M/S Anil Agro Industries and Anr v. M/S Bhoday Steel Rolling Mills

INoTHEoHIGHoCOURToOFoPUNJABoANDoHARYANAoAToo o CHANDIGARHo o o o o o o CRM-M-23251-2015o o DateoofoDecision:-o16.01.2023o o M/SoANILoAGROoINDUSTRIESo&oANOTHERo o ,,Petitionerso Versuso o M/SoBHODAYoSTEELoROLLINGoMILLSo ,,Respondento o CRM-M-36782-2014o o SUDHAoMITTALo ,,Petitionero Versuso o M/SoBHODAYoSTEELoROLLINGoMILLSo ,,Respondento o CORAM:o HON'BLEoMR.oJUSTICEoJASJIToSINGHoBEDIo o Present:o Mr.oAvnishoMittal,oAdvocateowithoo Ms.oIshikaoJain,oAdvocateoo forotheopetitioner(s).o o Mr.oPrateekoGupta,oAdvocateoandoo Mr.oNitinoGupta,oAdvocateoo forotheorespondent(s).oo o o JASJIToSINGHoBEDI,oJ.o o o o ThisoorderoshallodisposeoofotwoopetitionsobearingoNo.CRM-M-23251-2015o titledo aso M/so Anilo Agroo Industrieso &o Anothero Versuso M/so BhodayoSteeloRollingoMillsoandoCRM-M-36782-2014otitledoasoSudhaoMittalo VersusoM/soBhodayoSteeloRollingoMills.oForotheosakeoofoconvenience,otheo factsoareobeingotakenofromoCRM-M-23251-2015oasobothotheseopetitionsoareo arisingooutoofotheosameocomplaintoandosummoningoorder.o

2.o o TheopresentopetitionsohaveobeenofiledounderoSectiono482oCr.P.C.oo foro quashingo ofo theo criminalo complainto No.105-Ao datedo 24.04.2013o (AnnexureoP-1)ounderoSectiono138oofoNegotiableoInstrumentsoAct,o1881,o

CRM-M-23251-2015o o o o o o o o -2-o

summoningoorderodatedo24.10.2013o(AnnexureoP-3)opassedobyotheoCourtoofo stJudicialo Magistrate,o 1 o Class,o Amloh,o Districto Fatehgarho Sahib,o theo accusationo ordero datedo 06.08.2014o (Annexureo P-2)o alongo witho allo subsequentoproceedingsoarisingotherefrom.o

3.o o Theobriefofactsoasoemanatingofromotheopleadingsoareothatotheo accused/petitionerso purportedlyo availedo ao loano fromo theo complainant/o respondentoforotheopurposesoofobusinessoofotheirofirmoaccusedoNo.1.oTheo accusedo agreedo ando assuredo too repayo theo saido loano amounto alongo witho interesto @o 12o %o pero annumo too theo complainant/respondent.oAso pero theo assuranceogivenobyotheoaccused,otheocomplainantoadvancedoaoloanotootheo accusedo@o12o%operoannum.oTheototaloloanoavailedobyotheoaccusedowaso Rs.15,00,000/-ovideoChequeono.3162767odatedo03.08.2011oforoanoamountoofo Rs.7,00,000/-oandoChequeono.592801odatedo08.08.2011oforoanoamountoofo Rs.8,00,000/-.o o o Overoaoperiodoofotime,otheoaccusedoareostatedotoohaveopaidobacko someo parto ofo theo loano advancedo alongo witho interesto too theo complainant/respondentoafterodeductingoTDSoandotheorecordsoofotheosameo wereoenteredointootheoaccountobooksoofotheoaccusedoandotheocomplainant.o Aftero adjustingo theo accounto betweeno themselves,o aso ono 31.03.2012,o ano amounto ofo Rs.10,74,250/-o remainedo too beo paido byo theo accusedo too theo complainant.oAsoono31.12.2012,otheoamountoincreasedotooRs.11,70,933/-.o Withoaoviewotoodischargeotheirolegaloliabilities,oaochequeoNo.043464odatedo

08.01.2013oforoaosumoofoRs.11,50,000/-odrawnoonoUnionoBankoofoIndia,o Brancho Mandio Gobindgarho waso issuedo ino favouro ofo theo complainant/respondent.oTheoaccusedoSachinoMittalopurportedlyosignedotheo cheque,owhereasotheoaccusedoSudhaoMittalopurportedlyosignedotheomaterialo alterationsoonotheosaidocheque.oHowever,otheocomplaintodoesonotomentiono

CRM-M-23251-2015o o o o o o o o -3-o

theofactumoofoalterations.o o o Theosaidochequeowasodishonouredoonoaccountoofotheofactothato thereowasomaterialoalterationoinotheochequeoandoitorequiredotheofullosignatureso ofotheodrawer.oThereafter,oitowasopresentedoonceoagainoandotheoreasonoforotheo subsequento dishonouro waso thato theo accounto hado beeno closed.o Ito mayo beo mentionedohereothatoonlyotheosubsequentodishonouroisospokenooffoinotheo complaint.oo oo Thereafter,o ao legalo noticeo waso servedo upono theo accusedo ando pursuanto thereto,o theo complainto undero Sectiono 138o ofo Negotiableo InstrumentsoActocameotoobeofiledoono24.04.2013.oTheocopyoofotheocomplainto isoannexedoasoAnnexureoP-1otootheopetition.oo o o Pursuantotootheofilingoofotheocomplaint,otheoaccused/petitionerso cameotoobeosummonedoforohavingocommittedotheooffenceounderoSectiono138o ofoNegotiableoInstrumentsoAct.oTheocopyoofotheosummoningoorderodatedo

24.10.2013oisoannexedoasoAnnexureoP-3otootheopetition.o o o Thereafter,onoticeoofoaccusationowasoservedouponotheoaccusedo ono06.08.2014.oTheocopyoofotheosaidoaccusationoisoannexedoasoAnnexureoP-2o tootheopetition.oo

4.o o Theoaforementionedocomplaint,osummoningoorderoandonoticeo ofoaccusationoalongowithosubsequentoproceedingsoareounderochallengeoino theseopetitions.oo

5.o o Theo maino contentiono raisedo byo theo learnedo counselo foro theo petitioneroisothatothereoisomaterialoalterationoandointerpolationoinotheochequeo whicho waso ino contraventiono ofo theo RBIo Guidelines.oAo copyo ofo theo saido guidelines/instructionsoareoannexedoasoAnnexureoP-4/Aotootheopetition.oo o o TheosignaturesoofoSudhaoMittalo(petitioneroinoCRM-M-36782-2014)oatofouroplacesoareodifferent.oTheonameoofotheobeneficiaryohasobeeno

CRM-M-23251-2015o o o o o o o o -4-o

changed/alteredo aftero makingo over-writings/cuttings.o CW1-Balwindero Singh,oClerk,oUnionoBankoofoIndia,oBranchoMandioGobindgarhohasostatedoino hisocross-examinationothatotheochequeohadobeenoreturned/dishonouredoforo theofirstotimeoonoaccountoofocancellation/alterationoinotheochequeoandotheo sameorequiredotheofullosignaturesoofotheodrawer.oAsoperotheoreportodatedo

05.09.2014o (Annexureo P-5)o ofo theo Handwritingo Expert,o theo chequeo ino questionowasoforgedoandofabricated.oItoisotherefore,otheocaseoofotheopetitionero (CRM-M-23251-2015)othatoasotheochequeowasoforgedoandofabricated,onoo offenceounderoSectiono138owasomadeoout.oo o o WithorespectotootheocaseoofoSudhaoMittalo(petitioneroinoCRM-M-36782-2014),oitoisoinoaddition,opleadedothatosheowasoonlyotheomotheroofo accusedoNo.2o(SachinoMittal).oSheowasoneitheroaopartneronoroaoproprietoroofo theosaidofirmoM/soAniloAgrooIndustriesoandoasosuchotheocomplaintowasonoto maintainableoagainstoher.oo

6.o o Theo respectiveo replieso haveo beeno filedo byo theo respondent/complainanto ino botho theseo petitions.o Aso pero theo replyo datedo

11.12.2015oinoCRM-M-o23251-2015,opetitioneroNo.2-SachinoMittalowasotheo soleoproprietoroofopetitioneroNo.1oproprietorshipofirm.oTheopetitioneroNo.2o SachinoMittaloalongowithohisomotheroSudhaoMittalo(petitioneroinoCRM-M-36782-2014)owereoactivelyoinvolvedoinotheobusinessoandodailyofunctioningo ofotheoaccusedoconcern.oThough,otheochequeowasodrawnoandosignedobyotheo accusedoSachinoMittal,ohowever,oalterationsowereomadeoonotheosaidochequeo whichowereodulyosignedobyoSudhaoMittal.oSachinoMittal,opetitioneroNo.2,o proprietoroofo petitionero No.1o hado executedo ao Specialo PoweroofoAttorneyo datedo16.06.1995oinofavouroofohisomotheroauthorizingoherotoosignochequesoono hisobehalfowithorespectotootheoaccountomaintainedoatoUnionoBankoofoIndia,o MandioGobindgarh.oTheocopyoofotheoSpecialoPoweroofoAttorneyoisoannexedo

CRM-M-23251-2015o o o o o o o o -5-o

asoAnnexureoR2/1.oo o o Theochequeoinoquestionoalongowithotheoalterationsohadobeeno handedooverotootheoansweringorespondentobyotheoaccusedoandothereowasonoo reasonoforotheocomplainantotoomakeoalterations/changesoonotheosaidochequeo toohisoownodetriment.oTheoreportoofotheohandwritingoexpertoproducedobyotheo accused/petitionero couldo noto beo reliedo upono ato thiso stageo ino summaryo proceedingso undero Sectiono 482o Cr.P.C.o ando theo petitionso raisedo disputedo questionsoofofact.oDeliberateocancellationsoandoalterationsowereomadeoonotheo chequeo ando eacho ofo thoseo cancellations/alterationso boreo theo signatureo ofo SudhaoMittalo(petitioneroinoCRM-M-36782-2014).oItowasothus,opleadedothato theopresentopetitionsobeingodevoidoofomeritooughtotoobeodismissed.o

7.o o Theolearnedocounseloforotheopetitionersostatesothatotheopresento complainto haso noto beeno filedo disclosingo theo trueo facts.o Theo chequeo ino questionowasomateriallyoaltered,oforgedoandofabricatedoasoisoborneofromotheo reportoofotheohandwritingoexperto(AnnexureoP-5).oTakingotheoallegationsotoo beotrue,otheoalterationsoboreotheosignaturesoofoSudhaoMittaloandonotoSachino Mittalowhooisotheosignatoryotootheocheque.oMerelyobeingoaosignatoryotootheo bankoaccounto wouldo notosanctifyo ao chequeosignedo byo Sachino Mittalo ando purportedlyo signedo byo Sudhao Mittalo ono theo alterations.o Foro ao materiallyo alteredochequeotoobeovalidotender,oitomustobeosignedobyotheoexecutantoorotheo drawero ofo theo chequeo ando noo othero persono eveno though,o theo saido othero persono waso ao co-signatoryo too ao banko accounto ando authorizedo too signo cheques.oMostoimportantlyoreadingoSectiono87oofotheoNIoActowithotheoRBIo Regulationso ito waso apparento thato onlyo theo dateo ono theo chequeo couldo beo altered.oAnyootheroalterationowasocompletelyoimpermissible.oStrangely,otheo complainto doeso noto discloseo theo facto thato theo earliero dishonouro waso ono accountoofomaterialoalterationsoallegedlyosignedobyoSudhaoMittalorequiringo

CRM-M-23251-2015o o o o o o o o -6-o

theofullosignaturesoofotheodrawer.oItoonlyorefersotootheosubsequentodishonouro whicho waso ono accounto ofo theo facto thato theo accounto waso closed.o Theo complainanto wouldo nevero accepto ao materiallyo alteredo ando forgedo chequeo fromotheoaccused.oInofact,onothingopreventedotheocomplainantofromoaskingo theoaccusedotooprovideoaofreshocheque.oo o o SoofaroasoSudhaoMittalo(petitioneroinoCRM-M-36782-2014)oiso concerned,o sheo iso neithero ao partnero noro ao proprietoro ofo M/so Anilo Agroo Industries,oaccusedoNo.1.oSheoisoalsoonototheodraweroofotheocheque.oHero purportedosignaturesoonotheoalterationsocannotoaffixoanyoliabilityouponoher.oo

8.o o Theo learnedo counselo foro theo respondent/complainanto ono theo otherohandovehementlyocontendsothatowhetherothereowasomaterialoalterationo withoconsentooronotowasoaodisputedoquestionoofofact.oItowasotheocaseoofotheo complainantothato theo chequeohado beenohandedoovero witho theo alterations,o though,oheoadmitsothatothereoisonoosuchoavermentoinotheocomplaint.oSinceo SudhaoMittalowasoaoco-signatoryoandoauthorizedotoosignochequesoinotermsoofo theo Specialo Powero ofoAttorneyo (Annexureo R2/1),o hero signatureso ono theo materialoalterationsowouldomakeotheochequeoaovalidotenderotherebyoentitlingo theocomplainantotooinitiateoproceedingsounderoSectiono138oofoNegotiableo InstrumentsoAct.oo

9.o o Iohaveoheardotheolearnedocounseloforotheopartiesoatolength.o

10.o o Beforeo proceedingo ino theo matter,o ito wouldo beo appositeo too examineotheorelevantoprovisionsoofolawoinothisoregard:-o o o Sectiono7oofotheoNegotiableoInstruments,oreadsoasounder:-o

7.o"Drawer",o"drawee".o—Theomakeroofoaobilloofoexchangeooro chequeoisocalledotheo"drawer";otheopersonotherebyodirectedotoo payoisocalledotheo"drawee".ooo "Draweeo ino caseo ofo need".—Wheno ino theo billo oro ino anyo indorsemento thereono theo nameo ofo anyo persono iso giveno ino

CRM-M-23251-2015o o o o o o o o -7-o

additionotootheodraweeotoobeoresortedotooinocaseoofoneedosucho personoisocalledoao"draweeoinocaseoofoneed".oo "Acceptor".o—Afterotheodraweeoofoaobillohasosignedohisoassento uponotheobill,oor,oifothereoareomoreopartsothereofothanoone,oupono oneoofosuchoparts,oandodeliveredotheosame,oorogivenonoticeoofo suchosigningotootheoholderoorotoosomeopersonoonohisobehalf,oheo isocalledotheo"acceptor".oo "Acceptoroforohonour".o—o[Whenoaobilloofoexchangeohasobeeno notedooroprotestedoforonon-acceptanceooroforobetterosecurity],o andoanyopersonoacceptsoito????? ???????oforohonouroofotheodrawero oro ofo anyo oneo ofo theo indorsers,o sucho persono iso calledo ano "acceptoroforohonour".oo "Payee".o—Theopersononamedoinotheoinstrument,otoowhomooro toowhoseoorderotheomoneyoisobyotheoinstrumentodirectedotoobeo paid,oisocalledotheo"payee".o o o o Sectiono27oofotheoNegotiableoInstruments,oreadsoasounder:-o "27.oAgency.—Everyopersonocapableoofobindingohimselfooroofo beingobound,oasomentionedoinosectiono26,omayosoobindohimselfo orobeoboundobyoaodulyoauthorizedoagentoactingoinohisoname.oo Ao generalo authorityo too transacto businesso ando too receiveo andodischargeodebtsodoesonotoconferouponoanoagentotheopowero ofoacceptingooroindorsingobillsoofoexchangeosooasotoobindohiso principal.oo Anoauthorityotoodrawobillsoofoexchangeodoesonotoofoitselfo importoanoauthorityotooindorse."o Sectiono87oofotheoNegotiableoInstruments,oreadsoasounder:-o

87.oEffectoofomaterialoalteration.—Anyomaterialoalterationoofo aonegotiableoinstrumentorendersotheosameovoidoasoagainstoanyo oneo whoo iso ao partyo theretoo ato theo timeo ofo makingo sucho alterationoandodoesonotoconsentothereto,ounlessoitowasomadeoino ordero too carryo outo theo commono intentiono ofo theo originalo parties;oo Alterationobyoindorsee.—Andoanyosuchoalteration,oifomadeobyo anoindorsee,odischargesohisoindorserofromoalloliabilityotoohimoino respectoofotheoconsiderationothereof.oo Theoprovisionsoofothisosectionoareosubjectotoothoseoofosectionso

CRM-M-23251-2015o o o o o o o o -8-o

20,o49,o86oando125.o oooooooooooSectiono138oofotheoNegotiableoInstruments,oreadsoasounder:-o

138.oDishonouroofochequeoforoinsufficiency,oetc.,oofofundsoino theoaccount.o—Whereoanyochequeodrawnobyoaopersonoonoano accountomaintainedobyohimowithoaobankeroforopaymentoofoanyo amountoofomoneyotooanotheropersonofromooutoofothatoaccounto forotheodischarge,oinowholeooroinopart,oofoanyodebtooroothero liability,oisoreturnedobyotheobankounpaid,oeitherobecauseoofotheo amounto ofo moneyo standingo too theo credito ofo thato accounto iso insufficientotoohonourotheochequeoorothatoitoexceedsotheoamounto arrangedotoobeopaidofromothatoaccountobyoanoagreementomadeo witho thato bank,o sucho persono shallo beo deemedo too haveo committedoanooffenceoandoshall,owithoutoprejudiceotooanyoothero oprovisionsoofothisoAct,obeopunishedowithoimprisonmentofor[ao termowhichomayobeoextendedotootwooyears],oorowithofineowhicho mayoextendotootwiceotheoamountoofotheocheque,oorowithoboth:oo Providedothatonothingocontainedoinothisosectionoshalloapplyo unless—o

(a)otheo chequeo haso beeno presentedo too theo banko withino ao periodoofosixomonthsofromotheodateoonowhichoitoisodrawnooro withinotheoperiodoofoitsovalidity,owhicheveroisoearlier;o

(b)otheopayeeoorotheoholderoinodueocourseoofotheocheque,oaso theocaseomayobe,omakesoaodemandoforotheopaymentoofotheo saidoamountoofomoneyobyogivingoaonoticeoinowriting,otootheo draweroofotheocheque,o[withinothirtyodays]oofotheoreceiptoofo informationobyohimofromotheobankoregardingotheoreturnoofo theochequeoasounpaid;oando

(c)otheodraweroofosuchochequeofailsotoomakeotheopaymentoofo theosaidoamountoofomoneyotootheopayeeoor,oasotheocaseomayo be,otootheoholderoinodueocourseoofotheocheque,owithinofifteeno daysoofotheoreceiptoofotheosaidonotice.o Explanation.—oForotheopurposesoofothisosection,o"debtooro otheroliability"omeansoaolegallyoenforceableodebtooroothero liability.o

11.o o Theo variouso judgmentso ofo theo Higho Courto ando theo Hon'bleo SupremeoCourtoasohaveobeenocitedobyotheocounseloforotheopartiesoareodiscussedo

CRM-M-23251-2015o o o o o o o o -9-o

hereinbelow:-o o o InoSmt.oVeenaoSinghaloVersusoStateoofoU.P.o&oanother,o2020(1)o NIJo72,owhereotheo"Thous"owasochangedotoo"lacs"owithoutotheocounter-signsoofo theoexecutantoofotheocheque,otheoCourtoquashedoproceedingsoholdingothatotheo cuttingoamountedotoomaterialoalterationoandowasoviolativeoofoRBIoGuidelines.o (anoSLPoNo.10549/2019oisopendingobeforeotheoHon'bleoSupremeoCourtotitledo asoSanjayoKumaroGuptaoVersusoTheoStateoofoUttaroPradesho&oanother).oTheo relevantoparagraphsoofotheosaidojudgmentoareoasounder:-o

7.oAtotheotimeoofoargument,olearnedocounseloforotheoapplicanto hasomainlyoemphasisedothreeopointsothatotheochequeoinoquestiono isonotoaolegallyoenforceableoinstrumentoinotheolightoofoguidelineso issuedo byo theo R.B.I.o datedo 6.10.2010,o clauseo 9o ofo whicho prohibitso changes/correctionso ino theo cheque.o Theo saido guidelineso haveo beeno affirmedo inoCentralo Banko ofo Indiao v.o Ravindraoandoother,o(2002)o1oSCCo367oandoalsooinoFragranto Leasingo&oFinanceoCompanyoLtd.o&oAnr.ov.oJagdishoKaturiyao &oAnr.,o2007oCri.L.J.o3880.o

8.oClauseo9oofotheosaidoguidelinesoisoasofollows:-o "R.B.I.o haso madeo specifico provisiono undero theo powero conferredotoothemoinoPaymento&oSettlementoSystemoAct,o2007o whichoreadsoas:-o"Noochanges/correctionsoshouldobeocarriedo outoonochequeo(otherothanoforodateovalidationopurposes,oifo required).o Foro anyo chequeo ino theo payee'so name,o courtesyo amounto (amounto ino figure)o ando legalo amounto (amounto ino words),ofreshochequeoformoshouldobeousedobyocustomers.oThiso wouldo helpo bankso too identifyo ando controlo fraudulento transactions."o

9.oInorebuttaloofothisoargument,olearnedocounseloforotheooppositeo partyono.o2ohasodrawnoattentiono too theoparagrapho10oofo theo sameoguidelinesoinowhichoSub-clauseo10o(iii)(iv)ostipulatesoaso follows:-o

(iii)oWillobeoapplicableoonlyoforochequesoclearedounderotheo image-basedoChequeoTruncationoSystemo(CTS).oCollectingo banksoshouldoensure,oab-initio,othatosuchochequesoareonoto

CRM-M-23251-2015o o o o o o o o -10-o

acceptedoforopresentmentoinoCTS.o

(iv)o Iso noto applicableo too chequeso clearedo undero othero clearingoarrangementsosuchoasoMICRoclearing,onon-MICRo clearing,ooverotheocounterocollectiono(forocashopayment)ooro directo collectiono ofo chequeso outsideo theo Clearingo Houseo arrangement."o

10.oInoCentraloBankoofoIndiao(supra),otheoHon'bleoApexoCourto hasoheldothatoR.B.I.oCircularsohaveostatutoryoforceoandoitoisoono thisointerpretationothatotheolearnedocounseloforotheoapplicanto hasoreliedouponothatothisowouldomakeotheoguidelinesomentionedo aboveotoobeobindingoandoanyoviolationoofotheosameowouldorendero theoimpugnedochequeotoobeonotoaovalidoinstrument.o

11.o Theo factso ofo theo aboveo citationo areo thato ito involvedo interpretationoofo phraseso"o theo principalo sumoadjudged"oando "suchoprincipalosum",ooccurringoinosectiono34oofotheoCPC,o1908o aso amendedo byoActo 66o ofo 1956.o Ito waso heldo byo theo Hon'bleo SupremeoCourtothatoitoisoaolongoestablishedobankingopractiseoofo chargingointerestoatoaoreasonableoratesoonoperiodicalorestsoando capitalisingo theo sameo ono remainingo unpaid.o Thiso practiseo iso permissible,olegaloandohasobeenojudiciallyoupheldoexceptowheno supersededobyolegislation.oTheofactsoofotheopresentocaseoareothato thereoisoaocuttingofoundoinotheoimpugnedocheque,owhichocuttingo wasoalsoonotofoundosignaturedobyotheoperson,owhoohadoissuedo theosame.o

12.o Theo replyo ofo theo argumento ofo learnedo counselo foro theo applicantothatotheosaidoguidelineono.o9,oonowhich,oapplicantoiso relyingouponotoostateothatotheosaidochequeohasobecomeoinvalido onlyoonoaccountoofosaidocuttingoisothatotheosaidokindoofocuttingoiso impermissibleo onlyo ino respecto ofo chequeso clearedo undero theo Chequeo Truncationo Systemo (CTS)o ando noto foro thoseo chequeso whichoareoclearedounderootheroclearingoarrangementosuchoaso MICRo clearing,o Non-MICRo clearing,o overo theo countero collectiono(forocashopayment)oorodirectocollectionoofochequeso outsideotheoClearingoHouseoArrangement",obut,oIofindonooforceo inotheoargumentoofolearnedocounseloforotheooppositeopartyono.o2o becauseotheoestablishedopractiseoofoBankoisothatoanyoalterationo ino originalo stateo ofo ao chequeo sucho aso date,o amount,o payee'soJITESH LAL

CRM-M-23251-2015o o o o o o o o -11-o

name,ochangingowordo"order"otoobeareroappearingoafteropayee'so nameo oro ino endorsemento iso calledo materialo alteration.o Allo materialoalterationomustohaveodrawer'soapprovalowithohisofullo signatureo(notoinitials)owhereotheoalterationoareomade.oOneoofo theo mandatoryo featureso ofo theo CTS-2010o chequeo formato prescribedobyoR.B.I.oisothatonoochanges/correctionsoshouldobeo carriedo outo ono theo chequeso (othero thano foro dateo validationo purposes,o ifo required)o foro anyo changeo ino theo payee'so name,o courtesyoamounto(amountoinofigure)oorolegaloamounto(amountoino words)o etc.,o theo fresho chequeo formso shouldo beo usedo byo theo customers.oInotheopresentocase,owhenochequeoofosuchoaohugeo amountowasodrawnoinofavouroofooppositeopartyono.o2oandoitowaso foundotoohaveocutting,owhichowasonotosignaturedoinofullobyotheo accused-applicant,o theo oppositeo partyo no.o 2o shouldo haveo objectedotootakingotheosaidochequeoatotheoveryooutset,omoreoso,o inoconditionowhenotheoamountoinoquestionowasohuge.o

13.oAttentionomayoalsoobeodrawnotoosectiono87oofotheoN.I.oActo whichoprovidesoasounder:-o "87.oEffectoofomaterialoalteration.-Anyomaterialoalterationo ofoaonegotiableoinstrumentorendersotheosameovoidoasoagainsto anyooneowhooisoaopartyotheretooatotheotimeoofomakingosucho alterationoandodoesonotoconsentothereto,ounlessoitowasomadeo inoorderotoocarryooutotheocommonointentionoofotheooriginalo parties;oAlterationobyoindorsee.-Andoanyosuchoalteration,oifo madeo byo ano endorsee,o dischargeso hiso indorsero fromo allo liabilityotoohimoinorespectoofotheoconsiderationothereof.oTheo provisionsoofothisosectionoareosubjectotoothoseoofosectionso 20,o49,o86oando125."o o

14.oInoviewoofoaboveoprovision,oIofindothatothisowouldofalloinotheo categoryoofomaterialoalterationoofotheoimpungedocheque.o o

15.oLearnedocounseloforotheoapplicantohasoreliedouponoFragranto Leasingo&oFinanceoCompanyoLtd.o&oAnr.ov.oJagdishoKaturiyao &oAnr.,o2007oCRI.L.J.o3880.oInothisocase,oaccusedotookoloanoofo Rs.o11,00,000/-ofromocomplainantono.o1oandoinoorderotoorepayo JITESH LAL theoloan,oissuedotwoochequesoofoRs.o6,00,000/-oando5,00,000/-o

CRM-M-23251-2015o o o o o o o o -12-o

respectively,o (totalo 11o lacs),o whicho wereo presentedo ato theo Centralo Banko ofo Indiao ino Varanasio buto wereo returnedo witho endorsemento "exceededo arrangement".o Meaningo therebyo thato theoaccusedohadoissuedochequeoknowingowellothatothereowasonoo sufficientoamountoinohisoaccountoandowithodishonestointentiono deceivedotheocomplainant,ohenceotheocaseowasoinitiatedoundero 138oofotheoN.I.oAct.oInoparagrapho8oofothisojudgment,otheocourto afteroconsiderationohasoheldothatomaterialoalterationowasomadeo inotheochequesointroducingotheodates,ohenceochequesowereovoido underoSectiono87oofotheoActoandoitowasoalsooheldoinoparagrapho 22oofotheojudgmentothatoitoisoaosettledolawothatoaoperson,owhooiso ino custodyo ofo documento subsequento too itso execution,o haso too dischargeo theoburdeno ofo establishingo thatoito waso notoaltered,o shouldothereobeoanyoalteration.o

16.oFactsoofotheopresentocaseomayobeotakenotoobeoidenticalotootheo citationoreliedouponobyotheolearnedocounseloforotheoaccused-applicantobecauseoinotheopresentocaseoalsoochequeoisostatedotoo haveo beeno returnedo foro insufficiento amounto ando noto foro anyo alterationoorocuttingoinotheochequeobutonooexplanationohasocomeo onorecordothatowhyotheoimpugnedochequeowasoreceivedobyotheo oppositeopartyono.o2odespiteotheosaidochequeohavingoalterationo inotheoamountoinowordsowithoutoanyosignatureoofotheoexecutanto ofotheochequeoandowhyoitowasonotoinsistedobyohimoatothatoveryo momentothatotheosaidochequeowasovoidounderotheoprovisionsoofo Sectiono87oofotheoActodueotootheosaidocuttingoparticularlyowheno theoamountowasosoobig.oHeowouldobeotreatedotoobeoinopossessiono ofotheosaidochequeosoonoafterotheosameowasoissuedotoohimoando whenoheocameoinopossessionoofotheosame,oifoanyoalterationoinotheo saido chequeo happened,o theoburdeno wouldolieo onlyo onohimo too explainoasotoounderowhatocircumstancesotheosaidocuttingotooko placeo buto ino countero affidavit,o noo sucho disclosureo haso beeno made,o whicho renderso theo impugnedo chequeo too beo ao voido instrumentoinotheolightoofoSectiono87oofotheoAct.o ****o o ****o o ****o

25.oThereoisonooquarrelowithotheoprincipleolaidodownoaboveoasoIo amofullyoinoagreementowithotheoviewothatowhetherooronotochequeo JITESH LAL wasoissuedoforodischargingoaodebtooroliabilityocanobeoseenoato

CRM-M-23251-2015o o o o o o o o -13-o

theotimeoofotrialoandonotoinoproceedingobeforeothisoCourtoundero Sectiono482oCr.P.C.,o 1973o buto theo questiono remainso ino theo presento caseo thato theo impugnedo chequeo itselfo appearso too beo voidoonoaccountoofothereobeingocutting,owhichorendersotheosaido chequeotoobeovoidounderotheoprovisionsoofosectiono87oofotheoN.I.o Act,o aso haso beeno discussedo byo meo aboveo ando hence,o theo subsequento proceedingso ino opiniono ofo thiso Courto wouldo noto serveoanyopurpose,ohenceoinoviewoofothisopeculiarosituationoino thiso case,o Io considero ito appropriateo too quasho theo impugnedo order.o (emphasisosupplied)o o o InoM/soGoyaloEnterprisesoVersusoStateoofoJharkhand,o2012(3)o R.C.R.o (Criminal)o 110,o theo Courto heldo thato changeo ofo dateo ono theo chequeo amountedotoomaterialoalterationoinotheoabsenceoofotheosignatureoofotheodrawer.o Theorelevantoparasoofotheosaidojudgmentoheldoasounder:-o

11.oAfterohearingolearnedocounselsoforobothotheosidesoandoupono goingothroughotheomaterialsoonorecord,oIofindothatotheochequeso whichohaveobeenoprovedoinothisocaseoclearlyoshowothatothereo areomaterialoalterationsoinotheosameoinoasomuchoas,otheodateo

15.4.2000oinobothotheochequesohaveobeenoalteredoaso15.9.2000o ando thereo iso noo endorsemento oro signatureo thereono ofo theo drawero ofo theo cheques.o Sectiono87oofo theo Negotiableo InstrumentsoActoreadsoasoundero:o "87.oEffectoofomaterialoalteration.o-oAnyomaterialoalterationo ofo ao negotiableo instrumento renderso theo sameo voido aso againsto anyo oneo whoo iso ao partyo theretoo ato theo timeo ofo makingo sucho alterationo ando doeso noto consento thereto,o unlesso ito waso madeo ino ordero too carryo outo theo commono intentionoofotheooriginaloparties;o **o**o**o**"o

12.o Sectiono87oofo theo Negotiableo Instrumentso Acto iso ao mandatoryo provisiono ando ino thiso viewo ofo theo matter,o theo chequeso whicho wereo materiallyo alteredo beforeoproductiono ino theoCourtoandowithoutoanyoevidenceotootheoeffectothatohowotheo saido alterationso ino theo chequeso wereo made,o wereo absolutelyo

CRM-M-23251-2015o o o o o o o o -14-o

voidoandotheoaccusedocouldonotohaveobeenofoundoguiltyoofotheo offenceounderosectiono138oofotheoNegotiableoInstrumentsoActoono theobasisoofotheosaidovoidocheques.oInoviewoofothisofinding,otheo otheroargumentsomadeobyotheolearnedocounseloforotheoappellanto nowo remaino onlyo ofo academico importance,o whicho needo noo furtherodiscussionoinotheopresentocase.o o

13.oInoviewoofotheoaforementionedodiscussions,oIofindoandoholdo thatotheorespondentoaccusedocouldonotohaveobeenofoundoguiltyo ofotheooffenceounderosectiono138oofotheoNegotiableoInstrumentso Actoonotheobasisoofotheosaidovoidochequesowhichohaveobeeno producedoinotheoCourtobelowoandomarkedoExhibitso1/1oando1/2,o thereobeingomaterialoalterationoinotheodatesoofotheocheques.o (emphasisosupplied)o o o InoAllampatioSubbaoReddyoVersusoNeelapareddioRamanareddi,o 1996oAIRo(AndhraoPradesh)o267,othereowasomaterialoalterationoinotheodateoofo theopromissoryonote.oTheoCourtoobservedothatowhereoanoinstrumentoappearsotoo haveobeenoaltered,oitowasoaogeneraloruleothatoaopartyoofferingoitoinoevidenceowaso tooexplainoitsoappearanceobecauseoeveryoalterationoofoaonegotiableoinstrumento renderedoitosuspicious.oTheorelevantoparao5oofotheojudgmentoheldoasounder:-o

5.oTheolawoonotheopointoseemsotoomeotoobeoclear.oTheoEnglisho ruleothatoaomaterialoalterationoofoaodateomakesoitoaltogethero voidoisosummarisedothusoinoHalsbury'soLaw'soofoEngland,oIIIo Edition.oVol.o11,op.o367,oParas.o598oando599o:-o "598.oAowritingoproposedotoobeoexecutedoasoaodeedomayobeo alteredobyoerasureoorointerlineationooroinoanyootherowayo beforeoitoisosooexecuted;oandoanyoalterationosoomadeobeforeo executionodoesonotoaffectotheovalidityoofotheodeed.oAnyoalte-ration,oerasureoorointerlineationoappearingouponotheofaceo ofoaodeedoisopresumed,oinotheoabsenceoofoevidenceotootheo contrary,otoohaveobeenomadeobeforeotheoexecutionoofotheo deed."o "599.oIfoanoalterationo(byoerasure,ointerlineation,oorooth-erwise)oisomadeoinoaomaterialopartoofoaodeed,oafteroitsoex-

CRM-M-23251-2015o o o o o o o o -15-o

ecution,obyoorowithotheoconsentoofoanyopartyotheretoooroper-sonoentitledothereunder,obutowithoutotheoconsentoofotheopar-tyooropartiesoliableothereunder,otheodeedoisotherebyomadeo void.oTheoavoidance,ohowever,oisonotoaboinitio,oorosooasotoo nullifyo anyo conveyancingo effecto whicho theo deedo haso al-readyohad;obutoonlyooperatesoasofromotheotimeoofosuchoalte-ration,oandosooasotoopreventotheoperson,owhoohasomadeooro authorisedotheoalteration,oandothoseoclaimingounderohim,o fromoputtingotheodeedoinosuitotooenforceoagainstoanyopartyo boundothereby,owhoodidonotoconsentotootheoalteration,oanyo obligation,o covenant,o oro promiseo therebyo undertakeno oro made."o

6.oTheolawoisonotootherwiseoinoIndia.oTheoaboveosaidoruleoiso quotedowithoapprovaloinoseveraloIndianodecisions.osectiono87oofo theoNegotiableoInstrumentsoActostatutorilyoadoptsotheosaidorule.o Sectiono87oisosoofaroasoitoisorelevantoisoinotheofollowingotermso:-o "Anyo materialo alterationo ofo ao negotiableo instrumento rendersotheosameovoidoasoagainstoanyooneowhooisoaopartyo theretooatotheotimeoofomakingosuchoalterationoandodoesonoto consentothereto,ounlessoitowasomadeoinoorderotoocarryoouto theocommonointentionoofotheooriginaloparties;"o Itomustobeorememberedothatoitoisonotoanyoandoeveryoalterationo thatoavoidsotheoinstrument.oToohaveothatoeffectotheoalterationo mustobeoinoaomaterialoparticular.oAomaterialoalterationocanobeo broughtoaboutobyochangeoinodateoorotimeoofodrawingooroofotheo placeoofopaymentoorobyochangeoinotheosumopayable,oetc.,oetc.oIto isothusoevidentothatotheodateoofoaopromissoryonoteoisoaomaterialo portionoofoit,oandoanyoalterationoofosuchodateowillonaturallyo avoidotheopromissoryonote,ounless,oofocourse,oasostatedoinotheo Section,osuchoanoalterationoisomadeowithotheoconsentoofotheo otheroparty,ooroisomadeotooeffectuateotheocommonointentionoofo theooriginaloparties.oItoisowrongotooassumeothatotheodateoofotheo promissoryonoteoisomerelyoaodescription.oItoindicatesotheotimeo whenotheopromissoryonoteowasoexecuted.oInomostocasesotheodateo isoveryomaterialoinocalculatingotheodateoofotheoperformanceoofo theo contracto ando moreo ofteno fixingo theo periodo ofo limitationo JITESH LAL withinowhichotheoplaintiffowillohaveotooinstituteotheosuitoonotheo

CRM-M-23251-2015o o o o o o o o -16-o

footo ofo sucho promissoryo note.o Ito iso immaterialo whethero theo alterationo iso madeo ino theo dateo oro montho oro year.o Anyo sucho alterationo beingo materialo musto necessarilyo resulto ino theo avoidanceoofotheopromissoryonote.o

7.oItoisotrueothatoinotwoocasesoalterations,othoughomaterial,odoo notovitiateotheoinstrumentsofirstly,owhenotheoalterationoisomadeo beforeotheopromissoryonoteoisoexecuted,oandosecondly,oifotheo alterationomadeowasomerelyotoocorrectoaomistake,oorotoomakeoito whatoitowasooriginallyointendedotoobe.oAsostatedoearlier,otheo Sectiono(S.o87)oitselfostatesothatotheoalterationocanobeomadeo withotheoconsentoofotheoparties,oorotoocarryooutotheocommono intentionoofotheooriginaloparties.oAnyomistakeooccurringobeforeo theoexecutionoofotheopromissoryonoteocan,ohowever,oalwaysobeo correctedobeforeotheodocumentoisoactuallyoexecuted.o

8.oTheogeneraloruleoinoEnglisholawofollowedoinoIndiaoisothatoao partyohavingocustodyoorocontroloofoaodocumentoproducedoino evidenceomustoexplainotheoalteration.oWhenotheoinstrumentoono itsoproductionoappearsotoohaveobeenoaltered,oitoisoaogeneraloruleo thato theo partyo offeringo ito ino evidenceo musto explaino itso appearance,o becauseo everyo alterationo ino theo caseo ofo ao negotiableo instrumento renderso ito suspicious.o Ito iso onlyo reasonableothatotheopartyoclaimingounderoitoshouldoremoveotheo suspicion.oItoisotrueothatoitoisonotoonoeveryooccasionothatoaopartyo tenderingoanoinstrumentoinoevidenceoisoboundotooexplainoanyo materialo alterationo thato appearso upono itso face.o Heo must,o however,oexplainowhenoheoisoseekingotooenforceoit.oItoisoplaino thato wheno theo alterationo appearso too haveo beeno madeo contemporaneouslyowithotheodocument,ooroifoitoisomadeoatosomeo subsequentoperiodowithotheoprivityoofotheopartiesochargedoando thereo iso noo fraud,o ito doeso noto affecto theo validityo ofo theo instrument.o

9.oItoisothusoevidentothatowhereotheoinstrumentoappearsotoobeo alteredoitoisoincumbentouponotheoholder,othatois,otheoplaintiff,otoo showo thato theo alterationo iso noto improperlyo made.o Ito iso nowo fairlyo settledo thato ino caseo ofo negotiableo instrumento theo presumptionoisothatotheoalterationowasomadeosubsequentotootheo JITESH LAL issueo ofo instrument.o Whato musto followo iso thato wheno ao

CRM-M-23251-2015o o o o o o o o -17-o

promissoryo noteo appeal'so too haveo beeno alteredo oro thereo areo markso ofo erasureso ono it,o theo partyo seekingo too enforceo theo promissoryonoteoisoboundotoosatisfyotheoCourtothatoalterationo doeso noto avoido theo promissoryo noteo byo explainingo howo theo alterationohasobeenoeffected.oIfoitofallsounderoanyooneoofotheo exceptionso mentionedo above,o ito iso obviouso thato such,o ano alterationowillonotofallowithinotheomischiefoofosectiono87oofotheo NegotiableoInstrumentsoAct.o

10.oWhereoanoinstrumentoappearsotoobeomateriallyoalteredotheo lay,onaturallyocastsoaoheavyoburdenoonotheoplaintiffotooexplaino theo alterationo ando showo wheno ito waso made.o Ordinarilyo theo partyo whoo presentso ao negotiableo instrumento whicho iso ano essentialo parto ofo hiso caseo ino ano apparentlyo alteredo ando suspicionsostate,omustofail,ofromotheomereoinfirmityoorodoubtfulo complexiono ofo theo instrumento unlesso ito cano satisfactorilyo explaino theo existingo stateo ofo theo document:o SeeoMt.o Khoobo Conwarov.o Babooo MoodnarainoSingh,o (1861-63)o 9o MoooIndo Appo1oatop.o17o(PC).oItoisotrueothatothisowholesomeoruleoisonoto withoutoitsoexceptions.oIfothereobe,oforoexample,oindependentlyo ofotheoinstrumentocorroborativeoproofostrongoenoughotoorebuto theo presumptiono whicho ariseso againsto ano apparento ando presumableo falsifiero ofo evidence,o thereomusto however,obeoano explanationo ando sucho ao strongo proofo too rebuto theo initialo presumption.oItoisorelevantotoonoteothatotheopresumptionoundero theoEnglishoLawoisothatoinotheocaseoofodeedsosignedoandosealed,o alterationso wereo madeo beforeo execution,o buto noo sucho presumptionoexistsoinotheocaseoofonegotiableoinstruments.oTheo lawoonotheosubjectohasobeenothusostatedoinotheoHalsbury'soLawso ofoEngland.oIIIoEdition,oVol.o11.oPara.o622,op.o379o:-o "Aowritingowhichoisointendedotoobeounderohandoonlyocano beo alteredo byo erasure,o oro interlineation,o oro otherwise,o beforeoitoisosigned,obutoitoliesouponotheopartyowhooputsotheo instrumentoinosuitotooexplainoanoalterationoandoshowowheno itowasomade."o ThatobeingotheopositionoofolawoasoIounderstandoit,oletomeoseeo whetheroanyoexplanationowasoofferedobyotheoplaintiffoaboutotheo JITESH LAL suspiciousonatureoofotheosuitopromissoryonote.oIohaveoalreadyo

CRM-M-23251-2015o o o o o o o o -18-o

statedothatoonoexaminationoofotheodocumentoitobecomesoclearo thatothereoareomarksoofoerasureoandotheofigureo'9'oisore-writteno inotheomanneroinowhichoitoisomentionedoabove.oThereocanobeo littleodoubtothatotheodateowhichoisomaterialolooksotoobeoaltered.o Ino sucho circumstanceso ito waso foro theo plaintiffo whoo seekso too enforceothisopromissoryonoteotooexplainotootheoCourtoasotoowheno ando howo thiso alterationo waso made.o Theo plaintiffo ino hiso depositiono denieso anyo correction,o heo haso noo explanationo too offeroinocaseoitoisofoundothatotheodateoappearsotoobeomateriallyo altered.o Ino theoabsenceo ofoanyo explanationoonobehalfoofo theo plaintiffo whoo seekso theo enforcemento ofo theo document,o ito iso obviousothatotheoplaintiffomustofail,oasotheoonusowasoonohimotoo showo thato theo materialo alterationo wasomadeo eithero witho theo consentoofotheopartiesooroinoorderotooeffectuateotheocommono intentionoofotheoparries.oInotheoabsenceoofoanyosuchopleaotheo presumption,oasostatedoearlier,oisothatotheomaterialoalterationo waso madeo subsequento too theo executiono ofo theo document.o Ino viewoofothatopresumptionotheoirresistibleoconclusionoisothatotheo suitopromissoryonoteoisovoidounderosectiono87oofotheoNegotiableo Instrumentso Acto ando ito cannot,o therefore,o beo enforcedo ino ao Courtoofolaw.oIn,oHermanov.oDickinson,o(1828)o130oERo1031,oito wasoheldoasofollowso:-o ".o.o.o.o.o.o.o.o.owhereoanoalterationoappeal'souponotheofaceoofoao Billotheopartyoproducingoitomustoshowothatotheoalterationo wasomadeowithoconsentoofotheoparties,oorobeforeoissuingotheo bill."o Too theo sameo effecto isoC.S.o Pillayo v.o K.K.o Konar,o AIRo 1935o Rangoono131.oIoamotherefore,osatisfiedothatotheoplaintiffohaso failedotooofferoanyoexplanation,oandoalsoofailedotooproveothato theo materialo alterationo appearingo ono theo faceo ofo theo promissory,onoteowasomadeowithotheoconsentoofotheoparties,ooro wasomadeoinoorderotooeffectuateotheocommonointentionoofotheo parties.o Hiso suit,o therefore,o waso rightlyo dismissedo ono theo ground.oThisorevisionopetition,otherefore,oisodismissed.oInotheo circumstancesoofotheocaseoIoleaveotheopartiesotoobearotheiroowno costsoofobothotheoCourts.o

CRM-M-23251-2015o o o o o o o o -19-o

(emphasisosupplied)o o o o InoRaghuoLakshminarayananoVersusoM/soFineoTubes,o2007(2)o R.C.R.o (Criminal)o 571,o theo Hon'bleo Supremeo Courto heldo thato ino ao proprietorshipoconcern,oonlyotheoproprietorowasoliableounderoSectiono138oofotheo Negotiableo InstrumentsoActo ando noo employeeo couldobeoprosecuted,o sinceoao proprietaryoconcernowasonotoaojuristicopersonoandotheoprinciplesoofovicariouso liabilityowouldonotoapplyotooitoasotooaocompany.oo o o oo InoVeeraoExportsoVersusoT.oKalavathy,o(2002)o1oSCCo97,otheo complaintowasoquashedoonotheoassertionoofotheoaccusedothatosheohadochangedo theodateoonotheochequeoagainstoherowill.oTheoHon'bleoSupremeoCourtosetoasideo theoorderoofotheoHighoCourtowherebyotheocomplaintowasoquashedoholdingothato whetherotheoaccusedohadore-validatedotheochequeobyowillooronotowasoaomatteroofo trial.oo o o InoArpanoJaino&oanotheroVersusoStateo&oanother,o2021oSCCo OnLineo Delo 4222,o theo contentiono ofo theo petitioners/accusedo waso thato theo chequeohadobeenogivenoasoaosecurity.oTheosameowasoalteredomateriallyobyotheo complainantobyochangingotheodateoforore-validationowithoutotheoconsentoando knowledgeoofotheopetitioners/accused.oTheoCourtoheldothatoitowasoaotriableoissueo asotoowhetherotheocomplainantohadoalteredotheochequeoorotheosameohadobeeno doneobyotheoaccused/petitioners.oAosimilaroviewowasoexpressedoinoR.oArjunrajo VersusoV.oKrishnasamy,o2017oSCCoOnLineoMado3462.oo o o Ino M.M.T.C.o Ltd.o &o Anothero Versuso Medchlo Chemicalso ando Pharmao(P)oLtd.o&oanother,o(2002)o1oSCCo234,oitowasoheldothatowhetherooro nototheochequeowasoissuedoforotheodischargeoofoanyolegallyoenforceableodebtooro liabilityowouldobeoaomatteroofotrial.oTheocomplaintocouldonotobeoquashedoonotheo pleadingsounderoSectiono482oCr.P.C.othatothereowasonoosuchodebtooroliability.oo o o InoBiroSinghoVersusoMukeshoKumar,o(2019)o4oSCCo197,oitowaso

CRM-M-23251-2015o o o o o o o o -20-o

heldo thato ao blanko signedo chequeo leafo handedo overo byo theo accusedo too theo complainanto wouldo attracto theo presumptiono undero Sectiono 139o ofo theo NegotiableoInstrumentsoActoinotheoabsenceoofoanyocogentoevidenceotooshowothato theochequeohadonotobeenoissuedoforotheodischargeoofoaodebtooroliability.oIfotheo chequeowasootherwiseovalid,otheopenaloprovisionsowouldobeoattracted.o o oo InoNEPCo Micono Ltd.o &o otherso Versuso Magmao Leasingo Ltd.,o

(1999)o4oSCCo253,otheoHon'bleoSupremeoCourtoheldothatowhereotheochequeohado beenodishonouredobecauseotheoaccountohadobeenoclosed,otheosameowouldoattracto liabilityounderoSectiono138oofotheoNegotiableoInstrumentsoAct.oooo

12.o o Comingobackotootheofactsoofotheopresentocase,otheocomplaintodoeso notodiscloseothatotheochequeowasomateriallyoalteredoorothatoitowasodishonouredo firstotimeodueotooaomaterialoalterationooroasotoohowoandoatowhatostageodidoSudhao Mittalopurportedlyosign/counter-signotheomaterialoalterations.o o o Ao perusalo ofo theo CTSo Chequeo (Annexureo P-4)o wouldo revealo cuttingo ono theo nameo ofo theo beneficiaryo ando theo amounto ino words.o o Thereo appearsotoobeoanooverwritingoonotheoamountoinofiguresoasowell.oTherefore,oino termsoofotheoRBIoGuidelinesodatedo22.02.2010o(AnnexureoP-4/A)owhichohaveo statutoryoforce,oreadowithoSectiono87oofotheoNegotiableoInstrumentsoAct,otheo chequeo waso noto valido tendero ando couldo nevero haveo beeno presentedo foro encashmentoevenoassumingothatotheomaterialoalterationsowereosignedobyoSudhao Mittaloandoassumingothatosheowasocompetentotoosignotheosameodespiteotheofacto thatosheowasonotoanoexecutantoofotheocheque.oo o o AocombinedoreadingoofotheoRBIoGuidelinesoalongowithoSectiono87o ofo theo Negotiableo Instrumentso Acto wouldo showo thato theo onlyo permissibleo materialoalterationoisoonotheodateoofotheochequeowhichomustoalsoobeosignedobyo theoexecutant/draweroofotheochequeonamely,oSachinoMittal.oFurther,oaoperusalo ofoSectiono27oofotheoNegotiableoInstrumentsoActowouldoshowothatoSudhaoMittalo purportedlyoactingoasoanoagentowasonotoconferredowithotheopoweroofoacceptingoJITESH LAL

CRM-M-23251-2015o o o o o o o o -21-o

oroindorsingobillsoofoexchangeosooasotoobindotheoprincipaloi.e.oSachinoMittal.o o o Though,otheochequeohasobeenodishonouredodueotooclosureoofotheo bankoaccount,osinceotheoveryochequeoinoquestionoisomateriallyoalteredoandohado beeno returnedo backo firsto timeo ono theo groundso ofo materialo alteration,o theo provisionso ofo Sectiono 87o ofo theo Negotiableo InstrumentsoActo ando theo RBIo guidelineso wouldo applyo renderingo theo chequeo void,o moreso,o wheno theo complaintodoesonotoexplainoasotoohowotheomateriallyoalteredochequeocameointoo theo possessiono ofo theo complainant.o Further,o ino replyo too thiso petitiono foro quashing,otheostandoofotheocomplainantoisothatotheomateriallyoalteredochequeo hadobeenohandedooverotoohimowhichoheopresentedoforoencashment.oOnceoagain,o heochoosesotoosidestepotheoissueoofotheoearlierodishonouroonoaccountoofomaterialo alterationsowhichohadobeenoadmittedobyoCW1-BaljinderoSingh,oClerk,oUniono BankoofoIndiaoinohisocross-examination.oThereoisoabsolutelyonooexplanationoaso toowhyoheowouldoacceptosuchoaomateriallyoalteredochequeoandonotoaskoforoaonewo oneotoobeoissued.oo o o Ito mayo alsoo beo relevantotoo mentiono hereo thato theo judgmentso quotedo byo theo learnedo counselo foro theo respondent/complainanto doo noto discusso o theo o RBIo Circularo datedo 22.02.2010o (Annexureo P-4/A)o ando pertainedoprimarilyo otoocasesopriorotootheo yearo2010oi.e.otheodateoofotheo Circular.oInotheopresentocase,otheochequeoisodatedo08.01.2013o(AnnexureoP-4)oandotherefore,oasohasoalreadyobeenosubmittedohereinabove,otheomaterialo alterationopermittedoisoonlyoonotheodateoandonothingoelse.ooo o oo Inoaddition,oinotheocaseoofoSudhaoMittal,osheoisoneitheroaopartnero noro proprietoro ofo theo firmo M/so Anilo Agroo Industries.o Sheo iso alsoo noto ao signatory/draweroofotheocheque.oTheobankoaccountoisoinotheonameoofotheo proprietorshipoconcernoandoSudhaoMittaloisosimplyoanoauthorizedosignatoryo forotheoissuanceoofochequesooutoofotheosaidobankoaccount.oTherefore,otheo

CRM-M-23251-2015o o o o o o o o -22-o

complaint,osummoning,onoticeoofoaccusationoandoallosubsequentoproceedingso areoliableotoobeoquashedoquaoheroonothisogroundoasowell.oo

13.o o Keepingo ino viewo theo aforementionedo discussion,o theo continuationoofotheoproceedingsoinotheopresentocasesowouldobeonothingobuto anoabuseoofotheoprocessoofotheoCourt.oTherefore,otheocomplaintoNo.105-Ao datedo24.04.2013o(AnnexureoP-1),otheosummoningoorderodatedo24.10.2013o (AnnexureoP-3),otheonoticeoofoaccusationodatedo06.08.2014o(AnnexureoP-2)o andoallosubsequentoproceedingsoarisingotherefromoareoherebyoquashedoquao allotheoaccused.o o

16.01.2023o o o o o o (JASJIToSINGHoBEDI)o Jitesho o o o o o o o JUDGEo o Whetherospeaking/reasoned:-o o o o o o Yes/Noo WhetheroReportable:-o o o o o o o Yes/Nooo