BILLS OF EXCHANGE ACT - 1961 (ACT 55)

Section - 47 - Rules as to Notice of Dishonour

Notice of dishonour in order to be valid and effectual must be given in accordance with the following rules-

(a) The notice must be given by or on behalf of the holder, or by or on behalf of an endorser who, at the time of giving it, is himself liable on the bill.

(b) Notice of dishonour may be given by an agent either in his own name or in the name of any party entitled to give notice whether that party be his principal or not.

(c) Where the notice is given by or on behalf of the holder, it enures for the benefit of all subsequent holders and all prior endorsers who have a right of recourse against the party to whom it is given.

(d) Where notice is given by or on behalf of an endorser entitled to give notice as hereinbefore provided, it enures for the benefit of the holder and all endorsers subsequent to the party to whom notice is given.

(e) The notice may be given in writing or by personal communication, and may be given in any terms which sufficiently identify the bill, and intimate that the bill has been dishonoured by non-acceptance or non-payment.

(f) The return of a dishonoured bill to the drawer or an endorser is, in point of form, deemed a sufficient notice of dishonour.

(g) A written notice need not be signed, and an insufficient written notice may be supplemented and validated by verbal communication. A mis-description of the bill shall not vitiate the notice unless the party to whom the notice is given is in fact misled thereby.

(h) Where notice of dishonour is required to be given to any person, it may be given either to the party himself, or to his agent in that behalf.

(i) Where the drawer or endorser is dead, and the party giving notice knows it, the notice must be given to a personal representative if such there be, and with the exercise of reasonable diligence he can be found.

(j) Where the drawer or endorser is insolvent, notice may be given either to the party himself or to the trustee.

(k) Where there are two or more drawers or endorsers who are not partners, notice must be given to each of them, unless one of them has authority to receive such notice for the others.

(l) The notice may be given as soon as the bill is dishonoured and must be given within a reasonable time thereafter.

In the absence of special circumstances notice is not deemed to have been given within a reasonable time unless-

(i) Where the person giving and the person to receive notice reside in the same place, the notice is given or sent off in time to reach the latter on the day after the dishonour of the bill.

(ii) Where the person giving and the person to receive notice reside in different places, the notice is sent off on the day after the dishonour of the bill, if there be a post at a convenient hour on the day, and if there be no such post on that day then by the next post thereafter.

(m) Where a bill when dishonoured is in the hands of an agent, he may either himself give notice to the parties liable on the bill, or he may give notice to his principal. If he gives notice to his principal, he must do so within the same time as if he were the holder, and the principal upon receipt of such notice has himself the same time for giving notice as if the agent had been an independent holder.

(n) Where a party to a bill receives due notice of dishonour, he has after the receipt of such notice the same period of time for giving notice to antecedent parties that the holder has after the dishonour.

(o) Where a notice of dishonour is duly addressed and posted, the sender is deemed to have given due notice of dishonour, notwithstanding any miscarriage by the post office.