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Section 92: Dishonor by non-payment

Negotiable Instruments Act • Official Statutory Text & Practice Guide

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Act 1881
Section 91 All 148 Sections of Negotiable Instruments Act Section 93

Legal Commentary & Landmark Judgments: Section 92

Section 92 defines 'dishonour by non-payment', enacting that a promissory note, bill of exchange, or cheque is dishonoured by non-payment when the maker, acceptor, or drawee makes default in payment upon being duly required to pay.

  • Default in Payment: Occurs when the primary obligor (maker of note, acceptor of bill, or drawee bank of cheque) fails or refuses to pay at maturity.
  • Excused Presentment Dishonour: Also deemed dishonoured where presentment for payment is excused under Section 76 and the instrument remains overdue and unpaid.
  • Foundation of Commercial Debt Recovery: The statutory trigger that activates the holder's civil right to sue under Section 30 and the criminal mechanism under Section 138.
Key Landmark Precedents:
  • Kusum Ingots & Alloys Ltd. v. Pennar Peterson Securities Ltd. (2000) 2 SCC 745: The Supreme Court analyzed Section 92 as the foundational commercial breach that triggers notice obligations and subsequent criminal liability under Section 138.
  • Jagjivan Mavji v. Ranchhoddas Meghji (AIR 1954 SC 554): Affirmed that dishonour by non-payment under Section 92 crystallizes the secondary liability of drawers and indorsers.
Courtroom Practice & Strategic Litigation Guidance:

In cheque bounce cases, the return of the cheque with a bank memo (e.g., 'funds insufficient', 'account closed', 'payment stopped') constitutes definitive proof of dishonour by non-payment under Section 92 and Section 146.

Section 91 All 148 Sections of Negotiable Instruments Act Section 93