L. NARASIMHA REDDY, J.

( 1 ) THE question that arises for consideration in this CRP is, as to whether it is competent for the holder in due course of a negotiable instrument, to institute a suit in a Court within whose jurisdiction the indorsement on the instrument takes place.

( 2 ) THE petitioner filed O. S. No. 57 of 1999 in the Court of Principal Junior Civil judge, Kavali, against the respondents for recovery of certain amount, on the strength of a promissory note, dated 20-9-1995. The promissory note is said to have been executed by the respondents in favour of one Dasari Vajayalakshmi. She, in turn, had indorsed the promissory note in favour of the petitioner on 1-4-1998, for a consideration of Rs. 30,000/-, at Kavali.

( 3 ) THE respondents filed written statement They pleaded that they did not borrow any amount from Dasari Vijayalakshmi and denied execution of the promissory note. They have also disputed her capacity to lend the amount. One of the contentions raised by them is, that they are the residents of Ongole proper, and no cause of action has arisen at Kavali.

( 4 ) AT one stage, the matter came to be dealt with by this Court in CRP No. 592 of 2001. It was disposed of on 25-6-2001, directing the Trial Court to frame the following additional issues:1. "whether the suit promissory note is true, valid and binding on the defendants ?2. Whether the Court below has jurisdiction to try the suit?"

( 5 ) RESPONDENTS filed LA. No. 2108 of 2001, under Order 14 Rule 2, read with section 151 C. P. C. , requesting the Trial court to decide the preliminary issue, touching on the jurisdiction of the Court. The respondents reiterated their plea that no part of cause of action has arisen within the territorial jurisdiction of the trial Court, and that the plaint deserves to be returned. The application was resisted by the petitioner. Through its order dated 26-7-2002, the trial Court held that it does not have the territorial jurisdiction to entertain the suit, and accordingly returned the plaint, to be presented in a proper Court, having territorial jurisdiction over the matter. Hence this revision.

( 6 ) SRI P. Sridhar Reddy, learned counsel for the petitioner submits that the promissory note was indorsed in favour of the petitioner, and thereby he became a holder in due course, as defined under negotiable Instruments Act (hereinafter referred to as the N. I. Act ). He submits that since the indorsement has taken place within the territorial jurisdiction of the Trial court, the suit ought not to have been returned. He contends that being a holder in due course, the petitioner can maintain the suit. After referring to the various provisions of the N. I. Act, learned Counsel submits that the obligation arising out of a negotiable instrument can be enforced at any place, including the one where it passes on to the holder in due course. Placing reliance upon several judgments rendered by different High Courts, learned Counsel submits that the Trial Court, in which the suit was presented, did possess the territorial jurisdiction.

( 7 ) SRI M. Subba Reddy, learned counsel for the respondents, on the other hand, submits that basically a suit is to be filed in a Court within whose jurisdiction the defendants reside, or where the suit transaction has taken place. He contends that the respondents have not borrowed any amount from Dasari Vijayalakshmi, much less, executed any promissory note in her favour. He contends that even assuming that a promissory note has been executed at Ongole, the suit has to be filed in a competent Court at that place. Learned counsel contends that the so called indorsement, in favour of the petitioner, cannot be pleaded as a cause of action, either in its entirety, or in part, and in that view of the matter, no exception can be taken to the order under revision.

( 8 ) PETITIONER filed O. S. No. 57 of 1999 in the Court of Principal Junior Civil Judge, at Kavali, against the respondents for recovery of certain

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