Section 91 Negotiable Instruments (NI) ACT: Dishonour by non-acceptance.—
A bill of exchange is said to be dishonoured by non-acceptance when the drawee, or one of several drawees not being partners, makes default in acceptance upon being duly required to accept the bill, or where presentment is excused and the bill is not accepted. Where the drawee is incompetent to contract, or the acceptance is qualified the bill may be treated as dishonoured.
Overview:
Section 91 of the Negotiable Instruments (NI) Act pertains to the dishonour of a bill of exchange due to non-acceptance. According to this provision:
- A bill of exchange is considered dishonoured by non-acceptance when the drawee, or one of the drawees (if they are not partners), fails to accept the bill upon being duly required to do so.
- If presentment is excused and the bill remains unaccepted, it is also treated as dishonoured.
- In cases where the drawee is not competent to contract or if the acceptance is qualified, the bill can be regarded as dishonoured.
Key Points:
1. Definition of Non-Acceptance: The section clearly defines the circumstances under which a bill of exchange can be considered dishonoured due to non-acceptance, ensuring clarity in transactions.
2. Implications for the Drawer and Drawee: The dishonour of a bill can have significant implications for both the drawer and the drawee. It can lead to legal consequences and affect their financial standing.
3. Role of Presentment: The provision highlights the importance of presentment in the process of accepting a bill of exchange. If presentment is excused, the bill’s non-acceptance can lead to its dishonour.
Thought-Provoking Insights:
1. Impact on Business Transactions: How does the dishonour of a bill of exchange due to non-acceptance affect business relationships and transactions?
2. Legal Recourse: What legal remedies are available to the aggrieved party when a bill of exchange is dishonoured due to non-acceptance?
3. Evolution of Negotiable Instruments: With the rise of digital transactions and electronic banking, how has the relevance and application of provisions like Section 91 evolved?
