Forums
Back
Negotiable instruments
Corporate & Other Laws
If Mr.A inherits a promissory note from Mr.B(his dad) then if Mr.C (drawer of the promissory note) is unable to pay .can Mr.A sue Mr.C since he is a holder in this example?
Answers (6)
Yes , as the holder of the promissory note Mr.A has the legal right to sue Mr.C , the drawer of the note, if Mr.C is unable to pay .the holder of a negotiable instrument has the right to enforce the instrument against the parties liable for payment, including the drawer , the maker, and any endorser of the instrument. Therefore Mr.A can take legal action against Mr.C to recover the amount owed on the promissory note.
Sandeep Kumar
Yes , as the holder of the promissory note Mr.A has the legal right to sue Mr.C , the drawer of the note, if Mr.C is unable to pay .the holder of a negotiable instrument has the right to enforce the instrument against the parties liable for payment, including the drawer , the maker, and any endorser of the instrument. Therefore Mr.A can take legal action against Mr.C to recover the amount owed on the promissory note.
But isn't that the only holder in due course can be able to sue not the holder.so in the given Mr.A can't sue Mr.C
Thread Starter
Gokul NathBut isn't that the only holder in due course can be able to sue not the holder.so in the given Mr.A can't sue Mr.C
In case of Gift, the holder cannot sue the transferer as their is no consideration. However, Its not the same in case of holder who has inherited the negotiable instrument. There is consideration present and legal representative can sue the Drawer in case of default. (Proof of that can be seen in section 93 relating to giving notice to legal representative or assignee in case of default.)
CA YOGITA HARJANI Faculty
In case of Gift, the holder cannot sue the transferer as their is no consideration. However, Its not the same in case of holder who has inherited the negotiable instrument. There is consideration present and legal representative can sue the Drawer in case of default. (Proof of that can be seen in section 93 relating to giving notice to legal representative or assignee in case of default.)
So it means that both holder and holder in due course can sue if it involves consideration?
Thread Starter
Gokul NathSo it means that both holder and holder in due course can sue if it involves consideration?
Check if all conditions of valid contract exist.
Your Reply