BANKING AFFAIRS

Detailed explanation-1: -Any alteration in the original state of a cheque such as date, amount, payee’s name, changing the word ‘order’ to bearer appearing after payee’s name or in endorsement is called material alteration.

Detailed explanation-2: -Crossing a cheque will not be treated as material alteration in relation to negotiable instrument.

Detailed explanation-3: -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.

Detailed explanation-4: -Material alteration is any change in written instrument which makes it to speak different legal language from that of the original e.g. altering the date of instrument, altering sum payable, altering place of payment, altering time of payment. Any material alteration of a negotiable instrument renders the same.

Detailed explanation-5: -A material alteration to the instrument by party to the instrument or while in the hands of the party after its execution without consent of the other party renders the instrument void. Immaterial alteration can be made by the party without informing the others. Example can be correction of spelling etc.