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2025 (5) TMI 928
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....able under Section 138 of the Negotiable Instruments (NI) Act. It was asserted that the complainant is a body corporate having its head office at Dharamshala and Branch at Manali. It is engaged in the business of banking. The accused raised a loan from the complainant and issued a cheque dated 22.10.2007 for an amount of Rs. 1 lac to discharge his liability. The complainant presented the cheque before the bank of the accused, but it was dishonoured with an endorsement of insufficient funds. The complainant issued a notice to the accused asking him to pay the amount of Rs. 1 lac within 15 days from the date of receipt of the notice. However, the accused failed to pay the amount despite the receipt of the notice. Hence, the complaint was filed before the learned Trial Court to take action against the accused as per the law. 3. The learned Trial Court, found sufficient reasons to summon the accused. When the accused appeared, a notice of accusation was put to him for the commission of an offence punishable under Section 138 of N. I Act, to which he pleaded not guilty and claimed to be tried. 4. The complainant examined Man Singh (CW-1) and Nitin Hazari (CW-2). 5. The accused ....
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.... Chachoga Handloom Society and not to the bank. A bare perusal of the cheque shows that there is an interpolation in the cheque, and the name of the payee was altered. Luder Chand (DW-1) proved that the cheque was issued to the Society and not to the bank. There was no valid service as the notice was returned unserved. Learned Trial Court erred in holding that the accused was the Director of the Society. The sentence imposed by the learned Trial Court is excessive. Therefore, it was prayed that the present revision be allowed and the judgments and order passed by learned Courts below be set aside. 9. I have heard Mr. Sanjeev Kuthiala, learned Senior Advocate, assisted by Ms. Amita Chandel, learned counsel for the petitioner and Mr. I.S. Chandel and Mr. Sohan Singh Rathore, learned counsel for the respondent/complainant. 10. Mr. Sanjeev Kuthiala, learned Senior Advocate for the petitioner/accused, submitted that the learned Courts below erred in convicting and sentencing the accused. A bare perusal of the cheque shows that there is an interpolation in the name of the payee. The words 'KCC bank in the loan account' were added subsequently to the cheque. This is a material alter....
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....ection 397 of the Criminal Procedure Code (in short "CrPC") vests jurisdiction to satisfy itself or himself as to the correctness, legality or propriety of any finding, sentence or order, recorded or passed, and as to the regularity of any proceedings of such inferior court. The object of the provision is to set right a patent defect or an error of jurisdiction or law. There has to be a wellfounded error which is to be determined on the merits of individual cases. It is also well settled that while considering the same, the Revisional Court does not dwell at length upon the facts and evidence of the case to reverse those findings. 14. This position was reiterated in State of Gujarat v. Dilipsinh Kishorsinh Rao, 2023 SCC OnLine SC 1294, wherein it was observed: "13. The power and jurisdiction of the Higher Court under Section 397 Cr. P.C., which vests the court with the power to call for and examine records of an inferior court, is for the purposes of satisfying itself as to the legality and regularity of any proceeding or order made in a case. The object of this provision is to set right a patent defect or an error of jurisdiction or law or the perversity which has crep....
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....s apparent from a simple review of the cheque. Maan Singh Thakur (CW-1) has not explained who wrote these words. 17. It was held in Narayan Prasad Rai v. Ghanshyamlal, 1960 SCC OnLine MP 141: ILR 1960 MP 999: AIR 1961 MP 62 at page 1002 that any material alteration will make the instrument void. It was observed: "Section 87 of the Negotiable Instruments Act is as follows: "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. The plain meaning of this section, as it stands, is that if any material alteration is found in a negotiable instrument, the instrument itself becomes void, and the party basing its claim upon it is precluded from claiming anything. This result follows irrespective of the fact whether the party concerned was responsible for the alteration or whether it was made by someone else without their consent or knowledge. This interpretation of the provision is hard on the innocent holder of the instrument. On the other hand, Shri R.K. Pandey contends that section 87 is attracted only if the alteration has been pro....
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....appears to have been altered, the Court will not receive it, or act upon it, till it is most satisfactorily proved by all the subscribing witnesses at the least, and other evidence, that alteration was made antecedently to Signature." The obvious implication of these observations is that if no such proof is forthcoming, the alteration shall be presumed to have been made after the instrument was executed. To the same effect is the following passage in Mst. Khoob Conwur v. Baboo Moodnarain Singh [(1861-64) 9 Moo IA 1.]. "It may be conceded chat, in an ordinary case, the party who presents an instrument, which is an essential part of his case, in an apparently altered and suspicious state, must fail, from the mere infirmity or doubtful complexion of his proof, unless he can satisfactorily explain the existing state of the document." Although their Lordships held that the presumption may be rebutted by the appearance of the document itself, but the principle laid down obviously is that he who produces an altered document must prove how the alteration was made. The same view has been consistently taken by this Court. In Kanhayalal v. Sitaram [20 NLR 7....
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....iff." 19. It was held in C. Sonamuthu v. R. Barsha Beevi, 2013 SCC OnLine Mad 386: (2013) 1 MWN (Cri) DCC 113 that any material alteration in the instrument will make it void. It was observed : 16. At this juncture, this Court aptly quotes the decision, T. Kalavathi v. Veera Export, 2002 BC 1247 Mad., wherein it is held that "where material alteration made by the Accused in Negotiable Instruments Act, after the expiry of the period of validity, it would render the said instruments void, hence the Complaint on the basis of invalid, Negotiable Instruments Act could not be maintained." 17. The effort of Section 87 of the Negotiable Instruments Act is that such a document is void and as such non-est. The technical defence or absence of a plea should not drive the Court on such occasion, especially with reference to the contention and evidence. 18. Ordinarily, 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, unless it was made in order to carry out the common intention of the original parties. Any such alteration, if made by a....
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..... John : (1977) 1 SCC 379: AIR 1977 SC 336). 16. Alteration of the payee's name in a cheque is material which affects the character of the instrument, and so also the relationship of the parties and their legal position as originally expressed. Therefore, it has to be concluded that material alteration of Ext.P1 cheque was effected with regard to the name of the payee. 17. Section 87 of the Act reads as follows: "87. 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 - 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 and 86 and 125. 18. The party who consents to the alteration, as well as the party who made the alteration, are not entitled to complain against such alteration. If the drawer of the cheque himself altered....
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....eing the authorised signatory/Director is not sustainable. 28. Admittedly, the society was not arrayed as a party. The Society is a juristic person under the H.P. Co-operative Societies Act. It was laid down by the Hon'ble Supreme Court in Aneeta Hada v. Godfather Travels & Tours (P) Ltd., (2012) 5 SCC 661 that it is not permissible to prosecute the Directors in the absence of the Company. It was observed that "58. Applying the doctrine of strict construction, we are of the considered opinion that the commission of the offence by the company is an express condition precedent to attract the vicarious liability of others. Thus, the words "as well as the company" appearing in the section make it unmistakably clear that when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence, subject to the averments in the petition and proof thereof. One cannot be oblivious to the fact that the company is a juristic person and it has its respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a....
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....make specific averments against the company in the complaint for the commission of an offence under Section 138 of the NI Act, the same cannot be rectified by taking recourse to general principles of criminal jurisprudence. Needless to say, the provisions of Section 141 impose vicarious liability by deeming a fiction which presupposes and requires the commission of the offence by the company or firm. Therefore, unless the company or firm has committed the offence as a principal accused, the persons mentioned in sub-sections (1) and (2) would not be liable to be convicted based on the principles of vicarious liability." 32. Therefore, in view of the binding precedents of the Hon'ble Supreme Court, the prosecution of the Society is necessary before the accused can be held vicariously liable. Since Society has not been arrayed as the accused, therefore, the accused cannot be held vicariously liable. 33. Learned Courts below did not have the advantage of the judgment of the Hon'ble Supreme Court in Anita Hada (supra) and could not consider whether the petitioner/accused could be held liable in the absence of Society. Hence, they committed a jurisdictional error while convicting a....