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Guntupalli Basavaiah Vs. Nalamothu Venkamma - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtAndhra Pradesh High Court
Decided On
Case NumberCivil Revn. Petn. No. 415 of 1964
Judge
Reported inAIR1967AP275
ActsNegotiable Instruments Act, 1881 - Sections 9
AppellantGuntupalli Basavaiah
RespondentNalamothu Venkamma
Advocates:K.B. Krishna Murthy, Adv.
Excerpt:
.....instruments act, 1881 - petitioner claimed for collection of money on promissory note but not parted with consideration - lower court decided case on basis of consideration - document endorsed only for collection and not for consideration - plaintiff not required to prove that he parted with consideration - held, order of lower court liable to be set aside. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and insurer - held, the language employed in enacting sub-section (2) of section 149 appears to be plain and simple and there is no ambiguity in it. it shows that when an insurer is impleaded and has been given notice of the case, it is entitled to defend the action only on..........the suit on the ground that the plaintiff, basavayya, who is a transferee from the payee, had no parted with consideration for the transfer, and is, therefore, not a holder in due course.(2) the trial court had not understood the difference between a holder for collection and a holder in due course, which is well established in law. a holder in due course will be entitled to claim better rights than the transferor i.e. , any defect in title of the transferor will not affect the rights of the holder in due course. it is only where the transferee wants to claim higher rights than the transferor that he must satisfy the requirements of a holder in due course as laid down in section 9 of the negotiable instruments act, i.e., for consideration he became the possessor of the instrument from.....
Judgment:
ORDER

(1) The learned District Munsif found that the promissory note is supported by consideration, but dismissed the suit on the ground that the plaintiff, Basavayya, who is a transferee from the payee, had no parted with consideration for the transfer, and is, therefore, not a holder in due course.

(2) The trial Court had not understood the difference between a holder for collection and a holder in due course, which is well established in law. A holder in due course will be entitled to claim better rights than the transferor i.e. , any defect in title of the transferor will not affect the rights of the holder in due course. It is only where the transferee wants to claim higher rights than the transferor that he must satisfy the requirements of a holder in due course as laid down in section 9 of the Negotiable Instruments Act, i.e., for consideration he became the possessor of the instrument from the payee or endorsee before the amount mentioned in it became payable, and without having sufficient cause to believe that any defect in the title of the transferor existed.

(3) In the instant case, it is not defendant's contention that the suit amount or any part of it was paid to the transferor. Therefore, the transferor herself was entitled to recover the amount due under the promissory note; that being so, the plaintiff-transferee, even though be had not parted with consideration, is equally entitled to recover that amount. If the learned District Munsif had carefully read the endorsement, he would have realised that it is only for collection, and not for consideration. Hence there was no need for the plaintiff to have proved that he parted with consideration.. It is also in evidence that the payee. Kotamma, got herself examined as P. W. 1 and she has no objection to a decree being passed in favour of the plaintiff.

(4) In the result, the decree and judgment of the lower Court are wholly unsustainable. The Revision Petition is allowed, and the decree of the Court below is set aside,. The suit is decreed with costs only in the trial Court.

(5) Revision allowed.


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