Swaminadan Chetty V. Kannan Et Al.,

Sept.2,1910   Present: Middleton J.

SWAMINADAN CHETTY v. KANNAN et al.

71 and 71A-C. R. Colombo, 16,942.

Blank promissory note--Insertion of rate of interest agreed upon-No express authority -Material alteration-Bills of Exchange, Act, ss. 20 and 64.

Where the defendant borrowed from plaintiff money on a blank promissory note and agreed to pay interest at a certain rate on the amount borrowed by him, the insertion by the payee of the said rate of interest in the note without express authority is not a material alteration.

Middleton J.-If the note was given in blank, the payee was entitled to fill it up, as the Commissioner has found, to the amount covered by the stamp, and in my opinion he would have implied authority to insert the interest agreed on between the parties. It is not suggested here that the note was filled up first without mentioning the interest, and then that the interest was added by the payee, although as between payee and maker, where the rate of interest so inserted was the rate of interest agreed on between them, I am by no means confident that this should be deemed a material alteration so as to vitiate the note between payee and maker.

Raman Chetty v. Ramanathan1 [(1905) 1 Bal. 182.] and Abdul Majeed v. Yasaya Nadan2 [(1909) 4 Leader L. R. 1.] distinguished.

IN this case the plaintiff sued the defendants on a promissory note for the recovery of the balance sum of Rs. 230 due on it. The issues agreed on were: -

(1) Was the note signed in blank ?

(2) Was the amount of the note filled in contrary to authority ?

(3) Was the rate of interest filled in with the authority of the defendants ?

The learned Commissioner (M. S. Pinto, Esq.) delivered the following judgment: -

It its quite clear that the first defendant did not fill in the rate of interest. The figures " 30 per cent." are in the same hand as the rest of the words in the body of the note: not only is the handwriting the same, but the pen and ink used appear to be the same.

The handwriting of the first defendant is particularly bold and firm. The words in the body of the note, including " 30 per cent.", are written lightly over the paper.

It is hardly necessary to enlarge on this point; the conclusion I have arrived at is supported by a comparison of the figures " 30 per cent." with the figures " 30 " or D 1. The latter figures " 30 " are of the same type as the signature of the first defendant.

I, therefore, readily believe the first defendant's statement that the figures " 30 per cent." were not inserted by him. Even as regards the figures " 200," I am of the opinion that they were not filled in by the first defendant. But there is the implied authority to fill in any amount covered by the stamp.

But as regards the rate of interest, there was no authority to fill in the rate of interest. My finding is that this rate was filled in after the defendants signed the note. But there is no proof that the plaintiff was authorized to fill in the rate of interest. He was asked, " Did you agree that the rate of interest was to be inserted on the note ?" He said " Yes." But he apparently did not understand the question, for he repeatedly said immediately afterwards that there was no authority to fill in the rate of interest. What he meant was that it was agreed upon to pay 30 per cent, interest.

I am satisfied that the evidence given by the defendant is true in every respect. Now, in view of the Supreme Court decision in Raman Chetty v. Ramanathan1 [ (1905) 1 Bal. 182.] followed in the Supreme Court decision in another case of this Court, I am bound to hold that the note was materially altered by the insertion of the rate of interest, without the authority of the defendants to such insertion. The authority cannot be implied from the agreement to pay interest. The learned counsel for the plaintiff argued that there was a ratification of the alteration; but there was no ratification o

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