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Andhra Pradesh High Court
Vakkalagadda Kondiah - Appellant
Versus
Channamsetty Pedda Pulliah - RESPONDENT
Decided On: 08-07-59

A material alteration of a negotiable instrument renders it void and unenforceable under Section 87 of the Negotiable Instruments Act.

Headnote:

NEGOTIABLE INSTRUMENTS ACT, 1881 - SECTION 87 - MATERIAL ALTERATION - EFFECT - RENEWAL PROMISSORY NOTE - ACKNOWLEDGMENT OF PART PAYMENT - LIMITATION ACT, 1908 - SECTIONS 19 AND 20 - APPLICABILITY.

Fact of the Case:

Plaintiff filed a suit for recovery of Rs. 444.00 towards the principal and interest due under a renewed promissory note. Defendants resisted the suit, contending that the suit promissory note had been materially altered by the plaintiff and was not enforceable, that the endorsement of payment of Rs. 4.00 dated 2/11/1951 on the suit promissory note was false, and that they had paid Rs. 400.00 in full discharge of the suit debt.

Finding of the Court:

The court held that the alteration in the date of the suit promissory note amounted to a material alteration, rendering it unenforceable under Section 87 of the Negotiable Instruments Act. The court also held that the plaintiff could not rely on the original cause of action as evidenced by the earlier promissory note, as the suit was not based on that cause of action and the part payment on the renewed promissory note did not alter the position.

Issues: 1. Whether the alteration in the date of the suit promissory note amounted to a material alteration, rendering it unenforceable? 2. Whether the endorsement of payment of Rs. 4.00 dated 2/11/1951 on the suit promissory note was true, valid, and binding on the respondents? 3. Whether the plea of discharge set up by the respondents was true?

Ratio Decidendi: 1. Section 87 of the Negotiable Instruments Act provides that any material alteration of a negotiable instrument renders it void. The alteration in the date of the suit promissory note was a material alteration, as it changed the date of maturity and the period of limitation for enforcing the note. 2. The plaintiff failed to prove that the endorsement of payment of Rs. 4.00 dated 2/11/1951 on the suit promissory note was true and valid. The defendants had denied making the payment, and the plaintiff had not provided any evidence to support his claim. 3. The defendants failed to prove their plea of discharge.

Final Decision: The court allowed the revision petition and decreed the suit for Rs. 300-2-0 with interest at Rs. 12.00 per cent per annum till the date of the institution of the suit and Rs. 6.00 per cent per annum till the date of realization of the sum decreed. The petitioner was awarded costs throughout from the respondents 1 to 5.

QAMAR HASSAN, J.

( 1 ) 1. This is a revision petition on behalf of the plaintiff and it is directed against the judgment and decree dated 25-7-1955 of the District Munsif, Narasaraopet, dismissing the suit.

( 2 ) TO appreciate the points canvassed before me a few facts need be mentioned. Channamsetty Pedda Puliah, respondent No. 1, Boligorla Yerrayya father of Respondents 2 to 4, Madagani Venkatigaou father of respondent No. 5, and Megali Pulligadu, respondent No. 6 executed a promissory note Ex. A-1 on 6-11-1945 promising to pay Rs. 300. 00 with interest at the rate of 12 per cent per annum. On 4-11-1948 they made an endorsement Ex. A1 (a) on Ex. A. 1 to the effect that a promissory note is executed for the sum of principal and interest for Rs. 410-4-0 due under the promissory note. The renewed promissory note, Ex. A-2 again bore the endorsement, Ex. A. 2 (a) by the promisors acknowledging the payment of Rs. 4. 00 on 2-11-1951 under Ex. A. 2.

( 3 ) THE petitioner brought SCS No. 500 of 1954 for recovery of Rs. 444. 00 towards the principal and interest due under the renewed promissory note. Respondents 1 to 5 resisted the suit. They contended that the suit promissory note had been materially altered by the plaintiff and for that reason the same was not enforceable. They denied that they ever paid Rs. 4. 00 on 2-11-1951 as alleged by the petitioner and that the endorsement to that effect was forgery. Their last plea was that about three years back, the 1st respondent and fathers of respondents 2 to 4 and 5 had paid Rs. 400. 00 in full discharge of the suit debt.

( 4 ) ON 4-1-1955 the advocate for the petitioner endorsed on the plaint in the lower court giving up the 6th respondent. In this state of pleadings the points that arose for consideration were -- (1) Whether the alteration in the date of the suit promissory note amounted to a material alteration? If so, whether the suit promissory note was enforceable? (2) Whether the endorsement of payment of Rs. 4. 00 dated 2/11/1951 on the suit promissory note was true, valid and binding on the respondents? (3) Whether the plea of discharge set up by the respondents was true? On points 2 and 3 the learned District Munsif, on the authority of Govindaswami v. Kuppuswami, ILR 12 Mad 239, Kedarnath Singh v. W. C. Garrad, 77 Ind Cas 761: (AIR 1922 Low Bur 40 (1)), and Basappa v. Marule Gowda, AIR 1951 Mys 102, decided that there was material alteration of the date and month in the opening line of the suit promissory note which attracted the mischief contemplated by Section 87 of the Negotiable Instruments Act and the same could not he said to be enforceable. He also repelled the plea advanced by the petitioner that he was entitled to relief on the original cause of action as evidenced by Ex. A-l, read with Ex. A-l (a) and Ex. A-2 (a) on the ground that the suit is not based on that cause of action and that the fact that there was a part payment on Ex, A-2 did not alter the position.

( 5 ) THE learned advocate for this petitioner in the first place contended that the alleged material alterations were not fatal since the petitioner had sworn that he was not responsible for it. To fortify himself he referred me to Krushanacharan Padhi v. Gourochandro Dyano Sumanto, AIR 1940 Mad 62, and Gourochandro Dyano Sumanto v. Krushana-charana Padhi, AIR 1941 Mad 383. The latter authority was decided when an appeal was taken from the decision in the former case. There the question was to the effect of a material alteration in a promissory note made by a stranger and it was held that the right of a holder of a promissory note is not affected by a material alteration in the instrument when the alteration has been made by a stranger without the consent of the holder of the instrument and when there has been no fraud or laches on the part pf the holder. In the present case, there is no such plea and, therefore, the authorities cited are clearly distinguishable. The bald statement of the petitioner that he


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