Appeal No 131 of 1961
Appeal from the judgment and decree dated September 30 1957 of the Kerala High Court in Appeal suit No 19 of 1956 T
T N Subramania lyer R Mahalingier and MR Krishna Pillai for the appellant
V A Seyid Muhammed for the respondent
September 14
The judgment of the Court was delivered by KAPUR J
It is not necessary for me to give the facts of this case as they are set out in detail in the 65 judgments of my learned brethern Sarkar  Hidayatullah JJ
In my opinion this appeal should be dismissed and my reasons are these On the findings of the High Court it appears that the Bank had agreed to allow an overdraft to defendant No 1 for Rs 20000  that the appellant gave a surety bond for the repayment of Rs 25000 and when that was pointed out to defendant No 1 the principal debtor lie the latter made the alteration in the document by reducing the figure of Rs 25000 to Rs 20000 The case of the appellant was not that he never stood surety for defendant No 1 but that he stood surety for Rs 25000 which was subsequently altered to Rs 20000 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 obliger the appel lant in this case cannot be held liable on the obligation in the altered form because he never made be consented to such an obligation and he can not be held liable on the obligation in the original form because the obligation was never assented to by the creditor respondent Bank
Now an unauthorised material alteration avoids a contract so that if a promisee after a written contract has been executed materially alters it without the consent of the promisor whether by adding anything to the contract or striking out any part of it or otherwise the contract is avoided as against the person who was otherwise liable upon it Halsbury s laws of England 3rd Edn Vol 8 para 301 p 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 66 by a stranger when the contract was not in the custody of the promisee the promisor is not discharged
Halsbury s Laws of England 3rd Edn Vol 8 para 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 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
para 1914 P5354
Thus the position in the present case comes to this
The appellant agreed to stand surety for an overdraft allowed by the respondent Bank to the principal debtor Shankaran
The Bank required a guarantee in the form which was handed over to the principal debtor Shankaran
Shankaran got it filled by the appellant for a sum of Rs 25000 
The Bank did not accept the guarantee up to that limit but wanted the figure to be corrected ie by insertion of Rs 20 000 
The document was there upon handed back to the principal debtor who it is stated altered the document
At that stage the principal debtor was acting for and on behalf of the appellant because it was at his instance that the appellant was standing surety and the appellant handed over the deed of guarantee to the principal debtor for the pur poses of being given to the balik the respondent
In these circumstances the avoidance of contract by material alteration is in applicable because the document was not altered while in possession of the promisee or its agent but was altered by the principal debtor who was at the time acting as the agent of the guarantor the appellant
In these circumstances the plea of material alternation is of no avail to the appellant and the 67 appeal must therefore fail and is dismissed but no order as to costs
SARKAR J
This appeal arises out of a suit filed by the respondent Bank against the appellant as the guarantor and one Sankaran as the principal debtor to recover moneys advanced to the latter on an overdraft account
The suit was decreed against Sankaran by the trial Court and he never appealed from that decree
We will therefore be concerned in this appeal only with the claim against the appellant
The suit against the appellant was based on a letter of guarantee dated May 24 1947
It was stated in the plaint that by this letter of guarantee the appellant had undertaken to repay to the Bank the balance due on the overdraft account opened in favour of Sankaran up to a maximum of Rs 200001 which was also the maximum amount for which the overdraft had been arranged
The appellant s defence to the suit was that he had agreed to guarantee the liability of Sankaran on the overdraft up to Rs 5000 and had signed the letter guaranteeing thereby repayment up to that sum but the letter had been altered without his consent by substituting Rs 20000 for Rs 5000 
The appellant contended in the courts below that as this was a material alteration of the instrument of  guarantee
he was absolved of ill liability on it
The trial court found that the amount guaranteed had originally been mentioned in the letter as Rs 25000 and this had been altered without the consent of the appellant to Rs 20000 
It observed that as it was not disputed that the alteration was material the suit against the appellant had to be dismissed and passed a decree accordingly obviously in the view that the alteration had avoided the instrument
The respondent Bank then appealed to the High Court of Kerala the High Court agreed with the trip 68 court that the letter of guarantee originally mentioned Rs 25000 and this figure was later altered to Rs20000 without the consent of the appellant
It added that probably the alteration had been made by the principal debtor Sankaran
It however held that the appellant had mentioned Rs 25000 in the place of Rs 20000 in the letter probably by a mistake and that the alteration had been made in order to carry out the common intention of Sankaran the appellant and the Bank that for the overdraft accommodation of Rs 20000 allowed to Sankaran the appellant would give a letter of guarantee to the Bank
In this view of the matter the High Court relying on the principle contained in section 87 of the  passed a decree against the appellant
The appellant has come up to this Court in appeal against the judgment of the High Court
Unfortunately the Bank for reasons unknown to us has not appeared in this appeal
Dr Seiyid Muhammed argued the case for the Bank at our request and has rendered us great assistance
Now the provision of the on which the High Court relied in terms applies to a negotiable instrument which a letter of guarantee is not
The principle of that provision may however be of wider application
That principle has been formulated in Halsbury s Laws of England 3rd edn vol
11 p 370 in the following words  An alteration made in a deed after its execution in some particular which is not material does not in any way affect the validity of the deed  
It appears that an alteration is not material    Which carries out the intention of the parties already apparent on the face of the deed
It is now well settled that this principle applies to instruments under hand also  see ibid 69 p 380 f n c and Master vs Miller 1791 4
Term Rep 320
The question then is was the alteration in the letter of guarantee of the kind contemplated by this principle
The learned judges of the High Court thought it was and so held that the letter of guarantee as altered could be enforced
I am unable to accede to that view
It seems to me that the intention to carry out which an alteration is permissible under the rule on which the High Court has relied is the intention with which the instrument was executed
That is why in formulating the rule it has been stated in Halsbury s Laws of England that the intention has to be already apparent on the face of the deed
I need only refer to the observation of Le Blanc J in Knill vs Williams1 in support of this proposition If I had thought that there was any evidence on which the jury might have found that the words afterwards added had been originally intended to have have been inserted and were omitted by mistake I Should certainly have left it to them so to find the case of Kershaw vs Cox2 being then fresh in my mind but
according to my recollection of the evidence it was impossible for them to draw that conclusion from it
The opinion which I delivered in Karshaw vs Cox can only be supported on the ground that the alteration there made in the bill the day after it was negotiated was merely the correction of a mistake made by the drawer of it in having omitted the words or order  which it was intended at the time should be inserted
 The two cases on which the learned judges of the High Court relied are also cases where the mistake was in writing the instrument
In Lachmi Rai vs Srideo Rai3 it was found that the omission regarding the payment of interest was accidental and in Ananda Mohan Saha vs Ananda Chandra Naha4 where 1  1809 10 East 931 2 3 Esp
N Cas 246
3 A I R 1939 All
4 1916 1
L R 70 the instrument originally provided for interest on a loan of Rs 200 at Rs 1 per mensem and had been altered by the addition of the words per cent  it was said that it was the intention of the parties as  it seems to me to be obvious upon reading the document that interest was to be paid at the rate of one rupee per cent
per mensem
It seems to me that if it were not so and the intention contemplated in the rule could be gathered from a pre existing agreement alone without caring to find out the intention with which the instrument was executed then there would be no justification for the rule
It would then warrant the alteration of an instrument intentionally written in variance with the pre existing agreement which a person was in law free to do by the other party to it
That would amount to making a new contract out of a written instrument by unilateral action and in disregard of the intention of the writer
For such a position our laws make no provision
It may be that a person who writes a document in terms which deliberately depart from the agreement pursuant to which it is written may be liable on that agreement but he cannot be made liable on the document as altered by the other party to the agreement alone even though such alteration makes the document consonant with the agreement
Now there is absolutely no evidence in this case that in writing the letter of guarantee the appellant had intended to mention the maximum amount of guarantee as Rs 20400 and had by mistake written Rs 25000 instead
In holding that there was such a mistake the High Court proceeded purely on the basis of conjecture which is evident from the language used by it
It said probably defendent 2 the appellant made a mistake in Ext
C the letter of guarantee
There was not the slightest warranty for this conjecture
In fact the evidence indicates that Rs 25000 had been mentioned intentionally in the letter of guarantee
That evidence was given by the 71 Banks agents too
 He said that the overdraft arrangement commenced on February 24 1947 when Sankaran executed a promissory note for Rs 20O00 in favour of the Bank
At that time the appellant was not available to sign the letter of guarantee
The letter was typed by the Bank with blank spaces left for entries to be made by the guarantor regarding the maximum limit of the account the rate of interest and the date
Sankaran brought this letter back to the Bank in May 1947
At that time the space for the amount of the limit was filled up with the figure Rs25000 
Sankaran said that he required Rs25000 and would renew the promissory note for that amount
The Bank was not prepared to advance to him more than Rs 20000 and so the letter of guarantee was returned to Sankaran who then took it away and brought it back some time later with the amount of the maximum limit corrected to Rs 20000 
This is all the evidence on the question
I think it right to point out here that the Bank s agent did not speak to any oral agreement with the appellant nor indeed to any interview with him concerning the overdraft arrangement or the guarantee
The appellant in his written statement no doubt admitted that he had agreed to guarantee the due repayment of the overdraft up to Rs 5000 
He did not however say that the agreement was verbal but mentioned the letter of guarantee
The appellant s admission can of course be taken against him but it must be taken as made and not a part of it only
Again no verbal agreement concerning the guarantee had been pleaded anywhere by the Bank not even in the application that it filed in answer to the
written statement of the appellant alleging that the letter of guarantee having been materially altered no suit lay on it
 Lastly I have to observe that the trial court did not findthat any such oral agreement had been made
If there  had been any agreement the letter of guarantee as typed
out would have contained no blanks
72 In these circumstances it is impossible to hold that there was any prior agreement about the guarantee or its limit between the appellant and the Bank and if there was not the High Court s view that in the letter of guarantee Rs 25000 had been mentioned by mistake would lose its foundation
But even assuming a preexisting verbal agreement and in this case the agreement if any could only be verbal the fact that Sankaran made a request that the amount of the overdraft should be increased to Rs 25000 would rather indicate that the letter of guarantee had intentionally stated Rs 25000 as the amount of guarantee and this figure had not been written by any mistake
It would be impossible to hold on this evidence that there had been any mistake in writing the letter of guarantee
The evidence does not prove any pre existing agreement and tends to prove that there ha been no mistake in writing the letter of guarantee even if there was an agreement
Therefore it seems to me that the High Court was in error in thinking that the alteration in this case had been made to carry out the intention of the parties
The principle underlying section 87 of the has no application to the facts of this case
Dr Seiyid Muhammed however put the matter from another point of veiw
He said that in order that an alteration in an instrument made without a party s knowledge might be avoided against him that alteration had to be material and in support of it he referred us to a passage in Halsbury s Laws of England 3rd Ed vol
11 p 380
He then said that no alteration could be material unless it was to the prejudice of a party
He pointed out that the alteration in the present case had reduced the limit of the appellant s liability from Rs 25000 to Rs 20000 and it was not therefore a material alteration
Hence he contended that the letter of guarantee had not been avoided by the alteration
I do not think that this contention assists the Bank at all
I will assume that an alteration in an 73 instrument which is not to the prejudice of a party to it is not a material alteration and does not release him from his liability under the instrument
This rule however does not make the instrument as altered binding on that party
If it did that would amount to changing by unilateral action the terms of a contract made by common consent or to changing the terms of an offer made by one without his consent
As I have earlier said none of these things can be done under our law
I may add that I have not been able to find any authority laying down that in such a case the altered instrument would be binding
All that we would get in this case if Dr Seiyid Muhammed is right is that the alteration might be ignored and the instrument in its original form might be considered as existing unaffected by the alteration
In the present case therefore we would have a letter of guarantee written by the appellant undertaking to repay the balance due by Sankaran on the overdraft account up to a limit of Rs 25000 
What then  The suit is not on a contract to guarantee up to Rs 25000 
Indeed according to the Bank s pleading and evidence there never was any agreement for such a guarantee between it and the appellant
The letter therefore cannot be considered as evidence of such a contract
Further the evidence to which I have already referred proves that as an offer the letter was not accepted by the Bank
In fact the letter in its original form is of no assistance to the Bank at all in this case it neither proves a guarantee for Rs 25000 nor for Rs 20000 
But it is said that the letter contained an enforceable contract as it was supported by consideration which had already moved from the Bank namely the advance made to Sankaran before the date of the letter and the promise to make further advances
Then it is said that inadequacy of consideration does not avoid a contract as stated in Explanation 2 of section 25 of the Contract Act 1872 and therefore the Bank s undertaking 74 to advance upto Rs 20000 could support the appellant s promise to guarantee up to Rs 25000 
But it is not the Bank s case that there was such a contract of guarantee
Its case was that the contract of guarantee was for Rs 20000 
That contract is not supported by the letter on which alone the suit is based
If there was no contract as stated in the letter then
no question of consideration to support it can possibly arise
Therefore it seems to me that the
contention that the alteration was immaterial and did not affect the instrument so far as the appellant is concerned is to no purpose in the present case
The position may then be thus stated
We have a suit against the appellant based on a written contract to guarantee repayment of Sankaran s dues to the Bank up to Rs 20060 
There is no evidence of any verbal contract of guarantee
The appellant  wrote a letter guaranteeing repayment of those dues up to Rs 251000 
Sankaran also signed this letter but that signature is of no consequence to the question of guarantee which alone arises in this appeal for Sankaran could not guarantee his own debit and his signature would therefore only be evidence of his liability for the amount advanced to him by way of overdraft
Such liability however he had already undertaken by executing a promissory note for Rs 20000 in favour of the Bank
His signature on the letter of guarantee therefore made no difference in the legal relations that have to be considered in this appeal
Returning now to the letter of guarantee Written by the appellant the Bank refused to accept that letter and therefore on the Bank s own case no contract on its terms was ever made
That letter was altered without the consent of the appellant probably by Sankaran by substituting Rs 20000 for Rs 25600 
If the alteration was without the appellant s consent it could not have been authorised by him if it had been consent would be implied
There is further neither evidence nor pleading nor 75 finding of any such authority
The altered document is not binding on tile appellant for the alteration had not been made to carry out the intention of the parties in the alteration is ignored then the document creates no liability in the appellant for the Bank refused to accept a guarantee on the terms Contained in the document before it was altered
Further the contract sued upon is different from the contract which might have been made by the document as it stood before the alteration
The unaltered document cannot establish the contract sued upon
The conclusion to which I arrive then is that the suit against the appellant as framed must fail
I would therefore allow the appeal with costs here and below and dismiss the suit against the appellant
HIDAYATULLAHJ I have had the advantage of  reading the judgment prepared by my brother Sarkar
In my opinion and I say it with great respect this appeal must fail
I shall give my reasons briefly
The facts of the case are simple
The suit out of which this appeal arises was filed by the Thomco s Bank Ltd Trivandrum to be called in this judgment the Bank  against V Sankaran the principal Debtor and N section Anirudhan the surety and appellant before us
The suit was based against V Sankaran on a promissory note executed by him in favour of the Bank on February 24 1947 Exhibit B and against the present appellant on a letter of guarantee dated May 24 1947
In so far as Sankaran has not appealed against the decree passed against him we need not mention the facts leading up to the promissory note which was prior in time
Anirudhan in defending himself stated that the letter of guarantee was for Rs 5000 and that it had been altered without his knowledge and consent in a sum of Rs 20000 
The letter of guarantee is Exhibit C and the original does show two corrections in the figures as well as the written words mentioning the amount
Figure 5 in the amount of Rs 25000 in figures appears to have been 76 altered to O and in the words Rupees twenty five thousand the word five has been struck out
The appellant s case that 5000 in figures was altered to 20000 by the addition of the figure 2 and the alteration of the figure 5 into O and the corresponding change in the words by the addition of the words twenty and the scoring out of word five has not been believed
Thus the case made out by Anirudhan has not been accepted
The correction
however is patent and the question that has arisen in this case is whether by the alteration of the letter of guarantee the surety is discharged
The finding of the High Court is that there was no prior oral agreement between the Bank and Anirudhan
This letter as is obvious from the dates was give after the loan had already been made
The contention of the Bank was that when Sankaran brought this letter and asked for additional loan of Rs 5000 the Bank refused to advance any further amount and declined to accept this letter of guarantee for Rs 25000 lest the Bank might be compelled to loan a further sum of Rs 5000
Sankaran then took back the letter and after some time brought it back with the figure 5 changed into O and the word five scored out
These corrections were not initialled either by Sankaran or by Anirudhan
The Bank however accepted this letter and kept it and sued Anirudhan upon it
The question is whether Anirudhan s liability is discharged by the alteration in the document which alteration is not proved to have been made either by him or with his knowledge or consent
It is conceded and indeed it is the law that only a material alteration makes a document void
It is also the law that if the custodian of the document makes or allows an alteration to be made while the document is in his custody he cannot sue upon it because it is his duty to preserve the document in the state in which he got it
In the present case the 77 document was not altered by Bank nor with the Bank s consent or connivance while the document was in
its custody
The document was apparently altered either by Anirudhan or by Sankaran or by both
If it was altered by Anirudhan or by him and Sankaran together the document still remains the document of Anirudhan and the suit of the Bank based upon it is competent against him
If it was altered by Sankaran the question is whether the alteration was a material alteration to make it void against Anirudhan
The High Court is of the opinion that it was not material
I am inclined to accept the conclusion of the High Court
Anirudhan by the letter to the Bank wished to guarantee an overdraft of Sankaran not exceeding Rs 25000 
His case that it was Rs 5000 and not Rs 25000 has been disbelieved
The document was originally written for an amount of Rs 25000 which was reduced to Rs 20000 1 will assume by Sankaran and the letter of guarantee was accepted by the Bank
The question is whether by the reduction of the amount of the guarantee Anirudhan can say that the document executed by him has been materially altered and his liability is at an end
In my judgment in the present case it cannot be said
The document still continues to represent what was intended by Anirudhan
That intention was to guarantee a loan up to Rs 25000 which includes the sum for Rs 20000 for which the guarantee now stands
The question is whether Anirudhan can say that this guarantee is at an end
There are really two defences open to Anirudhan the surety
The first is that he had offered to stand surety on certain terms and as those conditions have been altered he is discharged from any liability
The second also depends on the alteration and it is that a document executed by him has been materially altered and is therefore void
This is a plea of non est factum
Both the arguments rest upon the alteration of the contract into which Anirudhan wished to enter
A surety is considered a favoured debtor and his 78 liability is strictissimi juris
Lord Westbury LC in Blest vs Brown 1 stated this liability in the following words It must always be recollected in what manner a surety is bound
You bind him to the letter of his engagement
Beyond the proper inter pretation of that engagement you have no hold upon him
He receives no benefit and no consideration
He is bound therefore merely according to the proper meaning and effect of the written engagement that he has entered into
If that written engagement is altered in a single line no matter whether the alteration be innocently made he has a right to say  The contract is no longer that for which I engaged to be surety you have put an end to the contract that I guaranteed and my obligation therefore is at ail end
 It is not necessary to go into the fact of that case where the surety guaranteed fulfilment of a contract for the supply of flour to a banker who in his turn had undertaken to supply bread to Government
The case turned upon stipulations by the Government and their breach and the decision cannot be regarded a direct authority apart from the general observation in the present case
The statement of the law in Blest vs Brown 1 Was considered by the Court of Appeal in Holme vs Brunskill 2 in an appeal from a judgment of Denman J later Lord Denman
Cotton LJ stated the law in these words The true rule in my opinion is that if there is any agreement between the principals with reference to the contract guaranteed the surety ought to be consulted and that if he has not consented to the alteration although in cases where it is without inquiry evident that the alteration is unsubstantial or that it cannot be otherwise than beneficial to the surety the surety may not be discharged  Yet that if it is not self evident that 1  1862 4 De G F  J 365  2 79 the alteration is unsubstantial or one which cannot be prejudicial to the surety the Court will not in an action against the suerty go into an inquiry as to the effect of the alteration   To this statement of the law must be added the dissent of Brett LJ who stated that the surety in that case was not raleased observing that the doctrine of release of sureties was carried far enough and that lie would not carry it any further
There is noticeable a difference between the strict rule stated by Lord Westbury and that stated by Cotton L J and the law now accepts that unsubstantial alteration which are to the benefit of the surety do not discharge the surety from the liability
Of course if the alteration is to the disadvantage of the surety or its unsubstantial character is not self evident the surety can claim to be discharged
The Court will not then inquire whether it in fact harmed the surety
That dictum of Cotton L J was quoted with approval by the Judicial Committee in ward vs The National Bank of Neu Zealand
Limited 1
Other cases in which a similar liberal view is taken are mentioned in these two decisions
Before I examine the position of Anirudhan with regard to the law applicable to sureties I wish to refer to the law relating to the alteration of documents
These two matters really go together in this case
Here again the strict rule at one time was that the slightest alteration makes the document void
The leading case for a long time was Pigot s case 2 where Lord Coke stated the doctrine as follows These points were resolved 1
When a lawful deed is raised whereby it becomes void the obligor may plead non est factum and give the matter in evidence because at the time of the plea pleaded it is not his deed Secondly it was resolved that when any deed is altered in a point material by the plaintiff himself or by any stranger without the privity 1  2 11 CoRep26 b77ER177 80 of the obligee be it by interlineation addition raising or by drawing of a pen through a line or through the midst of any material word that the deed thereby becomes void  so if the obligee himself alters the deed by any of the said ways although it is in words not material yet the deed is void but if a stranger without his privity alters the deed by any of the said ways in any point material it shall not avoid the deed
 The passage is also to be found in an article Discharge of Contracts by Alteration by Williston in 18 Harvard Law Review p 105
The strictness of this rule was tempered in subsequent cases and was departed from in Aldous vs Cornwell 1 where Lush J speaking for Cockburn C J Blackburn J and himself after referring to numerous authoritiesobserved This being the state of the authorities we think we are not bound by the doctrine of Pigot s case or the authority cited for it and not being bound
We are certainly not disposed to lay it down as a rule of law that the addition of words which cannot possible prejudice any one destroys the validity of the note
It seems to us repugnant to justice and common sense to hold that the maker of a promissory note is discharged from his obligation to pay it because the holder has put in writing on the note what the law would have supplied if the words had not been written
 What is said here about an addition or alteration of a promissory note was prior to the enactment of the rule in Bills of Exchange Act in England which has altered the law with regard to negotiable instruments but the observations apply forcefully to a document of the type we have where there were
two executants one being the debtor and the other his surety and the debtor has not increased but reduced the amount of his own liability as well as that of his 1 81 surety
That immaterial alterations do not matter is borne out by the observation of Swinfen Eady J in Bishop of Creditor vs Bishop of Exeter 1 where Pigot s case2 and the earlier statement of the law in Sheppard s Touchstone 7th ed
Preston s p 55
 were not accepted
During the course of the argument Swinfen Eady J referred to cases in which corrections in the testimonium of documents to accord them with existing facts were held not to be material alterations
The question before me is whether a document jointly executed by two persons creating a liability equal for both is to be regarded as materially altered if the liability is reduced equally for both but the alteration is made only by one of them
In my opinion such an alteration must be regarded as unsubstantial and not otherwise than beneficial to the surety and it cannot attract the strict rule stated by Lord Coke or that stated by Lord Westbury in the cited cases
me give an example If A places an order with a trader for supply on credit of ten bags of wheat and B endorsed the order by writing I guarantee payment up to ten bags can it be said that the guarantee by B is dissolved when A takes the note and finding that the tradesman has only six bags of wheat in stock corrects his order as well as the endorsement by altering ten  into six  In my opinion to such a correction neither the one rule nor the other can apply
The strict rule of law which was brought to our notice from the well known Suffell s Case3 where a Bank of England note was mutilated and its number destroyed depended upon its special facts
The number of the Bank of England note was considered its vital part and the alteration a material alteration
Suffell s Cage3 was not followed by the Privy Council in a case where a bank note issued by bank which was only a contract and not currency as in the other case was destroyed because the owner had forgotten that the note was in the pocket of a garment and the garment had been washed
The 1 2   3 82 note was reconstructed and showed the contract but not the number
The Privy Council held the bank liable even though the contract had been Altered by eraser see Hong Kong and Shanghai Banking Corporation vs Lo Lee Khi1
These cases establish that both the limbs of the argument which Anirudhan can raise are not vali in the circumstances of this case
In my judgment the particular document in this case cannot be said to have been materially altered because
it has not been altered in such a manner as to change its nature
The alteration does not save the surety from liability arising under it
The alteration was made by a co executant who reduced not only his own liability but that of the surety also
indeed the surety himself under stood the law to be this because he set up the case that the document originally guaranteed an overdraft of Rs 5000 but was altered to guarantee an overdraft of Rs 20000 
This case has been proved false and he never set up the case that the document was void because the amount was reduced from Rs 25000 to Rs 20000 
It does not lie in the mouth of Anirudhan
to say the he meant
to guarantee 25000 but
not Rs 20000 because he never went to the Bank and made this a condition of the agreement
Now he cannot say that the document has become void against him or that the contract which had emerged by the Bank s acceptance of the document as altered does not bind him
There is no need in my opinion to consider whether there was a prior oral agreement or not
I agree there is no proof of such an agreement
The letter of Anirudhan to the Bank was based on a consideration which had already moved to Sankaran and which Anirudhan wished to guarantee
Even if treated as an offer by Anirudhan to the Bank the Batik accepted the amended offer and Sankaran must be deemed to have had the authority to reduce the amount 1  83 though not to increase it
The document was altered while in the possession of the very person who as the agent of Anirudhan brought it to the Bank on both the occasions
Anirudhan must be deemed to have held out Sarikaran as his agent for this purpose and this creates an estoppel against Anirudhan because the Bank believed that Sankaran had the authority
The offer thus remains in its amended form an offer of Anirudhan to the Bank and the Bank by accepting it turned it into a contract of guarantee which was backed by the past consideration on which the offer of Anirudhan was originally based
In my opinion the appeal must fail
I would therefore dismiss it
By COURT  In accordance with the opinion of the majority the appeal is dismissed
There would be no order as to costs
Appeal dismissed


Summary:
The appellant agreed to stand surety for an overdraft allowed by the respondent Bank to section A blank form of guarantee was given by the Bank to S who then had it filled up by the appellant stating the maximum amount which he guaranteed as Rs 25000 
When S brought the letter of guarantee duly signed by the appellant and himself to the Bank the latter refused to accept the guarantee up to that limit as it was not prepared to give S accommodation for a larger sum than Rs 20000 and wanted it to be limited to Rs 20000 
S then made alterations in the letter with the amount of the maximum limit corrected to Rs 20000 and gave it to the Bank
In a suit instituted by the Bank against the principal debtor S and the appellant on the basis of the contract of guarantee for Rs 20000  the appellant pleaded that as the document was altered without his knowledge or consent he was discharged from his liability
Held per Kapur and Hidayatullah JJ Sarkar J dissenting that the appellant was not discharged from his liability under the contract of guarantee
64 per Kapur J S was acting for and on behalf of the appellant since it was at his instance that the appellant was standing surety and the appellant handed over the deed of guarantee to S for the purpose of being given to the Bank
The plea of avoidance of contract by material alteration was of no avail to the appellant because the document was not altered while in possession of the promisee but was altered by S who was at the time acting as the agent of the appellant
per Sarkar J The suit against the appellant as framed must fail
The altered document was not binding on the appellant for the alteration had not been made to carry out the intention of the parties
If the alteration is ignored as immaterial then the document creates no liability in the appellant for the Bank refused to accept a guarantee on the terms contained in it before it was altered and therefore there was no contract made between the parties by the document
Further the contract sued upon is different from the contract which might have been made by acceptance of the document as it stood before the alteration
The unaltered document cannot establish the contract sued on
per Hidayatullah J The document in this case could not be said to have been materially altered because it was not al tered in such a manner as to change its nature
The alteration was made by a co executant who reduced not only his own liability but that of the surety also
The document was altered while in the possession of S the very person who as the agent of the surety brought it to the Bank
The surety must be deemed to have held out S as his agent for this purpose and this created an estoppel against the surety because the Bank believed that S had the authority
Accordingly the alteration of the document did not save the surety from liability under it