Section 109 NI Act: How acceptance for honour must be made
Negotiable Instruments Act, 1881
Section 109 NI Act at a Glance
Section 109 NI Act states how a bill of exchange is accepted for honour. The person must declare, by writing on the bill under that person's hand, that the person accepts the protested bill under protest for the honour of the drawer, of a named indorser, or generally for honour.
Section 109 NI Act Bare Act Text
109. How acceptance for honour must be made.
A person desiring to accept for honour must, by writing on the bill under his hand, declare that he accepts under protest the protested bill for the honour of the drawer or of a particular indorser whom he names, or generally for honour. ***
Amendments to this section
- Subs. by Act 2 of 1885, s. 8, for "in the presence of a notary public, subscribe the bill with his own hand, and".
- The words "and such declaration must be recorded by the notary in his register" rep. by Act 2 of 1885, s. 8.
Section 109 NI Act in Simple Words
Section 109 NI Act sets out the form in which an acceptance for honour must be made on a bill of exchange.
A person who desires to accept a bill of exchange for honour must do so by writing on the bill under that person's hand.
In that writing on the bill, the person must declare that the person accepts under protest the protested bill. The declaration must state that the acceptance is for the honour of the drawer, or for the honour of a particular indorser whom the acceptor names, or for honour without naming a specific party.
Act 2 of 1885 put the words "by writing on the bill under his hand," in place of "in the presence of a notary public, subscribe the bill with his own hand, and". It also repealed the closing words "and such declaration must be recorded by the notary in his register".
When Section 109 NI Act Applies
- A person desires to accept a protested bill of exchange for honour.
- The person makes the acceptance by writing on the bill under that person's hand.
- The writing declares that the person accepts under protest the protested bill.
- The declaration states that the acceptance is for the honour of the drawer, for the honour of a particular named indorser, or for honour without naming a specific party.
Example of Section 109 NI Act
FAQs on Section 109 NI Act
What is Section 109 NI Act?▼
Section 109 NI Act prescribes the formal requirements for making an acceptance for honour on a bill of exchange. The person accepting for honour must declare, by writing on the bill under that person's hand, that the person accepts the protested bill under protest for the honour of the drawer, of a particular named indorser, or generally for honour.
Can an acceptance for honour be made orally under Section 109 NI Act?▼
No. Section 109 NI Act requires the person desiring to accept for honour to make the declaration by writing on the bill under that person's hand.
Must the acceptor for honour name a specific party under Section 109 NI Act?▼
No. Under Section 109 NI Act, the acceptor may declare that the bill is accepted for the honour of the drawer, for the honour of a particular named indorser, or for honour without naming a specific party.
What happens if an acceptance for honour under Section 109 NI Act does not specify for whose honour it is made?▼
It is treated as made for the drawer. Under Section 110 NI Act, where the acceptance does not express for whose honour it is made, the law deems it to be made for the honour of the drawer.
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Sources: Bare Act Text, Negotiable Instruments Act, 1881 (India Code) ·