A holder in due course of a negotiable instrument is entitled to recover the full amount due under the instrument, even if the instrument has been partially discharged by payment to the original payee, if the holder in due course had no knowledge of the payment.

ISMAIL, J. :- The defendants in O.S.No.3224 of 1964 on the file of the City Civil Court. Madras are the appellants herein. They executed a promissory note, Ex. A-1, dated 6-4-1960. for a sum of Rs. 5,000 payable with interest at 12 per cent per annum in favour of one Peter Manickam (P. W. 1). The said Peter Manickam endorsed the promissory note in favour of the respondent herein on 10-9-1964 as evidenced by Ex. A-2. It, is on the basis of this endorsement, the respondent herein instituted the suit against the appellants for recovery of Rs. 6,800 made up of the principal of Rs. 5,000 and interest of Rs. 1,800 due under the promissory note, but prayed for a decree only against the first appellant-first defendant. In his written statement, the first appellant contended that the respondent herein was not a holder in due course under law, since there was no notice of transfer and that the respondent had knowledge of the partial discharge of the suit promissory note to the extent of Rs. 3,000 on 7-8-1961, even before the transfer, and that consequently the claim of the respondent for the whole of the suit promissory note instead of only claiming the balance of Rs. 2,000 was prima facie fraudulent and collusive. He further contended that the respondent who was abetting the original payee in all the transactions knew about all the facts stated above and that the assignment of the suit promissory note in his favour was not a bona fide transfer and was a fraudulent and collusive one. The second appellant herein filed a separate written statement in which she also contended that the appellants had paid Rs. 3,000 to the original promisee on 7-8-1961, that the original promisee, as his usual custom, did not allow the first appellant to endorse the payment of this sum of Rs. 3,000 paid towards the principal amount under the suit promissory note and the same was ignored, that the original promisee has not given due credit for this payment of Rs. 3,000 and had fraudulently transferred the suit promissory note in favour of the respondent and that to a notice sent to the original promisee demanding him to give credit for the same, there was no reply. The further case of the second appellant was that the respondent was not a holder in due course and that the assignment of the suit promissory note in his favour was not bona fide, as it was vitiated by fraud and that there was also no notice of assignment or demand from the respondent to the appellants herein.

2. The learned VII Assistant Judge, who tried the suit, framed the following issues-

1. Whether the plaintiff is not a bona fide holder in due course ?

2. Whether the principal amount of the suit promissory note was partially discharged by the defendant by payment of Rs. 3,000 on 7-8-1961 apart from payment of interest upto 27-9-1961 to the original payee ?

3. Is the suit liable to be dismissed against the second defendant ?

4. To what amount if any the plaintiff is entitled ?

On issue No. 2, the learned VII Assistant Judge accepted the case of the appellants herein that a sum of Rs. 3,000 was paid by the first appellant to the original payee, namely, P. W. 1. under the promissory note on 7-8-1961 as evidenced by Ex. B-5. On issue No. 1, he held that the appellants had not established that the respondent herein was not a bona fide holder in due course. On issue No. 3 he held that the appellants had jointly executed the suit promissory note and were jointly and severally liable and therefore the respondent was entitled to pray for a decree only against the first appellant and that on that ground it could not be held that the suit was liable to be dismissed as against the second appellant. In view of these findings, he decreed the suit as prayed for. Hence, the present appeal by the defendants in the suit.

3. The only point urged by the learned counsel for the appellants is that the suit promissory note had matured on the date of the endorsement by the original payee in favour of the respond