Unauthenticated Alteration In Cheque Date Renders It Void: Kerala High Court

The Kerala High Court has recently held that an alteration in the date of a cheque that is not authenticated by the drawer's full signature amounts to a material alteration and renders the cheque void, while upholding an acquittal in a cheque dishonour case.

Justice A. Badharudeen held:

“When there is alteration of the date in the cheque which is not authenticated by putting the full signature of the drawer on the place of alteration, the same operates as a material alteration and the same makes the instrument void.”

The Court was hearing an appeal filed by a complainant challenging a November 2006 judgment of the Judicial First Class Magistrate Court-I, Thodupuzha, which had acquitted the accused in a prosecution under Section 138 of the Negotiable Instruments Act.

According to the complaint, the accused had allegedly issued a cheque dated September 20, 2005 for ₹55,000 towards discharge of a liability. When the cheque was presented for encashment through Kodikulam Service Co-operative Bank, it was dishonoured.

The bank returned the cheque with the remarks “alteration in date” and “requires full signature”. Despite issuance of a legal notice, the amount remained unpaid and the complainant initiated criminal proceedings.

The trial court acquitted the accused after finding that although there were insufficient funds in the account of the drawer to honour the cheque, it had been dishonoured for the reasons “alteration in the date” and “requires full signature”. It held that the cheque was void because of a material alteration and that a criminal prosecution based on the cheque could not succeed.

Before the High Court, counsel for the complainant argued that the correction in the date had been made by the drawer at the time of issuance of the cheque. It was further argued that the complainant was entitled to the benefit of the presumption under Section 139 of the Negotiable Instruments Act and that there was no material alteration rendering the cheque void.

Examining the cheque, the Court observed that the figure “05” showing the year as 2005 had been rewritten after erasing the earlier entry. The Court also noted the accused's case that the cheque had been issued during 2004 and that the figure “04” had later been corrected as “05” without his authentication.

Referring to Section 87 of the Negotiable Instruments Act, which deals with material alteration, the Court held:

“Thus, if there is alteration in the date of the cheque, the same should be authenticated by the drawer, and if there is alteration after the sharing of the common intention of the drawer and the drawee to do so, as authenticated by the drawer by putting his full signature on the place of alteration, then it cannot be treated as a material alteration.”

The Court held that where the date in a cheque is altered without authentication by the drawer through his full signature at the place of alteration, the alteration operates as a material alteration and renders the instrument void.

The Court further held:

“Be it so, Ext.P1 is a void cheque, as the alteration in the date was not authenticated by the drawer/accused with his full signature, and the same cannot be the basis of the prosecution.”

Agreeing with the trial court's view that the cheque was void, the High Court upheld the acquittal and dismissed the appeal.

For Appellant: Advocate Unnikrishnan V Alapatt

For Respondents: Advocate Renjith B Marar, L Rajesh Narayan and Vipin Narayan A, PP