JUDGMENT : 1. This Second Appeal has been filed by the Appellant/Appellant/Defendant against the Decree and Judgment dated 17.10.2006, in A.S.No.8 of 2003 on the file of VIII Additional District and Sessions Judge, (Fast Track Court), Vijayawada (for short, ‘the 1st Appellate Court’) confirming the decree and Judgment dated 20.01.2003, in O.S.No.17 of 1997 on the file of I Additional Senior Civil Judge, Vijayawada (for short, ‘the trial Court’). 2. The Respondent/Respondent is the Plaintiff, who filed the suit in O.S.No.17 of 1997 seeking recovery of Rs.50,284/- being the principal and interest from the Defendant based on the promissory note, dt.26.05.1994. 3. Referring to the parties as they are initially arrayed in the suit in O.S.No.17 of 1997 is expedient to mitigate any potential confusion and better comprehend the case. 4. The factual matrix, necessary and germane for adjudicating the contentious issues between the parties inter se, may be delineated as follows: On 26.05.1994, the Defendant procured a loan of Rs.30,000/- from Smt. K. Sarada, executing a promissory note with a stipulated interest of 24% per annum. Despite repeated demands, the Defendant failed to remit the owed amount. Subsequently, Smt. K.Sarada, incapacitated by illness, borrowed funds from the Plaintiff and, upon settling her debts, transferred the promissory note to the Plaintiff on 24.02.1995, for valid consideration. Following her demise on 09.03.1995, the Plaintiff made several demands for repayment, but the Defendant, for reasons undisclosed, evaded payment. Consequently, the Plaintiff issued a legal notice on 17.10.1996, compelling the Defendant to repay the debt, yet the Defendant chose to remain silent after receiving the notice on 22.10.1996. 5. The Defendant vehemently contested the suit by filing a written statement that categorically refuted the assertions delineated in the plaint. He contends that the purported transfer endorsement on the promissory note dated 24.02.1995, is a fraudulent fabrication orchestrated by the Plaintiff. Following the demise of K. Sarada, the Plaintiff is alleged to have illicitly forged Sarada's signature on the reverse of the promissory note. The Defendant asserts that the amount owed under the promissory note was duly paid to K. Bapuji, the late Sarada's husband, on 31.12.1994, accompanied by a receipt acknowledging the receipt of Rs.30,000/-. In December 1994, K.Bapuji approached the Defendant, beseeching assistance due to his wife's affliction with cancer, which necessitated medical treatment at the Madras Cancer Institute. The Defendant asserts that the amount owed under the promissory note was duly paid to K. Bapuji, the late Sarada's husband, on 31.12.1994, accompanied by a receipt acknowledging the receipt of Rs.30,000/-. In December 1994, K.Bapuji approached the Defendant, beseeching assistance due to his wife's affliction with cancer, which necessitated medical treatment at the Madras Cancer Institute. Consequently, the Defendant inquired about the status of the promissory note, to which K. Bapuji replied that it had been misplaced but assured the Defendant of its return in due course. The Defendant then remitted Rs.30,000/- to K. Bapuji and obtained a receipt on that date. He has consistently paid monthly interest on the amount stipulated in the promissory note. The Plaintiff is the late K. Sarada’s sibling. The Defendant became aware of disputes arising between the Plaintiff and K. Bapuji subsequent to Sarada's death. The Defendant posits that the Plaintiff, driven by ulterior motives, fabricated the transfer endorsement on the reverse of the promissory note to present a fraudulent claim in the present litigation. Accordingly, the Defendant submits that the promissory note has been fully discharged, thereby absolving him of any financial obligation to the Plaintiff. 6. Based on the above pleadings, the trial Court has framed the following issues: i. Whether the Plaintiff is entitled for the suit amount? ii. To what relief? 7. During the trial, PWs.1 to 3 were examined and marked Exs.A.1 to A.5 on behalf of the Plaintiff. Conversely, on behalf of the Defendant, DWs.1 to 3 were examined and marked Ex.B.1. 8. After completing the trial and hearing the arguments of both sides, the trial Court decreed the suit with costs against the Defendant for Rs.50,284/- together with interest at 12% per annum from the date of suit till the date of decree on Rs.30,000/- and thereafter at 6% per annum till realization. 9. Aggrieved by the same, the Defendant filed an Appeal in A.S.No.8 of 2003 on file of the 1st Appellate Court. The 1st Appellate Court, being the final fact-finding Court, framed the following points for consideration: i. Whether the discharge plea taken by the Defendant/Appellant is established? ii. Whether the judgment of the trial Court is erroneous? iii. To what relief? 10. The 1st Appellate Court, after scrutinizing oral and documentary evidence adduced on behalf of both sides, dismissed the Appeal by its Judgment and Decree dated 17.10.2006. ii. Whether the judgment of the trial Court is erroneous? iii. To what relief? 10. The 1st Appellate Court, after scrutinizing oral and documentary evidence adduced on behalf of both sides, dismissed the Appeal by its Judgment and Decree dated 17.10.2006. Assailing the same, the Defendant preferred the present Second Appeal. 11. Heard Sri P. Prabhakar Rao, learned Counsel representing the Appellant/Defendant, and Ms. G. Jhansi, learned Counsel representing the Respondent/Plaintiff. 12. Based on the Appellant’s contentions, the following substantial question of law is involved in this Second Appeal: i. Does the Appellate Court having come to conclusion that the Appellant/Defendant has discharged the suit promissory note and that the Defendant rightly paid the amount on 31.12.1994 is right in dismissing the Appeal without allowing it? ii. Does the Respondent/Plaintiff become “holder in due course” under section 9 of the N.I. Act when he himself pleaded that in spite of several demands made by his transferor debt under Ex.A.1 was not discharged. iii. Does the presumption under section 118 of N.I.Act is available to the Respondent in view of the Appellant successfully rebutting the said presumption by way of cogent evidence shifting the burden of proof on to the Respondent. iv. Does Section 78 of N.I.Act has application to the facts of the case on hand. 13. Before delving into the matter, since the Appeal is filed under Sec.100 of C.P.C., this Court must see the scope of Section 100 of C.P.C. 14. In H.P.Pyarejan V. Dasappa (dead) by L.Rs. and others, 2006 (3) ALT 41 (SC), the Hon’ble Supreme Court held that: Under Section 100 of the Code (as amended in 1976), the jurisdiction of the High Court to interfere with the judgments of the courts below is confined to hearing on substantial questions of law. Interference with the finding of fact by the High Court is not warranted if it involves re-appreciation of evidence (see Panchugopal Barua v. Umesh Chandra Goswami (1997) 4 SCC 713 ) and Kshitish Chandra Purkait v. Santosh Kumar Purkait (1997) 5 SCC 438 )…… 15. Considerations in Section 100 of C.P.C. arise only when there is a substantial question of law and not mere such questions of law or one based on facts. The learned Counsel for Respondent is right in placing reliance on these rulings. Considerations in Section 100 of C.P.C. arise only when there is a substantial question of law and not mere such questions of law or one based on facts. The learned Counsel for Respondent is right in placing reliance on these rulings. However, it has to be borne in mind that in case of misapplication of law and improper appreciation of evidence on record, particularly the documentary evidence, it is the bounden duty of the High Court sitting in Second Appeal to consider such questions which are substantial in terms of law. 16. In the second Appeal, while exercising jurisdiction under Section 100 of the C.P.C., this Court must confine itself to the substantial question of law involved in the Appeal. This Court cannot re-appreciate the evidence and interfere with the findings of the Courts below, where the Courts below recorded the findings judicially by appreciating both oral and documentary evidence. Further, the existence of a substantial question of law is the sine qua non for the exercise of jurisdiction. This Court cannot substitute its own opinion unless the findings of the Courts below are manifestly perverse and contrary to the evidence on record. 17. The stand taken by the Defendant in the written statement reveals a notable absence of dispute regarding the execution of the promissory note in favour of Smt. K.Sarada. However, the Defendant, as DW.1, asserts that he borrowed Rs.30,000/- on 26.05.1994 from K. Bapuji, the husband of Sarada. To substantiate his defence, Defendant examined K. Bapuji as DW.3. Conversely, to affirm the execution of the promissory note (Ex.A.1), Plaintiff examined K.Subbarayudu as PW.3, who testified that Defendant indeed borrowed Rs.30,000/- from K. Sarada on the same date and attested the promissory note. 18. PW.2, Y. Ramachandra Rao, who is the brother-in-law of PW.1 and the scribe of the transfer endorsement (Ex.A.2), consistently supports the testimony of P.Ws.1 and 3 regarding the illness of K. Sarada, who was diagnosed with cancer. PW.1 provided financial assistance for her medical treatment, and on 24.02.1995, K. Sarada executed Ex.A.1 in favour of PW.1 after receiving an additional Rs.12,000/-, beyond the previous consideration. It is undisputed that P.Ws.1 to 3 are closely related to K. Sarada, the original lender, who is, in fact, PW.1’s sister. The assertion that Smt. K. Sarada fell ill due to cancer remains uncontested, and it is a fact that she passed away on 09.03.1995. It is undisputed that P.Ws.1 to 3 are closely related to K. Sarada, the original lender, who is, in fact, PW.1’s sister. The assertion that Smt. K. Sarada fell ill due to cancer remains uncontested, and it is a fact that she passed away on 09.03.1995. Before initiating the suit, PW.1 issued a legal notice dated 17.10.1996 to the Defendant, demanding repayment of the debt, which was received, as evidenced by Ex. A.4. 19. The evidence adduced reveals that one K. Srinivasa Rao scribed Ex.A.1, which K.S.Rayudu attested. Defendant contends that K. Bapuji (DW.3) requested repayment of the loan amount stipulated in the promissory note, citing urgent financial need for the treatment of his wife, K.Sarada, who was battling cancer. In response, Defendant settled the amount due under the promissory note and requested the return of Ex.A.1. However, DW.3 claimed the document had been misplaced. Nevertheless, DW.3 issued Ex.B.1, a receipt dated 31.12.1994 acknowledging the payment. 20. As aptly noted by both the trial Court and the 1st Appellate Court, the Defendant has not disputed the execution of the promissory note in favour of K.Sarada nor the receipt of the consideration amount there under. Instead, the Defendant asserts that he received this amount from DW.3. To substantiate the transfer endorsement, Plaintiff called upon P.W.s.2 and 3, whose testimonies reinforced Plaintiff's claims. Upon careful evaluation of the evidence, the trial Court determined that PW.1 effectively proved the transfer endorsement of Ex.A.2 by examining both the scribe and the attestor. The trial Court found the Defendant’s assertions regarding the discharge of the debt through Ex.B.1 to be unconvincing. The 1st Appellate Court, in turn, considered the arguments presented by both parties and meticulously reviewed the evidence, ultimately affirming the findings of the trial Court. 21. Both the trial Court and the 1st Appellate Court carefully examined Ex.B.1 and Ex.A.5, noting that these documents may have been created by the Appellant/Defendant with the assistance of DW.3, K. Sarada’s husband. The Courts observed that despite the Defendant's claim of having made the payment on 31.12.1994 and the subsequent passing of K. Sarada on 09.03.1995, he took no steps to retrieve Ex.A.1 or to obtain an endorsement from K. Sarada herself. The Courts observed that despite the Defendant's claim of having made the payment on 31.12.1994 and the subsequent passing of K. Sarada on 09.03.1995, he took no steps to retrieve Ex.A.1 or to obtain an endorsement from K. Sarada herself. Given that Defendant has acknowledged the execution of the Ex.A.1 promissory note and the receipt of the consideration amount, the burden of proof squarely rests upon him to demonstrate that the payment was made by DW.3 rather than by his wife. 22. Both the trial Court and the 1st Appellate Court, after a thorough appraisal of the evidence on record, arrived at the correct conclusion that the Defendant failed to provide adequate evidence to support the assertions made in his written statement. 23. In Satya Gupta v. Brijesh Kumar, (1998) 6 SCC 423 , the Hon’ble Supreme Court had observed as under: "At the outset, we would like to point out that the findings on facts by the lower appellate Court as a final court of facts, are based on appreciation of evidence and the same cannot be treated as perverse or based on no evidence. That being the position, we are of the view that the High Court, after reappreciating the evidence and without finding that the conclusions reached by the lower appellate Court were not based on the evidence, reversed the conclusions on facts on the ground that the view taken by it was also a possible view on the facts. The High Court, it is well settled, while exercising jurisdiction under Section 100 CPC, cannot reverse the findings of the lower appellate Court on facts merely on the ground that on the facts found by the lower appellate Court another view was possible." 24. In S.R. Tewari v. Union of India, (2013) 6 SCC 602 , the Hon’ble Supreme Court formulated the following test of what constituted perversity under Section 100 of C.P.C.: “The findings of fact recorded by a court can be held to be perverse if the findings have been arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant/inadmissible material. The finding may also be said to be perverse if it is ‘against the weight of evidence’, or if the finding so outrageously defies logic as to suffer from the vice of irrationality. The finding may also be said to be perverse if it is ‘against the weight of evidence’, or if the finding so outrageously defies logic as to suffer from the vice of irrationality. If a decision is arrived at on the basis of no evidence or thoroughly unreliable evidence and no reasonable person would act upon it, the order would be perverse. But if there is some evidence on record which is acceptable and which could be relied upon, the conclusions would not be treated as perverse and the findings would not be interfered with.” 25. Interference on facts is a forbidden zone in a Second Appeal unless the Appellant can make out a case that the appreciation of evidence suffers from any form of perversity. As a natural corollary, sans any perversity, merely because an alternative view is possible on a reading of the evidence, that would not constitute a legally valid ground for interference under Section 100 of C.P.C. 26. At the outset, it is important to emphasize that both the trial Court and the 1st Appellate Court reached concurrent findings of fact regarding the execution of the promissory note by the Defendant in favour of Smt. K.Sarada. Furthermore, they rightly discredited the Defendant’s claims concerning the discharge of the debt through payment to her husband, DW.3. These findings were made following a comprehensive evaluation of the entire evidence on record. Consequently, unless the concurrent findings of the trial Court and the 1st Appellate Court are deemed perverse, this Court is not required to interfere with them in the exercise of its powers under Section 100 of the C.P.C. 27. Defendant contends in the Second Appeal that, given Plaintiff's own assertion that Smt K.Sarada made multiple demands before transferring the promissory note to Plaintiff and the Respondent/Plaintiff cannot be considered a holder in due course under Section 9 of the N.I.Act. However, the Defendant did not raise this contention in the trial and 1st Appellate Courts. 28. The learned counsel for the Appellant contends that both Courts overlooked the admission made by the Respondent/Plaintiff that he got transferred the promissory note only after the original transferor made demands. The Appellant/Defendant maintains that, in law, the Respondent/Plaintiff cannot be deemed a Holder in Due Course of the promissory note, given his admission that he had the promissory note solely following a demand notice issued by the original lender. 29. The Appellant/Defendant maintains that, in law, the Respondent/Plaintiff cannot be deemed a Holder in Due Course of the promissory note, given his admission that he had the promissory note solely following a demand notice issued by the original lender. 29. The main contention projected by the Learned Counsel for the Appellant/Defendant is that both the Courts failed to consider the necessary ingredients of Section 9 of N.I.Act, which provides that 'Holder in Due Course' means any person who for consideration became the possessor of the promissory note before the amount mentioned in it became payable. 30. Per contra, it is the submission of the learned Counsel for the Respondent/Plaintiff that both the Courts have taken into account the entire attendant facts and circumstances of the case, coupled with the oral and documentary evidence available on record and has come to a clear conclusion that the suit promissory note debt has not been discharged by the Appellant/Defendant. 31. For better appreciation, it is relevant to extract the plaint averments, which are as follows: “3……………………… In spite of repeated demands made by the said Sarada, Defendant has not chosen to repay the same, and further, the said Sarada made several requests that she is in need of the said amount as she has to clear off her debts with the said amount. All attempts made by the said Sarada are in vain. 4.…………..In the above circumstances, due to her ill-health, the said Sarada, by taking into consideration the said due amount payable by her to the Plaintiff, after receiving the remaining balance amount, transferred the said promissory note in favour of the Plaintiff on 24.02.1995 for a valid consideration ……………….…… …………………….. After that, Plaintiff made several demand Defendant to collect the said amount, but for the reasons best known to himself, the Defendant dragged on the payment and finally, the Plaintiff constrained to issue a notice and got issued the same on 17.10.1996 …………………………………. 32. Whereas, Defendant has contended in the written statement as follows: "4. Except the allegation thatDefendant borrowed a sum of Rs.30,000/- from one Kodali Sarada, wife of Bapuji, on 26.05.1994 and executed a promissory note in favour of Kodali Sarada and other all allegations are all false and frivolous……………… 33. 32. Whereas, Defendant has contended in the written statement as follows: "4. Except the allegation thatDefendant borrowed a sum of Rs.30,000/- from one Kodali Sarada, wife of Bapuji, on 26.05.1994 and executed a promissory note in favour of Kodali Sarada and other all allegations are all false and frivolous……………… 33. The Plaintiff has not claimed to have personal knowledge of the demands made by Smt. K. Sarada to Defendant regarding the discharge of the debt, nor has he stated that he demanded repayment of the debt by Defendant. Defendant has explicitly disputed this contention in his written statement and testified to this effect in Court. As such, it is difficult to accept the Appellant's counsel's submission and consider the plea articulated in the plaint. Nevertheless, this Court is inclined to weigh the arguments presented by both sides in light of the pleas raised in the plaint and in the written statement and the evidence adduced. 34. Learned counsel for the Appellant relied on the decision in Somisetty Subbarao V. Mynampati Ramakrishna Rao, MANU/AP/0981/2007, wherein the composite High Court of Andhra Pradesh held that: In order to get the status of holder in due course, Plaintiff has to get the transfer of the promissory note in his favour before making the demand for payment to Defendant. 4. Section 9 of the Negotiable Instruments Act defines holder in due course reads as follows: "Holder in due course": "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 indorse 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. According to this section, there is a difference between a holder for collection and a holder in due course. In due course, a holder is entitled to claim better rights than the transferor. Any defect in the transferor's title will not affect the holder's rights in due course. It is only where the transferee of the payee 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. Basavaiah v. Venkamma MANU/AP/0058/1967: AIR1967AP275. 5. Any defect in the transferor's title will not affect the holder's rights in due course. It is only where the transferee of the payee 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. Basavaiah v. Venkamma MANU/AP/0058/1967: AIR1967AP275. 5. Section 9 mentions that when a consideration becomes payable to the possessor of the promissory note and before the amount becomes payable to the transferee becomes a holder in due course. But in the present case, given the legal notice issued by the transferor to Defendant on 24.8.1989, he has lost the status of holder in due course as the transfer endorsement obtained by the Plaintiff was only on 31.12.1989, which is subsequent to the date of legal notice. So far as the original creditor is concerned, it is an undisputed fact that the suit promissory note was executed at Kandukuru, and the transferor belongs to Kandukuru, so also Defendant. Therefore, the Kandukuru Court was the proper Court to present the Plaintiff for the purpose of adjudication of the dispute. But the Plaintiff filed the suit at Ongole on the basis of endorsement that the consideration for the endorsement was paid at Ongole and the endorsement was also obtained there. 9. In the light of the above judgments, the Plaintiff cannot be treated as a holder in due course. Therefore, he cannot acquire better rights than the transferor. When once he had no better rights, no part of the transaction regarding the execution of the promissory note passing of the consideration took place at Ongole. Therefore, the Court at Ongole has no jurisdiction to entertain the suit. Therefore, the suit is liable to be dismissed. 35. A review of the plaint and the evidence on record needs to be clarified regarding whether Plaintiff became aware of the demands made by the original lender before or after the transfer of the promissory note in his favour. Furthermore, the Judgment does not indicate that a transferee who acquires knowledge of such demands before the transfer of the instrument is precluded from recovering the amount from the borrower. 36. Furthermore, the Judgment does not indicate that a transferee who acquires knowledge of such demands before the transfer of the instrument is precluded from recovering the amount from the borrower. 36. The Appellant’s counsel further relied on the decision in Dittakavi Venkata Narayana V. Chennuri Venkateswara Rao and another, 1988 SCC OnLine AP 306, wherein the composite High Court of Andhra Pradesh held that: 1………………… The defence raised by the respondents is that Ex. A-1 is not supported by consideration. It was executed only as collateral security to another transaction; therefore, he is not a 'holder in due course'. Since the Appellant is only a 'holder' for collection, the Court below has no territorial jurisdiction to entertain the suit. The trial court framed appropriate issues and negatived the respondents' contention that it is not supported by consideration and held that the promissory note Ex. A-1 is supported by consideration but it held that the Appellant is not a 'holder in due course' under Ex. A-2, dated February 1, 1978. Since the endorsement was made at Pamarru, the Court below has no jurisdiction to entertain the suit. On that premise, dismissed the suit. 6. It is seen that the Court below found, and, in fairness, it was not disputed across the bar, that the Appellant has laid the suit on July 17, 1978, in his own right as a 'holder in due course'. It has now been found that no consideration has been given under the endorsement, Ex. A-2. he is not a 'holder in due course'. When the Appellant came to the Court in his own right as a 'holder in due course' but not as a 'holder' and having the finding that he is not a 'holder in due course' undisputed, then it is not open to him to fall back upon the plea that he is continuing to be a 'holder' as a beneficial owner, for the benefit of the original owner, promisee, under Ex. A-1. This stand was not taken earlier nor pleaded in the plaint, and there was no opportunity for the respondents to contest this stand. Under those circumstances, having become unsuccessful in his stand that he is a 'holder in due course', it is not open to him to fall back upon the plea that he continues to be a 'holder', namely, beneficial owner for the benefit of the original promisee under Ex. Under those circumstances, having become unsuccessful in his stand that he is a 'holder in due course', it is not open to him to fall back upon the plea that he continues to be a 'holder', namely, beneficial owner for the benefit of the original promisee under Ex. A-1 Promissory note—on that promise, the second question, namely, whether the suit should be transferred to the Court having pecuniary jurisdiction, is redundant…….. 37. Upon careful examination of the decision, it becomes evident that Plaintiff failed to demonstrate that consideration had been paid under Ex.A.2. In contrast, in the present case, the Plaintiff has successfully established the transfer of the consideration amount under transfer endorsement. 38. The learned counsel for the Respondent relied on the decision in Pradeep Kumar v. Postmaster General, (2022) 6 SCC 351 , wherein the Hon’ble Supreme Court held that: 15. Sections 15 and 16 of the N.I. Act defines "indorsement”, “indorsee”, “indorser", "indorsement in blank", and "in full". Indorsement for the purpose of negotiation is made by the maker or holder of the negotiable instrument when he signs on the back or face of thereof, on a slip of paper annexed thereto or on a stamp paper for the purpose of negotiation. The person signing is called the indorser. If the instrument is signed by the indorser in his name only, it is an indorsement in blank. If the indorser also specifies the person to whom payment is to be made, the indorsement is said to be “in full”, and the person so specified is called the indorsee. 16. Sections 78 and 82 of the N.I. Act read: “78. To whom payment should be made.—Subject to the provisions of Section 82, clause (c), payment of the amount due on a promissory note, bill of exchange or cheque must, in order to discharge the maker or acceptor, be made to the holder of the instrument.” *** 82. 16. Sections 78 and 82 of the N.I. Act read: “78. To whom payment should be made.—Subject to the provisions of Section 82, clause (c), payment of the amount due on a promissory note, bill of exchange or cheque must, in order to discharge the maker or acceptor, be made to the holder of the instrument.” *** 82. Discharge from liability.—The maker, acceptor or indorser, respectively, of a negotiable instrument is discharged from liability thereon— (a) by cancellation.—to a holder thereof who cancels such acceptor's or indorser's name with intent to discharge him, and to all parties claiming under such holder; (b) by release.—to a holder thereof who otherwise discharges such maker, acceptor or indorser, and to all parties deriving title under such holder after notice of such discharge; (c) by payment.—to all parties thereto, if the instrument is payable to bearer, or has been indorsed in blank, and such maker, acceptor or indorser makes payment in due course of the amount due thereon.” 17. Section 78 states that when payment is to be made to the "holder" of the instrument, which would include his accredited agent, such as a banker acting as an agent for collection [See Maddali Tirumala Ananta Venkata Veeraraghavaswami v. Srimat Kilambi Mangamma, 1939 S.C.C. OnLine Mad 237: A.I.R. 1940 Mad 90 and Raghubir Mahto v. Ramasray Bhagat, 1937 S.C.C. OnLine Pat 268: A.I.R. 1939 Pat 347 and also p. 533 of Bhashyam & Adiga's The Negotiable Instruments Act, 22nd Edn. (2019).] The maker or acceptor is discharged from liability. However, Section 78 is subject to and does not apply to payments covered under clause (c) of Section 82 of the N.I. Act. Clause (c) to Section 82 applies to an instrument payable to the bearer or has been indorsed in blank, and in such cases, the maker, acceptor or indorser of a negotiable instrument is discharged from liability when such maker, acceptor or indorser makes “payment in due course” of the amount due thereon. The expressions “holder” and “payment in due course” are “terms of art” as Section 8 defines the expression “holder”, whereas Section 10 defines the expression “payments in due course”. The expressions “holder” and “payment in due course” are “terms of art” as Section 8 defines the expression “holder”, whereas Section 10 defines the expression “payments in due course”. On a harmonious reading of Section 78 and clause (c) of Section 82, it follows that different principles apply for discharge from liability when the negotiable instrument is payable to bearer or has been indorsed in blank, in which case payment must be made in terms of Section 10, whereas when the negotiable instrument is payable to order, the maker, acceptor or endorser would be discharged from liability when payment is made to the “holder” of the instrument. xxxxxxxx 19. The requirements of Section 8 are twofold, and both requirements have to be satisfied. A holder means a person: (i) entitled to possession of a promissory note, bill of exchange or a cheque, and (ii) entitled to sue the maker, acceptor or indorser of the instrument for the recovery of the amount due thereon in his name [ In the context of the present case, we need not examine the controversy and difference of opinion on the issue of benami owner, which aspect and issue have been the subject-matter of several decisions, including Subba Narayana Vathiyar v. Ramaswami Aiyar, 1906 S.C.C. OnLine Mad 79: I.L.R. (1907) 30 Mad 88, Bacha Prasad v. Janki Rai, 1957 S.C.C. OnLine Pat 25: A.I.R. 1957 Pat 380 and Bhagirath v. Gulab Kanwar, 1956 S.C.C. OnLine Raj 13: A.I.R. 1956 Raj 174. We express no opinion in this regard.]. Thus, a person who is in possession of the instrument but has no right to recover the amount due thereon from the parties thereto is not a "holder". On a harmonious reading of Sections 8 and 78, it follows that payment made to a person in possession of the instrument but not entitled to receive or recover the amount due thereon in his name is not a valid discharge. xxxxxxxxxx xxxxxxxxxxx 21. As per Section 9, a "holder in due course" is a person who, for consideration, has become a possessor of the instrument if payable to a bearer or if payable to the order to the person mentioned, i.e. the payee, or becomes the indorsee thereof. xxxxxxxxxx xxxxxxxxxxx 21. As per Section 9, a "holder in due course" is a person who, for consideration, has become a possessor of the instrument if payable to a bearer or if payable to the order to the person mentioned, i.e. the payee, or becomes the indorsee thereof. Holder in due course means the original holder or a transferee in good faith, who has acquired possession of the negotiable instrument for consideration without having sufficient cause to believe that there was any defect in the title of the person from whom he has derived the title. Negotiation in case of transfer should be before the amount mentioned in the negotiable instrument becomes payable—clause (g) to Section 118………... 22. This brings us to Section 10 of the N.I. Act, which defines the expression "payment in due course" and reads as follows: “10. “Payment in due course”.—“Payment in due course” means payment in accordance with the apparent tenor of the instrument in good faith and without negligence to any person in possession thereof under circumstances which do not afford a reasonable ground for believing that he is not entitled to receive payment of the amount therein mentioned.” When payment is made in accordance with the apparent tenor of the instrument in good faith and without negligence to a person in possession thereof, it is payment in due course. The requirement in Section 10 that the payment should be in both good faith and without negligence is cumulative. Thus, mere good faith is not sufficient. Consequently, Section 3(22) of the General Clauses Act, 1897, which defines "good faith" as an act done honestly, whether done negligently or not, is not sufficient to hold that the payment made was "payment in due course" under the N.I. Act. Ascertainment of whether the act of payment is in good faith and without negligence is by examination of the circumstances in which payment is made. In other words, antecedent and present circumstances should not afford a reasonable ground for believing that the person to whom payment is made is not entitled to receive payment of the amount mentioned. [Bank of Maharashtra v. Automotive Engg. In other words, antecedent and present circumstances should not afford a reasonable ground for believing that the person to whom payment is made is not entitled to receive payment of the amount mentioned. [Bank of Maharashtra v. Automotive Engg. Co., (1993) 2 S.C.C. 97 : 1993 S.C.C. (Cri) 461] While it would not be advisable or feasible to straitjacket the circumstances, albeit value of the instrument, other facts that would raise doubts about the reliability and identity of the person entitled to receive payment and genuineness of the instrument in the payer's mind are relevant considerations. 39. In M/s. Precision Processors (India) Private Limited V. Bank of India, 2016 SCC OnLine Cal 75, the High Court of Calcutta held that: 32. The indorsement by Espee Trading on the reverse of the bill of exchange does not indicate that the amount covered under the bill would be payable to the bank. In absence of such indorsement, it cannot be said that the opposite parties would be liable as an acceptor of the bill to the bank. However, the obligation of the opposite party to Espee on the tenor of the bill of exchange remains, although the opposite party has relied upon communications to show that Espee Trading has discharged the opposite party from its obligation to pay under the Bill of Exchange. Under such circumstances, I am inclined to accept the view expressed by the Debt Recovery Tribunal that the said bills were sent on a collection basis, and the bank was not authorized to enforce its right as a holder in due course in respect of the said bills. Moreover, Espee Trading Corporation has contended that they have communicated to the bank that the opposite party is discharged from its liability. 40. This extract supports the notion that, even if the proper endorsement for establishing the holder in due course status was missing, the underlying obligation between the drawee (Precision Processors) and the drawer (Espee Trading) still persists based on the terms of the bill of exchange itself. 41. In M.Selvaraj vs T.S.R.M.Subramaniya Iyer, 2012 SCC OnLine Mad 196, the High Court of Madras held that: 41. 41. In M.Selvaraj vs T.S.R.M.Subramaniya Iyer, 2012 SCC OnLine Mad 196, the High Court of Madras held that: 41. It cannot be gainsaid that as per Section 59 of the Negotiable Instruments Act, 1881, the holder of a negotiable instrument, who has acquired it after dishonour, whether by non-acceptance or non-payment, with notice thereof, or after maturity, has only, as against the other parties, the rights thereon of his transferor etc. 42. Indeed, Section 43 of the Negotiable Instruments Act has to be read subject to Section 59 of the Negotiable Instruments Act in all cases in which Section 59 squarely applies. In Kizhedath Pappi Amma V. Rama Iyer, A.I.R. 1937 Mad 438: 173 IC 147, it is held that 'Where an indorsee of a pronote is not proved to be a holder in due course, he is entitled only to such rights as the indorser of the note had. 42. This Court's view is that if the holder in due course was aware of the previous demand and non-payment when acquiring the promissory note, then the holder in due course would not enjoy the protections granted under the N.I.Act. He would be stepping into the shoes of the original holder. He would face the same limitations as the original holder. If the holder in due course had known that the demand for repayment was dishonoured before they acquired the promissory note, and they still went ahead with the transaction, he essentially lost the special protections granted to a holder in due course under the N.I.Act. However, it doesn’t necessarily mean the debt is entirely lost. 43. As the Defendant admitted to the execution of the promissory note in favour of Smt. K. Sarada and the receipt of the consideration amount, the burden now lies with Defendant to prove that the amount was paid by K.Sarada’s husband (DW.3). Upon careful examination of the record and considering the probabilities, both courts concluded that Defendant failed to substantiate his defence. The trial Court and the 1st Appellate Court provided cogent and convincing reasons for disbelieving Defendant's claim that he subsequently discharged the suit debt by paying the amount to DW.3. Both the courts determined that the Appellant/Defendant likely colluded with DW.3, creating Ex.B.1 to take advantage of the disputes between PW.1 and DW.3. The trial Court and the 1st Appellate Court provided cogent and convincing reasons for disbelieving Defendant's claim that he subsequently discharged the suit debt by paying the amount to DW.3. Both the courts determined that the Appellant/Defendant likely colluded with DW.3, creating Ex.B.1 to take advantage of the disputes between PW.1 and DW.3. Furthermore, both the Courts noted that the contents of Ex.A.5 and Ex.B.1 strongly suggest that the Appellant may have fabricated both documents with assistance from DW.3. 44. The Supreme Court, in several cases, has held that the exercise of powers under Section 100 of the Code of Civil Procedure can interfere with the findings of fact only if the same is shown to be perverse and based on no evidence. Some of these judgments are Hajazat Hussain vs. Abdul Majeed & others, 2011 (7) SCC 189, Union of India vs Ibrahim Uddin, 2012 (8) SCC 148 , and Vishwanath Agrawal vs Sarla Vishwanath Agrawal, 2012 (7) SCC 288 . 45. The findings of the trial court and the 1st Appellate Court, which affirm that Plaintiff has successfully established the payment of consideration amount to Defendant on execution of the promissory note and Defendant failed to establish the plea of discharge, are neither perverse nor a result of misinterpretation of documents or misreading of evidence. After careful reading of the material on record, this Court finds that the trial Court and the 1st Appellate Court concurrently decreed the Plaintiff's suit by recording all the findings of facts against Defendant enumerated above, and the findings were neither against the pleadings nor evidence nor against any provisions of law. This Court considers that the conclusions of the trial Court and the 1st Appellate court are not subject to interference under Section 100 of C.P.C. There is no question of law, let alone the substantial questions of law, involved in this Second Appeal, and therefore, the Second Appeal is liable to be dismissed. 46. Accordingly, the present second Appeal sans merit and is hereby dismissed without costs for the reasons indicated above. Consequently, the Judgment dated 17.10.2006 of the learned VIII Additional District and Sessions Judge (Fast Track Court), Vijayawada, in A.S.No.8 of 2003, is hereby affirmed. Miscellaneous petitions pending, if any, in this Appeal, shall stand closed.