Deliberately Appending Mismatched Signature To Prevent Encashment Of Cheque Attracts S.138 NI Act: J&K&L High Court

The Jammu and Kashmir and Ladakh High Court has held that where a drawer of a cheque deliberately appends a signature that does not tally with his specimen signature available with the bank, with the intent to prevent the cheque from being honoured, the offence under Section 138 of the Negotiable Instruments Act, 1881, would stand attracted.

A bench of Justice Sanjay Dhar remarked,

“.. so long as an act or omission on the part of the drawer of the cheque is intended to prevent the cheque being honoured, the dishonour would become an offence under Section 138 of the Negotiable Instruments Act”

The Court made these observations while dismissing a petition seeking quashing of a complaint and summoning order passed in a cheque dishonour case, holding that deliberate acts intended to frustrate encashment cannot be used as a shield against prosecution.

Background:

The petition arose out of a complaint filed by one Abdul Hamid Lone alleging commission of offences under Sections 138 and 142 of the Negotiable Instruments Act against Abdul Hamid Wani. The complainant asserted that the accused owed him a sum of ₹14 lakhs and, towards discharge of this liability, had issued a cheque. Upon presentation, the cheque was returned unpaid with the endorsement “alterations require drawer's authentication.”

Despite issuance of a statutory demand notice, the amount remained unpaid, leading to the filing of a complaint. The Magistrate, upon forming a prima facie opinion, took cognizance and issued process against the accused. This order, along with the complaint itself, was assailed before the High Court.

Appearing for the petitioner-accused, Advocate Mudasir Bin Hassan contended that the cheque in question was forged and that the complainant had himself altered the amount. It was argued that the petitioner owed only ₹14,000, which had allegedly been manipulated into ₹14 lakhs by converting figures and words on the cheque.

Emphasis was also laid on the fact that the petitioner had sufficient balance in his account and that the dishonour was not due to insufficiency of funds but because of forgery allegedly committed by the complainant.

Court's Analysis & Observations:

Justice Dhar framed the core issue as whether dishonour of a cheque on account of alterations in the cheque amount would constitute an offence under Section 138 of the Negotiable Instruments Act.

Relying extensively on the Supreme Court's decision in M/s Lakshmi Dyechem v. State of Gujarat (2012) 13 SCC 375, the Court observed that the contingencies mentioned in Section 138 are not to be interpreted narrowly. The expression “amount of money is insufficient” is a genus, while reasons such as “account closed,” “payment stopped,” or even “signatures do not match” are species falling within its sweep, the court clarified.

The High Court noted that the Supreme Court has consistently recognised that deliberate acts or omissions on the part of the drawer, intended to ensure dishonour of the cheque, would not take the case outside the ambit of Section 138. Acts such as changing specimen signatures, altering mandates, or otherwise creating a mismatch are treated as conscious steps to prevent honouring of the cheque.

“So long as the change is brought about with a view to preventing the cheque being honoured, the dishonour would become an offence under Section 138,” the Court emphasised, echoing the reasoning of the Supreme Court.

Applying this principle, Justice Dhar made it clear that if a drawer intentionally appends a different signature on the cheque, which does not match the specimen signature available with the bank, the offence under Section 138 would be constituted against him. The same principle, the Court held, applies where a drawer deliberately makes overwriting or alterations in the cheque whether in the amount or the date without authenticating such changes, with the intent to frustrate payment.

The Court then examined the impact of Section 87 of the Negotiable Instruments Act, which renders a negotiable instrument void in case of material alteration without consent. Justice Dhar observed that alteration in the amount mentioned in a cheque undoubtedly qualifies as a material alteration within the meaning of Section 87.

“The issue as to which of the parties has made alteration in the cheque is a question of fact which can be determined only during trial,” the Court categorically held.

An additional factor weighed by the Court was the petitioner's failure to respond to the statutory demand notice. Justice Dhar observed that had the petitioner replied to the notice and placed his version on record at that stage, the situation might have been different. Having remained silent, the determination of responsibility for the alleged alterations necessarily becomes a matter for trial, the court maintained.

Holding that the contentions raised by the petitioner involved disputed questions of fact, the High Court refused to exercise its inherent jurisdiction to quash the complaint or the summoning order. The petition was accordingly dismissed, with liberty reserved to the petitioner to raise all permissible defences before the trial court at the appropriate stage.

Case Title: Abdul Hamid Wani Vs Abdul Hamid Lone

Citation: 2026 LiveLaw (JKL)

Click Here To Read/Download Judgment