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Bhanwarlal Vs. Gulabchand - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtRajasthan High Court
Decided On
Case NumberSecond Appeal No. 98 of 1954
Judge
Reported inAIR1959Raj96
ActsNegotiable Instruments Act, 1881 - Sections 87; Stamp Act, 1899 - Sections 14 and 36
AppellantBhanwarlal
RespondentGulabchand
Advocates: M.L. Joshi, Adv.
DispositionAppeal allowed
Cases ReferredMangal Das v. Jaswant Singh
Excerpt:
- - the learned munsif has failed to notice that in order to determine whether there is a material alteration in the document or not it is not material whether the document has been admitted in evidence or not......been urged on behalf of the defendant is that the alterations made on the back of the document are material alterations and the suit should have been dismissed as the plaintiff had made material alterations in the document. 3. it has been laid down by their lordships of the privy council in the case of nathu lal v. mt gomti kuar, air 1940 pc 160 that 'a material alteration is one which varies the rights, liabilities, or legal position of the parties ascertained by the deed in its original state or otherwise varies the legal effect of the instrument as originally expressed, or reduces to certainty some provision which was originally unascertained and as such void, or may otherwise prejudice the party bound by the deed as originally executed.' it has also been held in the above authority.....
Judgment:

D.M. Bhandari, J.

1. This is a civil second appeal on behalf of Bhanwarlal against whom Gulabchand plaintiff-respondent brought a suit for the recovery of Rs. 1,486-5-9 in the Court of the Munsif, Phalodi. The suit is based on a promissory note Ex. P-1 dated 9-5-1949 executed at Phalodi for Rs. 1,260/-. The front portion of Ex. P-l is a promissory note signed by the defendant. On the back portion are four stamps of 0-1-0 each of the then Jodhpur State cancelled by the alleged signature of the defendant. Below that there is the attestation by one witness Ramchandar.

The plaintiff alleged that the defendant borrowed the amount of Rs. 1,260/- and executed Ex. P-l. The defendant denied the case of the plaintiff in toto. He denied to have borrowed the amount of Rs. 1,260/-and to have executed the document Ex. P-1. Both the lower Courts have decreed the suit of the plaintiff holding that the defendant had borrowed the amount of Rs. 1,260/- from the plaintiff and had executed the front portion of Ex. P-1.

Regarding the back portion both the Courts have come to the conclusion that the four stamps were not affixed at the time of the execution of the document but were affixed by the plaintiff without the consent of the defendant and that the signature of the defendant on the stamps cancelling the stamps was forged. It is also the concurrent finding of both the Courts that the document was not attested at the time of the execution but got attested by the plaintiff later on.

On these two findings, it was argued by the defendant before both the lower Courts that as the promissory note had been materially altered by the plaintiff without the consent of the defendant, it was void and the plaintiff's suit should be dismissed on that ground. Both the lower Courts have held that the alterations made in the document are not material and as such the plaintiffs suit was not liable to be dismissed on that ground.

2. In this appeal the main argument that has been urged on behalf of the defendant is that the alterations made on the back of the document are material alterations and the suit should have been dismissed as the plaintiff had made material alterations in the document.

3. It has been laid down by their Lordships of the Privy Council in the case of Nathu Lal v. Mt Gomti Kuar, AIR 1940 PC 160 that

'A material alteration is one which varies the rights, liabilities, or legal position of the parties ascertained by the deed in its original state or otherwise varies the legal effect of the instrument as originally expressed, or reduces to certainty some provision which was originally unascertained and as such void, or may otherwise prejudice the party bound by the deed as originally executed.'

It has also been held in the above authority that 'when any deed is altered in a point material by the plaintiff himself, or by any stranger without the privity of the obligee, be it by interlineation, addition, erasing, or by drawing of a pen through a line or through the midst of an material word, the deed thereby becomes void.' This is the rule of English Law and their Lordships were of opinion that there was no reason why the rule should not be made applicable to India. The English Rule has been adopted in India to its full extent in the case of negotiable instruments Section 87 of the Negotiable Instruments Act, 1881 lays down 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, unless it was made in order to carry out the common intention of the original parties; and any such alteration, if made by an indorsee, discharges his indorser from all liability to him in respect of the consideration thereof.

The provisions of this section are subject to those of Sections 20, 49, 86, and 12'.

4. What is to be seen in this case is whether the alterations made by the plaintiff were material alterations in the light of the rule laid down by their Lordships of the Privy Council in Nathulal's case AIR 1940 P.C. 160.

On reading Ex. P1, it is clear that the document is in the nature of a promissory-note. Such a promissory-note required to be stamped under the Mar-war Stamp Act which was in force in the former Jodhpur State at the time of the execution of the promissory-note. Under Section 35 of that Act, if the document was unstamped, it was inadmissible in evidence.

So if the plaintiff wanted to bring the suit on the basis of the promissory-note, he had to face a reply on behalf of the defendant that the document was unstamped and was therefore, inadmissible in evidence. It appears that the subsequent affixation of four annas stamp was only for the purpose of making the document admissible in evidence. The cancellation of the four stamps was also by putting forged signature of the defendant.

The affixation of the stamp and the cancellation thereof, were therefore, in the nature of material alteration. By this the legal position of the parties was varied. It also prejudiced the defendant from taking up the defence that the document was inadmissible in evidence as it was unstamped. In my opinion by affixing the stamps and cancelling them, the plaintiff had materially altered the promissory-note and it had become void under Section 87 of the Negotiable Instruments Act.

5. It appears that the plaintiff was not contented by merely affixing the stamps and cancelling them but also got Ex. P-1 attested. Ordinarily the subsequent attestation of the document without the consent of the defendant may not amount to material alteration if such document is not required by law to be attested, But if the purpose of the attestation of the document is to obviate some difficulty which the plaintiff apprehends he might have to face in a Court of law, then such an alteration may amount to material alteration. The front portion of Ex. P-1 was inadmissible in evidence as already mentioned.

It could be made admissible if the document was attested because in that case it might fall within the definition of the term 'bond' under the Marwar Stamp Act. It is argued by the learned Counsel for the defendant that the purpose of attestation was to make the document admissible in evidence. I am of opinion that looking to the circumstances of the case this contention is correct. If the purpose of attestation was to get the document Ex. P-1 admitted in evidence, the alteration was a material alteration. The same view is taken in the case of Mangal Das v. Jaswant Singh, AIR 1930 Lah 959.

6. The learned Munsif has referred to Section 36 of the Stamp Act for holding that the alteration did not affect the case as the document had been admitted by the court in evidence, and such admission could not be challenged. The learned Munsif has failed to notice that in order to determine whether there is a material alteration in the document or not it is not material whether the document has been admitted in evidence or not.

7. In my opinion both the lower courts have fallen in error of law in holding that the document was not materially altered by the plaintiff. With the findings of fact that they have given, they should have held that the document was materially altered and was void. The suit of the plaintiff should have been dismissed on that ground.

8. The appeal is, therefore, accepted, the judgment and decree of the learned Senior Civil Judge, Jodhpur dated the 24th of November, 1953 are set aside and the suit of the plaintiff is dismissed with costs in all the courts.


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