JUDGMENT:

1. The Appeal, under Section 96 of the Code of the Civil Procedure, is filed by the appellant/defendant challenging the decree and Judgment dated 03.11.2011 in O.S.No.147 of 2008 passed by the learned Senior Civil Judge, Chirala (for short, ‘trial court’). Respondent is the plaintiff, who filed the suit in O.S.No.147 of 2008 seeking recovery of Rs.4,30,616/- with interest and costs from the defendant based on the promissory note.

2. The parties will hereinafter be referred to as arrayed before the trial Court.

3. The facts leading to the present Appeal, in a nutshell, are as under:

The defendant borrowed Rs.2,75,000/- from the plaintiff on 02.04.2005 for his business purpose and executed a demand promissory note in her favour by agreeing to repay the amount with 18% interest per annum. On the plaintiff's demand, the defendant made part payment of Rs.50,000/-, endorsed on the back of the promissory note. The plaintiff demanded the defendant to pay the debt, but he postponed the payment on some pretext or other, and to evade the promissory note debt, the defendant was trying to sell his properties. The defendant kept quiet, though he received the plaintiff’s legal notice, dt.11.08.2008. Hence, the plaintiff is constrained to file the suit.

4. (a) In the written statement, the defendant contended that the defendant borrowed only Rs.1,25,000/- from Telaprolu Chidambara Rao, the plaintiff's father-in-law. The said T.Chidambara Rao used to get promissory notes with other names for double the borrowed amount. As per his usage, he obtained the promissory note for Rs.2,75,000/- in the name of his daughter in Law, i.e., the plaintiff herein. To the principal amount, added the same amount, i.e., Rs.1,25,000/- and made it double the amount, i.e., Rs.2,50,000/- and added Rs.25,000/- which rounded the promissory note to the total amount of Rs.2,75,000/-. When the defendant made a part payment of Rs.50,000/- in August 2005, the plaintiff obtained a signature on the back of the promissory note. The alleged part payment endorsement dated 31.01.2007 is fabricated and created. The rate of interest on the promissory note is usurious.

(b) After receiving the legal notice, the defendant approached the actual lender and requested time to repay the debt. But there was no positive response.

(c) The attached schedule property was allotted to the defendant when the properties were divided among the family members on 18.11.2005. From the partition date, the defendant's sister, A. Venkata Subbamma, used to help the defendant financially in his business. The defendant excluded the settlement deed conveying his rights with the delivery of possession before the attachment order.

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

(1) Whether the suit promissory note is not supported by consideration to the tune of Rs.1,50,000/-?

(2) Whether the part payment of Rs.50,000/- in August 2005 is true?

(3) Whether the part payment dated 31.01.2007 is true?

(4) Whether the interest claimed is usurious?

(5) To what relief?

6. During the trial, on behalf of the plaintiffs, P.Ws.1 and 2 were examined, and Exs.A.1 to A.4 were marked. On behalf of the defendant, D.W.1 was examined, and no documents were marked.

7. After completion of the trial and hearing the arguments of both sides, the trial Court decreed the suit with costs for a sum of Rs.4,30,616/- with future interest @ 12% p.a., on Rs.2,75,000/- from the date of the suit till the date of realization and after that @ 6% p.a., till realization.

8. Sri I.Gopal Reddy learned counsel representing the appellant/defendant, argued that the part payment endorsement is created one. Though the promissory note and the part payment are contained in Ex.A.1, the endorsement portion is not a negotiable instrument as contemplated in the N. I Act and the Sec.118 of N. I Act is not applicable, and the plaintiff must prove the part payment by adducing independent evidence. Mere admission of signature does not amou