2018 (2) TMI 2045 - HC - Indian Laws

Dishonor of cheque - privity of parties - material alteration of the document Exhibit-P1 - corrections in the cheque were carried out in presence of witness or not - HELD THAT - A reading of the said section go to show that if the party to the said Negotiable instrument has not given his consent for such material alteration or such material alteration was made, otherwise than in order to carry out the common intention of the original parties, in such event, that negotiable instrument is void as against the person who has not consented for such alteration. Thus ipso facto the material alteration in negotiable instrument does not make it void within itself. If the person producing and relying on that negotiable instrument satisfies the court that the person against whom the negotiable instrument is being enforced had his consent for such alteration or that the said alteration was made in order to carry out the common intention, then, such negotiable instrument would be still valid and binds the other party also. In the instant case, the alteration shown to have been made in Ex-P1 is with respect to the date of execution of the said document which is promissory note, upon which, the suit claim is based upon - the evidence of P.W.-4 scribe that he carried out the corrections in Ex-P1 in the presence of all and he read out those corrections to all on the same day when the document was executed gets support and corroboration by the consideration receipt at Ex-P2. Therefore, the said correction at Ex-P1 proves to have been made contemporaneously at the time of execution of the document and more so in the presence of the executant of the document. The substantial questions of law by holding that the courts below are right in passing the judgments and decrees and that the alleged material alteration does not lead the judgment and decree under appeal suffer from any infirmity - Regular Second appeal stands dismissed.

Summary

Issues:
Recovery suit based on promissory note with alleged material alteration in date - Validity of judgments by lower courts - Interpretation of Section 87 of The Negotiable Instruments Act, 1881.

Analysis:
The appellant was involved in a recovery suit filed by the respondent seeking repayment of a loan amount with interest based on a promissory note. The trial court and the Lower Appellate Court had decreed in favor of the respondent, leading to the appellant filing an appeal challenging the judgments.

The substantial questions of law framed by the High Court focused on whether the lower courts erred in passing judgments without considering the alleged material alteration in the promissory note and if such alteration affected the validity of the document.

The appellant's argument centered on the material alteration in the promissory note, claiming that it nullified the validity of the document and the courts should not have relied on it. Reference was made to a judgment of the Andhra Pradesh High Court to support this argument.

The High Court analyzed Section 87 of The Negotiable Instruments Act, 1881, which states that material alteration renders a negotiable instrument void unless made to carry out the common intention of the parties. The court emphasized that if the alteration was made with consent or to fulfill the common intention, the instrument remains valid.

Examining the evidence presented, the court noted corrections in the promissory note's date portion, accompanied by the scribe's signatures. Witnesses provided conflicting statements regarding the corrections, but the scribe confirmed making corrections in the presence of all parties involved.

The court highlighted the consideration receipt linked to the promissory note, which indicated the date of execution as the same day. This supported the conclusion that the correction in the date was made contemporaneously and with the defendant's involvement, not affecting the document's validity.

Ultimately, the High Court dismissed the regular second appeal, upholding the judgments of the lower courts and concluding that the alleged material alteration did not invalidate the promissory note. The court's decision was based on the evidence presented and the interpretation of relevant legal provisions.

In summary, the High Court's detailed analysis focused on the alleged material alteration in the promissory note, the requirements of Section 87 of The Negotiable Instruments Act, 1881, and the evidentiary support for the corrections made in the document. The judgment clarified the legal principles involved and affirmed the lower courts' decisions in the recovery suit.