(b) Liability of drawer (Section 30): The drawer of a bill of exchange or cheque is bound, in the case of dishonour by the drawer or acceptor thereof to compensate the however. Provided due notice of dishonour has been given to, or received by him provided in Section 93 to 98 of the Act.
The drawer’s liability is conditional, i.e., it arises only in the event of a dishonour by the drawee or acceptor. Once there has been dishonour and the notice of dishonour has been served on the drawer, he is bound to compensate the holder whatever be the state of the account between himself and the drawee or acceptor . The holder will have to be compensated, for the principal sum together with interest calculated according to the rules mentioned in Section 79 & 80 and form the expenses properly incurred by him in presenting noting and protesting the instrument. On dishonour of a bill of exchange by non-acceptance followed by a notice of dishonour to the drawer, the drawer becomes liable immediately for the full amount of the bill. The drawer cannot ask the holder to wait till the date of maturity to see whether it will be dishonoured by non-payment [Whitehead vs. Walker [1842] 9 M and W 506, If however, the holder chooses to wait till its maturity before he sues the drawer he ones not acquire a fresh cause of action by reason of its non-payment of the due date.
The only pre-condition of the liability of the drawer is that notice of dishonour should have been received by him, unless the case is one covered by Section 98 of the Act and notice of dishonour is dispensed with.
The drawer of a bill or cheque is a “prior party” to the instrument and as such as liable for every holder in due course, under Section 36 of the Act, till the instrument is discharged. Until acceptance, he is liable in the instrument as a principal debtor and thereafter as a surety (Section 37).
The drawer’s liability is conditional, i.e., it arises only in the event of a dishonour by the drawee or acceptor. Once there has been dishonour and the notice of dishonour has been served on the drawer, he is bound to compensate the holder whatever be the state of the account between himself and the drawee or acceptor . The holder will have to be compensated, for the principal sum together with interest calculated according to the rules mentioned in Section 79 & 80 and form the expenses properly incurred by him in presenting noting and protesting the instrument. On dishonour of a bill of exchange by non-acceptance followed by a notice of dishonour to the drawer, the drawer becomes liable immediately for the full amount of the bill. The drawer cannot ask the holder to wait till the date of maturity to see whether it will be dishonoured by non-payment [Whitehead vs. Walker [1842] 9 M and W 506, If however, the holder chooses to wait till its maturity before he sues the drawer he ones not acquire a fresh cause of action by reason of its non-payment of the due date.
The only pre-condition of the liability of the drawer is that notice of dishonour should have been received by him, unless the case is one covered by Section 98 of the Act and notice of dishonour is dispensed with.
The drawer of a bill or cheque is a “prior party” to the instrument and as such as liable for every holder in due course, under Section 36 of the Act, till the instrument is discharged. Until acceptance, he is liable in the instrument as a principal debtor and thereafter as a surety (Section 37).
Liability of drawer in Negotiable Instruments
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