Section 9 of NIA : Section 9: ''Holder In Due Course''

Explanation using Example

Imagine Sarah receives a cheque from John as payment for her graphic design services. Sarah is the payee, and she deposits the cheque into her bank account before the date written on the cheque. She has no reason to suspect John's ability to pay. In this scenario, Sarah is considered a "holder in due course" under The Negotiable Instruments Act, 1881, Section 9. This means she has the right to expect the cheque to be honored, and if it bounces, she has legal recourse against John without concerns about any previous transactions that might have occurred with that cheque before she received it.