Madras High Court
ISMAIL
Verco Private Ltd., Padi - Appellant
Versus
Newandram Naraindas - Respondent
Decided On : 12/21/1972
NEGOTIABLE INSTRUMENTS ACT, 1881 - SECTION 87 - MATERIAL ALTERATION OF PROMISSORY NOTE - EFFECT - COMMON INTENTION OF PARTIES - EVIDENCE.
Fact of the Case:
Plaintiff sued defendants for recovery of a sum of Rs. 4216/- on the basis of a promissory note executed by the second defendant on behalf of the first defendant. The defendants contended that the promissory note had been materially altered by the plaintiff by inserting the rate of interest, and therefore it was inoperative and no suit could be instituted thereon.
Finding of the Court:
The court held that the promissory note had been materially altered and was therefore inoperative. The court also held that the plaintiff had not established that there was a common intention between the parties to pay interest at the rate mentioned in the promissory note, and therefore the last portion of Section 87 of the Negotiable Instruments Act, which provides that a material alteration of a negotiable instrument does not render it void if it was made in order to carry out the common intention of the original parties, did not apply.
Issues: Whether the promissory note had been materially altered.
Ratio Decidendi: The court held that the promissory note had been materially altered by the plaintiff by inserting the rate of interest, and therefore it was inoperative. The court also held that the plaintiff had not established that there was a common intention between the parties to pay interest at the rate mentioned in the promissory note, and therefore the last portion of Section 87 of the Negotiable Instruments Act, which provides that a material alteration of a negotiable instrument does not render it void if it was made in order to carry out the common intention of the original parties, did not apply.
Final Decision: The appeal was allowed, the judgment and decree of the lower appellate court were set aside, and the judgment and decree of the trial court were restored.
2. On the admitted fact that the first respondent inserted the rate of interest and the word month, after the document was executed by the second defendant, it is clear that the promissory note has been materially altered. Similar were the facts before Alagiriswami, J. in the case referred to above and the learned Judge following an earlier judgement of Srinivasan, J. in C. R. P. 1544 of 1957, held that the promissory note so altered was inoperative and therefore could not be sued upon. Consequently, in my opinion, the judgement of Alagiriswami, J. referred to above directly applies to the facts of this case and therefore the suit instituted by the respondent herein was liable to be dismissed, as was done rightly by the learned trial Judge.
3. Mr. Vasudevan, the learned counsel for the first respondent, contends before me that there is a distinguishing feature which was not present in the case before Alagiriswami, J. This distinguishing feature is that P.W. 1 had stated in his evidence that the parties had previously agreed to pay interest at the rate mentioned above and since the same was not carried out by the second defendant he, (the plaintiff) filled up the rate of interest in the document Ex. A.2, and therefore under Section 87 of the Negotiable Instruments Act, the promissory note could not be said to have become inoperative so as to prevent the first respondent from suing thereon Section 87 of the Negotiable Instruments Act, so far as is relevant, is as follows
"Any material alteration of a negotiable instrument renders the same void
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