Instrument obtained by unlawful means or for unlawful consideration
Full Text
Instrument obtained by unlawful means or for unlawful consideration.—When a negotiable instrument has been lost, or has been obtained from any maker, acceptor or holder thereof by means of an offence or fraud, or for an unlawful consideration, no possessor or indorsee who claims through the person who found or so obtained the instrument is entitled to receive the amount due thereon from such maker, acceptor or holder, or from any party prior to such holder, unless such possessor or indorsee is, or some person through whom he claims was, a holder thereof in due course.
Plain English Summary
States that if an instrument is lost, or obtained via fraud, offense, or unlawful consideration, no subsequent holder claiming through the finder/wrongdoer can recover payment, unless they are a holder in due course.
Key Legal Elements
- Applies to lost instruments or those obtained by fraud, offense, or unlawful consideration
- Finder or wrongdoer cannot claim payment from any prior party
- Subsequent holders claiming through the wrongdoer are also barred from recovery
- An exception protects a holder in due course or anyone claiming through a holder in due course
Practical Note
Protects victims of fraud and theft. If a cheque is stolen or signed under coercion, the drawer is not liable to the thief or anyone who gets it from the thief, unless the current holder qualifies as a holder in due course (acted in good faith, paid value, and was unaware of the theft/fraud).
हिंदी पाठ
गैर-कानूनी साधनों द्वारा या गैर-कानूनी प्रतिफल के बदले प्राप्त लिखत।—जब कोई परक्राम्य लिखत खो जाता है, या किसी अपराध या धोखाधड़ी के माध्यम से, या गैर-कानूनी प्रतिफल (unlawful consideration) के बदले उसके किसी निर्माता, स्वीकर्ता या धारक से प्राप्त किया जाता है, तो कोई भी कब्जाधारी या पृष्ठांकिती जो उस व्यक्ति के माध्यम से दावा करता है जिसने लिखत को पाया था या इस प्रकार प्राप्त किया था, ऐसे निर्माता, स्वीकर्ता या धारक से, या ऐसे धारक के किसी पूर्ववर्ती पक्षकार से उस पर देय राशि प्राप्त करने का हकदार नहीं है, जब तक कि ऐसा कब्जाधारी या पृष्ठांकिती स्वयं यथाविधि धारक (holder in due course) न हो, या कोई व्यक्ति जिसके माध्यम से वह दावा करता है, उसका यथाविधि धारक न रहा हो।