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Section 44 – The Negotiable Instruments Act, 1881

The Negotiable Instruments Act, 1881

 

44. Partial absence or failure of money-consideration.-

 

When the consideration for which a person signed a promissory note, bill of exchange or cheque consisted of money, and was originally absence in part relation with such signer id entitled to receive from him is proportionally reduced.

 

Explanation.-The drawer of a bill of exchange stands in immediate relating with the acceptor. The maker of a promissory note, bill of exchange or cheque stands in immediate relation with the payee, and the endorser with his endorsee. Other signers may by agreement stand in immediate relation with a holder.

 

Illustration

 

A draws a bill on B for Rs. 500 payable to the order of A. B accepts the bill, but subsequently dishonours it by non-payment. A sues B on the bill. B proves that it was accepted for value as to Rs. 400, and as an accommodation to the plaintiff as to the residue. A can only recover Rs. 400.

 

 

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The Negotiable Instruments Act, 1881

 

Indian Laws – Bare Acts

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