by • 17/06/2011 • 2nd year BankingComments (0)593

There are many parties involved in the bill and sometimes a single party may enjoy different capacities. Following are the parties to a bill:

1.         Drawer or Maker: It is the person who draws the bill and sings it. He is the creditor in the capacity of a seller or exporter. He orders to drawee to pay a certain sum of money to him (drawer) or to his order.

2.         Drawee: Drawee is the person in whose name the bill is drawn by the drawer. The drawee is a debtor as a buyer or importer of the goods.

3.         It is the person who receives the amount mentioned in the bill. The payee may be the drawer himself or somebody else (a third party) to whom the drawer owes the amount.

The payee may be of the following status:

i.          Drawer

ii.         The bearer

  1. Seller
  2. Creditor
  3. The payee whose name is mentioned in the bill

4.         Acceptor: Usually the acceptor is the drawee who accepts the bill by signing it. Now the bill is usually accepted by the banker on behalf of the drawee to speed up the transaction.

The acceptor may have the following capacities:

  1. Drawee
  2. Buyer
  3. Debtor
  4. The banker

5.         Holder: The holder is the person who physically possesses the bill. He legally enjoys the right to  posses it. He may hold the following positions.

i.          Drawer

ii.         Creditor

iii.        Bearer

iv.        Payee

6.         Holder in Due Course: It is the party who rightfully possesses the bill. He receives it in good faith takes it as complete, regular on the face of it and without the knowledge of its previous dishonour.

7.         Endorser: Another party to a bill may be an endorser who transfers or negotiates the bill to another person. This transfer or negotiation of title is effected by delivery.

The endorser may be:

  1. Creditor (as mentioned in the bill)
  2. Holder
  3. Seller or exporter (according to the bill)

In fact, endorser is the real creditor as per bill, but he is, however, debtor to the endorsee under a separate transaction.

8.         Endorsee: It is a party to whom the bill is endorsed. He is the creditor to the endorser.

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