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Krushnacharana Padhi, Minor by Next Friend Chinna Padhiyani Vs. Gourochandro Dyano Symanto - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1940Mad62; (1939)2MLJ686
AppellantKrushnacharana Padhi, Minor by Next Friend Chinna Padhiyani
RespondentGourochandro Dyano Symanto
Cases ReferredPerumal Chettiar v. Kamakshi Ammal
Excerpt:
.....or change in an instrument which 'causes it to speak a different language in legal effect from that which it originally spoke, which changes the legal identity or character of the instrument either in its terms or the relation of the parties to it' is a material change. although the indian act does not clearly say so yet i do not think that there is any reason to hold that what would be regarded as a material alteration in england should not be held to be so in india. i have already said that it would not be safe to draw this conclusion; the cause of action was also stated to have arisen on the dates when the promissory note had actually come into existence and when interest had been paid and endorsed by the defendant. why did not the section, it may well be asked, clearly provide that..........on the admission made by him as a witness to the effect that the money in regard to the promissory note in suit had not been paid and was still outstanding.3. the first question to decide is whether the alterations made in the promissory note were material in character?4. since it was conceded on'behalf of the respondent that the suit could have been instituted, on account of the plaintiff's minority, not only on the date on which it was actually brought but even later, it was vehemently argued on behalf of the appellant that the alterations could not be regarded as material. i am not however impressed by this argument although it must be admitted that the motive of the person making the alterations is to a large extent immaterial. in order to decide the material character of the.....
Judgment:

Abdur Rahman, J.

1. This appeal arises out of a suit instituted on the basis of a promissory note dated the 15th October, 1928, executed by the defendant-respondent in favour of one Brojo Padhi who died shortly after its execution leaving him surviving an adopted minor son the plaintiff-appellant in this case. A sum of Rs. 10 seems to have been paid by the defendant on the 12th October, 1931. This payment was endorsed on the back of the promissory note and the endorsement was duly signed by the defendant. The suit was instituted on the 22nd October, 1934, while the plaintiff-appellant was a minor. It appears however that two dates in the promissory note were altered before the suit was brought. The first alteration was that the figure '1' in 15, that is, the date on which the promissory note was executed was altered into 2 and thus the promissory note would now read as if it was executed on the 25th October, 1928, and not on the 15th October. The second alteration was that the figure '1' in 12 was substituted by 2 and thus the endorsement by the defendant of the payment of Rs. 10 would appear to have been made on the 22nd October, 1931, and not on the 12th October, 1931, the date on which the endorsement was actually made by the defendant. The District Munsif passed a decree against the defendant as the plaintiff was held to have been unaware of these alterations but the learned District Judge accepted the appeal on the ground that having regard to the provisions of Section 87 of the Negotiable Instruments Act, it was not possible to found an action on a promissory note which was proved to have been altered in material respects. The plaintiff now appeals.

2. In support of his appeal the first contention raised by the learned Counsel for the appellant is that the alteration in the promissory note was not material in character and the motive with which the alteration might have been made was wholly irrelevant. His second contention is that even if the alterations are held to be material his client who was, as stated above, a minor at the time when the suit was instituted, did not know anything about them and could not in the absence of any conduct of his, either fraudulent or negligent, be held to be debarred from suing on the basis of the promissory note - particularly when the dates of the promissory note and of the endorsement of payment were correctly stated in the plaint and no advantage was attempted to have been taken on account of these alterations. The third contention raised on behalf of the appellant is that even if his first two contentions do not prevail, he should at all events be allowed to fall back on the original consideration as although the promissory note might have to be declared void and unenforceable on account of the alterations, yet it does not become inadmissible in evidence and the debt could not in any case be held to have been extinguished. It was admitted that the suit, as framed, was not based on the original consideration but this defect should be, it was alleged, cured by a formal amendment which might be allowed by the Court even at this stage. Lastly it was urged that a decree should have been passed against the defendant on the admission made by him as a witness to the effect that the money in regard to the promissory note in suit had not been paid and was still outstanding.

3. The first question to decide is whether the alterations made in the promissory note were material in character?

4. Since it was conceded on'behalf of the respondent that the suit could have been instituted, on account of the plaintiff's minority, not only on the date on which it was actually brought but even later, it was vehemently argued on behalf of the appellant that the alterations could not be regarded as material. I am not however impressed by this argument although it must be admitted that the motive of the person making the alterations is to a large extent immaterial. In order to decide the material character of the alteration, one will have to obviously confine himself to the alteration and the effect it is shown to have produced on the document itself. If the legal identity or the character of the instrument have been affected or if the liability has been attempted to have been extended by the alteration, it must be held to be material and this would be so irrespective of the fact whether the alteration is to the prejudice of the promisor or the executant of the instrument or not. The reason behind the rule is based on sound sense and is intended to prevent persons from tampering with valuable securities under the penalty of not being able to found their claims on them if the alterations are found to be material. If the integrity of a contract has been broken and, its identity changed either by a party to the contract or by one who is entitled to sue on it or with their connivance and possibly even when their negligence has contributed to the alteration, the instrument incorporating such a contract must be held to have been vitiated. This rule can be deduced from a number of cases cited at the bar. It is unnecessary however to refer to all of them and it would be sufficient to refer to three English and one old Calcutta case on which reliance was placed by learned Counsel for the respondent. See Davidson v. Cooper (1844) 13 M. & W. 343 : 153 E.R. 142, Gardner v. Walsh (1855) 5 E. & B. 83 : 119 E.R. 412, Master v. Miller (1791) 1 S.L.C. 803 : 4 T.R. 320 : 100 E.R. 1042. and Gogun Chunder Ghose v. Dhuronidhur Mundul I.L.R.(1881) 7 Cal. 616. It was held in the first case Davidson v. Cooper (1844) 13 M. & W. 343 : 153 E.R. 142. that a party who has the custody of an instrument made for his benefit, is bound to preserve it in its original state, and that any material alteration will vitiate the instrument.' Lord Denman, C.J., in delivering his judgment laid down as a test for determining the materiality of the alteration whether the addition gave a different legal character to the writing and whether it would change the nature of the relation of the parties towards each other and their remedies upon it. In the second case the promissory note had been altered by adding another party to it. The alteration was apparently of no disadvantage to the defendant and yet the promissory note was held to be invalid as against the defendant. Lord Campbell, C.J., observed:

We conceive that the defendant is discharged from his liability if the altered instrument, supposing it to be genuine, would operate differently from the original instrument, whether the alteration be or be not to his prejudice.

5. The same rule was stated in Master v. Miller (1791) 1 S.L. C. 803 : 4 T.R. 320 : 100 E.R. 1042. A study of these cases would show that the rule has now been well established that any alteration or change in an instrument which 'causes it to speak a different language in legal effect from that which it originally spoke, which changes the legal identity or character of the instrument either in its terms or the relation of the parties to it' is a material change. It might not be out of place to mention that an alteration in the date of a bill of exchange has been stated by the corresponding section of the Bills of Exchange Act to be material. Although the Indian Act does not clearly say so yet I do not think that there is any reason to hold that what would be regarded as a material alteration in England should not be held to be so in India. I am, for the above reasons, of opinion that the alteration of dates was a material alteration.

6. As for the second contention it was conceded on behalf of the respondent that the alterations in the promissory note were not made either by the minor or by his adoptive father who had died shortly after the execution of the promissory note in his favour. There was no suggestion that they were made by or with the knowledge of his next friend either who is no other than his adoptive mother and with whom the minor was living. It was however alleged that the alterations were effected by the plaintiff's natural father who had appeared as a witness on behalf of the plaintiff. There is no evidence on the record from which it could be concluded that the promissory note was altered by him although the learned District Judge has on account of certain circumstances hazarded that guess. I have considered these circumstances carefully. They are inconclusive in my opinion and the expression of opinion by the lower appellate Court must be regarded to be in the nature of a surmise. There is no evidence on the record that these alterations were made by the plaintiff's natural father. That is why the trial Court abstained from giving a definite finding in regard to the person who had effected them. The learned District Judge refused to believe the statement made by P.W. 1 and since as a natural father he was to some extent interested in the plaintiff and he was the last person who had admitted to be in possession of the promissory note before the suit was brought, the conclusion was drawn that these must have been made by him. I have already said that it would not be safe to draw this conclusion; but even assuming this to be correct, would this be enough to debar the plaintiff from maintaining his suit? Learned Counsel for the respondent contends that this would be so and urges that the question whether these alterations were made with the knowledge of the minor plaintiff or with that of his next friend is wholly immaterial. The language of Section 87 of the Negotiable Instruments Act does, if literally construed, seem to support his contention but in view of the fact that this construction would lead to most undesirable and absurd results, the question is whether one should not have a little measure of freedom in construing this section somewhat liberally. But before interpreting the language of this section in the light of certain decided cases, it is essential to ascertain whether there is anything in evidence which would show whether these alterations were made either with the knowledge or complicity of the plaintiff or even with that of his next friend. The plaintiff, as observed before, was a minor at the time when the suit was instituted and there is nothing on the record which would suggest his knowledge or complicity. The same must be said, although it is not perhaps necessary, of his adoptive mother, who was the plaintiff's next friend when the suit was instituted. Moreover there is nothing to show that they, that is, the plaintiff and his adoptive mother, were guilty of laches or negligence in permitting the promissory note to go out of their custody. The plaintiff was a minor and the next friend was an old Indian lady who would have found it difficult to look after the estate left by her deceased husband without the help of servants and persons who took an interest in their affairs. The question to decide is whether the plaintiff should be held to be debarred from suing on the basis of the promissory note which had been proved to have been materially altered although without his or even his next friend's knowledge or complicity. It must be remembered in this connection that no advantage was taken of these alterations when the suit was instituted and the dates on which the promissory note was executed or the endorsement made were correctly stated. The cause of action was also stated to have arisen on the dates when the promissory note had actually come into existence and when interest had been paid and endorsed by the defendant. It is thus clear that nothing has been done either by or on behalf of the plaintiff which would induce the Court to withhold the relief asked for on the ground that he had not come to Court with clean hands. It may be however contended that this is not a case where it is discretionary with the Court to grant or refuse the relief asked for or in other words the Court was not being asked to dismiss the suit on any equitable grounds but on account of a clear bar created by the statute. This takes me to the language employed in Section 87 of the Negotiable Instruments Act. A careful study of the words used in this section leads me to the conclusion that the obvious intention of the legislature was to render the negotiable instruments to be void which were materially altered either by the party in whose favour the document was executed or the person on whom its ownership had devolved on account of a contract or by operation of law. The Legislature intended or may be presumed to have intended to take both the parties to the instrument or their representatives in interest into consideration and was providing a penalty for the unauthorised alterations effected by one of them without the consent of the other. The section did not obviously relate to an alteration by a stranger or contemplate a consent to the alteration by both the parties but only by one of them for the act of the other. Moreover as observed by Maxwell on the Interpretation of Statutes at page 198 in Chapter IX, 7th Edition:

When the language of a statute in its ordinary meaning and grammatical construction leads to absurdity, hardship or injustice,-presumably not intended, a construction may be put upon it which modifies the meaning of the words and even the structure of the sentence. This may be done by departing from the rules of grammar by giving unusual meaning to particular words, by altering their collocation, by rejecting them altogether, or by interpolating other words, under the influence, no doubt of an irresistible conviction that the legislature could not possibly have intended what its words signify and the modifications thus-made are mere corrections of careless language and really give the true meaning. The rules of grammar yield readily in such cases to those of common sense.

7. This is however not all. When the corresponding section of the Bills of Exchange Act where the language was almost identical with Section 87 of the Negotiable Instruments Act came up for construction before their Lordships of the Judicial Committee in Hongkong and Shanghai Banking Corporation v. Lo Lee Shi (1928) A.C. 181 : 55 M.L.J. 627 , it was held by their Lordships that the words of the section related only to alterations effected by the will of the person by whom or under whose directions they were made and that they did not apply to a change due to a pure accident such as the document being mutilated and defaced by the wash and ironing of the garment in which it was left or by the ravages of the white ants or the seal of a deed being torn off by a child or eaten off by rats or burnt by the hot-end of a cigarette. If cases of pure accident were not found to fall within the terms of the corresponding section of the Bills of Exchange Act, is there any reason to interpret Section 87 of the Negotiable Instruments Act in such a manner as to debar an innocent person from maintaining an action simply because the promissory note was taken away without the knowledge or consent of its owner by a stranger who made some alterations in the instrument either knavishly or foolishly. In Hutchins v. Scott (1837) 2 M. & W. 809 : 150 E.R. 984, Anderson, B., remarked:

It is difficult to understand why an alteration by a stranger should in any case avoid the deed, why the tortious act of a third person should affect the two parties to it unless the alteration goes the length of making it doubtful what the deed originally was or what the parties meant.

8. The question 'suppose the stranger destroyed it instead of altering it?' put by Lord Abinger during the course of the arguments in the above case discloses the view the noble Lord was taking of the case. There is no doubt that an action would lie on a destroyed bill both at common law and under the Indian Act. The rule has been stated thus in paragraph 287 of Halsbury's Laws of England (Halsbury's edition):

If an alteration (by erasure, interlineation, or otherwise) is made in a material part of a deed, after its execution, by or with the consent of any party thereto or person entitled thereunder but without the consent of the party or parties liable thereunder, the deed is thereby made void. The avoidance, however, is not ab initio, or so as to nullify any conveyancing effect which the deed has already had; but only operates as from the time of such alteration, and so as to prevent the person, who has made or authorised the alteration, and those claiming under him, from putting the deed in suit to-enforce against any party bound thereby, who did not consent to the alteration, any obligation, covenant or promise thereby undertaken or made (h).

A material alteration is one which varies the rights, liabilities or legal position of the parties as ascertained by the deed in its original state, or otherwise varies the legal effect of the instrument as originally expressed (1) or reduces to certainty some provision which was originally unascertained and as such void (k), or may otherwise prejudice the party bound by the deed as originally executed (l).

The effect of making such an alteration without the consent of the party bound is exactly the same as that of cancelling the deed (m). The avoidance of the deed is not retrospective, and does not revest or reconvey any estate or interest in property which passed by the deed (n). And the deed may be put in evidence to prove that such estate or interest so passed, or for any other purpose than to maintain an action to enforce some agreement therein contained (o).

9. For the above reasons I would hold that the alteration referred to in Section 87 of the Negotiable Instruments Act refers to a deliberate alteration by a party to the instrument or by one on whom his interest had devolved and not by a stranger particularly when no conduct can be imputed to the party in whose interest the alteration has been effected or from which either his complicity, laches or negligence may be inferred.

10. The third contention raised on behalf of the appellant was that he might be permitted to fall back on the original consideration. It must be remembered in this connection that the promissory note, even if my interpretation of Section 87 of the Negotiable Instruments Act be assumed to be incorrect can only be declared to be void under Section 87 of the Negotiable Instruments Act but does not become inadmissible in evidence as would have been the case if the document were not duly stamped. It is unnecessary to say what the effect would have been if the alteration had been made fraudulently by the plaintiff himself: but in the absence of fraud it does not seem to me possible to hold that not only the note but the original debt is also destroyed. He could in my opinion fall back on the original consideration since the promissory note was a valid document and remained so-for a long time after it came into existence. A subsequent alteration in the document by a stranger would not deprive the person, who had advanced the money or to whom the money had become payable subsequently, on account of the promisee's death, of his remedy to bring a suit for the money advanced to the defendant by way of loan. As already observed, it might be remembered in this connection that the dates mentioned in the plaint both of execution and in regard to the payment made by the defendant towards interest were the original dates and not those which were subsequently altered and the cause of action also was stated to have arisen on the dates on which it would have been stated if no alteration had taken place. If therefore no claim was made on behalf of the plaintiff upon the promissory note as altered, there is no reason to hold that the document would not be admissible in evidence in proof of the original right which had come into existence at the time when the money was paid. Sutton v. Toomer (1827) 7 B. & C. 416 : 108 E.R. 778 may be referred to in this connection with advantage. It has been argued that since Section 87 of the Negotiable Instruments Act appears in Chapter VII which relates to discharge from liability on notes, bills and cheques it must not be taken to have rendered the document void only but also to have discharged the liability which arose at the time when the promissory note was executed. The argument is not correct in my opinion for two reasons. First of all, the Chapter relates to discharge from liability on notes, etc., and not to discharge from liability altogether. The suggestion that after a note has been avoided on account of a fraudulent conduct of a party the party will not be entitled to sue on it may be plausible but this does not mean that the party has no right to bring a suit on the original cause of action also. Moreover in this very section the second part states that an endorser's liability would be discharged if his indorsee made an alteration. If the alteration was meant to discharge the liability of every person under the negotiable instrument, where was the necessity of referring to an indorser's liability in the second paragraph of the section. Why did not the section, it may well be asked, clearly provide that the liability of every person under the instrument would be discharged - if that was the intention of the legislature? The case decided by the Full Bench reported in Perumal Chettiar v. Kamakshi Ammal : AIR1938Mad785 , on which reliance was placed on behalf of the respondent has-no application to this case for the simple reason that the promissory note which had been materially altered has not been declared by law to be inadmissible in evidence. It may have become unenforceable by operation of law - this being all that could be said against it and thus incapable of forming the basis of a suit but it would not entail the penalty of depriving the drawee or promisee or their representatives in interest from maintaining an action on the original consideration unless specifically declared to be so by the legislature. One may not be able to enforce the terms contained in the instrument but there can be no objection to the Court looking at it and granting the relief on the basis as if the document had not come into existence. The promissory note having become void, the defendant who had received an advantage under the instrument is bound to restore it or to make compensation for it. There seems to be no reason why the Court should not act in such a case on the principle embodied in Section 65 of the Indian Contract Act.

11. Section 87 would not therefore in my opinion stand in the plaintiff's way of getting the relief on the original cause of action. The application for amendment, made in this Court would have to be determined therefore on the ordinary principles contained in Order 6, Rule 17, Civil Procedure Code, and there is no reason why in the circumstances of this kind the plaintiff should not have been permitted to amend the plaint so as to fall back upon the original consideration if the second contention had not been decided in his favour. In view of the interpretation I have placed on Section 87 it is unnecessary to order the amendment and grant relief on the basis as if no promissory note had come into existence.

12. The third position taken upon on behalf of the appellant was that a decree should have been passed by the lower appellate Court on the admission made by the defendant. As I stated above I am not concerned in this case with what would have happened if the plaintiff had been guilty of fraud or had come into Court with unclean hands. But in this particular case nothing has been or can be said either against the plaintiff or his next friend which would show that he was not entitled to the relief when the defendant had admitted it in his statement before the Court as a witness that the debt due under the promissory note was still outstanding.

13. For these reasons, I set aside the decree of the lower appellate Court and pass a decree in favour of the plaintiff for the amount claimed by him with costs in this and in the lower Courts.

14. Leave granted.


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