JUDGMENT :- This is a defendants appeal against the judgement and decree dated 6-1-1969 passed by the II Additional Civil Judge, Moradabad in Civil appeal No. 218 of 1968 arising out of original suit No. 59 of 1963.

2. Facts relevant for the disposal of this appeal are these : The defendant appellant carries on business in Bhopal district Fatehgarh. The appellant placed order for supply of some utensils with defendant Nos. 2 to 4. The defendant respondents handed over railway receipt along with a hundi to plaintiff respondent No. 1. The plaintiff respondent No. 1 sent R-R and hundi to the Punjab National Bank. The hundi was payable after 21 days. The appellant accepted the hundi and took railway receipt from the bank. Thereafter the appellant took delivery of

the goods. But the appellant did not make payment of the hundi to the Bank. Therefore, the plaintiff respondent No. 1 brought suit for recovery of the amount of the hundi.

3. The appellant contested the suit on the grounds that the plaintiff respondent No. 1 was not a holder in due course of the hundi, that the liability to pay for the goods arose after the goods had been checked, that after taking delivery it was found that some of the goods were broken and some articles were short, that, therefore, the appellant wrote to respondents Nos. 2 to 4 who agree to take the amount after making deductions for the breakage and shortage, that in pursuance thereof the appellant paid Rs. 888.75 to defendants Nos. 2 to 4 by a bank draft dated 28-1-1960, that later on a small sum of Rs. 14.62 was further paid to defendants Nos. 2 to 4 and as such the plaintiff respondent was not entitled to get any amount from it.

4. The suit was contested by the defendants Nos. 2 and 3 also on the ground that the plaintiff respondent had given them no money in lieu of the hundi that after (Sic) the payment of the hundi was not made by the appellant, the plaintiff respondent No. 1 did not give any notice to them and as such the plaintiff respondent No.

1 was not entitled to get any decree against them.

5. The Additional Munsif who tried the suit found that the plaintiff respondent No. 1 had not paid the amount of the hundi to defendants Nos. 2 to 4, that the plaintiff was not a holder in due course of the hundi, that after the hundi was not paid by the appellant, the respondent No. 1 had not given any notice to defendants Nos. 2 to 4. On the basis of these findings the plaintiffs suit was dismissed with costs.

6. The plaintiff respondent No. 1 filed appeal and the Additional Civil Judge found that as the hundi was endorsed by defendants Nos. 2 to 4 in favour of the plaintiff, the plaintiff was entitled to get a decree against the appellant. The additional Civil Judge also found that the plaintiff was not entitled to get a decree against the defendants Nos. 2 to 4 because of his failure to serve a notice of dishonour of the hundi. Consequently the Additional Civil Judge decreed the plaintiffs suit for recovery of Rs. 1262.60 against the appellant.

7. The learned counsel for the appellant contended that as the plaintiff respondent No. 1 had not paid any amount of the hundi to defendants 2 to 4, drawer of the hundi, he was not a holder in due course of the hundi and was not entitled to sue and get the amount claimed. On the other side, the learned counsel for the respondent No. 1 contended that as the appellant had accepted the hundi, in view of the provisions of Section 32, 78 and 82(c) of the Negotiable Instruments Act, he was liable to make payment to the respondent.

8. The appellants counsel placed reliance on the definition of the expression "holder in due course" given in S.9 of the Negotiable Instruments Act and two cases Tarachand Kevalram v. K. Sikri Brothers, AIR 1953 Bom 290 and Braja Kishore Dikshit v. Purna Chandra Panda, AIR 1957 Orissa 153.

9. Section 9 of Negotiable Instruments Act reads as follows :

"Holder in due course means any person who for consideration became the possessor of a promissory

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