HON’BLE SRI JUSTICE B. PRAKASH RAO & HON’BLE SRI JUSTICE P. DURGA PRASAD L.P.A No.317 of 2001 Date: 14.02.2011 Between: Koduru Janakirami Reddy ….Appellant. And: Koduru Prasunamma …..Respondent. HON’BLE SRI JUSTICE B. PRAKASH RAO & HON’BLE SRI JUSTICE P. DURGA PRASAD L.P.A No.317 of 2001 JUDGMENT: (per Hon’ble Sri Justice P. Durga Prasad) This appeal under Clause 15 of the Letters Patent arises out of the judgment passed in A.S.No.445 of 1992 by the Single Judge of this Court on 19.8.1999. The appellant herein is the defendant and the respondent herein is the plaintiff and the respondent-plaintiff has filed the suit against the appellant-defendant for recovery of the amount of Rs.33,166.66 ps., under a pronote. The brief facts of the plaint are that the defendant has borrowed a sum of Rs.25,000/- from one Thummala Ramana Reddy, son of Syyala Reddy on 15.12.1982 for his agricultural purposes and executed a promissory note agreeing to repay the sum with 12% interest either to Ramana Reddy or his order on demand. The defendant has failed to pay the amount due under the said promissory note. As Ramana Reddy made persisted demand for the amount, the plaintiff has paid the amount due under the promissory note and obtained transfer endorsement on the back of the promissory note. Thus, the respondent-plaintiff became holder in due course having paid the consideration under the promissory note and hence she is entitled to the suit amount. The defendant has failed to pay the amount inspite of demands made by the plaintiff. Hence the suit is filed for recovery of the amount. The defendant has filed written statement pleading that there is no transfer of the suit promissory note in favour of the plaintiff. It is only receipt for payment of the amount on his behalf by the plaintiff. The plaintiff is not a holder in due course and there is no order in favour of the plaintiff entitling her to recover the amount under the pronote. The plaintiff is the mother of the defendant and both are residing at Momidi village and are members of joint family. The defendant alone sent the money out of his own funds through the plaintiff and she paid only as his agent and such payment does not confer any right on her to file the suit. Hence, the suit is liable to be dismissed. The lower court on the above pleadings, has framed the following issues: 1. Whether the plaintiff is a holder in due course, if so, whether she is entitled for the suit amount? 2. Whether the suit pronote is duly and properly stamped? 3. Whether the discharge pleaded is true? 4. To what relief? The plaintiff examined herself as P.W.1 and got marked Exs.A-1 and A.2. The defendant examined himself as D.W.1 and examined Tummala Ramana Reddy as D.W.2 and P. Pattabhi Reddy as D.W.3 and no documents are marked on their behalf. After taking into consideration of both oral and documentary evidence, the lower court held the issues 1 to 3 in favour of the plaintiff and thereby decreed the suit with costs as prayed for. Aggrieved by the said decree and judgment, the appellant herein who is the defendant has filed the A.S.No.445 of 1992 before this Court and the learned Single Judge of this Court has dismissed the said appeal confirming the judgment and decree passed by the lower court i.e., Subordinate Court, Nellore. Aggrieved by the said judgment of learned Single Judge of this Court, the present Letter Patent Appeal is filed: Now the only point that arises for consideration is whether the endorsement Ex.A-1 is a transfer endorsement made in favour of the plaintiff and whether she is a holder of the promissory note in due course. The learned counsel for the appellant has pleaded that he has sent the money due under the promissory note Ex.A.2 payable to Tummala Ramana Reddy through the plaintiff and she has paid the amount and obtained the endorsement Ex.A.1 and the same was got scribed by D.W.3 and on reading of the said endorsement it clearly shows that it is only payment endorsement and not a transfer endorsement and as such the plaintiff is not a holder in due course of the said promissory note and she is not entitled to recover the said amount. The learned Subordinate Judge, Nellore has held that the defendant has failed to pay the amount due under promissory note Ex.A.2 and hence the plaintiff has made payment of the amount of Rs.32,000/- to Thummala Ramana Reddy and as such the plaintiff is entitled for recovery of the amount paid by her from the defendant who is her son and Ex.A.1 is not a discharge endorsement and it is only a transfer endorsement. The learned Single Judge of this Court has also observed that there were disputes between the defendant and the plaintiff at that time and the payment endorsement cannot be believed and the said endorsement is only obtained by making the payment of amount due, by the plaintiff herself and obtained transfer of the pronote in her favour. If it is only the payment endorsement, there is no need for making such endorsement on the pronote and the learned Single Judge mainly relied upon the findings given by the learned Subordinate Judge, Nellore and expressed his inability to come to a different view and thereby confirmed the judgment passed by the Subordinate Judge, Nellore. Ex.A.1 is the payment endorsement obtained on Ex.A.2 by the plaintiff. The said endorsement shows that Ramana Reddy has made the endorsement stating that he has got the written endorsement in favour of the plaintiff having received the principal amount mentioned in the promissory note and interest and the said endorsement was written by one P. Pattabhirami Reddy and attested by Vijaya Raghavulu. The said endorsement was made on the Ex.A.2 pronote. From the reading, it is evident that it is only a payment endorsement and there is no mentioned in it about the transfer of pronote in favour of the plaintiff by Ramana Reddy after receiving full consideration due under the pronote. When coming to the evidence adduced by both the parties in that regard, P.W.1 who is the plaintiff has stated that the defendant is her son and he borrowed a sum of Rs.25,000/- from Thummala Ramana Reddy on 15.12.1982 agreeing to repay with interest 12% p.a. He executed pronote in favour of Thummala Ramana Reddy. He did not repay the debt. When Ramana Reddy demanded, she paid Rs.31,758/- to him and got the pronote transferred in her name on 16.3.1985. The scribe of transfer is Pattabhirami Reddy who was brought by Ramana Reddy. The attestor is one Vijaya Raghavulu. She asked the defendant to pay her the amount due under the pronote as he did not pay she filed the present suit. She further stated that she has got Ac.2.00 of wet land thirty years back. She was keeping the income from the land with her. She sold her jewellary and was keeping that cash also with her. The same land was settled in favour of her grandson i.e., son of defendant as she got him as a guardian. Ramana Reddy did not give any notice to her. Therefore, according to her Ex.A.1 is transfer endorsement obtained by her from Ramana Reddy. The said Ramana Reddy was examined on behalf of the defendant as D.W.2 and he has categorically stated that the defendant has borrowed Rs.25,000/- from him and executed a demand promissory note and he never demanded the plaintiff at any point of time for payment of the debt due by the defendant. He has been asking the defendant for the same. She has stated that her son sent the amount and the amount due under the promissory note is roughly Rs.32,000/-. The plaintiff pleaded for reducing the amount by Rs.30,000/-. He had agreed for the same thinking that she may go away with the money if he did not agree. She requested him not to reveal the matter to the defendant. He gave the pronote to the plaintiff and she got the endorsement written by some one. He did it as full payment was received and cancelled of the pronote. In his presence the endorsement was not attested by any one. Subsequently the defendant asked him whether the amount was received or not. He told him that the amount was received. In the cross-examination he has stated that the plaintiff discharged the amount due under the Ex.P.2. Ex.A-1 contains his signature. The scribe of Ex.A.1 P. Pattabhi Rami Reddy was examined as D.W.3 and he also categorically stated that the plaintiff informed him that the defendant who is her son had sent money through her for payment to the promissee Thummala Ramana Reddy in discharge of the amount due under the pronote and she requested him to write an endorsement to that effect. Accordingly he wrote Ex.A.1. At the time of writing the endorsement Ex.A.1, the intention of transfer was not present to the mind of the executant nor to him who wrote the endorsement or to the plaintiff. He questioned the plaintiff as to why the endorsement Ex.A.1 was required when the pronote itself was being returned. She told him that it was required to prove the payment made by her to the defendant. He did not make any provision for attestation in Ex.A.1 at that time as no body was present. Therefore, the execution of the Ex.A.1 was established by the plaintiff and defendants but the contention of the defendant is that he has sent the amount to Tummala Ramana Reddy through the plaintiff in discharge of the amount due under Ex.A.2 and the plaintiff admittedly has paid the said amount to the said Tummala Ramana Reddy. But according to her she has paid her own money and as such she is entitled for recovery of the amount in view of the endorsement made on Ex.A.2. The learned Subordinate Judge has discussed about the disputes between the plaintiff and the defendant with regard to their family affairs which are not relevant for the purpose of deciding the issue involved in the present appeal. From the evidence of D.1 to D.3, it is established that the defendant has sent the amount to the plaintiff for payment of the due under Ex.A.2 to Tummala Rmana Reddy and the said fact was admitted by D.W.2 and also the scribe D.W.3 of Ex.A.1. The contention of the plaintiff that she has paid the amount on her own cannot be believed, as admitted by her she was given only Ac.2.00 of land by her husband’s paternal uncle about 30 years back and the said land was stated to be in the name of her son i.e., the defendant, and she also admitted about borrowing various amounts from various persons and also obtained loans from the bank but they were not paid. Therefore, there is no material on record to show that the plaintiff has got her source of income for payment of the said amount. In her chief-examination, she has stated that she holds cash by selling her jewellary with her but there is no evidence to establish the said fact. On the other hand, D.W.1 has categorically stated that he has got Rs.33,000/- by selling the paddy during the March, 1985 and he has sent the amount through the plaintiff as she is going for Nellore to his sister’s house, who is residing in the house of Ramana Reddy. As already observed above, Ex.A.1 endorsement clearly shows that it is only a payment endorsement and not an endorsement for transfer. Even though it was not mentioned that the payment was made by the plaintiff for the amount due under Ex.A.2 to Tummala Ramana Reddy and the endorsement show about the receipt of the amount due under the promissory note with interest, it cannot be said that the endorsement authorizes the plaintiff to receive the amount from the defendant. Therefore, the said endorsement in Ex.A.1 is only a payment endorsement and not a transfer endorsement and as such it cannot be termed that the plaintiff is a holder of the pronote in due course. Therefore, she is not entitled for recovery of the said amount as claimed. Hence, both the Subordinate Judge, Nellore and Single Judge of this Court have committed error in coming to the conclusion that the endorsement is a transfer endorsement and thereby decreeing the suit. Hence, the finding of both the courts are liable to be set aside. In the result, the Letter Patent Appeal is allowed and the judgment and decree passed in O.S.No.99 of 1985 by Subordinate Judge, Nellore dated 2.12.1991 and the judgment in A.S.No.445 of 1992 by the Single Judge of this Court dated 19.8.1999 are hereby set aside. The respondent is liable to pay the entire costs to the appellant. _____________________ B. PRAKASH RAO,J. _____________________ P.DURGA PRASADJ. Date:14.02.2011. Gk. HON’BLE SRI JUSTICE B. PRAKASH RAO & HON’BLE SRI JUSTICE P. DURGA PRASAD L.P.A No.317 of 2001 Date:14.02.2011 Gk.