HOLDER IN DUE COURSE NEGOTIABLE INSTRUMENT.pptx

By CA SRIKANT
NEGOTIABLE INSTRUMENTS
PRIVILEGES OR RIGHTS OF HOLDER IN DUE COURSE
WITH EXAMPLES
FOR B.COM BBA AND OTHER COURSES

1. HOLDER IN DUE COURSE Section-9 HOLDER IN DUE COURSE IS A PERSON WHO .. (1) BECOMES HOLDER OF A NEGOTIABLE INSTRUMENT. (2) BEFORE DUE DATE BECOMES THE HOLDER. (3) BECOMES HOLDER FOR CONSIDERATION. (4) WITHOUT KNOWING THE DEFECTIVE TITLE OF THE PERSON FROM WHOM HE OBTAINS THE INSTRUMENT. (5) OBTAINS THE INSTRUMENT IN GOODFAITH.

2. HOLDER IN DUE COURSE Section-9 EXAMPLE OS HOLDER IN DUE COURSE: A ISSUES CHEQUE TO B. C STEALS AND FORGES THE SIGNATURE OF B. C ENDORSES IT TO D. D IS CALLED HOLDER IN DUE COURSE. A D C FORGES SIGN OF B HDC

3. PRIVILEGES OR RIGHTS OF HOLDER IN DUE COURSE (1) INSTRUMENT PURGED (CLEARED) OF ALL DEFECTS FOR A HOLDER IN DUE COURSE - HOLDER IN DUE COURSE OBTAINING INSTRUMENT IN GOODFAITH, GETS GOOD TITLE. (3) HOLDER IN DUE COURSE CAN SUE ALL PRIOR PARTIES IN HIS OWN NAME. (2) HOLDERIN DUE COURSE IS NOT AFFECTED IN CASE OF AN INCHOATE (BEGAN BUT INCOMPLETE) : FOR EXAMPLE, A DELIVERS A ONLY STAMPED INSTRUMENT TO B. B COMPLETES IT BY ENTERING HIGHER THE AMOUNT INTENDED BY THE MAKER AND ENDORSES IT TO C. C GETS GOOD TITLE AS A HOLDER IN DUE COURSE.

4. PRIVILEGES OR RIGHTS OF HOLDER IN DUE COURSE (4) HOLDERIN DUE COURSE CAN ENFORCE PAYMENT OF A FICTITIOUS BILL: WHEN THE NAME OF THE DRAWER OR PAYEE OR BOTH ARE FICTITIOUS, THE BILL IS CALLED A FICTITIOUS BILL (SEC. 42) . FOR EXAMPLE, AMIT ENDORSES TO H AN INSTRUMENT WHICH CONTAINS A FICTITIOUS DRAWER’S NAME. H GETS GOOD TITLE AS A HOLDER IN DUE COURSE.

5. PRIVILEGES OR RIGHTS OF HOLDER IN DUE COURSE (5) HOLDERIN DUE COURSE GETS GOOD TITLE EVEN WHEN THE INSTRUMENT IS DELIVERED CONDITIONALLY OR FOR SPECIFIC PURPOSE. FOR EXAMPLE: * BHEEM ENDORSES TO H AN INSTRUMENT WHICH HAD TO BE ENDORSED ONLY TO RAM (CONDITION). H GETS GOOD TITLE AS A HOLDER IN DUE COURSE. * BHEEM ENDORSES TO H A MONEY LENDER AN INSTRUMENT WHICH HAD TO BE ENDORSED ONLY FOR PAYING BHEEM’S SUPPLIERS. (SPECIFIC). H GETS GOOD TITLE AS A HOLDER IN DUE COURSE.

6. PRIVILEGES OR RIGHTS OF HOLDER IN DUE COURSE (6) HOLDERIN DUE COURSE GETS GOOD TITLE EVEN WHEN THE INSTRUMENT IS CREATED WITHOUT CONSIDERATION OR FOR UNLAWFUL CONSIDERATION. (7) ESPTOPPEL AGAINST DENYING ORIGINAL VALIDITY OF INSTRUMENT: THE DRAWER OR ACCEPTOR OF THE INSTRUMENT CANNOT SAY THE HOLDERIN DUE COURSE THAT THE BILL WHEN CREATED WAS NOT VALID. FOR EXAMPLE, ACCEPTOR SAYS THAT THE GOODS WERE NOT DELIVERED BY THE DRAWER.

7. PRIVILEGES OR RIGHTS OF HOLDER IN DUE COURSE (8) ESTOPPEL AGAINST DENYING CAPACITY OF THE PAYEE TO ENDORSE : DRAWERCANNOT SAY TO THE HOLDER IN DUE COURSE THAT HE WAS MINOR OR INSANE AT THE TIME OF THE ACCEPTING THE BILL. (9) ESTOPPEL AGAINST ENDORSER DENYING CAPACITY OF THE PARTIES: THE ENDORSER CANNOT SAY TO THE HOLDER IN DUE COURSE THAT PREVIOUS PARTIES HAD NO CAPACITY IN RELATION TO THE INSTRUMENT.