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The Negotiable Instruments Act, 1881: page 13

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    33. Only drawee can be acceptor except in need or for honour.—No person except the drawee of
a bill exchange, or all or some of several drawees, or a person named therein as a drawee in case of need,
or an acceptor for honour, can bind himself by an acceptance.
    34. Acceptance by several drawees not partners.—Where there are several drawees of a bill of
exchange who are not partners, each of them can accept it for himself, but none of them can accept it for
another without his authority.
    35. Liability of indorser.—In the absence of a contract to the contrary, whoever indorses and delivers a
negotiable instrument before maturity without, in such it indorsement, expressly excluding or making
conditional his own liability, is bound thereby to every subsequent holder, in case of dishonour by the
drawee, acceptor or maker, to compensate such holder for any loss or damage caused to him by such
dishonour, provided due notice of dishonour has been given to, or received by, such indorser as hereinafter
provided.
    Every indorser after dishonour is liable as upon an instrument payable on demand.
     36. Liability of prior parties to holder in due course.—Every prior party to a negotiable instrument
is liable thereon to a holder in due course until the instrument is duly satisfied.
    37. Maker, drawer and acceptor principals.—The maker of a promissory note or cheque, the drawer of
a bill of exchange until acceptance, and the acceptor are, in the absence of a contract to the contrary,
respectively liable thereon as principal debtors, and the other parties thereto are liable thereon as sureties for
                                                                                 e
the maker, drawer or acceptor, as the case may be.
                                                                          od
    38. Prior party a principal in respect of each subsequent party.—As between the parties so liable
                                                                   aC
as sureties, each prior party is, in the absence of a contract to the contrary, also liable thereon as a
principal debtor in respect of each subsequent party.
                                                             di
                                                          Illustration

                                                        In
    A draws a bill payable to his own order on B, who accepts. A afterwards indorses the bill to C, C to D, and D to E. As
between E and B, B is the principal debtor, and A, C and D are his sureties. As between E and A, A is the principal debtor, and C
and D are his sureties. As between E and C, C is the principal debtor and D is his surety.
    39. Suretyship.—When the holder of an accepted bill of exchange enters into any contract with the
acceptor which, under section 134 or 135 of the Indian Contract Act, 1872 (9 of 1872), would discharge
the other parties, the holder may expressly reserve his right to charge the other parties, and in such case
they are not discharged.
    40. Discharge of indorser's liability.—Where 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 strikes out, without John Rozario's consent, the indorsements by Peter
Williams and Wright & Co. A is not entitled to recover anything from John Rozario.
    41. Acceptor bound, although, indorsement forged.—An acceptor of a bill of exchange already
indorsed is not relieved from liability by reason that such indorsement is forged, if he knew or had reason
to believe the indorsement to be forged when he accepted the bill.
     42. Acceptance of bill drawn in fictitious name.—An acceptor of a bill of exchange drawn in a
fictitious name and payable to the drawer's order is not, by reason that such name is fictitious, relieved
from liability to any holder in due course claiming under an indorsement by the same hand as the drawer's
signature, and purporting to be made by the drawer.



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