IMPORTANT POINT
Material alteration would change legal character of instrument and extinguish liability under the instrument.

R. Subramanian, J.—The defendant who has suffered a money decree in O.S.No.124 of 2003 on the file of the District Court Nagapattinam is the appellant. The respondent which is a Benefit Fund incorporated under the Indian Companies Act, 1956, instituted the above suit for recovery of a sum of Rs.5,45,333/- allegedly due on a promissory note said to have been executed by the defendant on 21.05.2000 for a sum of Rs.4,00,000/-.

2. According to the plaintiff, the defendant had borrowed a sum of Rs.4,00,000/- on 21.05.2000 promising to repay the same with interest at 24% per annum. The defendant did not come forward to pay the amount, inspite of legal notice dated 20.12.2002, on the other hand she has chosen to issue a reply on 02.01.2003 denying the very borrowing. Hence, the plaintiff filed the above suit. In the plaint, the plaintiff had stated the facts relating to certain other borrowings made by the defendant from the plaintiff and the initiation proceedings under Section 138 of Negotiable Instruments Act, which came to be settled by the defendant by making payments.

3. The defendant resisted the suit contending that she never borrowed a sum of Rs.4,00,000/- from the plaintiff and did not execute the promissory note on 21.05.2000. She would claim that she borrowed a sum of Rs.20,000/- from the plaintiff. As a security for the said borrowings, the plaintiff had obtained four blank cheques bearing numbers 543027 to 543030 payable at Indian Bank Mayiladuthurai Branch and the two blank promissory notes for the said sum of Rs.20,000/-. The plaintiff had presented one of the cheques bearing No.503028 and upon it being dishonoured, it had launched proceedings under Section 138 of Negotiable Instruments Act.

4. It is admitted case of the parties that proceedings under Section 138 of Negotiable Instruments Act ended in a compromise. The defendant would contend that the claim made by her in the reply notice are the true and correct facts. Apart from the above in the additional written statement filed by her on 01.3.2007, the defendant took a plea of material alteration of suit promissory note. According to the defendant, the suit promissory note has been tampered with and corrections have been made in the date as well as in the consideration of the promissory note, which makes it a void document under Section 87 of the Negotiable Instruments Act. On the above contentions, the defendant claimed that the plaintiff is not entitled to the suit claim.

5. The Mr.P.C.Kailash Chand Jain, the Managing Director of the plaintiff was examined as PW.1 and Exs.A1 to A7 were marked. Defendant examined herself as DW1 and Exs.B1 to B3 were marked. The Trial Court framed following issues:-

(1) Whether the plaintiff is entitled to recover the suit amount with subsequent interest as claimed in the plaint?

(2) To what relief the plaintiff is entitled to? An additional issue was also framed:

(3) Whether the suit is barred by limitation?

6. On a consideration of the evidence on record, the learned District Judge, Nagapattinam disbelieved the case of the defendant. The learned District Judge rejected contention of material alteration on the ground that the same was not raised at the time of filing the written statement and the same was raised only in the additional written statement. On the aforesaid findings, learned District Judge, Nagapattinam decreed the suit as prayed for with costs.

7. Aggrieved by he said judgment and decree the defendant has filed this appeal.

8. I have heard Mr.Sivakumar learned counsel appearing for the appellant and Mr.Arvindkumar, learned counsel appearing for the respondent.

9. The following points emerge for consideration in this appeal.

(1) Whether the suit promissory note has been materially altered?

(2) Whether alteration renders the promissory note void against the defendant under Section 87 of the Negotiable Instruments Act?

(3) Whether the plaintiff’s failure to produce the account book, would dis-entitl