Section 35 NI Act: Liability of endorser

Section 35 of Negotiable Instruments Act: Liability of endorser

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

In the absence of a contract to the contrary, whoever indorses and delivers a negotiable instrument before maturity without, in such indorsement, expressly excluding or making conditional his own liability, is bound thereby to every subsequent holder, in case of dishonour by the drawee, acceptor or maker, to compensate such holder for any loss or damage caused to him by such dishonour, provided due notice of dishonour has been given to, or received by, such indorser as hereinafter provided.

Every indorser after dishonour is liable as upon an instrument payable on demand.

Statutory Defined Terms in this Section: (Click any term for official legal definition)

Holder Sec 8

Legal Commentary & Landmark Judgments: Section 35

Section 35 establishes the statutory liability of an indorser of a negotiable instrument to compensate every subsequent holder in the event of dishonour by the maker, drawee, or acceptor.

Warranty of Prior Title: Every indorser guarantees the genuineness of the instrument, validity of prior indorsements, and that the bill will be paid at maturity.
Condition of Due Notice: Liability is enforceable only if the holder presents the paper properly and serves prompt notice of dishonour on the indorser under Section 93.
Exclusion via 'Sans Recours': An indorser may expressly exclude personal liability by adding the words 'sans recours' (without recourse) to their signature under Section 52.

Key Landmark Precedents:

Seth Loon Karan Sethiya v. Ivan E. John (1977) 1 SCC 379: The Supreme Court examined the sequential liability of indorsers under Section 35, holding that every indorser is in the nature of a new drawer to subsequent holders.
Panchapakesa Ayyar v. Gopalan: Affirmed that failure of the holder to provide prompt statutory notice of dishonour completely discharges the indorser from liability under Section 35.

Courtroom Practice & Strategic Litigation Guidance:

When suing on an indorsed bill, join all prior indorsers as defendants under Order I Rule 3 CPC alongside the maker. Each indorser is jointly and severally liable to the holder under Section 35.

Section 35: Liability of endorser

Section 35 of Negotiable Instruments Act: Liability of endorser

Legal Commentary & Landmark Judgments: Section 35