Holder and Holder in due course are two terms associated with the possession of a negotiable instrument. They are different in many ways.

Section 8 of The Negotiable Instruments Act,1881 provides the definition of a ‘Holder’. The “holder” of a promissory note, bill of exchange or cheque means any person entitled in his own name to the possession thereof and to receive or recover the amount due thereon from the parties thereto. So a holder must have mainly two essentials, that is, the possession of the instrument and the right to recover the money. If a person find a lost instrument, or a person steal a negotiable instrument, it does not make them a holder. Because they don’t have the right to recover the money.

Section 9 of the same act defines ‘holder in due course’ as – “Holder in due course” means any 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 thereof, if [payable to order,] before the amount mentioned in it became payable, and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title. So a holder in due course may become the holder of the instrument before it’s get matured and he or she should hold the instrument for a valuable consideration.

Holder in due course has some privileges or rights. According to Section 53 of The Negotiable Instruments Act, holder in due course gets a good title to the instrument even though the title of the transferor or any price party to the instrument is defective. He can recover the full amount unless he was a party to fraud, or if the instrument is negotiated by means of a forged endorsement. Section 20 of the said act provides that he would gets a good title even though the instruments were originally stamped but was an inchoate instrument. Every prior party to the instrument us liable to the holder in due course until the instrument is satisfied and the parties liable to pay cannot plead that the delivery of the instrument was conditional or for a specific purposes only.

Holder and holder in due course are two different persons. They are different in many ways.


A holder may acquire the instrument even after its maturity. But a holder in due course must acquire the instrument before the date of maturity. Otherwise he won’t get the rights of a holder in due course


Consideration is an essential ingredient in holder in due course, but it is not necessary to become a holder. Holder may acquire the instrument by way of gift or donation.


Holder is entitled to the possess the instrument in his own name and he can recover the amount. But holder in due course is a person who got the possession for a consideration.


A holder in due course enjoys certain privileges under Negotiable Instruments Act, which are not available to a holder.

5.Right to recover amount

A holder has the right to recover amount only from whom he has got the instrument, but a holder in due course has the right to recover from any prior parties.


A holder does not acquire a better title than that of transferor. But a holder in due course has better title than that of transferor. He derives a good title freed from all defects.


Differences between Holder & Holder-In-Due-Course

Negotiable Instruments Act, 1881

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

If you are interested in participating in the same, do let me know.

Do follow me on FacebookTwitter  Youtube and Instagram.

The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.

If you would also like to contribute to my website, then do share your articles or poems at adv.aishwaryasandeep@gmail.com

We also have a Facebook Group Restarter Moms for Mothers or Women who would like to rejoin their careers post a career break or women who are enterpreneurs.

We are also running a series Inspirational Women from January 2021 to March 31,2021, featuring around 1000 stories about Indian Women, who changed the world. #choosetochallenge

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.