1. Defendants 1 and 3 to 5 in O. S. No. 106 of 1967, on the file of VIII Asst. Judge, City Civil Court, Madras, who succeeded before the trial Judge, but lost before the appellate Judge, are the appellants herein, the suit was instituted by the first respondent herein for the recovery of a sum of Rs. 4216/- on the basis of Ex. A.2, the promissory note, said to have been executed by the second defendant on behalf of the first defendant as its managing director. The suit has been filed under Order XXXVII, Rule 2, C. P. Code. The plaint avers that the plaintiff, the first respondent herein, advanced a sum of Rs. 10,000 under the promissory note Ex. A.2, with interest thereon at 1.80 per cent, per mensem and that in respect of the said promissory note, the first defendant has paid to the plaintiff only Rs. 6000 and failed to pay the balance. In paragraph 6 of the plaint it is stated that the defendants are liable to pay the balance of Rs. 4,000 and a sum of Rs. 216 by way of interest from 9-9-1966 till the date of suit. Hence the suit was instituted for the recovery of a sum of Rs. 4216. The defendants put forward various defences. One such defence which was put forward with reference to Ex. A.2 promissory note was that it had been materially altered by the plaintiff and consequently it was inoperative and no suit could be instituted thereon. The material alteration is said to be insertion of the rate of interest in the document. The first respondent gave evidence as P.W. 1 and he admitted that after the promissory note was executed, he inserted the rate of interest at Rs.1-80 per cent, per month, that the figure 1.80 and the word 'month' occurring in Ex. A.2 were written by him while the other portions of the document were written by the second defendant and that this writing by P.W. 1 was subsequent to the execution of the document. It was on this basis, it was contended on behalf of the defendants that the promissory note was materially altered and so it could not be sued upon. Relying upon the decision of this Court in Seth Tulsidas Lalchand v. Rajagopal : (1967)2MLJ66 , the learned trial Judge dismissed the suit. As against the dismissal, the first respondent herein preferred an appeal and the learned I Additiional Judge, City Civil Court, Madras on 29-7-1969, allowed the appeal and decreed the suit as prayed for. Hence the present second appeal by defendants 1 and 3 to 6.
2. On the admitted fact that the first respondent interested the rate of interest and the word month, after the document was executed by the second defendant, it is clear that the promissory note has been materially altered. Similar were the facts before Alagiriswami, J. in the case referred to above the learned Judge following and earlier judgment of Srinivasan, J. in C. R. P. 1544 of 1957, held that the promissory note so altered was inoperative and therefore could not be sued upon. Consequently, in my opinion, the judgment of Alagiriswami, J. referred to above directly applies to the facts of this case and therefore the suit instituted by the respondent herein was liable to be dismissed, as was done rightly by the learned trial judge.
3. Mr. Vasudevan, the learned counsel for the first respondent, contends before me that there is a distinguishing feature which was not present in the case before Alagiriswami, J. This distinguishing feature is that P.W. 1 had stated in his evidence that the parties had previously agreed to pay interest at the rate mentioned above and since the same was not carried out by the second defendant he, (the plaintiff) filled up the rate of interest in the document Ex. A.2, and therefore under Section 87 of the Negotiable Instruments Act, the promissory note could not be said to have become inoperative so as to prevent the first respondent from suing thereon. Section 87 of the Negotiable Instruments Act, so far as in relevant, 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, unless it was made in order to carry out the common intention of the original parties.'
It is the last portion of this section which is relies on by the learned counsel, and on which the learned I Additional Judge, City Civil Court, Madras, has decided in favour of the first respondent. I am unable to hold that this provision is attracted to the facts of this case. P.W. 1 has not stated in this evidence that there was a common intention of the parties at the time when the promissory note was executed to pay interest at the rate mentioned above and that only for the purpose of giving effect to the common intention he interested that rate. P.W. 1 has not mentioned any such thing in his evidence, Mr. Vasudevan relied on the fact that a sum of Rs. 900/- has been paid towards interest by the defendants and stated that this shows that there was an agreement between the parties to pay interest at the rate inserted in the promissory note. No doubt, this contention was put forward before the trial Judge, but the defendants disputed that they had paid any such sum of Rs. 900/- towards interest. However, before the learned I Additional Judge, an application was filed by the first respondent herein to receive two documents as additional evidence, one being a counterfoil of a chalan for having paid into the Canara Bank Ltd., Rs. 900/- to the credit of the first respondent, and the other being a copy of the account of the first respondent with the Canara Bank Ltd. The former was marked by the I Additional Judge, as Ex. A.9 dated 9-4-1966 and the latter was marked as Ex. A.10 dated 24-8-1968. I am clearly of the opinion that neither of these documents establishes the fact that the defendants have paid a sum of Rs. 900/- towards interest. My reasons for this conclusion are these: (1) the first respondent-plaintiff in his plaint did not refer to the fact that a sum of Rs. 900/- was received towards interest in advance and that was the reason why he was claiming interest on the balance due only from 9-9-1966. (2) Even P.W. 1 had not stated in his evidence that a sum of Rs. 900/- was received towards interest covering a period of five months from the date of Ex. A.2, till 8-9-1966. (3) The plaintiff had not produced his account book into the Court to show that he had credited a sum of Rs. 900 in the accounts of the defendants towards interest. (4) Ex. A.9 does not show that the cheque issued by the defendants was deposited into the bank on 9-4-1966. (5) Even Ex. A.10 does not show that it was the cheque for Rupees 900/- drawn by the defendants which was credited to the account of the plaintiff. Therefore it is clear that there is absolutely no evidence to show that the defendants have paid Rs. 900/- towards interest for a period of five months, namely, form 9-4-1966 to 8-9-1966. This is independent of my conclusion that P.W. 1 had not stated in his evidence that there had been a common intention between the parties to pay interest at the rate mentioned in Ex A.2 and in order to give effect to that intention he inserted the figure regarding thereto and the word 'month' in Ex. A.2. Therefore I am clearly of the opinion that the last portion of Section 87 of the Negotiable Instruments Act extracted above the relied upon by the learned counsel for the first respondent has no application to the circumstances of this case. The conclusion of the learned I Additional Judge is, therefore, erroneous.
4. The second appeal is, therefore, allowed, the judgment and decree of the learned I Additional Judge dated 29-7-1969 in A. S. 248 of 1968 are set aside and those of the learned VIII Assistant Judge (trial Judge) dated 9-3-1968 in O. S. 106 of 1967 are restored. The appellants will be entitled to their costs from the first respondent throughout. No leave.
5. Appeal allowed.