DISCHARGE OF PARTIES FROM LIABILITY UNDER NEGOTIABLE INSTRUMENT

·         DISCHARGE OF PARTIES FROM LIABILITY UNDER NEGOTIABLE INSTRUMENT

·         BUSINESS LAW

·         MEANING OF DISCHARGE

1.       DISCHARGE LITERALLY MEANS RELEASE FROM THE OBLIGATION.

2.       WHEN A NEGOTIABLE INSTRUMENT IS ISSUED,IT CARRIES A LIABILITY TO PAY CERTAIN AMOUNT TO THE HOLDER

3.       WHEN HIS LIABILITY IS SATISFIED,THE INSTRUMENT IS SAID TO BE DISCHARGED,

4.       DISCHARGE MEANS:

5.       DISCHARGE OF THE INSTRUMENT

6.       THE DISCHARGE OF ONE OR MORE PARTIES LIABLE ON THE INSTRUMENT

7.       THERE IS DIFFERENCE BETWEEN DISCHARGE OF THE INSTRUMENT AND DISCHARGE OF ONE OR MORE PARTIES FROM LIABLE THEREON

8.       ON THE DISCHARGEMENT OF THE INSTRUMENT,IT CEASES TO BE NEGOTIABLE

9.       BUT WHEN A  PARTICULAR PARTY IS DISCHARGED THE INSTRUMENT IS NEGOTIABLE

·         DISCHARGE OF INSTRUMENT

1.       BY PAYMENT IN DUE COURSE

2.       DEBTOR AS HOLDER

3.       BY EXPRESS WAIVER

4.       BY CANCELLATION

5.       BY MATERIAL ALTERATION OR LAPSE OF TIME

·         DISCHARGE OF INSTRUMENT

·         BY PAYMENT IN DUE COURSE:-

1.       PAYMENT OF THE AMOUNT DUE ON THE INSTRUMENT TO THE HOLDER WOULD RESULT IN DISCHARGE OF THE PARTIES TO THE INSTRUMENT

2.       PAYMENT BY MAKER,DRAWEE OR ACCEPTOR WOULD RESULT IN THE DISCHARGE OF THE INSTRUMENT

3.       ANY PERSON WHO IS LIABLE TO MAKE PAYMENT ON THE INSTRUMENT BY MAKING PAYMENT TO THE HOLDER ENTITLED TO HAVE IT SHOWN AND INSTRUMENT DELIVERED TO HIM. IF THE INSTRUMENT IS LOST OR CAN NOT BE PRODUCED THE PERSON MAKING PAYMENT IS ENTITLED TO BE INDEMNIFIED AGAINST ANY FURTHER CLAIM THERON AGAINST HIM ( SEC 81)

4.       CERTIFICATE ISSUED ON THE FOOT OF THE PRINTOUT ELECTRONIC IMAGE OF TURNCATED CHEQUE BY THE BANKER WHO PAID THE INSTRUMENT IS A PRIME FACIE EVIDENCE OF THE FACT OF SUCH PAYMENT

·         DEBTOR AS HOLDER:- (SEC 90 ) IF A BILL OF EXCHANGE WHICH HAS BEEN NEGOTIATED IS OR AFTER MATURITY HELD BY THE ACCEPTOR IN HIS OWN RIGHT,ALL RIGHTS OF ACTIONS THERON ARE EXTINGUISHED

·         BY EXPRESS WAIVER:- WHEN THE HOLDER OF AN INSTRUMENT AT OR AFTER ITS MATURITY ABSOLUTELY AND UNCONDITIONALLY GIVE UP HIS RIGHT AGAINST ALL THE PARTIES. AND THE RENUNCIATION MUST BE IN WRITING AND THE INSTRUMENT IS DELIVERED TO THE PARTY WHO IS PRIMARILY LIABLE.

·         DISCHARGE OF INSTRUMENT

·         BY CANCELLATION:-HOLDER CANCELS THE INSTRUMENT WITH THE INTENTION TO RELEASE THE PARTY PRIMARILY LIABLE THERON FROM THE LIABILITY

·         BY MATERIAL ALTERATION OR LAPSE OF TIME:-AN INSTRUMENT STANDS DISCHARGED WHEN THE PARTY PRIMARILY LIABLE IS DISCHARGED BY MATERIAL ALTERATION IN THE INSTRUMENT OR BY LAPSE OF THE TIME MAKING THE DEBT TIME BARRED UNDER THE LIMITATION ACT

·         DISCHARGE OF A PARTY OR PARTIES

·         SECTION 82 TO 89 DEALS WITH THE DISCHARGE OF PARTIES FROM LIABILITY ON BILL

·         DISCHARGE BY CANCELLATION:-IF THE HOLDER OF A NEGOTIABLE INSTRUMENT OR HIS AGENT DELIBERATELY CANCEL THE NAME OF ANY PARTY ON THE INSTRUMENT.CANCELLATION OF THE NAME OF THE PARTY NOT ONLY DISCHARGE THAT PERSON BUT ALSO SUBSEQUENT PARTIES WHO HAVE RIGHT OF ACTION AGAINST THE PARTY WHOSE NAME IS CANCELLED

·         DISCHARGE BY RELEASE:-IF THE HOLDER OF A NEGOTIABLE INSTRUMENT RELEASES ANY PARTY TO THE INSTRUMENT BY ANY METHOD OTHER THAN CANCELLATION THE PARTY SO RELEASED IS DISCHARGED. BUT THE RELEASE OF ONE OF THE JOINT PARTIES WILL NOT RELEASE ALL

·         DISCHARGE BY PAYMENT:-BY MAKING PAYMENT TO THE HOLDER OR HIS AGENT. AND IT SHOULD BE OF THE WHOLE AMOUNT

·         DISCHARGE BY ALLOWING DRAWEE MORE THAN 48 HOURS:-IF THE HOLDER OF A BILL OF EXCHANGE ALLOWS THE DRAWEE MORE THAN 48 HOURS EXCLUSIVE OF PUBLIC HOLIDAY TO CONSIDER WHETHER HE WILL ACCEPT. DISCHARGING THE PREVIOUS PARTIES NOT CONSENTING TO SUCH ALLOWANCE

·         DISCHARGE BY DELAY IN THE PRESENTMENT OF CHEQUE:-CHEQUE IS NOT PRESENTED FOR PAYMENT WITH IN REASONABLE TIME OF ITS ISSUE AND THE DRAWER SUFFERS ACTUAL DAMAGES THROUGH HE DELAY BECAUSE OF THE FAILURE OF THE BANK

·         EXAMPLE

·         A DRAWS A CHEQUE IN BATHINDA ON A BANK IN BARODA IN CHANDIGARH. THE BANK FAILS BEFORE THE CHEQUE COULD BE PRESENTED IN THE ORDINARY COURSE. IS A DISCHARGED FROM HIS LIABILITY UNDER THE CHEQUE

·         ANSWER IS NO SINCE THE PRESENTMENT IS NOT DELAYED. THE PAYEE WAS NOT AT FAULT. A WILL REMAIN LIABLE

·         A PROMISSORY NOTE IS PRESENTED FOR PAYMENT SEVEN DAYS AFTER MATURITY ARE THE MAKER AND INDORSER DISCHARGED FROM SUCH DELAY. ONLY INDORSER AND NOT THE MAKER. DELAY IN PRESENTMENT DOES NOT DISCHARGE THE PRIMARILY LIABLE PARTIES

·         CHEQUE PAYABLE TO ORDER: SEC 85 FOR EXAMPLE A CHEQUE IS DRAWN PAYABLE TO A’S ORDER ENDORSED TO B AND C STEALS THE CHEQUE FROM B AND FORGES B ‘S ENDORSEMENT UPON IT AND GETS PAID IN DUE COURSE. THE PAYING BANKER WILL BE DISCHARGED FROM THE LIABILITY

·         DISCHARGE BY TAKING QUALIFIED ACCEPTANCE:IF THE HOLDER OF THE BILL TAKES QUALIFIED ACCEPTANCE ON HIS RISK AND DISCHARGE ALL THE PARTIES PRIOR TO HIMSELF UNLESS HE TAKES THEIR CONSENT

·         DISCHARGE BY OPERATION OF THE LAW: AN ORDER OF THE INSOLVENCY COURT BY THE LAPSE TIME OR MERGER

·         DISCHARGE BY PAYMENT OF ALTERED INSTRUMENT:-HAS BEEN MATERIAL ALTERED BUT DOES NOT APPEAR TO HAVE BEEN SO ALTERED DISCHARGE THE PARTY LIABLE TO MAKE PAYMENT ACCORDING TO THE APPARENT TENOR OF THE INSTRUMENT.

·         MATERIAL ALTERATION WITH THE  NOT CONSENT OF ALL THE PRIOR PARTIES WILL DISCHARGE.