Section 138 NI Act- Burden Is Upon Complainant To Prove Alteration Of Name Of Payee Was Made By Accused Himself: Kerala HC [Read Judgment]

The Kerala High Court has held that when there is an alteration in the cheque with regard to the name of the payee, the burden is upon the complainant to prove that such alteration was made by the accused himself or that it was made with the consent of the accused.

In Geemol Joseph v. Kousthabhan, Justice R. Narayana Pisharadi also observed that filing of a complaint under Section 138 of the Act through the power of attorney holder is perfectly legal and competent

In this case, the name of the payee written as "Kousthubhan" [name of the accused] in the cheque was seen struck off and the name of the complainant was written in the cheque as the payee. Referring to Section 87 of the Negotiable Instruments Act and also the evidence on record, the Court agreed with the First Appellate Court that, when the cheque contained a correction with regard to the name of the payee, which was not even attested by the signature of the accused, it is highly improbable that the complainant would have accepted it.

The court further said that the effect of making a material alteration on a negotiable instrument without the consent of the party bound under it is exactly the same as that of cancelling the instrument and no criminal prosecution can be launched based on such an instrument. The court made following observations in this regard:

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 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 cannot be used as a ground to resist the right of the payee or the holder thereof. It is always a question of fact whether the alteration was made by the drawer himself or whether it was made with the consent of the drawer.

When there is an alteration in the cheque with regard to the name of the payee, the burden is upon the complainant to prove that such alteration was made by the accused himself or that it was made with the consent of the accused. The evidence of PW1 and PW2 does not prove that the alteration in the cheque with regard to the name of the payee was made by the accused himself or that it was made with his consent.

The effect of making a material alteration on a negotiable instrument without the consent of the party bound under it is exactly the same as that of cancelling the instrument. By alteration, the identity of the instrument is destroyed. If there is any material alteration in the cheque which renders it void, no criminal prosecution can be launched based on such a cheque

Cheque Complaint Can Be Filed Through PoA

On the issue of filing a complaint through power of attorney, the court observed:

The power of attorney holder is the agent of the grantor. When the grantor authorises the attorney holder to initiate legal proceedings and the attorney holder accordingly initiates such legal proceedings, he does so as the agent of the grantor and the initiation is by the grantor represented by his power of attorney holder and not by the attorney holder in his personal capacity. True, the power of attorney holder cannot file a complaint in his own name as if he is the complainant. He can initiate criminal proceedings on behalf of the principal. Filing of a complaint under Section 138 of the Act through the power of attorney holder is perfectly legal and competent.

Accused Not Entitled To Give Evidence On Affidavit

Though it upheld the acquittal, the court also noted that the accused had filed an affidavit and stated therein that that he had drawn the cheque in his own name for withdrawing amount from his bank and he had entrusted the cheque with his friend Babu to withdraw money from the bank but the cheque was lost from the possession of Babu. The court said:

An accused, in a case against him under Section 138 of the Act, is not entitled to give evidence on affidavit. Section 145(1) of the Act does not confer a right on the accused to give evidence on affidavit. The right available to a complainant, to adduce evidence by affidavit in lieu of examination-in-chief, is not available to an accused.

Tendering of a witness for cross examination, without conducting examination-in-chief, amounts to giving up of the witness

Taking note of the fact that there was no examination in chief of the witness, the court further added:

"When there was no examination-in-chief of a witness, no question of cross examination also arises. Section 138 of the Indian Evidence Act envisages that a witness would first be examined-in-chief and then subjected to cross examination. There is no meaning in tendering a witness for cross examination only. Tendering of a witness for cross examination, without conducting examination-in-chief, amounts to giving up of the witness." 

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