Section 87 of NIA : Section 87: Effect Of Material Alteration

Explanation using Example

Imagine John issues a cheque to Alice for $500. After receiving the cheque, Alice decides she wants more money and alters the amount on the cheque to $1500 without John's consent. This alteration is material and fraudulent. According to Section 87 of The Negotiable Instruments Act, 1881, the cheque is now void against John. If Alice presents the altered cheque for payment, the bank should not honor it, and John is not legally required to pay the altered amount.

Furthermore, if Alice had been given the cheque by Bob, who was an indorser, and she altered the cheque amount, Bob would be discharged from any liability to Alice because of the unauthorized alteration she made. In other words, Bob would not be responsible for the payment of the cheque to Alice, as the alteration voids the instrument in respect to him as well.