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HOLDER: S.

8: The" holder" of a promissory note, bill of exchange or cheque means any person entitled in his own name to the possession thereof and to receive or recover the amount due thereon from the parties thereto. Where the note, bill or cheque is lost or destroyed, its holder is the person so entitled at the time of such loss or destruction. HOLDER IN DUE COURSE: S. 9: Holder in due course means any person who for consideration became the possessor of a promissory note, bill of exchange or cheque, if payable to bearer, or the payee1 or indorsee thereof, if payable to order, before the amount mentioned in it became payable, and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title INSTRUMENT OBTAINED BY UNLAWFUL MEANS OR FOR UNLAWFUL CONSIDERATION: S. 58: When a negotiable instrument has been lost, or has been obtained from any maker, acceptor or holder thereof by means of an offence or fraud, or for an unlawful consideration, no possessor or indorsee who claims through the person who found or so obtained the instrument is entitled to receive the amount due thereon from such maker, acceptor or holder, or from any party prior to such holder, unless such possessor or indorsee is, or some person through whom he claims was, a holder thereof in due course. PRESUMPTIONS S. 118: Until the contrary is proved, the following presumptions shall be made:(a) of consideration; that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; (g) that holder is a holder in due course; that the holder of a negotiable instrument is a holder in due course: provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an SP offence or fraud or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him. To be a holder in due course, 1. The party must have taken the instrument for value [consideration] 2. The party must have obtained the instrument before its maturity 3. The instrument must be complete and regular on its face; and 4. The party must have taken the instrument in good faith and without notice of any defect either in the instrument of the title of the person negotiating it to him To defeat the title of a holder for value it must be shown that when he took the instrument he had some cause to believe that there was something wrong. The test here is subjective.
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The payee isnt assumed to be a holder in due course under the British Bills of Exchange Act.

Regarding the presumption of consideration under S. 118, if it is shown that the instrument was obtained from its lawful holder or from any person in lawful custody thereof by means of an offence or fraud or in breach of an agreement, or was obtained from the maker or acceptor by such means, the burden of proving that the holder is a holder in due course lies upon such holder,2 and the holder in such a case has to prove not only that he is a holder for value, but also that he became the holder before the instrument became payable, and without sufficient cause to believe any defect in the title of his transferor.3 When the bill of exchange is a fraudulent one, or an illegal one, or a stolen one, in any one of those cases it being known that the person who holds the bill was a party to that fraud, to that illegality...the presumption is so strong...that that shifts the burden4 The onus as to proving both value and bona fide shifts onto the holder,5 and that is the position adopted in both Indian and English law. Though the burden shifts when there is an allegation of an offence, fraud or illegality, where there is alleged mere absence of consideration between the original parties, the presumption of consideration still stands and the party alleging absence of consideration has to prove such absence. British position: The holder has to prove not only that he gave consideration, but also that he gave it without having sufficient cause to believe that any defect existed in the title of the person from whom he took the instrument.6 When, however, the holder who is seeking to enforce the instrument is also the person to whom it was originally delivered and in whose hands it remains, there is no shifting of onus.7 English law diverts from the stand, and S. 30(2) of the Bills of Exchange Act has been held not to apply to cases where the holder is the person to whom the bill was originally delivered and in whose possession it remains.

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Daulatram v. Nagindas, 15 Bom LR 333, 19 IC 789. Ramanadan v. Gundu, AIR 1928 Mad 1238. 4 Jones v. Gordon, (1877) 2 AC 616. 5 Tatam v. Haslar, (1889) 23 QBD 345; S. 30, Bills of Exchange Act. 6 Ramanadan v. Gundu, AIR 1928 Mad 1238. 7 Talbot v. Von Boris, (1911) 1 KB 854.

"national housing bank" and "anz grindlays bank" "plc 1998 2 lj 153

Fraud S. 58 clean hands

Equity fraud body corporate

Holder in due course and holder