Section 134 – The Negotiable Instruments Act, 1881

The Negotiable Instruments Act, 1881

 

134. Law governing liability of maker, acceptor or endorser of foreign instrument

 

In the absence of a contract to the contrary, the liability of the maker of drawer of a foreign promissory note, bill of exchange or cheque is regulated in all essential matters by the law of the place where he made the instrument, and the respective liabilities of the acceptor and endorser by the law of the place where the instrument is made payable.

 

Illustration

 

A bill of exchange was drawn by A California where the rate of interest is 25 percent, and accepted by B, payable in Washington where the rate of interest is 6 per cent. The bill is endorsed in 1[India], and is dishonoured. An action on the bill is brought against B in 1[India]. He is liable to pay interest at the rate of 6 per cent, only; but if A is charged as drawer, A is liable to pay interest at the rate of 25 percent.

 

1. Subs. by Act 3 of 1951, sec. 3 and Sch., for “the State”

 

 

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The Negotiable Instruments Act, 1881

 

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