What is a material alteration?

An alteration that changes the rights, liabilities, or legal position fixed by the document. If material, it can discharge the other party.

Did the Supreme Court find a material alteration here?

No. Even assuming a clause was added later, it did not change the parties’ core rights and duties, so it was not material.

Who finally won the case?

The plaintiff. The Supreme Court restored specific performance and rejected the story that only ₹350 was paid as advance.

What relief did the plaintiff seek?

A decree for specific performance of the land sale agreement, which the Trial Court had granted.

What lesson does this case teach?

Not every change is ‘material’. Only changes that truly affect legal positions can discharge a contract.

Kalianna Gounder v. Palani Gounder

(1970) 2 SCR 455 — Material Alteration • Discharge by Agreement

Supreme Court of India 1970 (1970) 2 SCR 455 Contract • Discharge ~7 min India

Author: Gulzar Hashmi • Published: 26 Oct 2025

Quick Summary

A buyer agreed to purchase land and paid an advance. Later, the sellers claimed only a small part was paid and said the deal was off. They also alleged the agreement was altered after signing. The Supreme Court checked the facts and held: the advance of ₹2,000 was real, the “₹350 only” story was false, and the alleged added clause did not change legal rights. So, no material alteration and the buyer won specific performance.

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Issues

Did the plaintiff pay only ₹350 on 4 July 1956 and wrongly take back the agreement?
Was there a material alteration after execution that discharged the agreement?

Rules

Material alteration: An alteration is “material” if it changes the rights, liabilities, or legal position fixed by the document.
Non-material changes do not discharge the contract.

The test focuses on whether the parties’ substantive legal relations are altered.

Facts — Timeline

1956 → 1970

4 Jul 1956: Plaintiff agrees to buy land for ₹12,000. Memorandum records ₹2,000 as advance.

7 Jul 1956: Defendants write alleging only ₹350 was paid and declare cancellation for non-payment of balance ₹1,650.

Suit filed: Plaintiff seeks specific performance and deposits ₹10,000 as balance price.

Trial Court: Decrees specific performance for plaintiff.

Madras High Court (Appeal): Reverses; accepts ₹350 story and finds material alteration.

Supreme Court: Restores decree for plaintiff; no material alteration; ₹350 story rejected.

Timeline visual for Kalianna Gounder v. Palani Gounder

Arguments

Appellant (Plaintiff)

Paid ₹2,000 as recorded; ready and willing to perform.
No material alteration; any added term does not change core rights.
Seeks specific performance of the sale agreement.

Respondents (Defendants)

Only ₹350 was paid; agreement cancelled for non-payment.
Document was altered after execution in material particulars.
Therefore, discharge by alteration; no specific performance.

Judgment

For the Plaintiff

The Supreme Court held that the ₹350 story was a later excuse to avoid the bargain. Even if a covenant was added after execution, it did not alter the rights and responsibilities in a real way. Hence, there was no material alteration. The decree for specific performance was restored.

Judgment concept image for material alteration dispute

Ratio (Legal Principle)

An alteration is “material” only if it changes the legal rights or liabilities created by the document. An added term that does not shift those rights or duties does not discharge the agreement.

Why It Matters

Draws a clear line between minor and material changes.
Stops parties from using small additions as an escape route.
Supports specific performance where real obligations remain the same.

Key Takeaways

Material = changes legal position; minor edits ≠ discharge.
Courts look at substance, not labels.
Specific performance will be granted when the core bargain survives.

Mnemonic + 3-Step Hook

Mnemonic: “Change that Changes = Material.”

Spot: Find the change in the document.
Test: Does it shift rights or duties?
Decide: If yes → material; if no → contract stands.

IRAC Outline

Issue

Was there a material alteration discharging the agreement, and was only ₹350 paid as advance?

Rule

Material alteration must change legal rights/liabilities fixed by the deed.

Application

Evidence supported ₹2,000 advance; alleged added covenant did not alter obligations; thus not material.

Conclusion

No discharge by alteration; decree for specific performance restored.

Glossary

Material Alteration: A change that affects legal rights or duties created by a document.
Specific Performance: A court order to carry out the contract as agreed.
Discharge: Ending of contractual obligations.