Under the Negotiable Instruments Act, 1881, a holder in due course is a person who acquires a negotiable instrument in good faith and for valuable consideration, before it becomes payable, and without having sufficient reason to believe that the person from whom he derives his title had a defective title. The concept of a holder in due course is important in business law because it gives special protection to a person who receives a negotiable instrument honestly and in the ordinary course of business. Such protection is necessary to maintain confidence in negotiable instruments such as bills of exchange, promissory notes and cheques. Section 9 of the Negotiable Instruments Act, 1881 defines a holder in due course. According to this section, a holder in due course means a person who, for consideration, becomes the possessor of a promissory note, bill of exchange or cheque if payable to bearer, or the payee or indorsee thereof, if payable to order, before the amount mentioned in it becomes payable, and without having sufficient cause to believe that any defect existed in the title of the person from whom he derives his title. Thus, certain essential conditions must be satisfied. First, there must be a negotiable instrument. Secondly, the person must become its holder or possessor according to the nature of the instrument. Thirdly, the instrument must be acquired for consideration. A person who receives a negotiable instrument merely as a gift cannot ordinarily claim the status of a holder in due course. Fourthly, the instrument must be acquired before it becomes payable. Fifthly, the person must acquire it in good faith and without sufficient cause to believe that there is a defect in the transferor's title. For example, A gives a bill of exchange to B in consideration of goods purchased by A. B indorses the bill to C for consideration before the date of maturity. C receives the bill honestly and has no reason to suspect any defect in B's title. C is a holder in due course. Even if there were certain defects in the earlier transaction, the law may protect C because he acquired the instrument for value, before maturity and in good faith. The most important feature of a holder in due course is that he enjoys several privileges which are not generally available to an ordinary holder. These privileges strengthen the negotiability and commercial usefulness of negotiable instruments. One important privilege is that a holder in due course obtains a better title than the person from whom he received the instrument. Ordinarily, a person cannot transfer a better title than he himself possesses. However, negotiable instruments are an exception to this general rule. If an instrument has been obtained by means of fraud, misrepresentation or for an unlawful consideration, a holder in due course who takes it honestly and for consideration may nevertheless obtain a valid title, subject to the statutory conditions. This principle is one of the chief advantages of negotiability. A