A holder in due course of a negotiable instrument is entitled to the presumptions under Sections 118 to 122 of the Negotiable Instruments Act, 1881, and can enforce the instrument against the maker, even if there is a lack of consideration or forgery.

1. The first defendant, aggrieved by the decree rendered against him by the learned Subordinate Judge of Coimbatore in O.S. No. 471 of 1970, has come up in appeal to this Court.

2. That suit was laid on two hundies, Exs. A6 and A7 dt. 28th March, 1967 drawn by the first defendant (the appellant) in favour of the plaintiff. The case of the plaintiff is that it is a Nationalised Banking Company having its head office at Bombay and branches all over India. The first defendant is carrying on business under the name and style of “Mars Hosiery Mills” at Coimbatore. The second defendant is a partnership firm transacting hundi business and as banker. Dena Bank Limited were the predecesso rs-in-title of the plaintiff. The second defendant, in the course of their dealings with Dena Bank, endorsed in favour of the Bank for valuable consideration two hundies, Exs. A6 and A7 for Rs. 5,000/- each, drawn in its favour on 28th March, 1967 by the first defendant promising to pay the second defendant at 90 days without days of grace. The second defendant represented to Dena Bank Limited that they obtained the said hundi from the first defendant after due and valuable consideration. The plaintiff endorsed the hundies for collection to the Union Bank of India Limited. When the hundies were presented for payment on maturity, they were not paid. The Union Bank of India Limited returned the hundies to the plaintiff. The plaintiff issued a notice of dishonour to the defendants on 21st February, 1968 (Ex. A14). The first defendant had sent a reply notice with false allegations. In spite of repeated demands, the sum was not paid. Since the money had been wrongfully retained, the plaintiff would be entitled to interest at 12 per cent per annum. The second defendant has been adjudged as an insolvent in I.P. No. 4 of 1970. So, the Official Receiver has been impleaded as the third defendant representing the estate of the second defendant.

3. The first defendant filed a written statement that he did not execute the suit hundies. The plaintiff is not a holder in due course. The first defendant closed his Mars Hosiery Mills about three years back and no branch of the plaintiff is at Coimbatore. Even at the time of the alleged execution of the suit hundies, there was no such branch. The second defendant was a firm of bankers. The business was closed somewhere in February, 1967. The first defendant at no time had any dealings with the Bombay Office of the second defendant. The first defendant is not liable for interest. Defendants 2 and 3 remained ex parte.

4. On the above pleadings, the following issues were framed for trial:—

“1. Whether the plaintiffs are holders in due course to consideration?

2. Whether the suit hundies are supported by consideration?

3. Whether the plaintiffs are entitled to enforce the suit hundies?

4. Whether the plaintiffs are entitled to interest and if so, at what rate?

5. To what relief the plaintiffs are entitled?”

The learned Subordinate Judge, on a consideration of the oral and documentary evidence, came to the conclusion that Exs. A6 and A7 were supported by consideration and the plaintiff was a holder in due course and that it is entitled to interest at 12 per cent per annum. In the result the suit was decreed with costs as prayed for against defendants 1 and 2. It is under these circumstances, the present appeal has been preferred.

5. Mr. V. Narayanaswami, the learned counsel for the appellant strenuously urges that prima facie it should be held that Exs. A10 and A11 are spurious documents. That will be evident on a comparison of these two documents with Ex. A2. Normally at seen from Ex. A2 the letter-head is used, while Exs. A10 and A11 have been written on blank papers. Therefore, there is no proof of the fact that before the date of maturity the endorsement of the hundies took place. Secondly, it is alleged that the endorsement was only by one of the partners and having regard to the terms of S. 27 of the Negotiable