Section 28 NI Act: Liability of agent signing
Negotiable Instruments Act, 1881
Section 28 NI Act at a Glance
Section 28 NI Act makes an agent personally liable on a promissory note, bill of exchange, or cheque if the agent signs without indicating agency or excluding personal responsibility, with an exception for inducement.
Section 28 NI Act Bare Act Text
28. Liability of agent signing.
An agent who signs his name to a promissory note, bill of exchange or cheque without indicating thereon that he signs as agent, or that he does not intend thereby to incur personal responsibility, is liable personally on the instrument, except to those who induced him to sign upon the belief that the principal only would be held liable.
Section 28 NI Act in Simple Words
Section 28 NI Act sets out when an agent becomes personally liable by signing a promissory note, a bill of exchange, or a cheque.
Under Section 28 NI Act, an agent who signs the agent's name to a promissory note, bill of exchange, or cheque without indicating on the instrument that the agent signs as agent, or that the agent does not intend by signing to incur personal responsibility, is liable personally on the instrument.
Section 28 NI Act provides one exception to this personal liability: the agent is not personally liable to those persons who induced the agent to sign upon the belief that only the principal would be held liable.
When Section 28 NI Act Applies
- An agent signs the agent's name to a promissory note, bill of exchange, or cheque.
- The agent does not indicate on the instrument that the agent signs as agent, or that the agent does not intend by signing to incur personal responsibility.
- The agent is personally liable on the instrument, except to persons who induced the agent to sign upon the belief that only the principal would be held liable.
Example of Section 28 NI Act
When Section 28 NI Act Does Not Apply
- As an exception under Section 28 NI Act, the agent is not personally liable to those who induced the agent to sign upon the belief that only the principal would be held liable.
FAQs on Section 28 NI Act
What is Section 28 NI Act?▼
Section 28 NI Act governs the personal liability of an agent who signs a promissory note, bill of exchange, or cheque. If the agent signs without indicating on the instrument that the agent signs as agent or without stating that the agent does not intend to incur personal responsibility, the agent is personally liable except to anyone who induced the signature on the belief that only the principal would be liable.
How can an agent avoid personal liability when signing a cheque or bill of exchange under Section 28 NI Act?▼
By indicating agency or excluding personal responsibility on the instrument itself. Under Section 28 NI Act, the agent must indicate on the promissory note, bill of exchange, or cheque that the agent signs as agent, or that the agent does not intend by signing to incur personal responsibility.
What is the exception to an agent's personal liability under Section 28 NI Act?▼
Inducement by the party claiming on the instrument. Under Section 28 NI Act, an agent who signed without indicating agency is not personally liable to those who induced the agent to sign upon the belief that only the principal would be held liable.
Which instruments are covered by Section 28 NI Act?▼
Promissory notes, bills of exchange, and cheques. Section 28 NI Act applies when an agent signs a promissory note, a bill of exchange, or a cheque.
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Sources: Bare Act Text, Negotiable Instruments Act, 1881 (India Code) ·