NIA 134 — Law governing liability of maker, acceptor or indorser of foreign instrument

Negotiable Instruments Act, 1881

Statutory text

In the absence
of  a  contract  to  the  contrary,  the  liability  of  the  maker  or  drawer  of  a  foreign  promissory  note,  bill  of
exchange or cheque is regulated in all essential matters by the law of the place where he made the instrument,
and the respective liabilities of the acceptor and indorser by the law of the place where the instrument is made payable.
Illustration A bill of exchange  was drawn by A in California, where the rate  of interest is 25 per cent., and accepted by B, payable in Washington, where the rate of interest is 6 per cent. The bill is erdorsed in

[India], and is dishonoured. An action on the bill is
brought against B in

[India]. He is liable to pay interest at the rate of 6 per cent. only; but if A is charged as drawer, A is liable to pay interest at the rate of 25 per cent.

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