A signs a promissory note for ₹10,000 payable to B or order. Without A's consent, B alters the amount to ₹15,000 and indorses the note to C, who indorses it to D for value. D sues on the note. Who…
Question and options
A signs a promissory note for ₹10,000 payable to B or order. Without A's consent, B alters the amount to ₹15,000 and indorses the note to C, who indorses it to D for value. D sues on the note. Who can rely on section 87 of the Negotiable Instruments Act, 1881 to resist liability?
No one, since D took the note for value
A, the maker
B, who made the alteration
C, who indorsed it after the alteration
Answer and explanation
Section 87 of the Negotiable Instruments Act, 1881 makes a materially altered instrument void against any person who was a party to it when the alteration was made and did not consent, unless the alteration carried out the original parties' common intention. A was a party and did not consent, so he can resist payment. B made the alteration and C became a party only afterwards, so neither can rely on the section.
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