negotiable instrument query

Page no : 2

priyanka narale (PCC student) (407 Points)
Replied 23 January 2009

what exactly is the meaning of '

sue upon a negotiable instrument in his own name for the recovery of the amount.'

It would be of great help if anybody can explain me the meaning.

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Ashish M (Chartered Accountant) (2731 Points)
Replied 23 January 2009

"sue upon a negotiable instrument in his own name for the recovery of the amount"

lets take the sentence in two parts.............

"sue upon a negotiable instrument..............." - that means by virtue of holding the instrument, the holder can sue.....

That is to say the party who got the instrument, can sue (file a case against) the party who drew the instrument and liable to pay on the basis of signing it.........

"in his own name" - means the holder can sue the drawer of instrument by saying that the amt. mentioned in the instruemnt is payable to him...................though the instrument was not directly given to holder in due course and naming him therein...........as he became the holder by way of endorsement..........(the bill actually drawn to somebody else, and the holder get the instruemtn by endorsement)

[In my example, B got the instruemt from A and C got it from 'B', in both cases nobody's name would be occuring in the instruemnt signed by A. Still C can sue A for the recovery of the amount which he is liable to get from B, ]

take it........

priyanka narale (PCC student) (407 Points)
Replied 23 January 2009

Instead of taking the meaning as u said I interpreted it as sue upon himself i.e the holder.

so I was confused.....now m satisfied

Prakash Popat (3134 Points)
Replied 23 January 2009

"sue upon a negotiable instrument in his own name for the recovery of the amount"

Holder Got priveledge to sue in sequential manners,jointly /Severally(separately),He may sue directly to the issuers as per his will,Ignoring the holders in undue courses.

This is What I would like to add further.apart from it's till some points for Ashish/Priyanka to delibarate & discuss.I would like You not to prepare topic for examination point of View.