X draws a cheque in favour of Y, a minor, Y endorses the same in favour of Z. The cheque is dishonoured by bank on grounds of inadequate funds. What legal remedy is available to Z under the provisions of the Negotiable I

Capacity to incur liability as a party to a negotiable instrument is co-extensive with capacity to contract. According to Section 26 of the Negotiable Instruments Act, 1881, every person capable of contracting according to law to which he is subject, may bind himself and be bound by making, drawing, acceptance, endorsement, delivery and negotiation of a promissory note, bill of exchange or cheque. Negatively, minors, lunatics, idiots, drunken person and persons otherwise disqualified by their personal law, do not incur any liability as parties to negotiable instruments. But incapacity of one or more of the parties to a negotiable instrument in no way, diminishes the liabilities of the competent parties to the said instrument. Therefore, where a minor is the endorser or payee of an instrument which has been endorsed all the parties excepting the minor are liable in the event of its dishonour. In the given case Z can recover the amount of cheque from X who delivers the cheque in favour of Y, a minor by resorting to the provisions of the Negotiable Instruments Act, 1881.