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Section 28: Liability of agent signing

Negotiable Instruments Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1881
Section 27 All 148 Sections of Negotiable Instruments Act Section 29

Legal Commentary & Landmark Judgments: Section 28

Section 28 regulates the personal liability of an agent signing a negotiable instrument, enacting that an agent who signs without indicating that they sign as agent is personally liable thereon.

  • Requirement of Express Disclosure: The agent must explicitly state on the instrument that they are signing 'as agent' or on behalf of a named principal.
  • Personal Liability Default: Merely adding a descriptive word like 'manager', 'director', or 'agent' without disclosing the principal's identity does not exempt the signer from personal liability.
  • Exception of Mutual Knowledge: The agent escapes personal liability only if the person who induced them to sign knew they were acting strictly as an agent without personal liability.
Key Landmark Precedents:
  • H.N. Soni v. Union Bank of India (AIR 2000 MP 301): Held that where a partner or director signs without naming the firm/company or prefixing representative words, they are personally liable under Section 28.
  • Radha Krishna v. Pritam Singh: Affirmed that descriptive words appended to a signature do not displace the statutory rule of personal liability under Section 28.
Courtroom Practice & Strategic Litigation Guidance:

Directors and authorized signatories must always stamp the full company name and prefix their signature with 'For and on behalf of [Company Name], Authorized Signatory'. Signing in personal capacity exposes the individual to personal decree in civil suits.

Section 27 All 148 Sections of Negotiable Instruments Act Section 29