M S ANIRUDHAN Vs. THOMCOS BANK LIMITED

JUDGEMENT

(1.) It is not necessary for me to give the facts of this case as they are set out in detail in the judgments of my learned brethren Sarkar and Hidayatullah JJ. In my opinion this appeal should be dismissed and my reasons are these:

(2.) On the findings of the High Court it appears that the Bank had agreed to allow an overdraft to defendant No. 1 for Rs. 20,000/-, that the appellant gave a surety bond for the repayment of Rs. 25,000/- and when that was pointed out to defendant No. 1, the principal debtor, he (the latter) made the alteration in the document by reducing the figure of Rs. 25,000/- to Rs. 20,000/-.

(3.) The case of the appellant was not that he never stood surety for defendant No. 1 but that he stood surety for Rs. 5,000/- which was subsequently altered to Rs. 20,000/- and that any change of figure was a material alteration resulting in the avoidance of the contract, even though the alteration might have been advantageous to him the obliger. It was argued that howsoever innocent the obligee might be or howsoever innocent the alteration might have been made so far as it is material the non- accepting obligor - the appellant in this case - cannot be held liable on the obligation in the altered form because he never made or consented to such an obligation and he cannot be held liable on the obligation in the original form because the obligation was never assented to by the creditor - the respondent Bank. Now an unauthorised material alteration avoids a contract so that if a promiser after a written contract has been executed materially alters it without the con sent of the promisor whether by adding any thing to the contract or striking out any part of it or otherwsie the contract is avoided as against the person who was otherwise liable upon it (Halsbury's Laws of England 3rd Editions, Vol. 8, paragraph 301 at page 176) it may also be taken to be the law that even if the alteration is made by a stranger without the knowledge of the promisee the other party is discharged if the contract is in possession of the promisee or his agent. But if the contract is altered by stranger when' the contract was not in the custody of the promisee the promisor is not discharged (Haisbury's Laivs of England, 3rd Edition Vol. 8 paragraph 301, p. 176). There is also, a further qualification and that is that if a Guarantor entrusts a letter of Guarantee to the principal borrower and the principal borrower makes an alteration without the assent of the appellant (sic) then the guarantor is liable because it is due to the act of the guarantor that the letter of guarantee remains with the principal debtor, in this case defendant No. 1, and what the principal debtor did will estop the guarantor from pleading want of authority (Williston on Contract Vol. VI, paragraph 1914, p. 5354).