signs of interpolation where "Rs. One Lakh" appeared to have been added.

¶ 10-11

Crucially, the Court noted that the cheque was not signed by the drawer and the bank return memo specifically cited the reason as "Cheque not in order".

¶ 4, 11

Applying Section 87, the Court reasoned that the manipulation and lack of a valid signature made the instrument legally unenforceable. Therefore, the clerical errors in the judgment did not cause a miscarriage of justice as the acquittal was based on the factually substantiated ground of a fraudulent instrument.

¶ 11-12