SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

1960 Supreme(MP) 248

High Court Of Madhya Pradesh
T. C. Shrivastava and S. P. Bhargava, JJ.
NARAYANPRASAD RAI GOKULPRASAD RAI - Appellant
Versus
GHANSHYAMLAL ALIAS SHUKHLAL JAWARHARLAL KURMI - Respondents
Letters Patent Appeal 121 Of 1958
Decided On : 08/31/1960

Advocates Appeared:
B.L.SETH, R.K.Pandey, S.L.Golcha

A material alteration of a negotiable instrument renders the same void under Section 87 of the Negotiable Instruments Act, 1881. The burden of proving how the alteration was made lies on the plaintiff. The plaintiff cannot fall back upon the original consideration of the pro-note if the passing of the consideration and the execution of the pro-note formed one transaction.

Headnote:

NEGOTIABLE INSTRUMENTS ACT, 1881 - SECTION 87 - MATERIAL ALTERATION - BURDEN OF PROOF - ALTERATION BY STRANGER WITHOUT CONSENT OF HOLDER - VOID INSTRUMENT - RECOVERY OF CONSIDERATION.

Fact of the Case:

Plaintiff, a minor, sued to recover Rs. 4000/- on the basis of a pro-note executed by the defendant. The defendant admitted the execution of the pro-note but claimed that it was only for Rs. 400/- and that the amount had been materially altered to Rs. 4000/-. The trial court and the first appellate court found that the pro-note had been altered and dismissed the suit. The plaintiff appealed to the High Court.

Finding of the Court:

The High Court held that the alteration of the pro-note rendered it void under Section 87 of the Negotiable Instruments Act, 1881. The court also held that the burden of proving how the alteration was made lay on the plaintiff and that, in the absence of any proof, it should be presumed that the alteration was made by the plaintiff or by his next friend, who was in custody of the document. The court further held that the plaintiff could not fall back upon the original consideration of the pro-note as the passing of the consideration and the execution of the pro-note formed one transaction.

Issues: 1. Whether the alteration of the pro-note rendered it void under Section 87 of the Negotiable Instruments Act, 1881? 2. Whether the burden of proving how the alteration was made lay on the plaintiff? 3. Whether the plaintiff could fall back upon the original consideration of the pro-note?

Ratio Decidendi: 1. Section 87 of the Negotiable Instruments Act, 1881 provides that any material alteration of a negotiable instrument renders the same void as against any one who is a party thereto at the time of making such alteration and does not consent thereto. 2. The burden of proving how the alteration was made lies on the plaintiff. In the absence of any proof, it should be presumed that the alteration was made by the plaintiff or by his next friend, who was in custody of the document. 3. The plaintiff cannot fall back upon the original consideration of the pro-note as the passing of the consideration and the execution of the pro-note formed one transaction.

Final Decision: The appeal was dismissed with costs.

SHRIVASTAVA, J.

( 1 ) THIS Letters Patent appeal has been filed by the plaintiff against the judgment of a single Judge of this Court in Second Appeal No. 745 of 1955, decided on 8-7-1958.

( 2 ) THE appellant had filed the suit out of which this appeal arises for recovery of Rs. 4000/- on the basis of a pro-note, dated 23-11-1946 Ex. P-l. . The plaintiff was a minor at the time of the execution of the pro-note, which was taken on his behalf by his father Gokul Prasad Rai. At the tune of filing of the suit also, the plaintiff was a minor and his father Gokul Prasad Rai acted as his next friend.

( 3 ) THE defendant (respondent) admitted the execution of the pro-note, but stated that it was only for Rs. 400/- and this was the only amount which he had received as consideration. The defendant stated that the pro-note had been materially altered by changing the amount of Rs. 400/- to Rs. 4000/- and therefore the plaintiff was not entitled to sue for recovery of anything on the basis of the pro-note.

( 4 ) THE trial Court and the first appeal Court found that the pro-note was for a consideration of only Rs. 400/- and it was materially altered by raising the amount to Rs. 4000/-, The trial Court decreed the suit for recovery of Rs. 400/ on the ground that the defendant had admitted the receipt of this amount. The lower appellate Court dismissed the whole claim holding that nothing could be recovered on the basis of the materially altered pro-note. The learned single Judge upheld the view taken by the lower appellate Court.

( 5 ) THE finding that the pro-note had been altered by raising the amount from Rs. 400/- to Rs. 4000/- is a finding of fact which was binding in second appeal and cannot be challenged in this Letters Patent Appeal. The short question, therefore, which arises for decision in this appeal is whether on account of the alteration, which has been made in the pro-note, the appellant could not recover the amount of Rs. 400/- which was admitted by the defendant.

( 6 ) SHRI R. K. Pandey for the appellant contends that although the alteration has been made in the pro-note as found by the Courts, there is nothing on record to show that the same was made either by the plaintiff or by his next friend. According to him, unless it is found that the plaintiff himself was responsible for the alteration, Section 87 of the Negotiable Instruments Act has no application. The plaintiff could, therefore, sue upon the altered pro-note.

( 7 ) SECTION 87 of the Negotiable Instruments Act is as follows: "any material alteration of a negotiable instrument renders the same void as against any one who is a party thereto at the time of making such alteration and does not consent thereto. . . " The plain meaning of this section, as it stands, is that if any material alteration is found in a negotiable instrument, the instrument itself becomes void and the party basing its claim upon it is precluded from claiming anything. This result follows irrespective of the fact whether the party concerned was responsible for the alteration or whether it was made by someone else without his consent or knowledge. This interpretation of the provision is hard on the innocent holder of the instrument. On the other hand, Shri R. K. Pandey contends that Section 87 is attracted only if the alteration has been proved to have been made by the holder himself and this fact must be pleaded and proved by the defendant. He went to the length of saying that in the instant case even if the alteration had been made by the minor's next friend or guardian, it would not affect the claims of the minor. This interpretation is obviously too narrow and is not justified by the wordings of Section 87.

( 8 ) STRONG reliance was placed by Shri R. K. Pandey on the decision in Krushnacharana v. Gouro-chandro, AIR 1940 Mad 62 and the connected Letters Patent Appeal in that case reported in Gouro-chandrao v. Krushnacharana, ILR (1941) Mad 295: -- (AIR 1941 Mad 383 ). The plaintiff in that ca















Click Here to Read the rest of this document

1
2
3
4
5
6
7
8
9
10
11
Judicial Analysis

AI

SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top