Section 95 NI Act: Party receiving must transmit notice of dishonour

Negotiable Instruments Act, 1881

Section 95 NI Act at a Glance

Section 95 NI Act requires a party who receives notice of dishonour to give notice within a reasonable time to any prior party to hold that prior party liable, unless the prior party otherwise receives due notice under Section 93 NI Act.

Section 95 NI Act Bare Act Text

95. Party receiving must transmit notice of dishonour.

Any party receiving notice of dishonour must, in order to render any prior party liable to himself, give notice of dishonour to such party within a reasonable time, unless such party otherwise receives due notice as provided by section 93.

Section 95 NI Act in Simple Words

Section 95 NI Act sets out the rule for a party who receives a notice of dishonour and wishes to make an earlier party on the instrument liable to that receiving party. Under Section 95 NI Act, any party receiving notice of dishonour must give notice of dishonour to a prior party within a reasonable time in order to render that prior party liable to the party receiving the notice.

Section 95 NI Act includes an exception referring to Section 93 NI Act. The party receiving notice does not need to give a separate notice to the prior party if that prior party otherwise receives due notice of dishonour as provided by Section 93 NI Act.

When Section 95 NI Act Applies

  • A party to the instrument receives notice of dishonour.
  • That party seeks to render a prior party liable to the party receiving the notice.
  • The party receiving notice must give notice of dishonour to such prior party within a reasonable time.
  • Separate notice is not required if the prior party otherwise receives due notice as provided by Section 93 NI Act.

Example of Section 95 NI Act

Abdul endorses a bill of exchange to Pooja, and Pooja endorses the bill to Rahul in Varanasi. When the bill is dishonoured, Rahul gives notice of dishonour only to Pooja. Under Section 95 NI Act, in order to render Abdul (the prior party) liable to Pooja, Pooja must give notice of dishonour to Abdul within a reasonable time. If Rahul has already given due notice of dishonour directly to Abdul as provided by Section 93 NI Act, Pooja does not need to give a separate notice to Abdul.

When Section 95 NI Act Does Not Apply

  • A party receiving notice of dishonour does not need to give notice to a prior party if that prior party otherwise receives due notice as provided by Section 93 NI Act.

FAQs on Section 95 NI Act

What is Section 95 NI Act?▼

Section 95 NI Act states that any party receiving notice of dishonour must give notice of dishonour to a prior party within a reasonable time in order to render that prior party liable to the receiving party. This requirement does not apply if the prior party otherwise receives due notice as provided by Section 93 NI Act.

Within what time must a party receiving notice of dishonour transmit it to a prior party under Section 95 NI Act?▼

Within a reasonable time. Giving notice of dishonour within a reasonable time is required to render the prior party liable to the party who received the notice.

Must a party transmit notice under Section 95 NI Act if the prior party already received due notice under Section 93 NI Act?▼

No. Section 95 NI Act states that a party receiving notice of dishonour does not need to give notice to a prior party if such party otherwise receives due notice as provided by Section 93 NI Act.

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