धारा 11

The drawer of a bill of exchange is liable to the holder thereof for the amount drawn, provided that the holder has taken the bill in good faith and for value. As per Section 11 of the Negotiable Instruments Act, 1881, 'The drawer of a bill of exchange shall be liable to the holder thereof for the amount drawn, if the bill is not paid by the drawee, and if the drawer has not been indemnified by the drawee against such default.' The drawer's liability is primary and arises as soon as the bill is accepted by the drawee or if the drawee dishonors the bill. The Supreme Court in the case of State Bank of India vs. Mula Sahakari Sakhar Karkhana Ltd. (2005) has held that the liability of the drawer is not affected by the fact that the drawee has become insolvent or has ceased to carry on business.