Materially Altered Cheque Cannot Sustain Conviction Under NI Act: Supreme Court

The Supreme Court has acquitted a man convicted under Section 138 of the Negotiable Instruments Act after finding that the cheque forming the basis of the prosecution had been materially altered. Holding that the alteration was apparent on the face of the cheque itself, the Court ruled that the conviction could not be sustained.

Background of the Case

The appeal was filed by Rajasab against a Karnataka High Court judgment that had upheld his conviction under Section 138 of the Negotiable Instruments Act while reducing the fine from ₹1,15,000 to ₹1,10,000. The compensation amount had already been paid to the complainant in compliance with the High Court's order.

Before the Supreme Court, the central issue was whether the cheque had originally been issued for ₹10,000 or whether it had been altered to show an amount of ₹1,10,000.

Court's Observation

A Bench of Justice Sanjay Kumar and Justice Sanjeev Sachdeva examined the cheque placed on record and found that the words "One Lak" had been inserted before "Ten Thousand only" and the numeral "1" had also been added before "10,000" in the amount box.

The bench observed,

"The material alteration of the cheque was manifest."

It further noted that when such an alteration is evident from the face of the cheque, the courts below should not have insisted on further evidence to establish it. As a result, the Court held that the conviction based on the dishonour of the altered cheque could not stand.

Court's Decision

Allowing the appeal, the Supreme Court set aside the judgments of the trial court, the appellate court, and the Karnataka High Court. It directed that the amount received by Hulagappa pursuant to the earlier orders be reimbursed to Rajasab within four weeks.

The Court also permitted the appellant to seek release of any amount still lying deposited before the trial court, along with accrued interest, if applicable.

Case Details

Case Title: Rajasab v. Hulagappa

Case Number: Criminal Appeal No. of 2026 (Arising out of SLP (Crl.) No. 17025/2025)

Judge: Justice Sanjay Kumar and Justice Sanjeev Sachdeva

Decision Date: July 17, 2026