to whom he was previously liable though he may further negotiate the bill.
In such a case, none of the intermediate holders is liable to him. And the general rule, that a holder in due course may sue all prior parties to the instrument, does not apply.
For example- A bill is drawn payable to Ajay or order. Ajay indorses it to Bijoy, Bijoy to Chunnu, Chunnu to Danny and Danny to Munnu and Munnu again to Ajay. The endorsement by Munnu to Ajay is a ‘negotiation back’. Ajay, having been relegated to his original position., cannot sue other parties, for that would only lead to circuity of action.
Where an instrument is negotiated back to a prior party, the holder can enforce payment against all intermediate parties to whom the holder was not liable as prior party as, for example, where the prior endorsement was without recourse.
