Law · Negotiable Instruments Act, 1881
A merchant in Mumbai draws a bill on a trader in Chennai payable to self or order, endorses it in blank, and hands it to a creditor. The creditor loses the bill, and it is found by a third party who sells it to a shopkeeper for value. The shopkeeper takes it in good faith, unaware that it was lost. Who has the legal right to the bill?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The third party who found it, until the merchant proves ownership.
- 2The shopkeeper, because he is a holder in due course.✓
- 3The merchant, because he is the original drawer.
- 4The original creditor, because the bill was lost and not sold by him.
Correct answer
The shopkeeper, because he is a holder in due course.
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