1. Which of the following is NOT a privilege of a "Holder in Due Course" (HDC) under the NI Act, 1881?
He gets a valid title even if the instrument is forged.
The instrument is presumed to be validly delivered to him.
He gets the instrument free from all defects of title of the transferor.
He can sue all prior parties to the instrument.
Explanation:
While an HDC gets a better title than the transferor (curing defects like fraud or lack of consideration), Forgery is a nullity . A forged signature does not convey any title, and even an HDC cannot acquire a valid title on a forged instrument.