Section 38ALiability of accommodation party and position of accommodation party

s. 38A

38A. Liability of accommodation party and position of accommodation party [(1) An accommodation party is liable on a negotiable instrument to a holder in due course, notwithstanding that when such holder took the instrument he knew such party to be an accommodation party. (2) An accommodation party to a negotiable instrument, if he has paid the amount thereof, is entitled to recover such amount from the party accommodated.]

1. 7. Section 38A was inserted by section 23 of the Negotiable Instruments (Amendment) Ordinance, 1962 (Ordinance No. XLIX of 1962)