1. I cannot agree with the learned Subordinate Judge in his view that the plaintiff is debarred from recovering the advance made by him for the mere reason that Ex. A. (the contract deed) and Ex. A. (1) in which the receipt of the advance was acknowledged were written on the same piece of paper and that a material alteration of one would affect the other with the taint of fraud.
2. In my opinion the defendant is bound to refund any advance taken by him whether the contract is void or voidable and rescinded. In one case Section 65 of the Contract Act applies, in the other Section 64.
3. There is no question now of performing the contract. 1st Defendant does not want to perform it and he may be treated as having rescinded it as he set up in his written statement another arrangement by which the original contract had been superseded. In fact the 1st defendant in his written statement, paragraph 10, did not deny his liability to refund the advance of Rs. 1,200, but he alleged that satisfaction had been given as regards Rs. 500 and that only Rs. 700 remained to be paid.
4. As for the claim for damages for non-performance of the contract on the point of law which is whether a plaintiff who has made a material alteration in an instrument containing a contract can recover any amount under it, 1 think we should follow Chitturi Suriah v. Boddu Ramayya (1915) M.W.N. 150 Gour Chandra Das v. Prasanna Kumar Chandra I.L.R.(1906) Cal. 812 and the case of Powell v. Divett (1812) 104 Eng. Rep 755.
5. In fact Mr. Narayanamurthi conceded after some argument that as the terms of the contract were embodied in Exhibit A. he was not entitled to recover damages independently of this document.
6. The only question then left was as to the appellant's (plaintiff's) right to recover the advance of Rs. 1,200 and this must be found for the appellant on the strength of 1st defendant's admission and the reasons given above.
7. The result will be that the appeal will be allowed with proportionate costs in this and the Lower Appellate Court on this part of the plaintiff's claim and the decree of the District Munsiff will be restored against 1st respondent and the second appeal dismissed with costs against 2nd respondent, who, it is conceded has been unnecessarily made a party to this appeal.
8. I accept the finding of the lower Court that the written contract Exhibit A has been materially altered by the plaintiff without the knowledge and consent of the 1st defendant, the other party to it. On that finding we must hold that plaintiff is not entitled to enforce that contract, see Powell v. Divett (1812) 104 Eng. Rep. 755 and that his suit so far as it is for damages was rightly dismissed as it would be enforcing the contract to give him such damages.
9. It is however argued that plaintiff, is nevertheless entitled to the repayment of the Rs. 1,200 paid by him as an advance for the 1st defendant and the claim is made under Section 64 or 65 of the contract Act. The view of the lower appellate court that Ex. A. (1) the receipt given for the money is also rendered invalid by the alteration in Ex. A. does not seem to me to be supportable. It is only a receipt for the money paid. If the repayment of that money is claimed by way of enforcement of the contract no doubt plaintiff will be met by the objection based on its material alteration. But it is not so claimed. The lower Courts have found that the 1st defendant did not perform the contract but on the other hand he committed breach of it. Though plaintiff cannot take advantage of the breach to claim damages, he is not precluded from relying upon it and treating the contract as having become void under Section 65 and requiring the deft. to repay the money advanced to him. Illustration (c) of Section 65 seems to indicate that the section is meant to apply also to cases where one party breaks a contract and the other party in consequence of it rescinds it. The material alteration though it prevents plaintiff from enforcing the contract does not seem to prevent him from rescinding it. No authority has been cited to show that it does. On the other hand the ruling in Chitturi Suriah v. Boddu Ramayya  M.W.N. 150 would seem to support the view that the money advanced could be claimed back. Plaintiff would therefore be entitled to be paid back the Rs. 1,200 that he paid.
10. The second appeal so far as it is against the 2nd respondent is not pressed. I would therefore allow the second Appeal against the 1st Respondent and reversing the decree of the Subordinate Judge, restore that of the Dt. Munsif. Plaintiff, will pay and receive proportionate costs so far as the 1st Respondent is concerned in this and the lower Appellate Court.
11. The Second Appeal is dismissed with costs against the 2nd Respondent.