2022 (1) TMI 8 - HC - Indian Laws

Dishonor of Cheque - rebuttal of presumption under Section 118 of the Negotiable Instruments Act - appellant had pleaded and proved that there was material alteration in the suit pronote - failure to note that a materially altered Negotiable Instrument was void under Section 87 of the Negotiable Instruments Act - HELD THAT - Here, it is the case of the plaintiff that the defendant himself written the word '₹ 40,000/-' in the pro-note. Further in respect of the same, while at the time the defendant gave evidence as D.W.1, he himself admitted that the word '4' was written by him in the pro-note. After admitting, now without any substantial evidence, arguing before this Court that the suit pro-note was materially altered, cannot be accepted. During the time of transaction the defendant was a contractor in Municipality, so, naturally he would have the wide knowledge in respect of the instrument and also he knows the value of his signature - Hence, being the reason that the defendant admits the signature found in the pro-note is his signature under Section 20 of the Negotiable Instruments Act, it was understand that the defendant gave authority to the plaintiff to fill up the same as a complete Negotiable Instrument. Before the trial Court the factum of material alteration is not proved and accordingly, in order to rebut the presumption raised under Section 118 of the Negotiable Instruments Act, the defendant has not produced any relevant evidence to show that the suit pro-note is not upon due consideration. Though it was contended on the side of the defendant that the alleged transaction is a loan transaction, in order to prove the same he has not produced the substantial evidence. Therefore, the substantial Questions of Law raised are answered in favour of the respondent. Appeal dismissed.

Summary

Issues:
- Dispute over a promissory note and alleged material alteration
- Evaluation of evidence presented by both parties
- Application of legal principles under the Negotiable Instruments Act
- Interpretation of Section 20 of the Negotiable Instruments Act
- Burden of proof in cases of material alteration

Analysis:

The judgment revolves around a dispute concerning a promissory note and the alleged material alteration of the amount mentioned in it. The plaintiff claimed that the defendant borrowed a sum of money and failed to repay it, while the defendant argued that the amount was altered without his consent. The trial court dismissed the suit, but the appellate court reversed the decision, leading to the second appeal.

The key contention was whether the promissory note was materially altered, rendering it void under the Negotiable Instruments Act. The defendant claimed that the amount was changed from ?40,000 to ?1,40,000 without his consent, making the instrument invalid. The plaintiff, on the other hand, argued that the defendant had authorized the alteration by signing the note.

The court analyzed the evidence presented by both parties, including witness testimonies and documents. It considered the legal principles under the Negotiable Instruments Act, particularly focusing on Section 20, which deals with the authority to fill in incomplete instruments. The court emphasized the burden of proof in cases of material alteration and the need to establish that alterations were improperly made.

Ultimately, the court found that the defendant failed to provide substantial evidence to prove the material alteration claim. It concluded that the plaintiff's case was valid, and the defendant was liable to pay the amount mentioned in the promissory note. The judgment highlighted the importance of proving material alterations and rebutting presumptions under the Negotiable Instruments Act.

In conclusion, the second appeal was dismissed, with the court ruling in favor of the respondent. The judgment underscored the significance of evidence, legal principles, and burden of proof in disputes involving negotiable instruments.