KALIPATNAPU VEERRAJU Vs. MAPPIRI SATYANANDAM

JUDGEMENT

(1.) .This revision is by the plaintiff and is directed against the Judgment and Decree of the Court of the District Munsif, Narasapur, dismissing the S.C. Suit No. 55 of 1961. The petitioner herein filed a suit for the recovery of Rs. 189 being principal and interest on the promissory note dated 5th March, 1960. The case of the petitioner was that, the suit promissory note was executed in favour of one Alluri Bhagwanraju by the defendant; that Alluri Bhagwanraju transferred the suit note in his favour after receiving Rs. 180 by endorsing on the promissory note itself and when he made a demand from the defendant he refused. The defendant, while admitting having executed the suit promissory note in favour of Alluri Bhagwanraju, pleaded that the suit promissory note was without consideration. While denying the alleged transfer of the suit promissory note in favour of the petitioner, he stated that since the original promissory note was without consideration, the plaintiff-petitioner had no cause of action against him. The trial Court framed three issues. On the evidence produced by the parties it found that the original promissory note Exhibit A-1 was without consideration. Holding so, he came to the conclusion that the plaintiff was not the holder in due -course. In the result he dismissed the suit. The plaintiff has now come up in revision.

(2.) It is contended by Shri Ayyappa Sastry, the learned Counsel for the petitioner, that the Court below without giving a finding whether the endorsement in favour of the plaintiff was for consideration or not, has dismissed the suit holding that the original promissory note was without consideration which the learned Counsel urges is not proper having regard to sections 37 and 188 (g) of the Negotiable Instruments Act, because failure of consideration for the original promissory note would not be sufficient to relieve the defendant of his liability. In this connection the learned "Counsel places reliance on the cases of Shaik Pudai v. Mt. Bilasi and Babulal v. Budhoo. I find sufficient force in the contention of the learned Counsel for the petitioner. Section 37 of the Negotiable Instruments Act reads : " The maker of a promissory note or cheque, the drawer of a bill of exchange until acceptance, and the acceptor are, in the absence of a contract to the contrary, respectively liable thereof as principal debtors, and the other parties thereto are liable thereon as sureties for the maker, drawer or acceptor as the case may be. " Section 118 (g) of the Act enacts : " that the holder of a negotiable instrument is a holder in due course : Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him. "

(3.) Reading both the above provisions, it becomes, clear that until the pro-note is discharged, the maker and the acceptor are both liable. It is not the case of the defendant that the promissory note has been discharged. The plea of the defendant is simply that the promissory note is without consideration. The question therefore that arises is whether on the ground that the original promissory note is without consideration, the suit of the plaintiff who is alleged to have got the suit promissory note endorsed in his name, could be dismissed on the ground that he is not a holder in due course. I am of the opinion that on the ground that the original promissory note is without consideration, the present suit cannot be dismissed. That plea cannot be available to the other party. I may in this connection refer to the cases of Shaik Pudai v. Mt. Bilasi, A.I.R. 1939 Oudh 107. and Babulal v. Budhoo, A.I.R. 1935 Oudh 264. The suit of the present plaintiff can only be dismissed if the Court came to the conclusion that the endorsement in his favour was not supported by consideration. But I find that the lower Court has not given a finding on this point. As the lower Court has not given any finding on this point and unless such a finding is given, it cannot be held that the petitioner is not the holder in due course.