A draws a cheque in favour of B, a minor. B endorses it in favour of C and C endorses in favour of D.…
Under section 26 of the Negotiable Instruments Act, 1881, a minor may draw, indorse, deliver and negotiate an instrument so as to bind all parties except himself. B's…
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A draws a cheque in favour of B, a minor. B endorses it in favour of C and C endorses in favour of D. The cheque is dishonoured. Which of the following is not correct about liabilities of the parties?
Answer and explanation
Correct answer A
Under section 26 of the Negotiable Instruments Act, 1881, a minor may draw, indorse, deliver and negotiate an instrument so as to bind all parties except himself. B's indorsement passes title to C and then D, and A as drawer and C as indorser remain liable on dishonour. The statement "C and D can claim from B" is therefore not correct, because the minor B incurs no personal liability.
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