Section 115 NI Act: Drawee in case of need

Negotiable Instruments Act, 1881

Section 115 NI Act at a Glance

Section 115 NI Act states that when a bill of exchange, or any indorsement on it, names a drawee in case of need, the bill is not dishonoured until that drawee in case of need has dishonoured it.

Section 115 NI Act Bare Act Text

115. Drawee in case of need.

Where a drawee in case of need is named in a bill of exchange, or in any indorsement thereon, the bill is not dishonoured until it has been dishonoured by such drawee.

Section 115 NI Act in Simple Words

Section 115 NI Act sets the rule for when a bill of exchange is dishonoured if the bill refers to a drawee in case of need. A drawee in case of need may be named either in the bill of exchange itself or in any indorsement written on the bill.

Under Section 115 NI Act, the bill of exchange is not dishonoured until the drawee in case of need has dishonoured the bill.

When Section 115 NI Act Applies

  • A drawee in case of need is named in a bill of exchange or in any indorsement on that bill.
  • The bill of exchange is not dishonoured until the named drawee in case of need has dishonoured it.

Example of Section 115 NI Act

Joseph in Kota draws a bill of exchange for ₹50,000 that names Harpreet in Aurangabad as a drawee in case of need. When the bill is presented, the original drawee refuses to accept it. Under Section 115 NI Act, the bill of exchange is not dishonoured at that stage because a drawee in case of need is named in the bill. The bill of exchange is dishonoured only when Harpreet, the drawee in case of need, also dishonours it.

FAQs on Section 115 NI Act

What is Section 115 NI Act?▼

Section 115 NI Act deals with a drawee in case of need. It states that where a drawee in case of need is named in a bill of exchange or in any indorsement on it, the bill is not dishonoured until that drawee has dishonoured it.

Where can a drawee in case of need be named under Section 115 NI Act?▼

In the bill of exchange itself or in any indorsement on the bill. Section 115 NI Act applies when the drawee in case of need is named in either of those places.

Is a bill of exchange dishonoured before the drawee in case of need dishonours it?▼

No. Under Section 115 NI Act, when a drawee in case of need is named in the bill of exchange or in any indorsement on it, the bill is not dishonoured until that drawee has dishonoured it.

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Disclaimer: This is for informational purposes only. Always consult a qualified advocate for legal advice.

Sources: Bare Act Text, Negotiable Instruments Act, 1881 (India Code) ·