Defendants 1 and 2 in a suit for realisation of money are the appellants. The plaintiff filed the suit alleging that he is a holder in due course in respect of Exts.A1 and A2 cheques drawn on the Kozhencherry Branch of the Federal Bank Ltd. First defendant firm issued two post dated cheques in favour of the third defendant who endorsed it in favour of 4th defendant and who in turn discounted the same on 1-2-1977 and received the entire amount due thereunder. Plaintiff later presented these cheques for collection. The cheques were dishonoured by the bank stating that payment was stopped by drawer. According to the plaintiff first defendant being the drawer and defendants 3 and 4 being the endorsees are jointly and severally liable to the plaintiff for the amount due under the two cheques.

2. Defendants land 2 filed a joint written statement, wherein they urged that 3rd defendant used to get post dated cheques from the first defendant with the specific understanding that the cheques will not be endorsed to any one or discounted. There cheques were without any consideration. These was further understanding between the first defendant and the 3rd defendant to the effect that