82. Discharge from liability.—The maker, acceptor or indorser respectively of a negotiable
instrument is discharged from liability thereon—
(a) by cancellation.—to a holder thereof who cancels such acceptor's or indorser’s name with
intent to discharge him, and to all parties claiming under such holder;
(b) by release.—to a holder thereof who otherwise discharges such maker, acceptor or indorser,
and to all parties deriving title under such holder after notice of such discharge;
(c) by payment.—to all parties thereto, if the instrument is payable to bearer, or has been
indorsed in blank, and such maker, acceptor or indorser makes payment in due course of the amount
due thereon.
1. Subs. by Act 30 of 1926, s. 2, for “except in cases provided for by the Code of Civil Procedure, s. 532”.
2. Subs. by Act 66 of 1988, s. 2, for “six per centum” (w.e.f. 30-12-1988).
3. Section 81 re-numbered as sub-section (1) thereof by Act 55 of 2002, s. 4 (w.e.f. 6-2-2003).
4. Ins. by s. 4, ibid. (w.e.f. 6-2-2003).
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83. Discharge by allowing drawee more than forty-eight hours to accept.—If the holder of a bill
of exchange allows the drawee more than 1
[forty-eight] hours, exclusive of public holidays, to consider
whether he will accept the same, all previous parties not consenting to such allowance are thereby
discharge from liability to such holder.
2
[84. When cheque not duly presented and drawer damaged thereby.—(1) Where a cheque is not
presented for payment within a reasonable time of its issue, and the drawer or person on whose account it
is drawn had the right, at the time when presentment ought to have been made, as between himself and
the banker, to have the cheque paid and suffers actual damage through the delay, he is discharged to the
extent of such damage, that is to say, to the extent to which such drawer or person is a creditor of the
banker to a large amount than he would have been if such cheque had been paid.
(2) In determining what is a reasonble time, regard shall be had to the nature of the instrument, the
usage of trade and of bankers, and the facts of the particular case.
(3) The holder of the cheque as to which such drawer of person is so discharged shall be a creditor, in
lieu of such drawer or person, of such banker to the extent of such discharge and entitled to recover the
amount from him.
Illustrations
(a) A draws a cheque for Rs. 1,000, and, when the cheque ought to be presented, has funds at the bank to meet
it. The bank fails before the cheque is presented. The drawer is discharged, but the holder can prove against the bank
for the amount of the cheque.
(b) A draws a cheque at Umballa on a bank in Calcutta. The bank fails before the cheque could be presented in
ordinary course. A is not discharged, for he has not suffered actual damage through any delay in presenting the
cheque.]
85. Cheque payable to order.—3
[(1)] Where a cheque payable to order purports to be endorsed by or
on behalf of the payee, the drawee is discharged by payment in due course.
4
[(2) Where a cheque is originally expressed to be payable to bearer, the drawee is discharged
by payment in due course to the bearer thereof, notwithstanding any endorsement whether in full or
in blank appearing thereon, and notwithstanding that any such endorsement purports to restrict or
exclude further negotiation.]
5
[85A. Drafts drawn by one branch of a bank on another payable to order.—where any draft, that
is an order to pay money, drawn by one office of a bank upon another office of the same bank for a sum
of money payable to order on demand, purports to be endorsed by or on behalf of the payee, the bank is
discharged by payment in due course.]
86. Parties not consenting discharged by qualified or limited acceptance.—If the holder of a
bill of exchange acquiesces in a qualified acceptance, or one limited to part of the sum mentioned in
the bill, or which substitutes a different place or time for payment, or which, where the drawees are
not partners, is not signed by all the drawees, all previous parties whose consent is not obtained to
such acceptance are discharged as against the holder and those claiming under him, unless on notice
given by the holder they assent to such acceptance.
Explanation.—An acceptance is qualified
(a) where it is conditional, declaring the payment to be dependent on the happening of an event
therein stated;
(b) where it undertakes the payment of part only of the sum ordered to be paid;
1. Subs. by Act 12 of 1921, s. 2, for “twenty-four”.
2. Subs. by Act 6 of 1897, s. 3, for s. 84.
3. S. 85 re-numbered as sub-section (1) thereof by Act 17 of 1934, s. 2.
4. Ins. by s. 2, ibid.
5. Ins. by Act 25 of 1930, s. 2.
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(c) where no place of payment being specified on the order, it undertakes the payment at a
specified place, and not otherwise or elsewhere; or where, a place of payment being specified in the
order, it undertakes the payment at some other place and not otherwise or elsewhere;
(d) where it undertakes the payment at a time other than that at which under the order it would be
legally due.
87. Effect of material alteration.—Any material alteration of a negotiable instrument renders the
same void as against anyone who is a party thereto at the time of making such alteration and does not
consent thereto, unless it was made in order to carry out the common intention of the original parties;
Alteration by indorsee.—And any such alteration, if made by an indorsee, discharges his indorser
from all liability to him in respect of the consideration thereof.
The provisions of this section are subject to those of sections 20, 49, 86 and 125.
88. Acceptor or indorser bound notwithstanding previous alteration.—An acceptor or indorser of
a negotiable instrument is bound by his acceptance or indorsement notwithstanding any previous
alteration of the instrument.
89. Payment of instrument on which alteration is not apparent.—1
[(1)] Where a promissory note,
bill of exchange or cheque has been materially altered but does not appear to have been so altered, or
where a cheque is presented for payment which does not at the time of presentation appear to be crossed
or to have had a crossing which has been obliterated, payment thereof by a person or banker liable to pay,
and paying the same according to the apparent tenor thereof at the time of payment and otherwise in due
course, shall discharge such person or banker from all liability thereon; and such payment shall not be
questioned by reason of the instrument having been altered or the cheque crossed.
2
[(2) Where the cheque is an electronic image of a truncated cheque, any difference in apparent tenor
of such electronic image and the truncated cheque shall be a material alteration and it shall be the duty of
the bank or the clearing house, as the case may be, to ensure the exactness of the apparent tenor of
electronic image of the truncated cheque while truncating and transmitting the image.
(3) Any bank or a clearing house which receives a transmitted electronic image of a truncated cheque,
shall verify from the party who transmitted the image to it, that the image so transmitted to it and received
by it, is exactly the same.]
90. Extinguishment of rights of action on bill in acceptor's hands.—If a bill of exchange which
has been negotiated is, at or after maturity, held by the acceptor in his own right, all rights of action
thereon are extinguished.