Altered Cheque on Its Face: Supreme Court Acquits Accused Under Section 138 NI Act

A Division Bench of Justices Sanjay Kumar and Sanjeev Sachdeva set aside conviction under the Negotiable Instruments Act after finding patent material alteration on the cheque itself.

The Supreme Court on 17 July 2026 acquitted Rajasab of the offence under Section 138 of the Negotiable Instruments Act, 1881, after examining the disputed cheque directly and finding its material alteration to be self-evident. The Court held that once a forgery or alteration is manifest on the face of the document, courts below cannot insist on further evidence to establish the fact. Three courts — the trial court, the District & Sessions Judge, and the High Court of Karnataka — had all rejected this plea and maintained the conviction. The Supreme Court disagreed, set aside all three judgments, and directed reimbursement of the amount already paid by the appellant.

How the Dispute Reached the Supreme Court

The case originates from a cheque dishonour complaint filed by Hulagappa against Rajasab. The complainant's case was that the cheque was drawn for ₹1,10,000 (Rupees one lakh ten thousand). Rajasab's consistent defence across all proceedings was that the cheque was originally made out for only ₹10,000 (Rupees ten thousand) and had been materially altered by the insertion of additional words and a numeral.

The trial court at Koppal convicted Rajasab by its judgment dated 11 August 2014, accepting the complainant's version. The learned District & Sessions Judge, Koppal, dismissed Rajasab's appeal on 25 March 2019. Rajasab then filed Criminal Revision Petition No. 100116/2019 before the High Court of Karnataka, Dharwad Bench. The High Court, by its judgment dated 25 April 2025, allowed the revision only in part — it maintained the conviction under Section 138 but reduced the fine from ₹1,15,000 to ₹1,10,000, directing that the reduced amount be paid as compensation within an extended time. The appellant paid that sum pursuant to the High Court's order.

Rajasab then filed SLP(Crl.) No. 17025/2025 before the Supreme Court. Leave was granted and the matter was converted into Criminal Appeal No. of 2026.

What the Cheque Showed

The Court examined a copy of the cheque placed on record at page 30 of the file. Its finding was direct: the words “One Lak” had been interjected before the words “Ten Thousand only” in the amount column, and the numeral “1” had been inserted in the numerical box before “10,000/-”. The interpolation was visible on the face of the instrument itself.

This physical examination of the cheque drove the Court's entire reasoning. The alteration did not require inference, expert opinion, or additional testimony — it was, in the Court's words, manifest.

The Court's Reasoning on Evidence and Material Alteration

The Court held that when the alteration of a cheque is “patently clear on the face of it,” the courts below ought not to have insisted on any further evidence in that regard. This reasoning has a practical consequence: where a document carries its own evidence of tampering, the standard judicial demand for corroborative oral or documentary evidence is misplaced.

All three courts below had declined to act on the alteration defence without, apparently, giving sufficient weight to the physical state of the cheque. The Supreme Court found this approach legally incorrect. Once the material alteration was accepted as manifest, the foundation of the Section 138 prosecution collapsed. A dishonoured cheque that has been materially altered cannot ground a conviction under the provision in the name of the drawer who signed the original instrument.

Accordingly, the Court set aside all the judgments: the trial court's conviction order dated 11 August 2014, the District & Sessions Judge's appellate order dated 25 March 2019, and the High Court's revision order dated 25 April 2025.

Directions on Reimbursement

Since Rajasab had already paid the fine amount to the respondent pursuant to the High Court's order, the Court addressed the restoration of that money. The respondent, Hulagappa, was directed to reimburse the amount to Rajasab within four weeks from 17 July 2026.

The Court also dealt with the possibility that some portion of the deposited amount might still be lying to the credit of the case before the court concerned. In that event, Rajasab was given liberty to move an appropriate application for release of that sum along with any interest accrued thereon.

Order

The Division Bench of Justice Sanjay Kumar and Justice Sanjeev Sachdeva allowed the criminal appeal in terms of the signed order dated 17 July 2026. All judgments of the courts below were set aside. The respondent was directed to reimburse the amount paid by the appellant within four weeks. The appellant was granted liberty to apply for release of any amount still lying in court, together with accrued interest. Pending applications, if any, were disposed of.