Shivalingappa v. P.B. Puttappa AIR 1971 Mys. 273
FACTS-
The respondent-plaintiff sued to recover Rs. 2,635, including a principal sum of Rs. 2,000 and interest, based on a promissory note dated 9-2-1961.
The defendant admitted executing the promissory note but pleaded discharge of Rs. 2,000. He also alleged that the note was materially altered by the plaintiff erasing an endorsement made by him.
The trial court dismissed the suit, finding that the promissory note was materially altered and accepting the defendant's plea of discharge.
The lower appellate court reversed the trial court's decision, holding that the note was not materially altered and that the discharge was not proven.
Hence, the present appeal before HC.
ISSUE-
Whether the promissory note was materially altered, and the Promissory note is void as per Section 87 of the Negotiable Instruments Act?
RULE-
Material alteration of a negotiable instrument renders it void against parties who did not consent to the alteration unless it was made to carry out the original parties' common intention (Section 87 of the Negotiable Instruments Act).
HELD-
The defendant alleged that an endorsement on the back of the promissory note was erased by the plaintiff. However, the plaintiff denied the existence of any such endorsement.
The hand-writing expert's opinion suggested some erasure on the back of the note, but it was deemed insufficient evidence to prove the defendant's claim.
The endorsement which is alleged to have been made on the back side of the pro note does not form part of the negotiable instrument, it did not constitute a material alteration of the promissory note under Section 87.
The court upheld the lower appellate court's decision, finding no merit in the defendant's claim of discharge or material alteration of the promissory note.
The appeal was dismissed.
COMMENTARIES RATIO/NOTE-
[30.183] Alterations not material
The following alterations have been held to be immaterial:
(1)alterations by mistake[Gourochandro Dyano Sumanto v Krushnacharana Padhi 53 MLW 59];
(2)alterations not changing basic intention of parties [M S Anirudhan v Thomco’s Bank Ltd AIR 1963 SC 746];
(3)alterations made before the bill or note is issued[Re Satti Subbi In Re ddi AIR 1936 Mad 154];
(4)alterations made to correct mistakes or give effect to intention of parties[ Lachmi Rai v Srideo Rai AIR 1939 All 248]; or
(5)the filling up intentionally of remaining blank spaces. Alterations by strangers to the instrument do not affect the holder’s right and are not material alterations [Gourochandro Dyano Sumanto v Krushnacharana Padhi AIR 1941 Mad 383], nor is an indorsement or alteration outside an instrument material [Mukat Ram v Sita Ram 189 IC 8].