SECTION 93 OF NEGOTIABLE INSTRUMENTS ACT, 1881 : By and to whom notice should be given.
When a promissory note, bill of exchange or cheque is dishonored by non-payment, the holder thereof, or some party thereto who remains liable thereon, must given notice that the instrument has been so dishonored to all other parties whom the holder seeks to make severally liable thereon, and to some one of several partied whom he seeks to make jointly liable thereon.
When a bill of exchange is dishonoured by non-acceptance the drawer or any indorser to whom such notice is not given is discharged; but the rights of a holder in due course subsequent to the omission to give notice shall not be prejudiced by that omission.
When a bill of exchange is dishonoured by non-acceptance and due notice of dishonour is given, it shall not be necessary to give notice of a subsequent dishonour by non-payment, unless the bill shall, in the meantime, have been accepted.
Nothing in this section renders it necessary to give notice to the maker of the dishonoured promissory note or the drawee or acceptor of the dishonoured bill of exchange or cheque.
Practical Scenario Illustrating Section 93 of NI Act
Consider a hypothetical scenario where a business issues a cheque to a supplier, which is subsequently dishonored due to insufficient funds. Under Section 93, the holder of the cheque (the supplier) must promptly notify the issuer (the business) of the dishonor. Failure to provide such notice can absolve the issuer from liability. This requirement ensures that all parties involved are aware of the dishonored instrument and can take appropriate action. Such scenarios highlight the practical implications of Section 93 in everyday financial transactions and the importance of adhering to legal procedures in financial matters.
Reviewed and updated by Century Law Firm, Delhi – October 2026. Statutory references are to the Acts as in force on that date.
Notice of dishonour under Sections 91 to 98 versus the Section 138 notice
Section 93 belongs to Chapter VIII of the Negotiable Instruments Act, 1881 (“Of notice of dishonour”, Sections 91 to 98), a set of rules from the law of bills of exchange that determines when a drawer or indorser remains civilly liable on a dishonoured instrument. It must not be confused with the statutory demand notice under the proviso to Section 138, which is the gateway to a criminal prosecution for cheque bounce. The two notices serve different purposes and follow different rules.
- Who gives and receives it (Section 93). The holder, or any party who remains liable, must give notice to every party he wishes to hold severally liable and to at least one of the parties he wishes to hold jointly liable. A drawer or indorser who is not given notice is discharged – except as against a subsequent holder in due course.
- Mode and time (Section 94). Oral or written, by post or otherwise, within a reasonable time, to the party’s place of business or residence; a properly addressed and posted notice is sufficient even if it miscarries.
- Notice to agents and representatives (Sections 95 to 97) and the cases in which notice is unnecessary (Section 98): where it is dispensed with by the party entitled to it, where the drawer has countermanded payment, where the party charged could not suffer damage for want of notice, where the party cannot be found after due search, or where the drawer is also the drawee or the acceptor.
- Liability it preserves. The drawer’s obligation under Section 30 to compensate the holder on dishonour, and the indorser’s under Section 35, are each conditional on due notice of dishonour having been given or dispensed with.
The Section 138 demand notice is different
- It must be in writing, sent to the drawer, within 30 days of the payee receiving the bank’s return memo, demanding payment of the cheque amount (proviso (b) to Section 138).
- The drawer has 15 days from receipt to pay (proviso (c)); the cause of action arises on the 16th day and the complaint must be filed within one month thereafter (Section 142(1)(b)), before the Magistrate within whose jurisdiction the payee’s bank branch is situated (Section 142(2), inserted in 2015 to undo Dashrath Rupsingh Rathod (2014)).
- Service is presumed when the notice is sent by registered post to the correct address, under Section 27 of the General Clauses Act and Section 114 of the Evidence Act (Section 119 BSA); a drawer who avoids the notice cannot plead non-receipt – C.C. Alavi Haji v. Palapetty Muhammed (2007).
- The 2018 amendment added interim compensation of up to 20% of the cheque amount at the trial stage (Section 143A) and a deposit of at least 20% as a condition of appeal against conviction (Section 148).
Related reading: cheque bounce cases under Section 138, Supreme Court guidelines on cheque-bounce trials, the court-fee calculator for the parallel recovery suit, and the Legal Sections Explained hub.
Frequently asked questions
No. Section 93 notice of dishonour preserves the civil liability of drawers and indorsers on any negotiable instrument and may be oral. The Section 138 notice is a written demand to the drawer of a dishonoured cheque, sent within 30 days of the return memo, and is a precondition to criminal prosecution.
The drawer or indorser who did not receive notice is discharged from liability on the instrument, unless notice was unnecessary under Section 98 or the claim is by a subsequent holder in due course.
Within 30 days of the payee receiving information from the bank that the cheque was returned unpaid. The drawer then has 15 days to pay, after which the complaint must be filed within one month.
