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      Question

      Who among the following is a 'holder in due course'

      under Section 9 of the Act?
      A Any person merely in possession of the instrument Correct Answer Incorrect Answer
      B A person who obtained the instrument by fraud Correct Answer Incorrect Answer
      C A person who acquired the instrument after maturity Correct Answer Incorrect Answer
      D A person who, for consideration, became the possessor before the amount became payable and without sufficient cause to believe any defect existed in the title Correct Answer Incorrect Answer
      E A legal representative of the deceased holder Correct Answer Incorrect Answer

      Solution

      Section 9 defines a holder in due course as a person who, for consideration, became the possessor of a promissory note, bill of exchange or cheque (if payable to bearer), or the payee or indorsee (if payable to order), before the amount mentioned became payable, and without having sufficient cause to believe that any defect existed in the title of the transferor. Consideration, acquisition before maturity, and good faith are essential. Mere possession (Section 8 'holder') is insufficient.

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