How to appreciate evidence in cheque dishonour case if there is allegation that cheque is materially altered?

 If a signed blank cheque is voluntarily presented to a payee,
towards some payment, the payee may fill up the amount and
other particulars. This in itself would not invalidate the cheque.
The onus would still be on the accused to prove that the cheque
was not in discharge of a debt or liability by adducing evidence.
39. It is not the case of the respondent-accused that he either
signed the cheque or parted with it under any threat or coercion.

Nor is it the case of the respondent-accused that the unfilled
signed cheque had been stolen. The existence of a fiduciary
relationship between the payee of a cheque and its drawer, would
not disentitle the payee to the benefit of the presumption under
Section 139 of the Negotiable Instruments Act, in the absence of
evidence of exercise of undue influence or coercion. The second
question is also answered in the negative.
40. Even a blank cheque leaf, voluntarily signed and handed over
by the accused, which is towards some payment, would attract
presumption under Section 139 of the Negotiable Instruments Act,
in the absence of any cogent evidence to show that the cheque
was not issued in discharge of a debt.
41. The fact that the appellant-complainant might have been an
Income Tax practitioner conversant with knowledge of law does not
make any difference to the law relating to the dishonour of a
cheque. The fact that the loan may not have been advanced by a
cheque or demand draft or a receipt might not have been obtained
would make no difference. In this context, it would, perhaps, not
be out of context to note that the fact that the respondent-accused
should have given or signed blank cheque to the appellantcomplainant,
as claimed by the respondent-accused, shows that
initially there was mutual trust and faith between them.
42. In the absence of any finding that the cheque in question was
not signed by the respondent-accused or not voluntarily made over

to the payee and in the absence of any evidence with regard to the
circumstances in which a blank signed cheque had been given to
the appellant-complainant, it may reasonably be presumed that
the cheque was filled in by the appellant-complainant being the
payee in the presence of the respondent-accused being the
drawer, at his request and/or with his acquiescence. The
subsequent filling in of an unfilled signed cheque is not an
alteration. There was no change in the amount of the cheque, its
date or the name of the payee. The High Court ought not to have
acquitted the respondent-accused of the charge under Section 138
of the Negotiable Instruments Act.
REPORTABLE
THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NOS.230-231 OF 2019

Bir Singh  Vs Mukesh Kumar 

Indira Banerjee, J.
Dated:FEBRUARY 06, 2019.

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Whether it is permissible for complainant to fill up details of cheque beyond knowledge of accused?

In other words it would be certainly unlawful if a complainant is allowed to fill up details of cheque beyond the knowledge of the accused such that filling up date and the amount in a blank cheque.

19. In this regard it would be useful to look into the decision of this Court reported in 2011 ACD 1326 (MADRAS) P. Krishnasamy v. Deltaknit Wearable's, wherein it was held that to presume under section 139 of the N.I Act due execution of Negotiable Instrument is to be proved. Due execution means not signing a cheque but mean to give a cheque in complete form towards a legally enforceable liability.

20. It would also be useful to look into a decision of Kerala High Court 2011 ACD 1136 relying upon the decision of the Hon'ble Apex Court reported in (2003) 8 SCC 745 : AIR 2004 SC 175 and (1996) 4 SCC 596 : AIR 1996 SC 2184 holding that the procedural approach as though mere production of cheque proves all the relevant facts which prosecution must establish in a prosecution is an incorrect approach.

21. Thus firstly the complainant must allege and prove the due execution of the cheque by accused and the allegations must be established by way of evidence. In the case on hand as stated above, the complainant had utterly failed to satisfy the Court that there was due execution of cheque. The figure denoting amount found to be written in different inks and the handwriting in as much as the digits and words also differs. The different ink, pen and manipulation of the amount would show that the complainant had failed to demonstrate due execution of the cheque. Therefore, I do not find any error or illegality over the impugned order of acquittal made by the lower appellate Court.

In the High Court of Madras

(Before M.V Muralidaran, J.)

E. Dhanuskodi  v.  D. Sreedhar 

Criminal Appeal No. 814 of 2011

Decided on November 8, 2018,

Citation: 2018 SCC OnLine Mad 5124

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What constitute material impairment of tenanted premises?

In the light of these decisions, if we examine the present case we find that the Rent Controller and the Appellate Authority as well as the High Court have obviously failed to construe Section 13(2)(iii) in its proper perspective and they have failed to apply the correct legal tests for judging the nature of the constructions made by the appellant. As has been repeatedly pointed out in several decisions it is not every construction or alteration that would result in material impairment to the value or the utility of the building. In order to attract Section 13(2)(iii) the construction must not only be one affecting or diminishing the value or utility of the building but such impairment must be of a material nature i.e. of a substantial and significant nature. It was pointed out in Om Prakash v. Amur Singh MANU/SC/0791/1987 : [1987]1SCR968 that the legislature had intended that only those constructions which brought about a substantial change in the front and structure of the building that would provide a ground for the tenant's eviction and hence it had taken care to use the word "materially altered the accommodation" and as such the construction of a chabutra, almirah, opening of window or closing a verandah by temporary structure or replacing of a leaking roof or placing partition in a room or making minor alterations for the convenient use of the accommodation would not materially alter the building. It would therefore follow that when a construction is alleged to materially impair the value or utility of a building, the construction should be of such a nature as to substantially diminish the value of the building either from the commercial and monetary point of view or from the utilitarian aspect of the building.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 2471 of 1980

Decided On: 04.10.1988

 Om Pal Vs. Anand Swarup (Dead) by Lrs.

Hon'ble Judges/Coram:

R.S. Pathak, C.J. and S. Natarajan, JJ.

Citation: (1988)4SCC545

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When overwriting in cheque will not amount to material alteration in cheque dishonour case?

Per contra, the learned counsel for the first respondent has argued that the said correction in one of the digits in the amount entered in figures in Ext. P1 is nothing but material alteration within the meaning of Section 87 of the NI Act. In Ext. P1 the amount has been clearly entered in words as "Rupees one lakh and fifty thousand only". The amount has been entered in figures also. It seems that in digit "0" after the digit "15", there is overwriting. The question to be considered is whether it amounts to material alteration within the meaning of Section 87 of the NI Act? Section 87 of the NI Act clearly says that such an alteration should be a material alteration. Here, an overwriting can also be categorised as an alteration. At the same time, when the amount is clearly discernible and is written in bold letters in words as "one lakh and fifty thousand only", the mere overwriting or correction in the digit "0" in the amount entered in figures in Ext. P1 cannot be treated as a material alteration within the meaning of Section 87 of the NI Act. Had there been any overwriting or corresponding correction in the amount entered in words in Ext. P1, it could have been said that it was an alteration of material nature as contemplated under Section 87 of the NI Act. When there is no corresponding correction or alteration in the amount entered in words in Ext. P1, at any stretch of imagination, it could not have been considered as a material alteration. It seems that the Court below has unnecessarily passed a judgment of acquittal in this case.

Negotiable Instruments Act, 1881 (Central Act 26 of 1881) - Section 87--Material alteration--Mere overwriting on a digit in the amount entered in figures in a cheque does not amount to material alteration, when there is no correction in the amount entered in words in that cheque.

IN THE HIGH COURT OF KERALA

Crl. A. No. 237 of 2009

Decided On: 15.07.2016

 Rajan P.K. Vs. K. Radhakrishnan and Ors.

Hon'ble Judges/Coram:

B. Kemal Pasha, J.

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When court should not pass decree for eviction on ground of additions or alterations to tenanted premises?

The question whether the alleged additions or alterations materially impaired the value or utility of the building in question, is a mixed question of law and fact. The decision in British Motor Car Co. v. Madan Lal Saggi (dead) and another(6) also, according to the revision petitioner has to be distinguished on facts. In that case, there was evidence to show that the sheds constructed by the tenant are of permanent nature which could not be removed without doing damage to the building in question as those sheds were embedded in the floor and also in the side wall, that by constructing the three sheds of almost whole of the courtyard the tenant had not only obstructed the ventilation of the courtyard, but had also reduced the area of the courtyard considerably. The facts of that case are totally inapposite to the facts of this case, since the revision petitioner had not done any such act so as to reduce the value and utility of the building materially or permanently.

15. Shri P. B. Krishnan, learned counsel for the revision petitioner has also relied upon the decision in Waryam Singh v. Baldev Singh(7), wherein it was held that enclosing a verandah by constructing walls and placing a rolling shutter in front did not justify an inference that the value or utility of the building had been impaired, in the absence of evidence to prove that the value and utility had been affected. In Brijendra Nath Rhargava v. Harsh Wardhan(8) it was held by the Apex Court that the construction of a wooden balcony in the showroom did not amount to material alteration. In G Arunachalam v. Thondaperienambi(9) it was held that replacing of wooden plank on the front door of the building or a rolling shutter was not an alteration that caused any damage to the building and as such, it did not provide ground for eviction. It was held in G. Reghunathan v. K. V. Varghese(10) that the words used in Section 11(4)(ii) are disjunctive that the value and utility of the building should be reduced materially and permanently and so the alteration, even if it is material, in order to entitle the landlord to get an eviction, should also be of a permanent character. In that case, the door in the western wall was bricked up, the windows on the northern, western and southern walls were also bricked up, but it was found that the bricked up portions can be removed and the doors and windows restored without weakening the structure. It was also found that the level of the floor was lowered, rafters were cut, two concrete pillars were erected and rolling shutter was fixed. It was found that the lowering of the floor and tampering with the roof was of some significance and they could lead to impairment of the value or utility of the building, materially and permanently. But, it was held that it has to be judged in the light of the surrounding circumstances. It was found that the rolling shutter was fixed to provide more security to the premises. It was held that height of the floor can be restored without impairment to the structure. There the tenant contended that the securing of the premises was essential and it was for that purpose the rolling shutters were fixed and so the value of the building was only enhanced. In the light of the evidence and circumstances which emerged in that case, it was held by the Apex Court in paragraph 14 as follows:

We find that the authorities below have not approached the question from the proper perspective. They have not given sufficient emphasis to the statutory requirement of the effect being material and permanent. It is 'material and permanent'. The words are not disjunctive, like in some other Acts. Here the landlord had not proved the material and permanent impairment in value or utility. One suspects that the value and utility are enhanced. The landlord admits that he will get a higher rent if the room is again let out. We are, therefore, satisfied that interference is justified. We hold that the landlord has failed to prove that the acts of the tenant constitute the user of the building in such a manner as to destroy or reduce the value or utility of the building materially and permanently. We set aside the order for eviction under Section 11(4)(ii) of the Act.

IN THE HIGH COURT OF KERALA

R.C.R. No. 287 of 2010

Decided On: 12.07.2011

 Poolakandy Malayil Vijayan Vs. Sakeena

Hon'ble Judges/Coram:

Mr. Justice Pius C. Kuriakose and Mr. Justice N.K. Balakrishnan

Citation:2011 (3) KLT 657 : 2011 (3) KLJ 600 : 2011 (3) KHC 587 : 

ILR 2011 (3) Ker. 737

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When filling up of blank Cheque will not amounts to Material Alteration in case of dishonour of cheque?

 With regard to the instruments other than a cheque, an implied
authority is given to the holder at the time of entrusting it to fill up the
same. There may be instances where an implied authority is given to the
person, at the time of entrusting a signed blank cheque containing the
signature of the drawer of the cheque, to fill the columns therein.
 If   a   principal   or   employer   deputes   his   agent   or   employee   to
purchase an article and if the dealer fills up that signed blank cheque
leaf showing the exact amount covered by the bill showing the price of
the article sold then it cannot be said that what was handed over by the
drawer of the cheque is only a signed blank cheque leaf. In such cases an
implied authority to the trader/seller of the article to fill up the cheque
leaf can certainly be inferred. Similarly, there may also be cases where at
the time of settlement of the accounts, a particular amount was found
payable by the drawer of the cheque to the other party and if a signed
blank cheque entrusted to be filled up later is filled up in tune with the
accounts,   showing   the   actual   amount   payable   by   the   drawer   of   the
cheque to the other party, then also it can be said that there was the
implied authority to fill up the signed blank cheque leaf. There may be
such instances where the sum is ascertainable and the signed blank
cheque leaf is given to fill up the same after ascertaining the same. In
such cases there would be no difficulty to infer an implied authority
given by the drawer. Simply because the cheque is seen filled up or
written   in   the   hand   writing   of   another   person   it   cannot   lead   to   a
conclusion that only a signed blank cheque leaf was given. The person
signing the cheque may have difficulty due to many reasons to write the
cheque and it might have been filled up by the payee or by another. In
such cases it cannot be said that what was handed over was only a
signed blank cheque leaf. In all such cases the ultimate conclusion may
depend   upon   the   proof   of   the   transaction   and   execution   of   the
instrument. It must also be held that when it is a case that only a signed
blank   leaf   was   handed   over   by   the   accused,   then   he   must   offer
satisfactory explanation as to the circumstances under which the signed
blank cheque happened to be handed over. Considering the totality of

the evidence and circumstances, it is for the court to draw the inference
as to whether it was given with an implied authority to fill up the same
showing the amount ascertained or ascertainable to discharge the debt
or liability. Therefore, there may be such cases where implied authority
can be inferred. But the contention that when a signed blank cheque leaf
is handed over, it can never be filled up and that if it is filled up it would
amount to a material alteration within the meaning of using Section 87
of   the   N.I.   Act,   does   not   stand   to   rhyme   or   reason.   Similarly,   the
contention that  Section 20 of the N.I. Act is applicable to an unfilled or
blank cheque leaf also cannot be accepted. It would depend upon the
facts of each case. Therefore, it is neither a case which attracts Section
87 of the N.I. Act nor is it a case where the complainant can rely upon
Section 20 of the N.I. Act and contend that as a signed blank cheque leaf
is given it gives an authority to fill up the same according to the whim
and fancy of the payee. [See : P. Purushothaman Nair v. K. Sreekantan
Nair, 2013 (4) ILR (Ker) 115]
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE FIR/ORDER)
NO. 968 of 2014


NIKHIL P GANDHI.
Versus
STATE OF GUJARAT & 2.
CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA
Date : 15/06/2016
Citation:2016 CRLJ4338 Guj

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Whether contract will be discharged if material alteration is done in contract without consent of other party?

In support of his contention, the learned Counsel for the appellant refers to the following passage in Principles (c)f the English Law of Contract by Sir William R. Anson, Twenty-second Edition at page. 482, which runs as follows :--

If a deed or contract in writing is altered by addition or erasure, it is discharged, except as against a party making or assenting to the alteration, for 'no man shall be permitted to take the chance of committing a fraud, without running any risk of losing by the event, when it is detected.

This principle is subject to the following rules:

(a) The alteration must be made deliberately by the promisee or by one acting with his consent ; but there is a supposed rule of law that even an alteration by a stranger while the instrument is in the custody of the promisee will have the same effect. This responsibility for the acts of officious burglars cannot be supported.

(b) The alteration must be made without the consent of the other party, else it would operate as a new agreement.

(c) The alteration must be made in a material part. What amounts to a material alteration necessarily depends upon the character of the instrument, and it is possible for the character of an instrument to be affected by an alteration, which does not touch the contractual rights set forth in it.

Madras High Court

S. Perumal Reddiar vs Bank Of Baroda By Its Power Of ... on 7 March, 1980

Equivalent citations: (1981) 1 MLJ 419,AIR1981Mad180

Author: S Swamikkannu

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