Privileges of a Holder in Due Course

PRIVILEGES OF A HOLDER IN DUE COURSE    

1. Every prior party to a negotiable instrument is liable to a HDC.
2. A holder who derives title from HDC has the same right as that of a HDC.
3. No prior party can set up a defence that the negotiable instrument was drawn, made or endorsed by him without any consideration.
4. No prior party can set up a defence that the negotiable instrument was lost or was obtained from him by offence or fraud or for an unlawful consideration. Thus, HDC gets a valid title to the negotiable instrument even though the title of the transferor was defective.
5. No prior party can allege that negotiable instrument was delivered conditionally or for a special purpose only.
6. HDC can claim full amount of the negotiable instrument (but not exceeding the amount covered by the stamp) even though such amount is in excess of the amount authorized by the person delivering an inchoate negotiable instrument.