The endorser of a bill may be discharged from his liability, but even then acceptor may be proceeded against. On the other hand, when a bill has been discharged by payment, all rights there under are extinguished, even a holder in due course cannot claim any amount under the bill.
(b) Different modes of discharge from liability: Parties to negotiable instrument are discharged from liabilities when the right of action on the instrument is extinguished. The right of action on a negotiable instrument is extinguished by the following method:
(i) By payment in due course: The maker, acceptor or endorser respectively of a negotiable ins trument is discharged from liability thereon to all parties thereto if the instrument is payable to bearer, or has been endorsed in blank and such maker, acceptor or endorser makes payment in due course of the amount due thereon i.e., when the payment has been made to the holder of the instrument at or after maturity in good faith and without notice of any defect in the title to the instrument (Section 82).
(ii) By cancellations of acceptor’s endorser’s name: The maker, acceptor and endorser respectively of a negotiable instrument is discharged from liability thereon to a holder there of who has cancelled such acceptor’s or endorser’s name with the intent to discharge him and to all parties claiming under such holder. In other words, if the holder ( Payee) of a bill cancels the signature of acceptor ( drawee ) with an intention to discharge him both maker (drawer) and the acceptor of such negotiable instrument are discharged from the liability to the holder and to all parties claiming under such a holder [Clause (a) Section 82.}
(iii) By release: The maker, acceptor or endorser respectively of a negotiable instrument is discharged from liability thereon to a holder thereof who has renounced his right in respect of the instrument. The waiver of the right may be express or implied [Clause (b) of Section 82.]
(iv) By default of the holder: If the holder of a bill of
exchange allows the drawee more than forty-eight hours, exclusive of public holiday, to decide whether he will accept the bill, all prior parties not consenting to such an allowance are discharged from liability to such holder. It is because if the drawee fails to signify his acceptance within forty-eight hours, the holder must treat the instrument as dishonoured and he must at once give notice to the drawer and to all prior, parties, and must not allow time unless they give their consent that more time should be allowed (Section 83).
(v) Dissenting parties discharged by qualified or a limited acceptance: If the holder of a bill who is entitled to an absolute and unqualified acceptance elects to take a qualified acceptance, he does so at his own peril and discharges all parties prior to himself unless he obtains their consent to such an acceptance. Thus, the previous parties are discharged in the following cases namely (i) when acceptance is qualified, (ii) when acceptance is for a part of the sum, (iii) when acceptance substitutes a different place or time of payment, (iv) when acceptance is not signed by the drawees not being partners.
They are discharged, if such acceptance is acquiesced in by the holder without obtaining their previous consent. They are discharged as against the holder and those claiming under him. But, if they subsequently approve of such acceptance by the holder , they will not be discharged.
(b) Different modes of discharge from liability: Parties to negotiable instrument are discharged from liabilities when the right of action on the instrument is extinguished. The right of action on a negotiable instrument is extinguished by the following method:
(i) By payment in due course: The maker, acceptor or endorser respectively of a negotiable ins trument is discharged from liability thereon to all parties thereto if the instrument is payable to bearer, or has been endorsed in blank and such maker, acceptor or endorser makes payment in due course of the amount due thereon i.e., when the payment has been made to the holder of the instrument at or after maturity in good faith and without notice of any defect in the title to the instrument (Section 82).
(ii) By cancellations of acceptor’s endorser’s name: The maker, acceptor and endorser respectively of a negotiable instrument is discharged from liability thereon to a holder there of who has cancelled such acceptor’s or endorser’s name with the intent to discharge him and to all parties claiming under such holder. In other words, if the holder ( Payee) of a bill cancels the signature of acceptor ( drawee ) with an intention to discharge him both maker (drawer) and the acceptor of such negotiable instrument are discharged from the liability to the holder and to all parties claiming under such a holder [Clause (a) Section 82.}
(iii) By release: The maker, acceptor or endorser respectively of a negotiable instrument is discharged from liability thereon to a holder thereof who has renounced his right in respect of the instrument. The waiver of the right may be express or implied [Clause (b) of Section 82.]
(iv) By default of the holder: If the holder of a bill of
exchange allows the drawee more than forty-eight hours, exclusive of public holiday, to decide whether he will accept the bill, all prior parties not consenting to such an allowance are discharged from liability to such holder. It is because if the drawee fails to signify his acceptance within forty-eight hours, the holder must treat the instrument as dishonoured and he must at once give notice to the drawer and to all prior, parties, and must not allow time unless they give their consent that more time should be allowed (Section 83).
(v) Dissenting parties discharged by qualified or a limited acceptance: If the holder of a bill who is entitled to an absolute and unqualified acceptance elects to take a qualified acceptance, he does so at his own peril and discharges all parties prior to himself unless he obtains their consent to such an acceptance. Thus, the previous parties are discharged in the following cases namely (i) when acceptance is qualified, (ii) when acceptance is for a part of the sum, (iii) when acceptance substitutes a different place or time of payment, (iv) when acceptance is not signed by the drawees not being partners.
They are discharged, if such acceptance is acquiesced in by the holder without obtaining their previous consent. They are discharged as against the holder and those claiming under him. But, if they subsequently approve of such acceptance by the holder , they will not be discharged.
(vi) By material alteration of the instrument without
assent of all parties
liable
(vii) By payment, alteration not being apparent
(viii) By acceptor becoming holder of a bill at or after
maturity in his own right:
When the endorser of a bill may be discharged from his liability?
![When the endorser of a bill may be discharged from his liability?]()
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