Section 133 NI Act: Holder of first acquired part entitled to all

Negotiable Instruments Act, 1881

Section 133 NI Act at a Glance

Section 133 NI Act resolves competing claims between holders in due course of different parts of the same set of bills, giving the holder who first acquired title the right to all other parts and the money.

Section 133 NI Act Bare Act Text

133. Holder of first acquired part entitled to all.
As between holders in due course of different parts of the same set, he who first acquired title to his part is entitled to the other parts and the money represented by the bill.

Section 133 NI Act in Simple Words

Section 133 NI Act decides priority when different parts of the same set of bills of exchange come into the hands of different holders in due course.

Where a bill is drawn in a set of parts and different parts of that same set are held by different holders in due course, Section 133 NI Act states that the holder in due course who first acquired title to a part is entitled to all the other parts of the set and to the money represented by the bill.

When Section 133 NI Act Applies

A bill of exchange is drawn in a set of parts.
Two or more persons are holders in due course of different parts of that same set.
One of those holders in due course acquired title to a part before the other holders in due course.
The holder in due course who first acquired title to a part is entitled to the other parts of the set and to the money represented by the bill.

Example of Section 133 NI Act

A bill of exchange for ₹75,000 is drawn in a set of two parts in Vadodara. On 5 April, Rukhsana in Thiruvananthapuram becomes a holder in due course of Part 1. On 8 April, Nikhil in Mangaluru similarly becomes a holder in due course of Part 2 of the same set. Both Rukhsana and Nikhil claim the ₹75,000 represented by the bill and demand the other part. Under Section 133 NI Act, because Rukhsana first acquired title to a part as between the two holders in due course, Rukhsana is entitled to Part 2 from Nikhil and to the ₹75,000 represented by the bill.

FAQs on Section 133 NI Act

What is Section 133 NI Act?▼

Section 133 NI Act is the rule that determines priority between holders in due course of different parts of the same set of bills. It provides that the holder in due course who first acquired title to a part is entitled to the other parts and to the money represented by the bill.

Who gets the money represented by a bill in a set when two holders in due course hold different parts under Section 133 NI Act?▼

The holder in due course who first acquired title to a part gets the money. Under Section 133 NI Act, that first holder in due course is entitled both to the money represented by the bill and to the other parts of the set.

Can the holder in due course who first acquired title to one part claim the remaining parts from other holders in due course under Section 133 NI Act?▼

Yes. Section 133 NI Act expressly states that the holder in due course who first acquired title to a part is entitled to the other parts of the same set as well as the money represented by the bill.

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Disclaimer: This is for informational purposes only. Always consult a qualified advocate for legal advice.

Sources: Bare Act Text, Negotiable Instruments Act, 1881 (India Code) ·