IMPORTANT POINT
A holder in due course must acquire the instrument before it becomes payable and without knowledge of any defects in title; the defendant failed to prove discharge of the promissory note.

JUDGMENT :

1. This Second Appeal has been filed by the Appellant/Appellant/Defendant against the Decree and Judgment dated 17.10.2006, in A.S.No.8 of 2003 on the file of VIII Additional District and Sessions Judge, (Fast Track Court), Vijayawada (for short, ‘the 1st Appellate Court’) confirming the decree and Judgment dated 20.01.2003, in O.S.No.17 of 1997 on the file of I Additional Senior Civil Judge, Vijayawada (for short, ‘the trial Court’).

2. The Respondent/Respondent is the Plaintiff, who filed the suit in O.S.No.17 of 1997 seeking recovery of Rs.50,284/- being the principal and interest from the Defendant based on the promissory note, dt.26.05.1994.

3. Referring to the parties as they are initially arrayed in the suit in O.S.No.17 of 1997 is expedient to mitigate any potential confusion and better comprehend the case.

4. The factual matrix, necessary and germane for adjudicating the contentious issues between the parties inter se, may be delineated as follows:

On 26.05.1994, the Defendant procured a loan of Rs.30,000/- from Smt. K. Sarada, executing a promissory note with a stipulated interest of 24% per annum. Despite repeated demands, the Defendant failed to remit the owed amount. Subsequently, Smt. K.Sarada, incapacitated by illness, borrowed funds from the Plaintiff and, upon settling her debts, transferred the promissory note to the Plaintiff on 24.02.1995, for valid consideration. Following her demise on 09.03.1995, the Plaintiff made several demands for repayment, but the Defendant, for reasons undisclosed, evaded payment. Consequently, the Plaintiff issued a legal notice on 17.10.1996, compelling the Defendant to repay the debt, yet the Defendant chose to remain silent after receiving the notice on 22.10.1996.

5. The Defendant vehemently contested the suit by filing a written statement that categorically refuted the assertions delineated in the plaint. He contends that the purported transfer endorsement on the promissory note dated 24.02.1995, is a fraudulent fabrication orchestrated by the Plaintiff. Following the demise of K. Sarada, the Plaintiff is alleged to have illicitly forged Sarada's signature on the reverse of the promissory note. The Defendant asserts that the amount owed under the promissory note was duly paid to K. Bapuji, the late Sarada's husband, on 31.12.1994, accompanied by a receipt acknowledging the receipt of Rs.30,000/-. In December 1994, K.Bapuji approached the Defendant, beseeching assistance due to his wife's affliction with cancer, which necessitated medical treatment at the Madras Cancer Institute. Consequently, the Defendant inquired about the status of the promissory note, to which K. Bapuji replied that it had been misplaced but assured the Defendant of its return in due course. The Defendant then remitted Rs.30,000/- to K. Bapuji and obtained a receipt on that date. He has consistently paid monthly interest on the amount stipulated in the promissory note. The Plaintiff is the late K. Sarada’s sibling. The Defendant became aware of disputes arising between the Plaintiff and K. Bapuji subsequent to Sarada's death. The Defendant posits that the Plaintiff, driven by ulterior motives, fabricated the transfer endorsement on the reverse of the promissory note to present a fraudulent claim in the present litigation. Accordingly, the Defendant submits that the promissory note has been fully discharged, thereby absolving him of any financial obligation to the Plaintiff.

6. Based on the above pleadings, the trial Court has framed the following issues:

i. Whether the Plaintiff is entitled for the suit amount?

ii. To what relief?

7. During the trial, PWs.1 to 3 were examined and marked Exs.A.1 to A.5 on behalf of the Plaintiff. Conversely, on behalf of the Defendant, DWs.1 to 3 were examined and marked Ex.B.1.

8. After completing the trial and hearing the arguments of both sides, the trial Court decreed the suit with costs against the Defendant for Rs.50,284/- together with interest at 12% per annum f