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2003 DIGILAW 5 (AP)

Maturi Sandesh v. Challa Venkateswara Rao

2003-01-02

DUBAGUNTA SUBRAHMANYAM

body2003
DUBAGUNTA SUBRAHMANYAM, J. ( 1 ) THE defendant in O. S. No. 66 of 1997 on the file of Junior Civil Judge, Khammam, preferred this appeal against the judgment and decree dated 11. 11. 1998 in A. S. No. 34 of 1998 on the file of Additional District Judge at Khammam confirming the judgment and decree passed in O. S. No. 66 of 1997 dated 20. 4. 1998. ( 2 ) THE respondent - plaintiff filed the suit for recovery of money based on two pro-notes dated 7. 7. 1993 executed by the appellant in his favour. The pro-notes are marked as Exs. A. 1 and A. 2 before the trial court. The consideration for each pro-note is Rs. 35,000=00. It is the further case of the respondent - plaintiff that on the date of the pro-note itself, the appellant paid a sum of Rs. 875=00 under Ex. A. 1 pro-note and defendant paid Rs. 25,000=00 each on 28. 7. 1994 under each of the pro-notes Exs. A. 1 and A. 2. The defendant contested the suit on various grounds. According to him the debt under pro-notes was incurred prior to 1993. It is also his case that on 28. 7. 1993 itself he paid a total sum of Rs. 70,000=00 and discharged both the pro-notes and therefore he is not liable to pay any amount. The payment endorsements on Exs. A. 1 and A. 2 are not signed by the appellant - defendant. According to plaintiff payment endorsements and corrections in them are written by defendant himself. The year in each of the payment endorsements is corrected from 1993 as 1994. It is the contention of the appellant - defendant that these alterations amount to a material alteration as per the provision in Section 87 of the Negotiable Instruments Act. Both the courts held that the corrections regarding year in the above two part payment endorsements are not material alterations. Accordingly both the courts decreed the suit filed by the plaintiff. Aggrieved by the judgment of the Appellate Court confirming the judgment of the trial court, the defendant preferred the present appeal. ( 3 ) AT the time of admission of this appeal, the learned Admission Judge treated the following points formulated in the memorandum of appeal as substantial questions of law that arise for consideration in the present appeal. (1) Whether the material alterations made on Exs. ( 3 ) AT the time of admission of this appeal, the learned Admission Judge treated the following points formulated in the memorandum of appeal as substantial questions of law that arise for consideration in the present appeal. (1) Whether the material alterations made on Exs. A. 1 and A. 2, the two pro-notes did not vitiate the two pro-notes and render them void in the light of Section 87 of Negotiable Instruments Act? (2) Assuming two pro-notes are valid in spite of material alteration of the endorsements, the plaintiff - respondent was entitled to the interest at the rate of 18% per annum on the principal amount till 28. 7. 1994 instead of 28. 7. 1993. (3) Whether the trial court is justified in granting interest at the rate of 12% from the date of suit till date of judgment on the decretal amount of Rs. 35,904=00 instead of principal amount Rs. 19,125=00? ( 4 ) POINTS 1 TO 3: The learned counsel for the appellant relied upon two decisions in support of his contention that the admitted alteration relating to the year in the payment endorsements is a material alteration. The first decision is a judgment of the Privy Council reported in NATHU LAL Vs. GOMTI KUAR. The second judgment is a judgment of the Apex Court reported in LOONKARAN SETHIA Vs. IVAN E. JOHN. The Apex Court followed the judgment of the Privy Council referred to supra. According to the Privy Council, 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. The said proposition of law was affirmed by the Supreme Court. In my considered opinion these two decisions are not applicable to the facts of the present appeal. In its judgment, the Privy Council clearly stated that the alterations of the date of execution of the deed and certain other words by making holes in the document without the consent of the obligee by the party in whose favour it was executed did not amount to material alterations within the meaning of the rule. In its judgment, the Privy Council clearly stated that the alterations of the date of execution of the deed and certain other words by making holes in the document without the consent of the obligee by the party in whose favour it was executed did not amount to material alterations within the meaning of the rule. In the present case, the material alteration alleged relates to alteration of the year 1993 as 1994. In the Supreme Court judgment also the alterations do not relate to the date of the execution of the document. The alterations made related to some terms of the agreement. Therefore, as the terms of the agreement are altered subsequently without the knowledge of the executant of the document, the Apex Court was pleased to hold that the said alteration is a material alteration. The above two judgments are not rendered interpreting the provision in Section 87 of Negotiable Instruments Act. Except these two decisions, no other decision is relied upon by the learned counsel for the appellant. As already pointed out, these two decisions do not come to the aid of the appellant in the circumstances of the present appeal. ( 5 ) THERE are two binding earlier decisions of this court. This Court in a decision reported in VENKATA SUBBAYYA Vs. VISWANATHAM interpreting the provision in Section 87 of Negotiable Instruments Act held that any alteration in a receipt is not an alteration made in a negotiable instrument and it is an alteration made in a document called receipt. This court held that a receipt regarding part payment is neither a promissory note, bill of exchange or a cheque payable either to order or bearer. In another decision reported in S. SUBBA RAO Vs. G. RAMA RAO , this court held that payment endorsement on a promissory note, even when it is found on the same paper on which the promissory note is engrossed, does not come within the definition of a negotiable instrument. This court further held that the suit pro-note cannot be regarded as having been materially altered or even altered to attract the provisions of Section 87 of the Act simply because payment endorsement is found to be spurious, when no reliance was placed upon it by the plaintiff for saving the suit from the bar of limitation. This court further held that the suit pro-note cannot be regarded as having been materially altered or even altered to attract the provisions of Section 87 of the Act simply because payment endorsement is found to be spurious, when no reliance was placed upon it by the plaintiff for saving the suit from the bar of limitation. In the present case the suit is filed well within three years from the dates of execution of the pro-notes and not beyond three years from the dates of pro-notes but within three years from the dates of payment endorsements. It is further contended on behalf of the appellant that part payment was made during the year 1993 and therefore the plaintiff is entitled for interest at the contract rate up to the said date of part payment only. It is to be stated that as the two courts below found that the payments were made during the year 1994 and not during the year 1993, the above contention cannot be accepted by this court. The rate of grant of interest subsequent to filing of the suit was also challenged in the present appeal. From the date of suit till the date of judgment, the interest was granted at the rate of 12%. It is less than contract rate of interest. From the date of the decree, the interest was granted at the rate of 6% per annum. In the circumstances of the present case, I do not see any ground to interfere with the rate of interest granted by the trial court and affirmed by the Appellate Court. I, therefore, do not find any merits in the present appeal. All the points are accordingly answered against the appellant and in favour of the respondent. ( 6 ) IN the result, the appeal is dismissed with costs.