1. A holder in due course gets a perfectly good title to the instrument. He is not affected by any defects in the title of the transferor or the previous parties. Just as in the case of a devout Hindu and dip in the Ganges frees him from all the sins, a negotiable instrument in the hands of a holder in due course is relived of all is previous defects. What is more important is that all the holders subsequent to him are also protected. They obtained the same rights and privileges as that of the holder in due course.
The implication of this right is that the acceptor of the instruments or maker of a note cannot plead against the holder in due course any right of set-off or a counter claim which he might have had against the transferor of the instrument.
2. He can recover the amount from al the previous parties. All of them will continue to be liable until the instrument is duly satisfied.
3. Sometimes instruments might have been delivered conditionally or for a special purpose. When such an instrument comes into the hands of a holder in due course, the other parties cannot escape liability on the ground that the condition or special purpose not be fulfilled.
4. In the case of inchoate instruments, he can recover the full amount covered by the stamp.
5. His title is not affected even if the instrument was the result of fraud or any other offence as between immediate parties. Holder in due course cannot, by very definition, be one of such parties.
There are, however, some exceptions. The signature on the instrument must not be the result of forgery. The instrument must not be vitiated due to lack of consent (absence of consensus ad idem) right from the beginning. In these cases, the holder in due course is affected by the defects of the instrument like any other holder.
6. Every holder is presumed to be a holder in due course unless proved otherwise.
7. The person liable to pay cannot set up defences against the holder in due course that the instrument has been lost or obtained from him by means of a fraud or unlawful consideration.
8. Acceptor is precluded from denying against the holder the existence of the drawer, genuineness of his signature, his capacity to draw, or to endorse or existence of the payee and his capacity to endorse.
9. The drawer is precluded from denying the existence of payee and his capacity to endorse.
10. So also the endorser is estopped form denying the genuineness of drawer’s signature or of the genuineness of previous endorsements.
11. Acceptor cannot raise the plea against the holder in due course that the drawer is a fictitious person
The implication of this right is that the acceptor of the instruments or maker of a note cannot plead against the holder in due course any right of set-off or a counter claim which he might have had against the transferor of the instrument.
2. He can recover the amount from al the previous parties. All of them will continue to be liable until the instrument is duly satisfied.
3. Sometimes instruments might have been delivered conditionally or for a special purpose. When such an instrument comes into the hands of a holder in due course, the other parties cannot escape liability on the ground that the condition or special purpose not be fulfilled.
4. In the case of inchoate instruments, he can recover the full amount covered by the stamp.
5. His title is not affected even if the instrument was the result of fraud or any other offence as between immediate parties. Holder in due course cannot, by very definition, be one of such parties.
There are, however, some exceptions. The signature on the instrument must not be the result of forgery. The instrument must not be vitiated due to lack of consent (absence of consensus ad idem) right from the beginning. In these cases, the holder in due course is affected by the defects of the instrument like any other holder.
6. Every holder is presumed to be a holder in due course unless proved otherwise.
7. The person liable to pay cannot set up defences against the holder in due course that the instrument has been lost or obtained from him by means of a fraud or unlawful consideration.
8. Acceptor is precluded from denying against the holder the existence of the drawer, genuineness of his signature, his capacity to draw, or to endorse or existence of the payee and his capacity to endorse.
9. The drawer is precluded from denying the existence of payee and his capacity to endorse.
10. So also the endorser is estopped form denying the genuineness of drawer’s signature or of the genuineness of previous endorsements.
11. Acceptor cannot raise the plea against the holder in due course that the drawer is a fictitious person
0 comments for "Mentionf The Rights and Privileges of the Holder in due course"