A holder in due course of a negotiable instrument is presumed to have taken the instrument for consideration and without notice of any defect in the title of the person who negotiated it to him.

Plaintiff is the appellant. He filed O.S. No.415 of 1978 on the file of Sub Court, Coimbatore, for recovery of a sum of Rs. 6,795/- being the principal and interest due on a promissory note dated 25-4-1975 under Ex. A-l. According to the plaintiff, the defendants executed a promissory note for Rs. 5000/- on 25-4-1975 in favour of Kairoon Bibi on 26-3-78 agreeing to repay the same with interest at 12 per cent. The plaintiff got assignment of the promissory note from Kairoon Bibi on payment of consideration provided in the promissory note. Since the defendants failed to comply with the demand as per his notice dated 21-4-1978, he laid the above suit.

2. The first defendant filed a written statement which was adopted by the 2nd defendant with the following contentions :-

The first defendant did not execute the suit promissory note being along with the second defendant in favour of the plaintiff's assignor and the 2nd defendant did not receive the consideration of Rs. 5000/- from the plaintiff's assignor. Therefore, the alleged assignment is not valid and the assignment is purposely made to, to circumvent the provisions of law. The assignor is none else than the sister of the plaintiff. The plaintiff's father has lent money to the defendant's wife, the 2nd defendant on a registered mortgage on 2-8-75 and took the mortgage deed in favour of plaintiff's mother Jaithoon Bibi. The plaintiff's father actually lent money and had taken signatures on blank stamped papers from the first defendant and also 2nd defendant under the pretext that he required them for the purpose of the said mortgage transaction. He was also under the impression that the signatures on the blank papers were required for the purpose of mortgage. Now it is learnt that the plaintiff's father misused them by manipulating the same as promissory note. Moreover Kairoon Bibi had no independent means to lend any money on that date. Further, after the said mortgage transaction, the first defendant was never in need of any money and he did not borrow from the plaintiff's assignor Kairoon Bibi, who was penniless and did not have any money at the time of the alleged execution of the promissory note. It is clear that the plaintiff was the brother (sic) and the plaintiff's father colluded and manufactured the alleged promissory note with the assignor with the stamped blank signatures of the first and 2nd defendants in order to make illegal gain. The first defendant is entitled to the benefit of Act 40 of 1978. Therefore he prayed for dismissal of the suit.

3. On the above pleadings, the following issues were framed by the learned Subordinate Judge, Coimbatore:-

(1) Whether the suit pronote is not supported by consideration?

(2) Whether the plaintiff is not a holder in due course?

(3) Whether the defendants are entitled to the benefits under Ordinance V/78?(TN Act 40/ 78)?

(4) To what relief?

4. The plaintiff was himself examined as P.W. 2. One Thirumoorthi, scribe of Ex. A-1 was examined as P. W. l. One of the attestors of Ex. A-2 was examined as P. W. 3. Suit pronote was marked as Ex. A-l. The endorsement made over by Kairoon Bibi was marked as Ex. A-2. The lawyer's notice was marked as Ex. A-3 and the reply sent by the defendant's counsel to the plaintiff's counsel was marked as Ex. A-4. On the other hand, the first defendant was examined as D. W. 1 and Kairoon Bibi was examined as D.W.2.They also marked receipts issued by Jaithoon Bibi in favour of Hyarunnis as Ex. B-l. The trial Court after noting that the execution of the suit promissory note was accepted, and the plaintiff is a holder in due course, decreed the suit as prayed for with costs.

5. Against the judgment and decree of the Sub-Court, Coimbatore, the unsuccessful defendant filed appeal A.S. No.47 of 1981 before the District Court. Coimbatore, After narrating the pleadings or the parties and the conclusion of the trial Court, the learned District Judge, Coimbatore, determined the following points for considerat