PRAFULLA KUMAR PATNAIK Vs. KUMAR HARISCHANDRA SINGH DEO

JUDGEMENT

(1.) THIS appeal arises out of suit to enforce a negotiable instrument passed in favour of the Bank of Kamrup, Ltd., which has now gone into liquidation. Defendant 2 is the authorized Agent of the Bank and was the Manager of its branch at Cuttack. The plaintiff had invested Rs. 2000/ - with the Bank as fixed deposit, when the Bank was about to collapse he took an endorsement of the suit handnote (Ex. 4) in partial discharge of the amount due from the Bank. He Has filed the present suit to recover the sum due under Ex. 4.

(2.) THE plea put forward by the executant, defendant 1, is that the handnote had been executed as collateral security to cover overdrawals on his Current Account with the Bank and that the amount had been fully discharged by two payments made on 3 -2 -1947 and 9 -4 -1947 for which the necessary receipts had been passed by defendant 2 under Exts. A -1 and A. The plaintiff took a transfer of the handnote on 13 -6 -1947 - - obviously sometime after the payments had been made.

(3.) MR . Rao appearing for the unsuccessful plaintiff urges that the plaintiff was a 'holder in due course' and as such is entitled to recover the amount irrespective of the fact whether the discharge pleaded is due or not. Section 9, Negotiable Instruments Act defines a 'holder in due course' as 'one who for consideration becomes the possessor of a promissory note before the amount mentioned in it becomes payable and without having sufficient cause to believe that any defect existed in the title of the person from whom he derives his title.' In order to appreciate whether the plaintiff satisfies the requirements of this definition, it is necessary to quote Ex. 4 which says: