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Section 96: Agent for presentment

Negotiable Instruments Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1881
Section 95 All 148 Sections of Negotiable Instruments Act Section 97

Legal Commentary & Landmark Judgments: Section 96

Section 96 regulates the role of an agent for presentment, enacting that when an instrument is in the hands of an agent for presentment, the agent is entitled to the same time to give notice to their principal as if the agent were an independent holder.

  • Agent's Independent Time Window: A collecting bank or clearing agent has standard reasonable time to inform their customer (principal) of the dishonour.
  • Principal's Subsequent Time Window: Upon receipt of notice from the agent, the principal enjoys a fresh period of reasonable time to notify prior parties.
  • Banking Clearance Standard: Standardizes modern banking practice where clearing branches first notify home branches before informing the customer.
Key Landmark Precedents:
  • Robson v. Bennett (1810) 2 Taunt 388: The classical authority establishing that bankers acting as agents for collection are treated as separate parties for computing the time for giving notice of dishonour.
  • Central Bank of India v. Gopinathan Nair (AIR 1970 Ker 74): Affirmed that delay caused by transmission between a bank's clearing department and the customer's branch is fully protected under Section 96.
Courtroom Practice & Strategic Litigation Guidance:

In Section 138 litigation, the 30-day clock for issuing the statutory demand notice runs from the date the payee receives the dishonour memo from their OWN bank, not the date the cheque was cleared or returned by the drawee bank. Section 96 codifies this protection.

Section 95 All 148 Sections of Negotiable Instruments Act Section 97