IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH : HYDERABAD WEDNESDAY, THE TWENTY SEVENTH (27TH) DAY OF JULY, TWO THOUSAND AND ELEVEN Present: HON’BLE SRI JUSTICE G.V.SEETHAPATHY Second Appeal No.994 of 2000 Between: Samudrala Venkateswara Rao (died) by Lrs … Appellant And: A.Srinivasulu … Respondent HON’BLE SRI JUSTICE G.V.SEETHAPATHY Second Appeal No.994 of 2000 JUDGMENT: This second appeal is directed against the judgment and decree dated 06.09.2000 in AS No.57 of 1994 on the file of the II Additional District Judge, Nellore, wherein the said appeal filed by the appellant herein was dismissed, confirming the judgment and decree dated 24.08.1994 in OS No.935 of 1988 on the file of the I Additional District Munsif, Nellore. 2. Heard both sides. Perused the record. 3. The respondent herein filed suit against the appellant for recovery of a sum of Rs.13,895/- due on a promissory note said to have been executed by the appellant/defendant on 23.05.1985 marked as Ex.A.1. According to the respondent/plaintiff, the defendant borrowed an amount of Rs.17,000/- on 23.05.1985 from S.Dorasanayya and his wife Vijaya and executed suit pronote and made part payment of Rs.10,000/- on 09.02.1987 and the remaining amount remained unpaid in spite of demands. Subsequently, on 07.04.1988 the said Dorasanayya and Vijaya transferred the suit pronote in favour of the plaintiff for consideration under Ex.A.3 transfer endorsement. After issuing a notice dated 22.05.1988, which evoked no response, the plaintiff filed the suit. 4. The appellant/defendant filed written statement admitting the borrowal of Rs.17,000/- from Dorasanayya and Vijaya on 23.05.1985 and also execution of the suit pronote. He further admitted part payment of Rs.10,000/- on 09.02.1987. He however pleaded that he paid a sum of Rs.6000/- on 20.06.1986 and another sum of Rs.4000/- on 14.07.1986 and thus entire debt was discharged. The defendant further contended that the transfer endorsement made by the plaintiff is false and is not supported by any consideration. 5. The trial Court framed the following issues for trial. 1. Whether this Court has no territorial jurisdiction to try this suit? 2. Whether the plaintiff is not a holder in due course of the suit pronote? 3. Whether the transfer endorsement made in the suit pronote is not supported by consideration? 4. Whether the defendant had discharged the original debt under the suit pronote by making the part payments totaling to Rs.20,000/- to the transferor Dorasanayya? 5. To what relief? 6. During trial, PWs.1 and 2 were examined and Exs.A.1 to A.12 were marked on behalf of the plaintiff. On behalf of the defendant, DWs.1 and 2 were examined and Exs.B.1 to B.6 were marked. On a consideration of the evidence available on record, on issue No.1 the trial Court held that the Court has got jurisdiction to entertain the suit; on issue No.2 it was held that the plaintiff is not the holder in due course of the suit pronote; on issue No.3 it was held that the transfer endorsement made in the suit pronote is supported by consideration; on issue No.4 the trial Court held that the plea of discharge is not substantiated by the defendant. Accordingly, the suit was decreed for an amount of Rs.13,895/- with interest at 6% per annum from the date of suit, till the date of realization. Aggrieved by the same, the defendant preferred appeal AS No.57 of 1994. By impugned judgment dated 06.09.2000, the learned II Additional District Judge dismissed the appeal. Hence, the present second appeal. 7. At the time of admitting the second appeal on 26.02.2001, this Court framed the following substantial question of law. “The lower courts failed to note that when it is held that plaintiff who pleaded to be a holder in due course of the suit promissory note and when the Court has held that the plaintiff is not a holder in due course for value, then it is not permissible in law for the plaintiff to fall back upon the plea that he is a holder of the suit promissory note (vide decision reported in 1988 ALT Vol.2 Page 775).” 8. It is to be noted that there has been some contradiction in recording a finding on issue Nos.2 and 3 by the trial Court. On issue No.3 the trial Court recorded a finding in favour of the plaintiff to the effect that the transfer endorsement is true, valid and supported by consideration. When that is so, the plaintiff would become holder in due course. However, on issue No.2, the trial Court recorded contradictory finding to the effect that the plaintiff is not a holder in due course. When once it is found that the transfer is for valid consideration, under section 9 of the Negotiable Instruments Act (for short ‘the Act’), the plaintiff becomes holder in due course. Section 9 of the Act defines the expression ‘holder in due course’ as meaning any person who for consideration became the possessor of a promissory note. Section 4 of the Act defines ‘promissory note’ as an instrument in writing containing an unconditional undertaking signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument. Being a transferee for consideration and thereby answering description of ‘holder in due course’ as defined in section 9 of the Act, the plaintiff is certainly entitled to recover the amount due under the suit pronote. The finding recorded by the trial Court on issue No.3 to the effect that the transfer is for valid consideration as confirmed by the appellate Court while answering point No.2, wherein it was held that that the transfer is for consideration. When once, it is found that the plaintiff is a ‘holder in due course’ and therefore entitled to maintain the suit, it is unnecessary to consider as to whether he becomes holder in due course and whether he can raise the plea that as a holder of promissory note, he can maintain the suit. The appellate Court while answering point No.4 has therefore observed that in view of the finding recorded on point No.3, necessity to take recourse under Section 59 of the Act does not arise. 9. Learned counsel for the appellant relied on the decision in ‘Dittakavi Venkata Narayana vs. Chennuri Venkateswara Rao[1]’, wherein this court held as follows: “In this case, the appellant has laid the suit in his own right as a ‘holder in due course’. It is now found as a fact that no consideration has been paid under the endorsement. Thereby, he is not a ‘holder in due course’. When the appellant came to the Court in his own right as a ‘holder in due course’ but not as a ‘holder’ and having the finding that he is not a ‘holder in due course’ undisputed, then it is not open to him to fall back upon the plea that he is still continuing to be a ‘holder’ as a beneficial owner, for the benefit of the original promisee’. 10. The above decision is not applicable to the facts of the present case in view of the consistent findings recorded by the trial Court and appellate Court that the transfer is for valid consideration and he is holder in due course. The substantial question of law which is pleaded in the present second appeal does not therefore arise for consideration in view of the consistent findings recorded by the trial Court and also appellate Court that the plaintiff is a holder in due course. No other substantial question of law is raised. In the circumstances, it is held that there are no merits in the second appeal. 11. In the result, the second appeal is dismissed. No order as to costs. __________________ G.V.SEETHAPATHY, J Date: 27.07.2011 bss [1] 1988(2) ALT 775