MEANING OF HOLDER ,HOLDER IN DUE COURSE AND PRIVILEGES OF HOLDER IN DUE COURSE

Ø  PRIVILEGES OF HOLDER IN DUE COURSE

Ø  NEGOTIABLE INSTRUMENTS

Ø  BUSINESS LAW

Ø  SHASHI AGGARWAL AND LAW CLASSES

Ø  HOLDER ( SEC8)

  HOLDER MEANS ANY PERSON ENTITLED IN HIS OWN NAME TO THE POSSESSION A PROMISSORY NOTE, BILL OF EXCHANGE OR CHEQUE AND TO RECOVER THE MONEY IN HIS OWN NAME.

  NO PERSON OTHER THAN A HOLDER CAN SUE UPON A NEGOTIABLE INSTRUMENT. WITH CERTAIN EXCEPTIONS HOLDER IS ENTITLED TO NEGOTIATE IT. HE IS THE CHIEF PERSON TO WHOM THE ALL OTHER PARTIES ARE LIABLE ARE ON BILL.

  UNTIL CONTRARY IS PROVED HE IS ASSUMED TO BE HOLDER IN DUE COURSE.

  HOLDER IN DUE COURSE (SEC 9)

·         THE PERSON MUST HAVE ACQUIRED THE POSSESSION OF THE INSTRUMENT FOR VALUABLE CONSIDERATION.

·         MUST HAVE OBTAINED THE POSSESSION BEFORE THE AMOUNT MENTIONED THEREIN BECAME PAYABLE

·         HAS TAKEN THE INSTRUMENT IN GOOD FAITH

·         THE INSTRUMENT SHOULD BE COMPLETE ON THE FACE OF IT.

ØESSENTIALS OF A PERSON CLAIMING TO BE HOLDER IN DUE COURSE

1.       THE PERSON MUST HAVE ACQUIRED THE POSSESSION OF THE INSTRUMENT FOR VALUABLE CONSIDERATION

2.       MUST HAVE THE OBTAINED THE POSSESSION BEFORE THE MATURITY

3.       THE PERSON IS A POSSESSOR OF THE INSTRUMENT IF IT IS BEARER INSTRUMENT

4.       THE PERSON IS THE PAYEES OR INDORSEE IF THE PAYABLE TO ORDER

5.       THE PERSON HAS TAKEN THE DELIVERY OF THE INSTRUMENT IN GOOD FAITH WITHOUT THE KNOWLEDGE OF THE DEFECT

6.       THE INSTRUMENT SHOULD BE COMPLETE ON THE FACE OF IT

Ø 

ØPRIVILEDGES OF A HOLDER IN DUE COURSE

1. PRESUMPTIONS (SEC 118):-EVERY HOLDER IS HOLDER IN DUE COURSE
2. INCHOATE STAMPED INSTRUMENTS ( SEC 20):-AN INCHOATE INSTRUMENT IF PROPERLY STAMPED IF IT SUBSEQUENTLY COMES INTO THE HANDS OF HOLDER IN DUE COURSE.TO ENTITLE A PERSON TO THE RIGHTS OF HOLDER IN DUE COURSE THE INSTRUMENTS MUST HAVE BEEN COMPLETED BEFORE IT WAS NEGOTIATED.
3. LIABILITY OF PRIOR PARTIES ( 36)::-EVERY PRIOR PARTY TO NEGOTIABLE INSTRUMENT IS LIABLE TO HOLDER DUE IN COURSE UNTIL THE INSTRUMENT IS DULY SATISFIED.
4. FICTITIOUS DRAWER OR PAYEE:-THE ACCEPTOR OF THE BILL CAN NOT PLEAD AGAINST A HOLDER IN DUE COURSE THAT THE BILL DRAWN IS IN FICTITIOUS NAME.
5. NO EFFECT OF CONDITIONAL DELIVERY:-NEGOTIATED TO HOLDER IN DUE COURSE,THE OTHER PARTY CAN NOT ESCAPE LIABILITY ON THE GROUND THAT THE DELIVERY OF THE INSTRUMENT WAS CONDITIONAL
6. INSTRUMENT CURED OF ALL DEFECTS:-WHEN IT COMES IN THE HANDS OF HOLDER IN DUE COURSE.

7. INSTRUMENT OBTAINED BY UNLAWFUL FULL MEANS OR FOR UNLAWFUL FULL CONSIDERATION:THE DRAWEE CAN NOT PLEAD IT IS OBTAINED BY UNLAWFUL FULL OR FOR UNLAWFUL CONSIDERATION
8. ESTOPPEL AGAINST DENYING ORIGINAL VALIDITY OF INSTRUMENT: NO DISPUTING THE ORIGINAL VALIDITY
9. ESTOPPEL AGAINST DENYING CAPACITY OF THE PAYEE TO ENDORSE: NO PLEADING THE CAPACITY OF THE PAYEE
10. ESTOPPEL AGAINST DENYING SIGNATURE OR CAPACITY OF PRIOR PARTIES:-NO PLEADING THE GENUINENESS OF THE SIGNATURE OR CAPACITY OF THE DRAWER

ØDIFFERENCE BETWEEN HOLDER AND HOLDER IN DUE COURSE

ØHOLDER:-

1.       MEANS ANY PERSON ENTITLED IN HIS OWN NAME TO THE POSSESSION OF THE NEGOTIABLE INSTRUMENT AND TO RECOVER OR RECEIVE THE AMOUNT DUE THERON FROM THE  PARTIES THERE TO

2.       WITH OR WITHOUT CONSIDERATION

3.       HOLDER DOES NOT ACQUIRE BETTER TITLE THAN THAT OF PERSON FROM HE OBTAINED THE BILL

4.       HE CAN ENFORCE IT AGAINST THE PERSON WHO HAS SIGNED IT AND AGAINST THE TRANSFEROR FROM WHOM HE OBTAINED IT

5.       HOLDER MAY ACQUIRE THE INSTRUMENT AFTER THE MATURITY OF THE INSTRUMENT

ØHOLDER IN DUE COURSE

1.       HOLDER IN DUE COURSE MEANS WHO TAKES THE INSTRUMENT IN GOOD FAITH FOR CONSIDERATION

2.       HE MUST HAVE GOT IT AFTER PAYING CONSIDERATION

3.       BEFORE THE MATURITY

4.       HOLDER A DUE IN COURSE GETS A GOOD TITLE EVEN THERE WAS DEFECT IN THE TITLE OF ANY PRIOR PARTIES

5.       HE CAN SUE ALL PRIOR PARTIES