Question

A party is said to be discharged from his liability when

• A. His liability on the instrument comes to an end.
• B. He endorses the bill in favour of any other person.
• C. The holder discharges the maker.
• D. Both (a) and (c) are correct

Hint:

Endorsement \(\neq\) discharge; release/payment/cancellation \(⇒\) discharge.

Answer 1

The Correct Option is D

Step 1: What is discharge?
Under the Negotiable Instruments Act, a party is discharged when his liability on the instrument ceases (payment, cancellation, release, or operation of law). This supports (a).
Step 2: Specific instance.
If the holder releases or discharges the maker/acceptor, the maker’s liability ends — (c) is also correct.
Step 3: Why (b) is wrong.
Endorsement transfers title but the endorser generally remains secondarily liable to subsequent holders unless discharged. \[ \boxed{(d)} \]