Under Section 36 of the Negotiable Instruments Act, who is liable to a Holder in Due Course upon a dishonoured instrument?
Answer and explanation
Correct answer: D. Every prior party to the negotiable instrument is liable until the instrument is duly satisfied
- Step 1: Examine Section 36 of the Negotiable Instruments Act 1881.
- Step 2: Every prior party to a negotiable instrument is liable thereon to a holder in due course until the instrument is duly satisfied.
- Step 3: The HDC can enforce payment against the drawer, acceptor, and all prior endorsers jointly and severally.
Answer
Every prior party to the negotiable instrument is liable until the instrument is duly satisfied.
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