Discharge of a party

DISCHARGE OF A PARTY   {Sec. 82 to 90}

Payment:-

Payment by a party who is secondarily liable on a negotiable instrument discharges the holder and all parties subsequent to the party making payment of the negotiable instrument.

Cancellation:-

Where the holder cancels the name of any party liable on the negotiable instrument (other than the party primarily liable on the negotiable instrument), such a party and all parties subsequent to him are discharged.

Release:-

Where the holder releases any party liable negotiable instrument (other than the party primarily liable on the negotiable instrument), such a party and all parties subsequent to him are discharged.

Allowing drawee more than 48 hours to accept:-

All prior parties not consenting to the same are discharged from liability to such holder.

Qualified acceptance:-

Where a holder of the bill consents to qualified acceptance, all the prior parties who did not consent to qualified acceptance are discharge.

Material alteration:-

Every party not consenting to a material alteration negotiable instrument is discharged.

Negotiation back:-

Where a party already liable on the negotiable instrument becomes the holder of negotiable instrument, such a party and all intermediate parties to whom such a party was previously liable shall be discharge.

Operation of law:-

*A party is discharged if the negotiable instrument becomes time barred.

*A party is discharged if he is declared as an insolvent by the court.