Banking · Negotiable Instruments Act
A borrower signs a set of loan documents. He forgets to put the date on the Demand Promissory Note. The bank clerk later fills in the date to match the date of the first disbursement without the borrower's consent. What is the legal effect of this 'Material Alteration' on the document's validity under the Negotiable Instruments Act?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The bank can validly rectify it by asking the borrower to sign a fresh date in the witness box during court proceedings.
- 2Only the date is void, but the amount and the promise to pay remain valid.
- 3The document becomes void as any material alteration without the consent of the maker renders the instrument unenforceable.✓
- 4The document remains valid because the bank clerk acted in good faith to complete the document.
Correct answer
The document becomes void as any material alteration without the consent of the maker renders the instrument unenforceable.
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