Material Alteration of Cheque Destroys Section 138 NI Act Conviction | Rajasab v. Hulagappa Supreme Court 2026
EduLaw EditorialLandmark JudgementsWhen the words "One Lak" were crudely interjected before "Ten Thousand only" on the face of a cheque, the Supreme Court asked a simple question why did three courts below ignore what was visible to the naked eye? In Rajasab v. Hulagappa, the Court dismantled a decade-old conviction and restored the liberty of a man wrongly held guilty under Section 138 of the Negotiable Instruments Act, 1881. Title: Material Alteration of Cheque Destroys Section 138 Conviction: Supreme Court's Landmark Ruling in Rajasab v. Hulagappa (2026) Case Name: Rajasab v. Hulagappa Case Number: Criminal Appeal No. ___ of 2026 (Arising out of SLP (Crl.) No. 17025/2025) Court: Supreme Court of India Judges: Hon'ble Mr. Justice Sanjay Kumar and Hon'ble Mr. Justice Sanjeev Sachdeva Judgment Date: July 17, 2026 Citation: 2026 SCC OnLine SC ___ (Criminal Appeal arising out of SLP (Crl.) No. 17025/2025) ABSTRACT The Supreme Court of India, in Rajasab v. Hulagappa (Criminal Appeal arising out of SLP (Crl.) No. 17025/2025), delivered a significant ruling on July 17, 2026, addressing the intersection of material alteration and criminal liability under Section 138 of the Negotiable Instruments Act, 1881 . The appellant, Rajasab, had been convicted by the trial court, the appellate court, and the High Court of Karnataka for dishonour of a cheque allegedly drawn for ₹1,10,000. The Supreme Court, upon examining the cheque placed on record, found that the instrument had been patently tampered with — the words "One Lak" were visibly inserted before "Ten Thousand only" and the numeral "1" was added before "10,000" in the amount box. Holding that the material alteration was manifest on the face of the cheque, the Division Bench of Justice Sanjay Kumar and Justice Sanjeev Sachdeva ruled that no further evidence was required to establish the tampering, set aside all three concurrent findings of guilt, acquitted the appellant, and directed the complainant to reimburse the amount already paid. The judgment reinforces the principle under Section 87 of the Negotiable Instruments Act, 1881 , that a materially altered instrument is void and cannot sustain a criminal prosecution. TABLE OF CONTENTS Introduction and Significance of the Judgment Factual Background and Chronology Procedural History Across Four Courts Core Legal Issue: Was the Cheque Materially Altered? Supreme Court's Analysis and Reasoning Statutory Framework: Sections 87, 89, 138, and 139 of the NI Act Relevant Case Laws and Judicial Precedents Key Takeaways and Implications for Future Litigation 1. INTRODUCTION AND SIGNIFICANCE OF THE JUDGMENT Cheque bounce cases under Section 138 of the Negotiable Instruments Act, 1881 constitute one of the most voluminous categories of criminal litigation in India. The statutory presumption under Section 139 — which mandates that the court shall presume the cheque was issued in discharge of a legally enforceable debt — places a heavy evidential burden on the accused. However, this presumption is not irrebuttable. One of the most fundamental defences available to an accused is that the cheque in question has been materially altered by the complainant, thereby rendering it void under Section 87 of the NI Act . The Supreme Court's judgment in Rajasab v. Hulagappa addresses the critical question of what happens when the alteration is visible on the face of the instrument itself — and whether lower courts are justified in demanding expert evidence to prove something that is self-evident. This ruling is particularly significant because it overturned three concurrent findings by courts below, demonstrating that even well-established convictions cannot survive when the foundational document of prosecution is demonstrably tampered with. 2. FACTUAL BACKGROUND AND CHRONOLOGY The dispute originated from a cheque dishonour complaint filed by the respondent, Hulagappa, against the appellant, Rajasab. The complainant alleged that Rajasab had issued a cheque for ₹1,10,000 (Rupees One Lakh Ten Thousand) which was subsequently dishonoured upon presentation at the bank. Rajasab's defence, maintained consistently from the trial stage to the Supreme Court, was straightforward — he had issued the cheque for only ₹10,000 (Rupees Ten Thousand), and the complainant had materially altered the instrument by inserting the words "One Lak" before "Ten Thousand only" in the written amount field, and by adding the digit "1" before "10,000" in the numerical amount box. The effect of this alleged alteration was to inflate the cheque amount by ₹1,00,000. The trial court at Koppal did not accept this defence and convicted Rajasab by its judgment dated August 11, 2014, accepting the complainant's version that the cheque was genuinely drawn for ₹1,10,000. Rajasab was ordered to pay a fine of ₹1,15,000. 3. PROCEDURAL HISTORY ACROSS FOUR COURTS The case traversed an unusually long path through the judicial system over a period of twelve years. Following his conviction by the trial court on August 11, 2014, Rajasab filed a criminal appeal before the learned District and Sessions Judge, Koppal. The appellate court dismissed his appeal on March 25, 2019, affirming both the conviction and the sentence. Rajasab then moved the High Court of Karnataka, Dharwad Bench, by filing Criminal Revision Petition No. 100116/2019. The High Court, by its judgment dated April 25, 2025, allowed the revision only in part — while it maintained the conviction under Section 138 , it reduced the fine amount from ₹1,15,000 to ₹1,10,000 and directed this sum to be paid as compensation to the complainant within an extended period. Rajasab complied with this direction and paid the amount. He then approached the Supreme Court by filing SLP (Crl.) No. 17025/2025. The Supreme Court granted leave and converted the petition into a Criminal Appeal. The matter was heard on July 17, 2026, by the Division Bench of Justice Sanjay Kumar and Justice Sanjeev Sachdeva, with Mr. Anil Katarki appearing for the appellant and Ms. Akhila Wali representing the respondent. 4. CORE LEGAL ISSUE: WAS THE CHEQUE MATERIALLY ALTERED? The singular question before the Supreme Court was whether the cheque in question was originally drawn for ₹10,000 or whether it was genuinely issued for ₹1,10,000 as claimed by the complainant. This factual determination carried decisive legal consequences — if the cheque had been materially altered by the complainant, the entire prosecution under Section 138 would collapse because a void instrument cannot form the basis of a criminal complaint for dishonour. The lower courts had all declined to accept the material alteration defence. It appears from the Supreme Court's observations that the courts below insisted on the accused producing further evidence — potentially expert handwriting analysis — to establish the alleged tampering. The Supreme Court took a fundamentally different approach. Rather than remanding the matter for fresh evidence or expert examination, the Court directly examined the copy of the cheque placed on record at page 30 of the case file. What the Court found was unambiguous and required no interpretation. 5. SUPREME COURT'S ANALYSIS AND REASONING The Court's analysis was direct and incisive. Upon bare perusal of the cheque, the Division Bench found that the words "One Lak" had been clearly interjected before the words "Ten Thousand only" in the amount-in-words column, and the numeral "1" had been inserted in the numerical box before "10,000/-". The Court characterised this alteration as "patently clear on the face of it" and described the material alteration as "manifest." The critical legal principle articulated by the Court was that when alteration of a cheque is visible on its face, courts below "ought not to have insisted on any further evidence in that regard." This observation carries significant weight for future cheque dishonour litigation. It establishes that the evidentiary standard for proving material alteration is not uniform — where the alteration is self-evident from the document itself, the document becomes its own proof. No corroborative testimony, no expert opinion from a handwriting analyst, and no additional documentary evidence is required. The Court held that once the material alteration was accepted as manifest, the conviction of the appellant on the ground that the cheque was dishonoured upon presentation "cannot be sustained." All three judgments — of the trial court, the District and Sessions Judge, and the High Court — were accordingly set aside, and Rajasab was acquitted of the charge under Section 138 . 6. STATUTORY FRAMEWORK: SECTIONS 87, 89, 138, AND 139 OF THE NI ACT The judgment engages with several interconnected provisions of the Negotiable Instruments Act, 1881 that govern the interplay between material alteration and criminal liability for cheque dishonour. Section 87 of the NI Act provides that "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." This section is the statutory death knell for any prosecution based on an altered cheque — once the instrument is rendered void, it ceases to have legal existence and cannot ground a criminal complaint. Section 89 of the NI Act addresses the scenario of payment on instruments where alteration is not apparent, providing protection to paying bankers who make payments in due course on cheques that do not bear visible signs of alteration. The corollary of Section 89 is significant — where the alteration is apparent (as in the present case), no such protection operates, and the instrument's infirmity is self-declaring. Section 138 of the NI Act criminalises the dishonour of a cheque for insufficiency of funds, but its operation presupposes a valid, legally enforceable instrument. A cheque that has been materially altered is void ab initio under Section 87 and therefore falls outside the ambit of Section 138 altogether. Section 139 of the NI Act raises a statutory presumption that the holder of a cheque received it in discharge of a legally enforceable debt. However, this presumption is rebuttable, and proof of material alteration — particularly when it is visible on the face of the instrument — constitutes a complete rebuttal of this presumption. 7. RELEVANT CASE LAWS AND JUDICIAL PRECEDENTS The ruling in Rajasab v. Hulagappa aligns with and strengthens a line of judicial authority on material alteration of negotiable instruments. In Ramachandran v. K. Dineshan & Anr. (2005 ALL MR (Cri) Journal 177), the Kerala High Court held that if there is any material alteration in the cheque which renders it void under Section 87 , no criminal prosecution can be launched based on such a cheque. The Bombay High Court, in a widely noted decision, similarly held that material alterations to a cheque without the prior consent of both parties renders the instrument void and prosecution under Section 138 cannot be initiated. In Central Bank of India v. Ram Narain (1955), the court established that modifying the date on a cheque constitutes a material alteration — broadening the scope of what qualifies as a material change to the instrument. The Supreme Court's own earlier pronouncements in Bir Singh v. Mukesh Kumar (2019) 4 SCC 284 clarified that while the presumption under Section 139 places the onus on the accused to rebut it, the nature of the rebuttal can take various forms, including demonstrating that the cheque itself is not a genuine or valid instrument. The significance of Rajasab v. Hulagappa lies in its clarification that where the material alteration is patent and self-evident, the accused need not discharge any additional evidentiary burden — the cheque speaks for itself. 8. KEY TAKEAWAYS AND IMPLICATIONS FOR FUTURE LITIGATION The Supreme Court's judgment in Rajasab v. Hulagappa carries several consequential implications for cheque dishonour litigation in India. First, the ruling establishes a clear evidentiary threshold — where material alteration is visible on the face of the cheque, courts must not insist on further proof such as expert handwriting analysis or forensic examination. The document itself constitutes sufficient evidence of tampering. Second, the judgment serves as a caution to complainants who may attempt to inflate cheque amounts through post-issuance alterations. The Court's willingness to overturn three concurrent findings of guilt demonstrates that such manipulation, when detected, will result not only in acquittal but also in mandatory reimbursement of amounts already extracted from the accused. Third, for accused persons in Section 138 cases, the judgment underscores the importance of placing the original or a clear copy of the cheque on record and drawing the court's attention specifically to any visible signs of alteration. The fact that three courts below had all rejected this defence despite the alteration being, in the Supreme Court's assessment, "patently clear" indicates that lower courts may sometimes overlook physical evidence in favour of procedural presumptions. Fourth, the direction for reimbursement within four weeks — coupled with liberty to recover any amount still deposited in court with accrued interest — demonstrates that the Court was mindful of the real financial prejudice suffered by Rajasab over twelve years of litigation. The respondent, Hulagappa, was ordered to return the money within four weeks from July 17, 2026, ensuring that the wrongful conviction did not continue to yield financial benefit to the complainant. This judgment will undoubtedly be cited in future Section 138 proceedings wherever material alteration is raised as a defence, and it firmly establishes that a cheque which tells its own story of tampering requires no additional narrator. FREQUENTLY ASKED QUESTIONS What is material alteration under the Negotiable Instruments Act? Material alteration refers to any unauthorized change to a key term of a negotiable instrument — such as the amount, date, payee name, or other essential particulars — that modifies the legal obligations of the parties. Under Section 87 of the NI Act, 1881 , any such alteration renders the instrument void against parties who did not consent to the change. Can a materially altered cheque be the basis of a Section 138 prosecution? No. As held in Rajasab v. Hulagappa (2026), a cheque that has been materially altered is void under Section 87 and cannot form the foundation of a criminal prosecution under Section 138 of the Negotiable Instruments Act. The dishonour of a void instrument does not attract criminal liability. Is expert evidence necessary to prove material alteration of a cheque? Not always. The Supreme Court in Rajasab v. Hulagappa held that when the alteration is "patently clear on the face of" the cheque, no further evidence — including expert handwriting analysis — is required. The document itself serves as proof of the tampering.