Negotiable Instruments Act Section 41 — Acceptor bound, although, indorsement forged

CHAPTER III PARTIES TO NOTES, BILLS AND CHEQUES.

General

Summary

If you accept a bill of exchange that already has a signature on it, you are still responsible for paying it even if that signature turns out to be fake, as long as you knew or had reason to believe the signature was forged at the time you accepted the bill. In other words, accepting the bill with that knowledge does not let you off the hook.

Official Text

An acceptor of a bill of exchange already indorsed is not relieved from liability by reason that such indorsement is forged, if he knew or had reason to believe the indorsement to be forged when he accepted the bill.