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TMI Blog2025 (5) TMI 928X X X X Extracts X X X X X X X X Extracts X X X X ..... struments (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 admitted in his statement recorded under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 alteration in the cheque, which would make it void. The findings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iction 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 crept into such proceedings. It would be apposite to refer to the judgment of this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rote 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 proved to have been made by the holder himself, and this fact must be pleaded and proved by the defendant. He went to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esses 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 76], it was held that a material alteration made by, or with the consent of, one party, but without the consent of the other party, makes the instrument void and disen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 an endorsee, discharges his endorser from all liability to him/her in respect of the consideration thereof in the considered opinion of this Court. 20. It was held that an alteration in the Negotia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly 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 the cheque, he cannot take advantage of it later by saying that the cheque became void as there is a material alteration thereto. Even if the payee or the holder of the cheque made the alteration with the consent of the drawer thereof, such alteration also cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vels & 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 Director is indicted. 59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative." 29. This judgment was followed by the Hon'ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 and sentencing the accused. Such an error can be corrected in the exercise of revisional jurisdiction. 34. The judgment of the Andhra Pradesh High Court in Moh. Isaq Gulsani (supra) will not help the respondent/complainant because this judgment is contrary to the judgment of the Hon'ble Supreme Court in Anita Hada (supr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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