In Aldons v. Cornwall, a material alteration to a negotiable instrument was defined as “an alteration, which alters the business effect of the instrument if used for any business purpose. Example:
- The time of payment,
- The place of payment,
- The sum of payment,
- The number of parties,
- The relationship between the parties,
- Legal character of the instrument,
- Opening a crossed cheque and,
- Converting an order cheque into a bearer cheque.
Here we are interested in knowing whether altering signature be termed as material alteration to a cheque? However, we are more consecrated with judicial opinion with respect to the same. So, lets go!
Section 87 of Negotiable Instruments Act (hereinafter NIA) reads as follows:
“Section 87 in The Negotiable Instruments Act, 1881
- Effect of material alteration.—Any material alteration of a negotiable instrument renders the same void as against anyone who is a party thereto at the time of making such alteration and does not consent thereto, unless it was made in order to carry out the common intention of the original parties; Alteration by indorsee.—And any such alteration, if made by an indorsee, discharges his indorser from all liability to him in respect of the consideration thereof. The provisions of this section are subject to those of sections 20, 49, 86 and 125.”
This section provides little insight into meaning of material alteration of a negotiable instrument in general and cheque in particular. This is perhaps due to the fact that NIA only defines effect of material alteration to a negotiable instrument and not the meaning of material alteration to a negotiable instrument.
However, in a case Delhi HC had made a tangential observation with respect to signature, its alteration and whether or not, it is a material alteration.
Delhi HC observed in Ravi Chopra vs State and Anr.
“…There is no provision in the NI Act which either defines the difference in the handwriting or the ink pertaining to the material particulars filled up in comparison with the signature thereon as constituting a ‘material alteration’ for the purposes of Section 87 NI Act. What however is essential is that the cheque must have been signed by the drawer. If the signature is altered or does not tally with the normal signature of the maker, that would be a material alteration. Therefore as long as the cheque has been signed by the drawer, the fact that the ink in which the name and figures are written or the date is filled up is different from the ink of the signature is not a material alteration for the purposes of Section 87 NI Act…”
Other than this, there is perhaps no other reported case (to the best of my knowledge) that deals with alteration of signature on a cheque as being equivalent to material alteration of a negotiable instrument.
However, an alternate method to prove ‘material alteration due to altering signature’ could be to exploit definition of material alteration, which in turn has been given in multiple judicial opinions. This definition of material alteration could then be run against meaning of cheque under section 6 of NIA to conclude that signature forms a material part of cheque. Hence, under such circumstances alteration of signature will constitute material alteration of the cheque and obvious implications under section 87 will follow. (However, the same hasn’t been considered here).