Facts of the Case
- A bill of exchange is drawn with the main body stating: “Pay to X or order the sum of ten thousand rupees.”
- However, in the margin of the bill, the amount is stated as Rs. 1,000.
- There is a discrepancy between the amount written in the body and the amount in the margin.
- The question is which amount will prevail in determining the liability under the bill.
Issues in the Case
- What is the effect of a discrepancy between the amount stated in words in the body of the bill and the figure written in the margin?
- Which amount—Rs. 10,000 in the body or Rs. 1,000 in the margin—should be considered legally binding?
- How does the Negotiable Instruments Act address such inconsistencies?
Principles Associated With It
- As per Section 18 of the Negotiable Instruments Act, 1881:
- “If the amount undertaken or ordered to be paid by any negotiable instrument is stated differently in figures and in words, the amount stated in words shall be the amount undertaken or ordered to be paid.”
- However, this applies only when there’s a difference between figures and words, not between the body and the margin.
- Courts have consistently held that the amount mentioned in the body of the instrument is the controlling and operative part.
- The margin is not part of the operative terms of the instrument.
Judgement
- The amount in the body of the bill (Rs. 10,000) will prevail over the margin note.
- The legal obligation is to pay Rs. 10,000 as stated in the main content of the bill.
- Therefore, the bill is valid for Rs. 10,000, and any marginal note cannot override the principal terms.