Thommen vs Usamiakhan

Krishnamoorthy Iyer, J.—Defendant is the appellant. The suit filed by the plaintiff for the recovery of a sum of Rs. 1160/- due under Ex. P. 1 promissory note dated 15-8-1952 alleged to have been executed by the defendant, thought dismissed by the trial court, was decreed by the lower appellate court. Though the trial court found that the defendant received the sum of Rs. 1160/- as alleged by the plaintiff, it was of the view that Ex. P.1 was materially altered and dismissed the suit. The learned Judge also was of the view, that the defendant received the sum of Rs. 1160/- but he differed from the learned Munsiff and held that there were no alterations in Ex. P.1 after its execution and even if there are any alterations they are hot material alteration but were made only to carry out the common intention of the parties to the instrument.

Though the learned advocate for the appellant questioned the findings of the courts below regarding the payment of Rs. 1160/- by the plaintiffs the defendant, we do not think that there is any ground to interfere with the concurrent findings of fact. These findings are based on an application of the oral and documentary evidence adduced in the case. It cannot be said that there is no evidence all to support the concurrent findings of fact. We therefore confirm the concurrent findings of the courts below and hold that the plaintiff advanced a loan of Rs. 1160/- to the defendant on 15-8-1952.

But we do not agree with the learned Judge: that there are no material alterations in Ex. P.1. Ex. P.1 consists of two parts. The defendant admitted one part of Ex. P.1 containing his signature but denied the second portion of the same. The admitted portion of Ex. P.1 is in these terms:

Below the admitted signature is the following portion which according to the plaintiff was signed by the defendant.

The defendant denied haying executed the above portion and his Signature to the same. The defendant also denied having stamped Ex. P. 1 at the time he affixed his signature to the admitted portion in Ex. P. 1 According to the defendant, the stamps were affixed to Ex. P.1 by the plaintiff without the knowledge and consent of the defendant to make it admissible in evidence in the suit to be filed.

Affixing of stamps to a promissory note after its execution without any stamp in order to make it a valid instrument for being sued upon is a material alteration within the meaning of Section 87 of the Negotiable instruments Act. Sir Charles Arnold White observed in Lakshmammal v Narasimharaghava Aiyangar : (1915) ILR. 38 Mad 746 at 749

Mr. Justice Wallis held that the alterations were made with the obvious purpose of enabling these documents, which could not be sued upon, to be sued upon where it was expected that they would have to be sued upon, namely in Mysore. There was some discussion as to whether the documents in their original form were bonds or promissory notes. In the plaint they are described as bonds; but in the documents themselves they are described as promissory notes. As promissory notes they are insufficiently stamped; and whether or not in this state of things they could be sued on in their original form in Madras, it seems clear that the insufficiency of stamp would have been a fatal obstacle to their being sued on in Mysore.

I should be prepared to take the same view as the learned Judge and to hold that the alterations were made in order that these documents could be sued upon in Mysore. If this is so, it seems to me to be absolutely clear that the alterations were material alterations since they were made for the purpose of enabling the plaintiff to sue in a court in which if the alterations had not been made, she would not have been able to sue.

In Srinivasan Pillai v Kanniappa Pillai 71 LW 398 Ramaswami, J. took the view that a subsequent affixture of a revenue stamp to a promissory note to make legally enforceable is material alteration which renders it void within the meaning of Section 87 of the Negotiable Instruments Act. The same view was taken in Bhanwarlal Vs. Gulabchand, .

Mathew, J. in Sankara Pillai v Usman Settu 1963 K.L. T. 241 followed the above decisions in a case where additional stamps were affixed to a promissory note insufficiently stamped and held that the affixing of the additional stamps rendered the instrument invalid against the person so altering the same.

No decision to the contrary was brought to our notice. We therefore follow the above decisions and hold that affixing of stamp subsequently to a promissory note executed without any stamp, without the knowledge of the promisor, is a material alteration within the meaning of Section 87 of the Negotiable Instruments Act which will render the instrument invalid against the person altering the same.

It was contended on behalf of the plaintiff, that the burden to establish that the stamps in Ex. P.1 were subsequently affixed is on the defendant and he has not discharged the same.

In the Negotiable instruments Act by Bhashyam and Adiga, 11th Edition, page 438, the law as to burden of proof when a note or a bill of exchange on its face appears altered is stated thus:

Where the instrument appears to be altered, it is incumbent upon the plaintiff (i.e. the holder) to show that the alteration is not improperly made, and the presumption in the case of negotiable instruments is that the alteration was made subsequent to the issue of the instrument; while in the case of deeds etc. the presumption is the other way. Where a bill appears to have been altered, or there are marks of erasure on it, the party seeking to enforce the instrument is bound to give evidence that it is not avoided thereby.

When a note or bill of exchange is materially altered by the consent of parties, it become a new contract requiring a fresh stamp. If the instrument is altered before it is issued or if it is altered for the purpose of correcting a mistake, and bringing the instrument in accordance with the original intention of the parties at the time of issue, the alteration does not require a new stamp.

On a perusal of Ex. P.1, it is seen that the stamps were not affixed when the admitted portion of Ex. P. 1 was executed by the defendant. The way in which stamps are affixed to Ex. P. 1 prima facie shows that the stamps were not there at the time of the execution of the admitted portion of Ex. P.1. The burden is therefore on the plaintiff to prove that there are no material alterations in Ex. P. 1. The plaintiff has not succeeded in proving the same. Dw. 2 who is the attestor deposed that the Stamps were not there when he attested Ex. P.1. Dw.1 the defendant also said that stamps were not affixed to Ex. P. 1 when he executed the same. There is only the evidence of Pw. 1 to prove that Ex. P. I had stamps affixed when it was executed by the defendant. The evidence of Pw. 1 alone is not sufficient to remove the suspicion created in our minds by the very appearance of Ext. P. 1 We therefore hold that Ex. P. 1 is vitiated by material alteration caused by the plaintiff and it is therefore invalid against the plaintiff. The decree in the suit based on Ex. P.1 cannot stand. It was then contended for the plaintiff that he should be allowed an opportunity to amend the plaint basing on his right to sue on the original consideration especially when the courts below found in his favor regarding, the payment of Rs. 1160/- by the plaintiff to the defendant on the date of Ex. P. 1. The prayer of the plaintiff was resisted by the learned advocate for the defendant relying on the decision in Achuthan Raghavan v Varkey Varithu 1962 K.L. T. 518. This decision is only an authority for the position that in a suit on a promissory note, no decree can be granted on the original consideration. The only question for us to decide on this aspect is whether the plaintiff can be permitted to amend the plaint claiming a relief on the original consideration. We are of the view that this is a fit case to exercise our judicial discretion in favor of the plaintiff. The contention of the learned advocate for the defendant that the request for an amendment is belated and the effect of allowing amendment will deprive his client of the plea of limitation cannot in the circumstances of this case persuade us to refuse the prayer for amendment. In the appeal memorandum filed on behalf of the plaintiff in the lower appellate court, he had made a request for amending the plaint. He also filed a separate application before the appellate court for amending the plaint. This petition was dismissed by the appellate Judge on the same date he pronounced judgment decreeing the suit in 1962. We are therefore of the view that delay is no ground for refusing the amendment prayed for in this case. There is no invariable rule that amendment when it will have the effect of depriving the opposite party of the plea of limitation should always be refused. We therefore allow the prayer for amending the plaint into one based on the original consideration.

In the result, we set aside the decrees and judgments of the courts below and remand the suit to the trial court. The trial court will allow the plaintiff to amend the plaint as one based on the original consideration and the defendant to file additional pleadings. The suit will be tried afresh after giving opportunities to both parties to adduce evidence. But our finding that on the date of Ex. P.1 the plaintiff advanced Rs. 1160/- to the defendant will stand and will be binding on the parties in the subsequent proceedings. The parties will bear their costs incurred till now and the costs to be incurred will be provided for in the decree to be passed. The court fee paid for the appeal will be refunded to the appellants advocate.