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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?

  1. No one, since D took the note for value

  2. A, the maker

  3. B, who made the alteration

  4. C, who indorsed it after the alteration

Answer and explanation

Correct answer: B - A, the maker

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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