Anirban issues an open 'bearer' cheque for ₹11,50,000 in favour of Bhemin who strikes out the word 'bearer' and puts crossing across the cheque. The cheque is thereafter negotiated to Cherian and Dhruven. When it is fina

As per section Section 138 of the Negotiable Instruments Act, 1881, where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for 4 [a term which may be extended to two years'], or with fine which may extend to twice the amount of the cheque, or with both. Effects of striking off the word bearer: It amounts to a material alteration. However, such material alteration is authorized by the Act. Therefore, the cheque is not discharged; it remains valid. Effects of crossing the cheque: It amounts to a material alteration. However, such material alteration is authorized by the Act. Therefore, the cheque is not discharged; it remains valid. Anirban argument is not valid: Since the reason for dishonour of cheque is not 'material alteration' but' payment countermanded by drawer, therefore, Arihant is liable for the payment of the cheque and he shall also be liable for dishonour of cheque in accordance with the provisions of Section 138.