SECTION 93 OF NEGOTIABLE INSTRUMENTS ACT, 1881 – By and to whom notice should be given | NI ACT

SECTION 93 OF NEGOTIABLE INSTRUMENTS ACT, 1881 - By and to whom notice should be given | NI ACT

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.

CENTURY LAW FIRM