Sachin bought 1000 Kgs sugar from Saurabh for 40,000 on three months credit. For this purpose, Sachin issued a promissory note to Saurabh on the…

(a) Provisions of the Negotiable Instruments Act,1881: According to section 117 of the Negotiable Instruments Act,1881, the compensation payable in case of dishonour of promissory note, bill of exchange or cheque, by any party liable to the holder or any endorsee, shall be determined by the following rules: (a) the holder is entitled to the amount due upon the instrument, together with the expenses properly incurred in presenting, noting and protesting it; (b) when the person charged resides at a place different from that at which the instrument was payable, the holder is entitled to receive such sum at the current rate of exchange between the two places; (c) an endorser who, being liable, has paid the amount due on the same is entitled to the amount so paid with interest at 18% per annum from the date of payment until tender or realisation thereof, together with all expenses caused by the dishonour and payment; Facts of the case: Sachin bought1000 Kgs sugar from Saurabh for 40,000 on three months credit and issued a Promissory Note payable after3 months. On due date, the Promissory Note was dishonoured by Sachin. Saurabh filed suit for the recovery of the amount plus fees of advocate paid by him for defending the suit. Conclusion: On the basis of above provisions of law and facts of the case, Saurabh has right to claim price of sugar plus fees of advocate plus interest @18% p.a. from the date of payment until tender or realisation thereof.