Court dismisses petitioner's challenge on demand notice and cheque alteration, ruling that the notice sufficiently conveyed cheque particulars and alteration was not material under Section 87 of Negotiable Instruments Act
In a significant ruling on 7th August 2026, the Andhra Pradesh High Court, presided over by Justice Subhendu Samanta, dismissed a criminal revision petition challenging the validity of a demand notice issued under Section 138 of the Negotiable Instruments Act, 1881 (NI Act), and the alleged material alteration in the date on the cheque involved.
The petitioner, A. Amaranadh Babu, was convicted by the trial court and the appellate court for dishonour of cheque under Section 138 of the NI Act. He challenged the conviction on two grounds: first, that the demand notice did not specifically state the amount payable in the concluding paragraph, rendering it invalid; and second, that the cheque bore a material alteration in the date, which under Section 87 of the NI Act should render it void.
The Court examined the demand notice in detail. While the concluding paragraph of the notice did not reiterate the cheque amount, the preceding paragraphs clearly specified the cheque number, date, and the amount (Rs.40,000/-) that was dishonoured due to insufficient funds. The Court held that the demand notice must be read as a whole and that mere omission of repeating the amount in the last paragraph does not invalidate the notice if the notice, when read in entirety, sufficiently informs the drawer about the cheque particulars and amount due. This interpretation aligns with the statutory requirement under proviso (b) to Section 138 of the NI Act, which mandates a demand for payment within 15 days.
Regarding the alleged material alteration in the date on the cheque, the Court noted that the cheque leaf was printed before the year 2000 with the pre-printed digits "19" for the year. The petitioner had struck off the digits "19" and inserted "2004" when the cheque was issued in 2004. The Court distinguished this minor alteration from the case relied upon by the petitioner (Rajasab v. Hulagappa, decided by the Supreme Court), where the alteration was patently clear and unauthorized. Here, the alteration was necessary due to the pre-printed year format and was not disputed by the drawer in terms of consent. The cheque return memo cited "insufficient funds" as the reason for dishonour, not alteration or unauthorized changes.
The Court emphasized that under Section 87 of the NI Act, a material alteration renders a negotiable instrument void unless made with the consent of the party liable. Since the petitioner did not deny issuing or signing the cheque and failed to prove that the alteration was unauthorized, the alteration was held to be non-material.
Consequently, the High Court upheld the conviction and sentence imposed by the lower courts. The petitioner's sentence, initially suspended during the pendency of the revision, was ordered to be served within six weeks, failing which a non-bailable warrant would be issued.
This judgment clarifies critical aspects regarding the sufficiency of demand notices under Section 138 of the NI Act and the scope of material alteration under Section 87, providing guidance for future cheque dishonour litigation.
Bottom Line:
Validity of demand notice under Section 138 of the Negotiable Instruments Act - Mentioning cheque particulars in the notice satisfies statutory requirements.
Statutory provision(s):
Negotiable Instruments Act, 1881 Section 138, Section 87
A. Amaranadh Babu v. Marreddy Anjaneya Reddy, (Andhra Pradesh) : Law Finder Doc Id # 2957608
