Meaning:-

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An alteration is called as material alteration if it alters-

*the character or operation (i.e. the legal effect) of a negotiable instrument, or

*the rights and liabilities of the parties to a negotiable instrument.

What is material alteration? What is NOT Material Alteration?
Alteration regarding-

(a)Date,

(b)Time of payment,

(c)Place of payment,

(d)Sum payable

(e)Opening a crossed cheque,

(f)Relationship between parties,

(g)Converting an order cheque into a bearer cheque.

 

 

(a)Filling blank of the instrument,

(b)Conversion of blank endorsement into endorsement in full,

(c)Crossing of Cheque,

(d)Conversion a General Crossing into Special Crossing, like addition of word “A/c payee” or “Not Negotiable”.

(e)Cancelling the word bearer and making cheque payable to order.

(f)Alternation made with the consent of the parties.

 

Effect of a material alteration   {sec. 87}

*Any material alteration of a negotiable instrument renders the same void as against any

One who is a party there at the time of making such alteration and does not consent thereto.

*But, a material alteration is valid, if it was made so as to carry out common intention of the original parties.

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