![]() ![]() If it is damaged or lost the last endorsee is considered as the holder of the cheque. In case of a bearer cheque, the person in whose name it is made or payee is only the holder of that cheque. If the instrument is obtained by the holder through false endorsement then the previous endorser is considered to be the owner. The party that is transferring this negotiable instrument should be capable of doing it in the eyes of law. He is entitled to claim the amount due on the negotiable instruments through the parties liable. He is usually the payee of a negotiable instrument. Holder and Holder in Due Course are the key elements of the Act.Ī person who has obtained the negotiable instrument legally through a third party by delivery or endorsement is known as a holder. The Act that deals with such kinds of negotiable instruments are known as The Negotiable Instruments Act, 1881. To keep a check on all these and save innocent people from such activities we need laws. With the increase in usage of these systems, there has been an increase in fraud and other unacceptable methods. ![]() Usage of cheques, bills of exchange, promissory notes, commonly known as negotiable instruments has grown exponentially these days.
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