Negotiable Instruments Act Section 42 — Acceptance of bill drawn in fictitious name

CHAPTER III PARTIES TO NOTES, BILLS AND CHEQUES.

General

Summary

If a bill of exchange is drawn using a fake name and is payable to the order of the drawer, the person who accepts that bill is still legally responsible for paying it. This responsibility stands even though the name on the bill is fictitious, as long as the person demanding payment is a holder in due course. The holder must be claiming under an endorsement that was made by the same hand as the drawer's signature and appears to be signed by the drawer.

Official Text

An acceptor of a bill of exchange drawn in a fictitious name and payable to the drawer's order is not, by reason that such name is fictitious, relieved from liability to any holder in due course claiming under an indorsement by the same hand as the drawer's signature, and purporting to be made by the drawer.