Judgment

KAPUR, J. : It is not necessary for me to give the facts of this case as they are set out in detail in the judgments of my learned brethren Sarkar and Hidayatullah JJ. In my opinion this appeal should be dismissed and my reasons are these:

2. On the findings of the High Court it appears that the Bank had agreed to allow an overdraft to defendant No. 1 for Rs. 20,000/-, that the appellant gave a surety bond for the repayment of Rs. 25,000/- and when that was pointed out to defendant No. 1, the principal debtor, he (the latter) made the alteration in the document by reducing the figure of Rs. 25,000/- to Rs. 20,000/-.

3. The case of the appellant was not that he never stood surety for defendant No. 1 but that he stood surety for Rs. 5,000/- which was subsequently altered to Rs. 20,000/- and that any change of figure was a material alteration resulting in the avoidance of the contract, even though the alteration might have been advantageous to him the obliger. It was argued that howsoever innocent the obligee might be or howsoever innocent the alteration might have been made so far as it is material the non- accepting obligor - the appellant in this case - cannot be held liable on the obligation in the altered form because he never made or consented to such an obligation and he cannot be held liable on the obligation in the original form because the obligation was never assented to by the creditor - the respondent Bank. Now an unauthorised material alteration avoids a contract so that if a promiser after a written contract has been executed materially alters it without the con sent of the promisor whether by adding any thing to the contract or striking out any part of it or otherwsie the contract is avoided as against the person who was otherwise liable upon it (Halsbury s Laws of England 3rd Editions, Vol. 8, paragraph 301 at page 176) it may also be taken to be the law that even if the alteration is made by a stranger without the knowledge of the promisee the other party is discharged if the contract is in possession of the promisee or his agent. But if the contract is altered by stranger when the contract was not in the custody of the promisee the promisor is not discharged (Haisbury s Laivs of England, 3rd Edition Vol. 8 paragraph 301, p. 176). There is also, a further qualification and that is that if a Guarantor entrusts a letter of Guarantee to the principal borrower and the principal borrower makes an alteration without the assent of the appellant (sic) then the guarantor is liable because it is due to the act of the guarantor that the letter of guarantee remains with the principal debtor, in this case defendant No. 1, and what the principal debtor did will estop the guarantor from pleading want of authority (Williston on Contract Vol. VI, paragraph 1914, p. 5354).

4. Thus the position in the present case comes to this. The appellant agreed to stand surety for an overdraft allowed the respondent Bank to the principal debtor, Shankaran. The Bank required guarantee in the form which was handed over to the principal debtor, Skankaran. Sharkaran got it filled by the appellant for a sum of Rupees 25,000/- The Bank did not accept the guarantee up to that limit but wanted the figure to be corrected i.e. by insertion of Rs. 20000/- The document was thereupon. handed back to, the principal debtor who, it is stated, altered the document. At that stage the principal debtor was acting for and on behalf of the appellant because it was at his instance that the appellant was standing surety and appellant handed over the deed of guarantee to the principal debtor for the purposes of being given to the Bank, the respondent. In these circumstances the avoidance of contract by material alteration is inapplicable because the document was not altered while in possession of the promise or its agent but was altered by the principal debtor who was at the time acting as the agent of the guarantor, the appellant.

5. In these circumstances the