Dishoour of Negotiable Instruments
When is a Negotiable Instrument be dishonoured? What steps should be taken by the holder of a dishonoured bill? A negotiable instrument, such as a bill of exchange, promissory note, or cheque, is considered dishonoured when it is not accepted or paid when presented for acceptance or payment. The Indian Negotiable Instruments Act, 1881, provides detailed provisions regarding the dishonour of negotiable instruments. Dishonour of Negotiable Instruments A negotiable instrument can be dishonoured by non-acceptance or non-payment. Dishonour by Non-Acceptance : A bill of exchange is dishonoured by non-acceptance when the drawee refuses to accept it or cannot be found (Section 91). Dishonour by Non-Payment : A negotiable instrument is dishonoured by non-payment when the maker, acceptor, or drawee fails to pay the amount due on the instrument upon its maturity (Section 92). Steps to be Taken by the Holder of a Dishonoured Bill When a negoti...