Section 90 NI Act: Extinguishment of rights of action on bill in acceptor's hands

Negotiable Instruments Act, 1881

Section 90 NI Act at a Glance

Section 90 NI Act states that if a negotiated bill of exchange is held by the acceptor in the acceptor's own right at or after maturity, all rights of action on the bill are extinguished.

Section 90 NI Act Bare Act Text

90. Extinguishment of rights of action on bill in acceptor's hands.

If a bill of exchange which has been negotiated is, at or after maturity, held by the acceptor in his own right, all rights of action thereon are extinguished.

Section 90 NI Act in Simple Words

Section 90 NI Act provides for the extinguishment of all rights of action on a bill of exchange when the bill comes back into the hands of the acceptor at or after maturity.

Under Section 90 NI Act, three requirements must be met: the instrument is a bill of exchange that has been negotiated, the time is at or after the maturity of the bill, and the bill is held by the acceptor in the acceptor's own right. When these requirements are satisfied, all rights of action on the bill of exchange are extinguished.

When Section 90 NI Act Applies

  • A bill of exchange has been negotiated.
  • The bill of exchange is held by the acceptor at or after maturity.
  • The acceptor holds the bill of exchange in the acceptor's own right.
  • All rights of action on the bill of exchange are extinguished.

Example of Section 90 NI Act

Sunil draws a bill of exchange in Guwahati payable 90 days after date to Tanvi, and Harpreet accepts the bill. Tanvi negotiates the bill to Joseph, and after further negotiation, Harpreet acquires the bill in Harpreet's own right and holds it at maturity. Under Section 90 NI Act, because the negotiated bill of exchange is held by the acceptor, Harpreet, in the acceptor's own right at maturity, all rights of action on the bill are extinguished.

FAQs on Section 90 NI Act

What is Section 90 NI Act?▼

Section 90 NI Act states that if a bill of exchange that has been negotiated is, at or after maturity, held by the acceptor in the acceptor's own right, all rights of action on the bill are extinguished.

Are rights of action extinguished under Section 90 NI Act if the acceptor holds the bill before maturity?▼

No. Section 90 NI Act extinguishes all rights of action only when the negotiated bill of exchange is held by the acceptor in the acceptor's own right at or after maturity.

Does Section 90 NI Act require the acceptor to hold the bill in the acceptor's own right?▼

Yes. Section 90 NI Act applies only where the acceptor holds the negotiated bill of exchange at or after maturity in the acceptor's own right.

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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) ·