IMPORTANT POINT
Corrections about year on part pay-
ment endorsements are not material alterations.

Dubagunta Subrahmanyam, J.—The defendant in O.S. No. 66 of 1997 on the file of Junior Civil Judge, Khammam, preferred this appeal against the Judgment and decree dated 11.11.1998 in A.S. No. 34 of 1998 on the file of Additional District Judge at Khammam confirming the Judgment and decree passed in O.S. No.66 of 1997, dated 20.4.1998.

2. The respondent-plaintiff filed the suit for recovery of money based on two pronotes dated 7.7.1993 executed by the appellant in his favour. The pronotes are marked as Exs. A.1 and A.2 before the Trial Court. The consideration for each pronote is Rs. 35,000.00. It is the further case of the respondent-plaintiff that on the date of the pronote itself, the appellant paid a sum of Rs. 875.00 under Ex. A.1 pronote and defendant paid Rs. 25,000.00 each on 28.7.1994 under each of the pronotes Exs. A.1 and A.2. The defendant contested the suit on various grounds. According to him the debt under pronotes was incurred prior to 1993. It is also his case that on 28.7.1993 itself he paid a total sum of Rs. 70,000.00 and discharged both the pronotes and, therefore, he is not liable to pay any amount. The payment endorsements on Exs. A.1 and A.2 are not signed by the appellant-defendant. According to plaintiff payment endorsements and corrections in them are written by defendant himself. The year in each of the payment endorsements is corrected from 1993 as 1994. It is the contention of the appellant-defendant that these alterations amount to a material alteration as per the provision in Section 87 of the Negotiable Instruments Act. Both the Courts held that the corrections regarding year in the above two part payment endorsements are not material alterations. Accordingly both the Courts decreed the suit filed by the plaintiff. Aggrieved by the Judgment of the Appellate Court confirming the Judgment of the Trial Court, the defendant preferred the present appeal.

3. At the time of admission of this appeal, the learned Admission Judge treated the following points formulated in the memorandum of appeal as substantial questions of law that arise for consideration in the present appeal.

(1)Whether the material alterations made on Exs. A.1 and A.2, the two pronotes did not vitiate the two pronotes and render them void in the light of Section 87 of Negotiable Instruments Act?

(2)Assuming two pronotes are valid in spite of material alteration of the endorsements, the plaintiff-respondent was entitled to the interest at the rate of 18% per annum on the principal amount till 28.7.1994 instead of 28.7.1993.

(3)Whether the Trial Court is justified in granting interest at the rate of 12% from the date of suit till date of Judgment on the decretal amount of Rs. 35,904.00 instead of principal amount Rs. 19,125.00?

4. Points 1 to 3 : The learned Counsel for the appellant relied upon two decisions in support of his contention that the admitted alteration relating to the year in the payment endorsements is a material alteration. The first decision is a Judgment of the Privy Council reported in Nathu Lal v. Gomti Kuar.1 The second Judgment is a Judgment of the Apex Court reported in Loonkaran Sethia v. Ivan E. John.2 The Apex Court followed the Judgment of the Privy Council referred to supra. According to the Privy Council, material alteration is one which varies the rights, liabilities, or legal position of the parties ascertained by the deed in its original state or otherwise varies the legal effect of the instrument as originally expressed, or reduces to certainty some provision which was originally unascertained and as such void, or may otherwise prejudice the party bound by the deed as originally executed. The said proposition of law was affirmed by the Supreme Court. In my considered opinion these two decisions are not applicable to the facts of the present appeal. In its Judgment, the Privy Council clearly stated that the alterations of the date of execution of the deed and certain other words by making hole