Altered Cheque or Amount Mismatch: Bounce Case Outcome

A cheque comes back with the return memo reading 'alteration' or 'amount in words and figures differ', and the accounts desk has to decide within days whether this is a payment problem or a document problem. In an altered cheque bounce case the answer decides everything: whether the Section 138 notice for the full figure will hold, whether you sue on the invoice instead, and whether the bank's memo helps or hurts you. The Negotiable Instruments Act, 1881 sets clear rules on material alteration, but banks apply them mechanically and courts apply them strictly. Here is how those rules work in practice.

What Counts as a Material Alteration

Section 87 of the Negotiable Instruments Act, 1881 is the starting point. A material alteration renders the instrument void against any party who was liable at the time of the alteration and did not consent to it, unless the change carried out the common intention of the original parties. The section does not catalogue every material change. The working test is whether the change alters the legal effect of the instrument — the amount payable, the payee, the date, the place of payment or the crossing.

Changing the amount from ₹50,000 to ₹5,00,000 is material. So is pushing the date forward to keep a stale cheque alive, inserting a payee name, or striking out a crossing. A correction that leaves the obligation exactly as it was, such as repairing a misspelt street name in the address block, may not be material at all.

Consent decides the case. An initial beside the correction is evidence that the drawer knew of it, but it binds only if the person initialling could bind the drawer. A junior accountant's initials on a company cheque do not bind the company; the authorised signatory's do. If the change carried out what both sides had already agreed, Section 87 does not void the cheque.

Section 89 protects a paying banker who pays an instrument that does not appear to have been altered. That is the bank's protection for paying in due course. It says nothing about whether the drawer consented, and it does not cure an alteration as between drawer and payee.

How an Altered Cheque Bounce Case Changes

If the alteration was unauthorised, the cheque is void against the drawer. Section 138 punishes the dishonour of a cheque issued for a legally enforceable debt; it does not punish the dishonour of an instrument the drawer never issued. A complaint built on the altered figure is exposed at the threshold. The underlying debt does not vanish — the payee can sue on the invoice, delivery challan and ledger — but the criminal route under Section 138 is no longer automatic.

If the alteration was authorised, the cheque stands for the altered amount and Section 138 runs its ordinary course. The holder must still show presentation within the cheque's validity period, a return memo citing insufficiency of funds or that the amount exceeds the arrangement, a written demand within 30 days of the memo, non-payment within 15 days of the notice, and a complaint filed within one month thereafter.

Presumptions help the holder. Section 139 presumes that the cheque was received for the discharge of a debt, and the drawer must rebut it. But those presumptions operate on the cheque as issued. Once the drawer points to a visible alteration, the holder is expected to explain the authority for it. Where a company's cheque is involved, Section 141 extends liability to the persons in charge of and responsible for the company's business at the time of the offence.

Two practical points. The return reason shapes the defence: a memo citing 'funds insufficient' invites the usual Section 138 fight, while 'alteration' invites a document fight first. And courts can order interim compensation of up to 20% of the cheque amount under Section 143A, so the figure you plead matters from day one.

Amount in Words vs Figures: Which Prevails

Section 18 of the Act settles it. Where the amount is stated in words and also in figures and the two differ, the amount in words is deemed to be the amount intended by the maker. For a cheque, the words prevail.

So a cheque reading 'Rupees One lakh eighteen thousand only' in words and '1,80,000' in figures carries ₹1,18,000. That is the amount of the instrument. The bank, however, is entitled to return it with 'amount in words and figures differ' rather than choose; clearing systems are built to reject discrepancies, not interpret them.

The rule fixes the amount of the cheque, not the amount of the debt. Suppose the invoice and ledger show ₹1,18,000 while the words read ₹1,80,000. The cheque amount is ₹1,80,000, yet a Section 138 demand for ₹1,80,000 still needs a legally enforceable debt of that size behind it. Overstating the demand is the easiest defence you can hand the drawer.

When the notice is drafted, align three things: the amount in words, the amount in your books, and the amount demanded. If they cannot be reconciled, issue the notice on the books figure and reserve the balance for a civil suit.

Worked scenario: one cheque, two figures

Meera Traders supplies fabric to a garment unit in Karur and on 12 March 2026 receives a cheque dated 1 April 2026 for a ₹1,18,000 invoice. The words read 'Rupees One lakh eighteen thousand only'; the figures read '1,80,000'. On 2 April, a Meera Traders accounts assistant strikes out the date, writes '1 May 2026' and initials the change in his own hand. The cheque is presented on 5 May 2026 and returns with 'alteration'.

The drawer's lawyer then sends a notice on 20 May 2026 claiming the cheque was materially altered and is void. The position is straightforward. Under Section 18 the instrument carried ₹1,18,000, because the words govern. The date change was made by the payee's own employee without the drawer's consent, so under Section 87 the cheque is void against the drawer. Section 138 will not run on this cheque at all. Recovery has to be filed on the invoice, delivery challans and ledger, with interest. The ₹1,18,000 debt survives; the criminal complaint does not.

Return Memo Reasons That Signal Tampering

Return memo wording varies by bank and clearing platform. Watch for 'alteration', 'date altered', 'amount altered', 'amount in words and figures differ', 'drawer confirmation required', 'signature differs' and 'mutilated'. The memo is the bank's stated reason for non-payment. It is evidence, not a finding of fact.

Collect the clearing image of the cheque — most banks provide it on request — and compare it with any photocopy, scan or photograph taken when the cheque was handed over. Note ink colour, handwriting, the position of initials, and whether the signature area shows disturbance. Do not write on, staple over or tape the original cheque; preserve it exactly as it came back.

Then classify. 'Funds insufficient' is a payment failure. 'Alteration' is a document dispute. 'Signature differs' is about authority. 'Drawer confirmation required' usually means the bank wants the drawer's confirmation before paying an unusual item. Each calls for a different notice, and mixing them weakens the file.

Proving the Alteration Was Authorised

The party relying on an altered cheque has to show consent. Three kinds of proof do most of the work.

First, a signed confirmation from the drawer — a letter, an email from the drawer's registered address, or a signed note on the invoice — stating that the change was agreed. That beats an initial any day.

Second, an initial by someone who could bind the drawer: the proprietor in a proprietorship, an authorised signatory under the board resolution and bank mandate in a company, an authorised partner in a partnership.

Third, contemporaneous records: purchase order, invoice, delivery challan, e-way bill, ledger extract and bank statement showing the payment pattern between the parties. If the two sides have corrected cheques by mutual initialling for years, that course of dealing is itself evidence.

Section 20 offers a related argument. Where a person signs and delivers a cheque incomplete as to amount or date, that person gives prima facie authority to the holder to complete it. A cheque that was never completed but is later filled in is a different case from a completed cheque later altered, and your evidence should make clear which one you are in. Electronic proof — WhatsApp messages agreeing a new date, emails attaching the corrected cheque — must be preserved with the certificate required under the Bharatiya Sakshya Adhiniyam, 2023 if you intend to rely on it.

First ten days after the return memo

• Stop presenting any further cheque from the same drawer and note the exact return memo date.

• Download the clearing image and photograph the original cheque front and back before filing it.

• Pull the invoice, delivery challan, ledger extract and bank statement for the transaction.

• Check whether the amount in words matches your books; if it does not, work from the books figure.

• Ask the drawer in writing to confirm or deny the change, and keep the reply even if it is a denial.

• Send the demand notice within 30 days of the return memo, by registered post and email.

• Diarise the 15-day payment window and the one-month complaint deadline that follow.

Documents to keep

Retain the original cheque with the return memo, the clearing image, the bank's memo copy, the invoice and delivery challans, the ledger extract, the bank statement, the drawer's written confirmation or denial, and a copy of the notice with postal proof. In a Section 138 complaint these are usually the documents that decide the matter, and the original cheque must be produced in court.

If a cheque has come back for alteration or a figures mismatch, do not fire off a notice for the higher amount. Establish the amount in words, decide within the 30-day window whether you are pursuing the cheque or the invoice, and file accordingly.

This article is for general information only and is not legal advice. Consult a qualified professional for your specific facts.