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CASE NO.:

Appeal (crl.) 1110-1111 of 2001

PETITIONER:

VEERA EXPORTS

Vs.

RESPONDENT:

T. KALAVATHY

DATE OF JUDGMENT: 02/11/2001

BENCH:

K.T. Thomas & S.N. Variava

JUDGMENT:

S. N. VARIAVA, J.

Leave granted.

Heard parties.

These appeals are against the Judgement of a single Judge of the

Madras High Court by which the criminal proceedings launched by the

appellant under Section 138 of the Negotiable Instruments Act have been

quashed.

Briefly stated the facts are as follows:

The Respondent had issued to the Appellants 8 cheques, bearing various

dates from 9th April, 1995 to 30th April, 1995, for a sum totalling Rs. 4 lacs.

The cheques were presented for payment on 15th May, 1995 but were

dishonoured. It is the case of the Appellant that the fact of dishonour was

brought to the notice of the Respondent and that the Respondent then

requested for more time to pay. The Appellants claim that they granted her

more time to pay. The Appellants claim that as the Respondent still could

not pay the amounts, in January 1996, she changed the date of the cheques

from 1995 to 1996. The Appellants claim that the Respondent also made the

necessary endorsement on the cheques at that time. The Appellant claim

that the Respondent then requested the Appellant to present the cheques after

a period of three months.

The cheques were again presented on 18th July, 1996 and were

dishonoured. A legal notice dated 8th August, 1996 was served upon the

Respondent. The Respondent, by her reply dated 23rd August, 1996, alleged

that she had been forced to change the dates against her will. She also took

up some other contentions. The Appellant then filed a complaint under

Section 138 of the Negotiable Instruments Act.

The Respondent thereafter filed a petition in the High Court of

Madras to quash the complaint. By the impugned order dated 24th

November, 2000, the High Court has quashed the complaint. Hence this

Appeal.

In the impugned judgment it has been held that the defence that the

alteration in the date was not made voluntarily was a question of fact which

would not constitute a ground for quashing the complaint. However, after so

holding correctly, the Court goes on to state that the validity period of a

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cheques is only 6 months. It was held that the validity period of all the 8

cheques had already expired by October, 1995, and then held that once the

validity period was over, the cheques could not be re-validated by

altering the dates so as to give fresh life to the cheques for another 6 months.

It is held that in law, a cheque which has become invalid because of the

expiry of the stipulated period could not be made valid by alteration of dates.

In our view this reasoning is entirely fallacious. There is no provision

in the Negotiable Instruments Act or in any other law which stipulates that a

drawer of a negotiable instrument cannot re-validate it. It is always open to

a drawer to voluntarily revalidate a negotiable instrument, including a

cheque.

The High Court has also placed reliance on Section 87 of the

Negotiable Instruments Act, which 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, 86 and 125."

The first paragraph of Section 87 makes it clear that the party who consents

to the alteration as well as the party who made the alteration are disentitled

to complain against such alteration, e.g. if the drawer of the cheque himself

altered the cheque for validating or revalidating the same instrument he

cannot take advantage of it later by saying that the cheque became void as

there is material alteration thereto. Further, 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. It requires evidence to prove the aforesaid question

whenever it is disputed.

It is held by the High Court that a change of date is a material

alteration which affected the interests of the Respondent. It is held that the

Respondent not being a willing party to the said alteration, the cheques were

void as contemplated by Section 87 of the Negotiable Instruments Act. At

this stage there is no basis for arriving at such a conclusion. In the earlier

part of the impugned Judgment it has been correctly held that this is a

question of fact. This is a fact which will have to be established on evidence

during trial. At this stage the High Court could not have quashed the

complaint merely on the basis of an assertion in the reply.

Under the circumstances the impugned order is set aside. The Petition

filed by the Respondent stands dismissed. The Judicial Magistrate II, Karur

shall now proceed with the complaint in accordance with law.

The Appeal stands disposed of accordingly. There shall be no Order

as to costs.

..J.

(K. T. THOMAS)

..J.

(S. N. VARIAVA)

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November 2, 2001.