Q.M draws a bill of exchange on N for ₹30,000, payable to M's own order, three months after date. N accepts the bill unconditionally. M then endorses it in full to O ('Pay O or order'), who further endorses it in blank to P. Identify each party's role at every stage, and state who must be given notice if N ultimately dishonours the bill on the due date.

This traces every role a bill of exchange creates as it moves through drawing, acceptance, and two further endorsements.

Stage 1 — M draws the bill. M is the drawer (the party ordering payment) and, because the bill is drawn 'payable to M's own order,' M is ALSO the original payee — this is a common and entirely valid arrangement where the drawer and payee are the same person.

Stage 2 — N accepts unconditionally. N was the drawee (the person M's order was directed at); by signing an unconditional (general) acceptance, N becomes the acceptor, and is now primarily and absolutely liable to pay the bill on its due date.

Stage 3 — M endorses in full to O. M, as the current holder (being both drawer and payee), now endorses the bill with a FULL endorsement ('Pay O or order') — M becomes an endorser, and O becomes the endorsee (and new holder).

Stage 4 — O endorses in blank to P. O, now the holder, endorses in BLANK (signing only, naming no further endorsee) and delivers the bill to P. This blank endorsement makes the bill bearer-effect at that point, and delivery to P completes a valid negotiation (Section 47, mere delivery, since the instrument was bearer-effect following O's blank endorsement). O becomes an endorser; P becomes the final endorsee and current holder. …

Students often forget that notice of dishonour must go to EVERY prior party the holder wants to hold liable, not just the immediate transferor — skipping notice to an earlier en …