HOLDER
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
07 October 2010
can a drawer be holder of instrument?
07 October 2010
You have asked this question in a very general manner. Kindly specify the name of instruments to proceed further.
There may be various channels through which a drawer may become the holder of instrument.
There may be various channels through which a drawer may become the holder of instrument.
Querist : Anonymous
Querist :
Anonymous
(Querist)
08 October 2010
In case of bills of exchange and promissory note
28 July 2024
Yes, a drawer can be the holder of an instrument under certain circumstances. Here’s how it works for both bills of exchange and promissory notes:
### **1. Bill of Exchange:**
- **Definition and Roles:**
- A **bill of exchange** is a negotiable instrument that contains an unconditional order from the drawer to the drawee to pay a specified sum of money to a payee on demand or at a future date.
- The **drawer** is the person who issues the bill.
- The **drawee** is the person or entity who is directed to pay the amount.
- The **payee** is the person to whom the payment is to be made.
- **Can the Drawer be the Holder?**
- Yes, the drawer can be the holder of the bill of exchange. The drawer is essentially the originator of the instrument and can hold it if it is not yet presented for payment or if it is payable to them.
- For example, if a drawer issues a bill of exchange to a third party but retains the right to receive payment (e.g., the drawer is also the payee), they can hold the bill.
### **2. Promissory Note:**
- **Definition and Roles:**
- A **promissory note** is a negotiable instrument where the maker (or issuer) promises to pay a certain sum of money to the payee or to their order at a specific date or on demand.
- The **maker** is the person who makes the promise to pay.
- The **payee** is the person to whom the payment is to be made.
- **Can the Maker be the Holder?**
- Yes, the maker of a promissory note can also be the holder. In a promissory note, the maker and the holder can be the same person or entity, particularly if the maker holds the note as an asset or if they are entitled to receive payment.
### **Key Points to Consider:**
1. **Holder Definition:**
- A **holder** of a negotiable instrument is the person who is in possession of the instrument and entitled to receive or recover the amount due under it.
2. **Transfer and Negotiation:**
- Both bills of exchange and promissory notes can be transferred or negotiated. The holder of the instrument can transfer it to another party by endorsing it, depending on the type of instrument and the terms set forth in the instrument.
3. **Legal Standing:**
- The drawer being the holder does not invalidate the instrument. The holder (including the drawer) has the legal right to enforce the instrument according to its terms.
### **Conclusion:**
In summary, both in the case of a bill of exchange and a promissory note, the drawer (in the case of a bill) or the maker (in the case of a promissory note) can indeed be the holder of the instrument. This is permissible under the law, provided the instrument is held in accordance with its terms and conditions.
### **1. Bill of Exchange:**
- **Definition and Roles:**
- A **bill of exchange** is a negotiable instrument that contains an unconditional order from the drawer to the drawee to pay a specified sum of money to a payee on demand or at a future date.
- The **drawer** is the person who issues the bill.
- The **drawee** is the person or entity who is directed to pay the amount.
- The **payee** is the person to whom the payment is to be made.
- **Can the Drawer be the Holder?**
- Yes, the drawer can be the holder of the bill of exchange. The drawer is essentially the originator of the instrument and can hold it if it is not yet presented for payment or if it is payable to them.
- For example, if a drawer issues a bill of exchange to a third party but retains the right to receive payment (e.g., the drawer is also the payee), they can hold the bill.
### **2. Promissory Note:**
- **Definition and Roles:**
- A **promissory note** is a negotiable instrument where the maker (or issuer) promises to pay a certain sum of money to the payee or to their order at a specific date or on demand.
- The **maker** is the person who makes the promise to pay.
- The **payee** is the person to whom the payment is to be made.
- **Can the Maker be the Holder?**
- Yes, the maker of a promissory note can also be the holder. In a promissory note, the maker and the holder can be the same person or entity, particularly if the maker holds the note as an asset or if they are entitled to receive payment.
### **Key Points to Consider:**
1. **Holder Definition:**
- A **holder** of a negotiable instrument is the person who is in possession of the instrument and entitled to receive or recover the amount due under it.
2. **Transfer and Negotiation:**
- Both bills of exchange and promissory notes can be transferred or negotiated. The holder of the instrument can transfer it to another party by endorsing it, depending on the type of instrument and the terms set forth in the instrument.
3. **Legal Standing:**
- The drawer being the holder does not invalidate the instrument. The holder (including the drawer) has the legal right to enforce the instrument according to its terms.
### **Conclusion:**
In summary, both in the case of a bill of exchange and a promissory note, the drawer (in the case of a bill) or the maker (in the case of a promissory note) can indeed be the holder of the instrument. This is permissible under the law, provided the instrument is held in accordance with its terms and conditions.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Manual Rectification through AO
- IT Return filed defective u/s 139 (9)
- Fixed Deposit Claim Relinquishment by the Nominee
- Defective Return - Tds on advance
- Not a CA , can we prepare balance sheet
- Income Type for interest from government bonds
- TCS ON SOFTWARE SALES
- Excess income received or excess expenses paid
- What is reason of its
- Is Input or receivable interchangeable words
- TDS - Form 26QB - Installment - Final payment Query
- ITR 6 Schedule CFL and UD Issues
- Gstr 9 2023-24
- GSTR-9 HSN Summary and Credit Note without item
- Interchangeable words in accounts
- Adjusted profit/Loss in the case of LLP and Pvt. Ltd.company
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
Trending Online Classes
-
Landmark Judgments: Important Provisions of the EPF & ESI Act interpreted by the Honorable Supreme Court of India
Mr.Balamurugan Ranganathan15 November 2024
CAclubindia
