Sponsored Links


Results 1 to 1 of 1

Thread: Q. When a negotiable instrument is said to be dishonoured?

  1. #1

    Word Icon 35px Jpg.ashx Q. When a negotiable instrument is said to be dishonoured?

    Sponsored Links1


    Q. When a negotiable instrument is said to be dishonoured? explain when the notice of disonour unnecessary? (2005/A)(2006/S)
    1. Introduction:

    If negotiable instrument is presented for acceptance, sight or payment before the acceptor, maker, drawer or other party liable thereon by or on behalf of the holder but such persons refused to accept it or to make payment upon it.
    2. Types of discharge of negotiable instrument:
    A negotiable instrument may be dishonoured in two different way.
    (i) Non-acceptance.
    (ii) Non-payment.
    I. Non-acceptance:
    A bill of exchange is non accepted in the following cases.
    I. When the drawer or one of several drawers fails to accept the bill within 42 hrs of its due presentment for acceptance.
    II. When the presentment is exceed and the bill remains unaccepted.
    III. Where the drawee has not capacity to contract.
    IV. Where the drawee gives the conditional acceptance.
    V. Where a drawee in case of need is named in a bill of exchange, or any endorsement thereon, the bill not dischonoured until it has been dishonoured by such drawee.
    II. Dishonour by non-payment:
    A promissory note, bill of exchange or cheque is said to be dishnoured by non payment when the maker of the note, acceptor of the bill or drawee of the being duly required to pay the same.
    3. Effect of dishonour:
    The drawer and all the endorsers of the bill become liable to the holder if the bill is dishonoured either by non-payment provided that he gives them notice of such dishonour.
    4. Notice of dishonour:
    The holder must give a notice of dishonour to all parties against whom he wants to file suit.
    5. Persons who can give notice:
    The following persons can give notice of dishonour.
    (i) The holder of the instrument.
    (ii) The authorized agent of the holder.
    (iii) The party receiving the notice of dishonour to all prior parties to make them liable.
    6. Persons to whom notice is given:
    Notice can be given to the following persons.
    (i) All the parties of negotiable instrument.
    Exception:
    Maker of a note acceptor of a bill or drawee of a cheque.
    (ii) In case of persons jointly liable, notice to any one of them is sufficient.
    (iii) To the official assignee if the person has been declared insolvent.
    7. Form of notice:
    It may be (i) oral (ii) written.
    8. Time of notice:
    Notice must be given within reasonable time.
    9. Effect of notice:
    (i) When the party to whom notice of dishonour is dispatched is dead, the party dispatching the notice is ignorant of his death, the notice is sufficient.
    (ii) If the notice is duly directed and sent by the post and miscarries, such miscarriage does not render the notice invalid.
    10. Cases when notice of dishonour is unnecessary:
    Notice of dishonour is unnecessary in the following cases.
    (i) When it is dispensed with by the party entitled to notice.
    (ii) In order to charge the drawer, when he has countermanded payment.
    (iii) When the party charged could not suffer damage for want of notice.
    (iv) When the party entitled to notice can not after due search, be found.
    (v) To charge the drawers, when the acceptors is also a drawer.
    (vi) In case of promissory note.
    (vii) When after knowing the facts, the party entitled to notice promises to pay unconditionally.
    11. Conclusion:
    To conclude I can say that, a negotiable instrument is said to be dishonoured when the drawee refuse to accept it or not make payment. in such situation a notice of dishonour must be given to the drawee under the negotiable instrument act a person is entitled for compensation with out giving the notice of dishonour in some cases.

    Sponsored Links
    Attached Files Attached Files

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Similar Threads

  1. Replies: 0
    Last Post: 08-29-2012, 05:59 AM
  2. Q. What are the modes in which a maker, acceptor and endorser of negotiable
    By vustudents in forum Assignments on Mercantile Law
    Replies: 0
    Last Post: 08-29-2012, 05:18 AM
  3. Q. What does "holder in the due course" mean in negotiable instruments act 1881.
    By vustudents in forum Assignments on Mercantile Law
    Replies: 0
    Last Post: 08-29-2012, 01:24 AM
  4. Q. What is negotiable instrument explain its special characteristics. (1995)(1998)
    By vustudents in forum Assignments on Mercantile Law
    Replies: 0
    Last Post: 08-28-2012, 07:18 PM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
-: Vuhelp Disclaimer :-
None of the files shown here are hosted or transmitted by this server. The links are provided solely by this site's users. The administrator's or staff of Vuhelp.net cannot be held responsible for what its users post, or any other actions of its users. You may not use this site to distribute or download any material when you do not have the legal rights to do so. It is your own responsibility to adhere to these terms. If you have any doubts about legality of content or you have any suspicions, feel free to contact us.
Online Education | JhelumSoft