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Section 91: Dishonor by non-acceptance

Negotiable Instruments Act • Official Statutory Text & Practice Guide

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Act 1881
Section 90 All 148 Sections of Negotiable Instruments Act Section 92

Legal Commentary & Landmark Judgments: Section 91

Section 91 defines 'dishonour by non-acceptance', enacting that a bill of exchange is dishonoured when the drawee makes default in acceptance upon being duly required to accept, or where presentment is excused and the bill is not accepted.

  • Default in Acceptance: Occurs when the drawee refuses to accept, neglects to accept within the 48-hour deliberation window, or gives a qualified acceptance.
  • Constructive Dishonour: Deemed dishonoured where the drawee is incompetent to contract, fictitious, or cannot be found after reasonable search under Section 61.
  • Immediate Right of Recourse: The holder acquires an immediate right of action against the drawer and prior indorsers without waiting for maturity.
Key Landmark Precedents:
  • Ram Ravji v. Pralhaddas (ILR 20 Bom 133): Held that upon dishonour by non-acceptance, an immediate cause of action accrues to the holder against the drawer, entitling them to sue without waiting for the nominal maturity date.
  • Hickling v. Hardey (1817): Affirmed that refusal by the drawee to sign an unqualified acceptance constitutes complete dishonour under Section 91.
Courtroom Practice & Strategic Litigation Guidance:

In international trade finance, when a buyer/drawee refuses to accept an import bill, do not wait for the 90-day maturity to elapse. Treat the bill as dishonoured immediately under Section 91, issue notices of dishonour under Section 93, and initiate recovery against the drawer.

Section 90 All 148 Sections of Negotiable Instruments Act Section 92