Section 91 NI Act: Dishonour by non-acceptance
Negotiable Instruments Act, 1881
Section 91 NI Act at a Glance
Section 91 NI Act states when a bill of exchange is dishonoured by non-acceptance, and adds that the bill may be treated as dishonoured where the drawee is incompetent to contract or the acceptance is qualified.
Section 91 NI Act Bare Act Text
91. Dishonour by non-acceptance.
A bill of exchange is said to be dishonoured by non-acceptance when the drawee, or one of several drawees not being partners, makes default in acceptance upon being duly required to accept the bill, or where presentment is excused and the bill is not accepted.
Where the drawee is incompetent to contract, or the acceptance is qualified the bill may be treated as dishonoured.
Section 91 NI Act in Simple Words
Section 91 NI Act sets out when a bill of exchange is dishonoured by non-acceptance. Under the first paragraph of Section 91 NI Act, a bill of exchange is said to be dishonoured by non-acceptance in two situations: when the drawee, or one of several drawees not being partners, makes default in acceptance upon being duly required to accept the bill; or where presentment is excused and the bill is not accepted.
Under the second paragraph of Section 91 NI Act, where the drawee is incompetent to contract, or where the acceptance is qualified, the bill of exchange may be treated as dishonoured.
When Section 91 NI Act Applies
- The drawee, or one of several drawees who are not partners, makes default in acceptance upon being duly required to accept the bill of exchange; or
- Presentment is excused and the bill of exchange is not accepted (in either case, the bill is dishonoured by non-acceptance).
- Where the drawee is incompetent to contract, the bill of exchange may be treated as dishonoured.
- Where the acceptance is qualified, the bill of exchange may be treated as dishonoured.
Example of Section 91 NI Act
FAQs on Section 91 NI Act
What is Section 91 NI Act?▼
Section 91 NI Act states when a bill of exchange is dishonoured by non-acceptance, namely when the drawee (or one of several non-partner drawees) defaults in accepting the bill upon being duly required to accept it, or when presentment is excused and the bill is not accepted. It also states that where the drawee is incompetent to contract or the acceptance is qualified, the bill may be treated as dishonoured.
What happens under Section 91 NI Act if a bill is drawn on several drawees who are not partners and one of them defaults in accepting it?▼
Under Section 91 NI Act, the bill of exchange is dishonoured by non-acceptance when even one of several drawees who are not partners makes default in acceptance upon being duly required to accept the bill.
Can a bill of exchange be dishonoured by non-acceptance when presentment is excused under Section 91 NI Act?▼
Yes. Section 91 NI Act provides that a bill of exchange is dishonoured by non-acceptance where presentment is excused and the bill is not accepted.
What is the effect under Section 91 NI Act if the drawee is incompetent to contract or gives a qualified acceptance?▼
Under the second paragraph of Section 91 NI Act, where the drawee is incompetent to contract or the acceptance is qualified, the bill of exchange may be treated as dishonoured.
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Sources: Bare Act Text, Negotiable Instruments Act, 1881 (India Code) ·