Negotiable Instruments Act Section 59 — Instrument acquired after dishonour or when overdue
CHAPTER IV OF NEGOTIATION
General
Summary
If you get a negotiable instrument like a cheque or promissory note after it has already been refused payment or acceptance, and you knew about that refusal, or you get it after its due date, you generally only have the same rights to claim money as the person who gave it to you. However, there is an exception: if you receive a promissory note or bill after its due date, in good faith and by paying for it, and that note or bill was originally created without any real payment behind it just to help someone raise money, then you can recover the full amount from any earlier party who signed it.
Official Text
The holder of a negotiable instrument, who has acquired it after dishonour, whether by non-acceptance or non-payment, with notice thereof, or after maturity, has only, as against the other parties, the rights thereon of his transferor: Accommodation note or bill.—Provided that any person who, in good faith and for consideration, becomes the holder, after maturity, of a promissory note or bill of exchange made, drawn or accepted without consideration, for the purpose of enabling some party thereto to raise money thereon, may recover the amount of the note or bill from any prior party.