Section 83 NI Act: Discharge by allowing drawee more than forty-eight hours to accept

Negotiable Instruments Act, 1881

Section 83 NI Act at a Glance

Section 83 NI Act states that if the holder of a bill of exchange allows the drawee more than 48 hours, excluding public holidays, to decide whether to accept it, all previous parties who did not consent are discharged from liability to that holder.

Section 83 NI Act Bare Act Text

83. Discharge by allowing drawee more than forty-eight hours to accept.
If the holder of a bill of exchange allows the drawee more than forty-eight hours, exclusive of public holidays, to consider whether he will accept the same, all previous parties not consenting to such allowance are thereby discharge from liability to such holder.

Amendments to this section

Subs. by Act 12 of 1921, s. 2, for "twenty-four".

Section 83 NI Act in Simple Words

Section 83 NI Act sets a limit on how long the holder of a bill of exchange can allow the drawee to consider accepting the bill without discharging earlier parties.

If the holder allows the drawee more than 48 hours, exclusive of public holidays, to consider whether to accept the bill, all previous parties to the bill who do not consent to that allowance are discharged from liability to that holder. The official text prints "are thereby discharge from liability"; the sense is "discharged". Act 12 of 1921 put "forty-eight" in place of "twenty-four".

When Section 83 NI Act Applies

The instrument is a bill of exchange.
The holder allows the drawee more than 48 hours, exclusive of public holidays, to consider whether the drawee will accept the bill.
Previous parties to the bill do not consent to that allowance of time.
All non-consenting previous parties are discharged from liability to that holder.

Example of Section 83 NI Act

Harish draws a bill of exchange for ₹80,000 on Arif, payable to Sneha, and Sneha indorses the bill to Amit. Amit, as the holder, presents the bill to Arif in Indore on Monday morning and allows Arif 4 working days (none of which are public holidays) to consider whether to accept the bill, without the consent of Harish or Sneha. Under Section 83 NI Act, because Amit allowed the drawee Arif more than 48 hours exclusive of public holidays to consider acceptance without the consent of Harish and Sneha, both Harish and Sneha are discharged from liability to Amit.

FAQs on Section 83 NI Act

What is Section 83 NI Act?▼

Section 83 NI Act discharges non-consenting previous parties on a bill of exchange when the holder gives the drawee excessive time to decide on acceptance. If the holder allows the drawee more than 48 hours, exclusive of public holidays, to consider whether to accept the bill, all previous parties not consenting to that allowance are discharged from liability to that holder.

What happens if the holder gives the drawee more than 48 hours to consider acceptance under Section 83 NI Act?▼

All previous parties who did not consent to that allowance are discharged from liability to that holder. The 48 hours exclude public holidays.

Are public holidays included in the 48 hours under Section 83 NI Act?▼

No. Section 83 NI Act explicitly states that the 48-hour period is exclusive of public holidays.

Are previous parties who consent to the extra time discharged under Section 83 NI Act?▼

No. Section 83 NI Act discharges only those previous parties who do not consent to the holder allowing the drawee more than 48 hours.

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