Judgment:
T. Ramachandran, J.
1. This appeal arises from the judgment and decree of the Sub-Judge of Thodupuzha in O.S. No. 97/85.
2. The appellants were the defendants in O.S. No. 97/85 before the Sub-Court of Thodupuzha. The suit was filed by the respondent as plaintiff or realisation of the amount due under three pronotes dated 1-10-1983, 3-11 -1983 and 3-12-1983 executed by the defendants in favour of one Kuruvilla Varghese and later endorsed in favour of the plaintiff by the said Kuruvilla Varghese. The facts are that Kuruvilla was the grand father of the plaintiff. He was a moneylender. The defendants borrowed Rs. 40,0007- on 1-10-1983 and executed Ext. A3 pronote. Later on 3-11-1983 Rs. 15,0007- was borrowed and executed Ext. A4 pronote. Then on 3-12-1983 Rs. 25,0007- was borrowed and executed Ext. A5 pronote. These pronotes were endorsed by Kuru villa Varghese in favour of the plaintiff and as a holder in due course the plaintiff demanded the amount from the defendants by sending a lawyer notice. Thus as the amount was not repaid the plaintiff filed the suit for realisation of the amount under the three pronotes, with future interest at the rate of 6% per annum and costs. The defendants contended before the trial court that even though they executed Exts. A3 to A5 pronotes in favour of Kuruvilla Varghese the suit was bad for non-joinder of necessary parties. According to them Kuruvilla Varghese is a necessary party. Their case was that the pronotes were not supported by consideration. It was also contended that they had no notice of the endorsement in favour of the plaintiff. Their contention was that the endorsement was made without consideration. Thus according to them the plaintiff was not a holder in due course. They could not send a reply notice as the suit was filed in the meanwhile. After framing necessary issues the lower Court examined P.W. 1 and D. Ws. 1 to 7 and marked Exts. A1 to A6 and B1 to B12. After hearing both sides the lower Court considered the matter and held that the plaintiff was a holder in due course and that it was supported by consideration. It was further held that the defendants failed to prove discharge of the amount shown under the three pronotes. Thus the suit was decreed as prayed for. Aggrieved by the judgment and decree this appeal is filed.
3. Counsel for both sides were heard. According to the learned counsel appearing for the appellants Kuruvilla Varghese was anecessary party and that the endorsement in favour of the plaintiff was not supported by consideration. On the basis of Section 9 of the Negotiable Instruments Act the learned counsel argued that the burden of proof was on the plaintiff to show that the endorsement was for consideration. The respondents filed cross-objections stating that the lower Court ought to have allowed costs at the time of decreeing the suit.
4. The points arising for consideration are :
(1) whether the endorsement of Exts. A3 to A5 pronotes in favour of the plaintiff was supported by consideration and whether the plaintiff is a holder in due course; and
(2) whether the lower Court was correct in rejecting costs.
5. Point No. 1 : The suit is filed by the plaintiff as a holder in due course. The execution of Exts. A3 to A5 pronotes in favour of Kuruvilla Varghese who is the grand father of the plaintiff is admitted by the defendants in the written statement. Their only case was the endorsement in favour of the plaintiff by Kuruvilla Varghese is not proved to be supported by consideration. Under Section 118(g) of the Negotiable Instruments Act of 1881, until the contrary is proved the presumption is that the holder of a negotiable instrument is a holder in due course. Holder in due course is defined in Section 9 of the Act. Thus holder in due course means any person who for consideration became the possessor of a promissory note, bill of exchange or cheque if payable to bearer, or the payee or endorsee thereof, if payable to order, before the amount mentioned in it became payable and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title. In the light of this definition the learned counsel appearing for the appellant submitted that the burden of proof was on the plaintiff to show that the endorsement was supported by consideration. The plaintiff as P.W. 1 gave evidence on this aspect before the trial Court. He deposed that the endorsement was supported by consideration. On the side of the defendants-Kuru villa Varghese was examined as D.W. 2. D.W. 2 supported the case of P.W. 1. D.W. 2 deposed that the endorsement of Exts. A3 to A5 pronotes in favour of the plaintiff was supported by consideration. Simply because the plaintiff is the grand son of Kuruvilla Varghese, it cannot be said that the endorsement was not supported by consideration. It was further argued by the learned counsel appearing for-the appellant that no accounts were produced in this suit. In the light of the evidence of P.W. I and D.W. 2 it is conclusively proved that the plaintiff is a holder in due course. Thus he is entitled to claim the amount due under Exts. A3 to A5 pronotes.
6. The learned counsel appearing for the appellant submitted that Kuruvilla Varghese was a money-lender. To prove this aspect D.Ws. 3 to 7 were examined. They were the persons who had dealings with D.W. 2. Their evidence does not disprove the case of the plaintiff as the only question arising for consideration is as to whether the plaintiff is a holder in due course of Exts. A3 to A5 pronotes.
7. Anotherconlention was that Ext. A4pronote is to be discarded. Thus the learned counsel appearing for the appellant submitted that as Ext. A3 pronote was mentioned in Ext. A4, it was illegal. Thus relying on illustration (d) of Section 4 of the Negotiable Instruments Act, it was argued that Ext. A4 is illegal. This argument has no force because illustration (d) of Section 4 of the Act mentioned that the amount should be definite in the pronote. In that illustration the wording was 'and for other sums.' But in the present case Ext. A4 only mentioned about Ext. A3 pronote and it clearly mentioned about the amount due under Ext. A4. Thus mention of Ext. A3 pronote in Ext. A4 does not make it illegal. It is to be noted that the first defendant is an advocate and Exts. A3 to A5 are in the handwriting of the maker of the pronotes. Thus it is futile to contend that Ext. A4 pronote is to be discarded. Thus I hold that Exts. A3 to A5 pronotes are valid and that the plaintiff is entitled to get the amount due under those pronotes as a holder in due course.
8. Point No. 2. According to the learned counsel appearing for the respondent, there was no reason why the costs was disallowed by the lower Court. Allowing costs is in the discretion of the Court and reading the deposition of P.W. 1 and D.W. 2 will show that there were reasons to disallow costs. The lower Court had the opportunity to note the demeanour of P.W. 1 and D.W. 2, and the lower Court thought it proper not to allow costs. Thus I do not find any reason to interfere with that discretion exercised by the lower Court. Thus the cross-objection are only to be dismissed.
For the above reasons confirming the judgment and decree of the lowerCourt both the appeal and the cross-objections are dismissed. The parties are to bear their costs.