Negotiable Instruments Act, 1881 · Chapter III: P A R T I E S T O N O T E S, B I L L S A N D C H E Q U E S .
Section 44: Partial absence or failure of money-consideration
In plain words
If the money consideration for signing a note, bill or cheque was partly missing from the start or later partly fails, the amount a holder in immediate relation with the signer can recover from them is reduced proportionally.
- The drawer of a bill is in immediate relation with the acceptor, the maker with the payee, and the indorser with the indorsee.
Example: A draws a bill on B for Rs. 500, which B accepts. B proves value was given for only Rs. 400. A can recover only Rs. 400.
A simplified explanation, prepared with AI assistance from the official text below and checked automatically against it for numbers and cross-references. The official text is the law and prevails over this summary. Not legal advice.
Official text
When the consideration for which a person signed a promissory note, bill of exchange or cheque consisted of money, and was originally absent in part or has subsequently failed in part, the sum which a holder standing in immediate relation with such signer is entitled to receive from him is proportionally reduced.
Explanation.— The drawer of a bill of exchange stands in immediate relation with the acceptor. The maker of a promissory note, bill of exchange or cheque stands in immediate relation with the payee, and the indorser with his indorsee. Other signers may by agreement stand in immediate relation with a holder.
Illustration
A draws a bill on B for Rs. 500 payable to the order of A, B accepts the bill, but subsequently dishonours, it by non-payment. A sues B on the bill, B proves that it was accepted for value as to Rs. 400, and as an accommodation to the plaintiff as to the residue. A can only recover Rs. 400.
Source: India Code (indiacode.gov.in), the consolidated text published by the Legislative Department, Government of India. Text as updated on India Code on 15 October 2026. Words in square brackets [ ] were inserted or substituted by later amending Acts, and *** marks words omitted by an amendment. The amendment footnotes are not reproduced here. Official text on India Code.
Supreme Court judgments citing the section 44
No Supreme Court judgment in our database cites this section yet.