One who holds a negotibale instrument free from any defect of the title of prior parties. “Holder in due course” means any person who for consideration becomes the posessor of a promissory note, bill of exchange or cheque if payable to bearer, or the payee or indorsee thereof, if payable to order, before it became overdue, without notice that the title of the person from whom he derived his own title was defective. [Section 9 of the Negotiable Instrument Act,1881]

To constitute a person a holder in due course it is necessary that (1) he must be a holder for consideration (2) the instrument must have been transferred to him before it became payable, and (3) he must be a transferee in good faith. [AIR 1923 Lah. 638 (DB)]