Question

A issues a cheque to
B. B loses the cheque. C finds the cheque and forges B’s signature to endorse it to D, who takes it in good faith and for value. Under the NI Act, 1881:

Q: Answer-A issues a cheque to B. B loses the cheque. C finds the cheque and forges B’s signature to endorse i...

Forgery conveys no title. Section 58 of the NI Act and common law principles dictate that a person claiming through a forged endorsement cannot be an HDC, as the chain of title is broken. A forged signature on a negotiable instrument is considered wholly inoperative under the law. This means that no right to retain the instrument, give a discharge for it, or enforce payment against any party can be acquired through or under that forged signature