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24/07/2024
Laws of Bangladesh

The Negotiable Instruments Act, 1881

( ACT NO. XXVI OF 1881 )

Chapter III

PARTIES TO NOTES, BILLS AND CHEQUES

Discharge of indorser’s liability
40. When the holder of a negotiable instrument, without the consent of the indorser, destroys or impairs the indorser's remedy against a prior party, the indorser is discharged from liability to the holder to the same extent as if the instrument had been paid at maturity.
 
 
 
 
Illustration
 
 
 
 
A is the holder of a bill of exchange made payable to the order of B, which contains the following indorsements in blank:-
 
 
 
 
First indorsement, “B”.
 
 
Second indorsement, “Peter Williams.”
 
 
Third indorsement, “Wright & Co.”
 
 
Fourth indorsement, “John Rozario.”
 
 
This bill A puts in suit against John Rozario and strike out, without John Rozario's consent, the indorsements by Peter Williams, and Wright & Co. A is not entitled to recover anything from John Rozario.

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