Section 108 NI Act: Acceptance for honour
Negotiable Instruments Act, 1881
Section 108 NI Act at a Glance
Section 108 NI Act allows a person who is not already liable on a bill of exchange to accept it for the honour of any party, with the holder's consent, after the bill is noted or protested for non-acceptance or better security.
Section 108 NI Act Bare Act Text
108. Acceptance for honour.
When a bill of exchange has been noted or protested for non-acceptance or for better security, any person not being a party already liable thereon may, with the consent of the holder, by writing on the bill, accept the same for the honour of any party thereto. ***
Amendments to this section
- The second sentence rep. by Act 2 of 1885, s. 7.
Section 108 NI Act in Simple Words
Section 108 NI Act states when and by whom a bill of exchange may be accepted for honour.
Acceptance for honour can take place only when a bill of exchange has been noted or protested for non-acceptance or for better security. In that situation, a person who is not already a party liable on the bill may step in to accept the bill for the honour of any party to the bill.
To make an acceptance for honour under Section 108 NI Act, the person must obtain the consent of the holder and must accept the bill by writing on the bill itself.
Act 2 of 1885 repealed the second sentence of the section.
When Section 108 NI Act Applies
- A bill of exchange has been noted or protested for non-acceptance or for better security.
- The person stepping in to accept the bill is not a party already liable on the bill.
- The holder of the bill consents to the acceptance for honour.
- The person accepts the bill by writing on the bill for the honour of any party to the bill.
Example of Section 108 NI Act
FAQs on Section 108 NI Act
What is Section 108 NI Act?▼
Section 108 NI Act permits acceptance for honour of a bill of exchange that has been noted or protested for non-acceptance or for better security. Any person not already liable on the bill may, with the holder's consent, accept the bill in writing on the bill for the honour of any party to it.
Can a party already liable on a bill of exchange accept it for honour under Section 108 NI Act?▼
No. Section 108 NI Act allows acceptance for honour only by a person who is not a party already liable on the bill of exchange.
Is the holder's consent required for acceptance for honour under Section 108 NI Act?▼
Yes. Under Section 108 NI Act, a person may accept a bill of exchange for honour only with the consent of the holder.
When can a bill of exchange be accepted for honour under Section 108 NI Act?▼
After noting or protest for non-acceptance or for better security. Section 108 NI Act applies only when a bill of exchange has been noted or protested for non-acceptance or for better security.
For whose honour can a bill of exchange be accepted under Section 108 NI Act?▼
Any party to the bill. Section 108 NI Act allows such a person to accept the bill of exchange for the honour of any party to the bill.
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Sources: Bare Act Text, Negotiable Instruments Act, 1881 (India Code) ·