Sections 132-133 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
A bill of exchange may be drawn in several numbered parts, called a set, so that if one part is lost in transit another can be used. Section 132 says what a set is and when it is extinguished, with an Exception; Section 133 says who gets the other parts when different holders in due course hold different parts. This follows the consolidated text consulted.
Bills of exchange may be drawn in parts, each part numbered and stating that it continues payable only so long as the others remain unpaid. All the parts together make a set, but the whole set is only one bill, and it is extinguished when one part, if a separate bill, would be extinguished (s.132). The Exception: if a person accepts or indorses different parts in favour of different persons, he and the later indorsers of each part are liable on that part as if it were a separate bill. Between holders in due course of different parts, the one who first acquired title to his part is entitled to the other parts and the money represented by the bill (s.133).
Why bills are drawn in sets
The text does not state the purpose, so this is background only. A bill sent abroad may be lost or delayed, and a set lets the parts travel by different routes. This is typical of international trade, which is the setting of our guide on the bill of exchange in export trade. If you are dealing with a set of bills and a dispute over who holds which part, a legal consultation can help you place the parts against these two sections. A note on spelling: the Act writes "indorse"; "endorse" is the common spelling.
The meaning of a bill of exchange is in Section 5. These two sections are about how a bill drawn in parts is treated.
Section 132: set of bills
The text: "Bills of exchange may be drawn in parts, each part being numbered and containing a provision that it shall continue payable only so long as the others remain unpaid. All the parts together make a set; but the whole set constitutes only one bill, and is extinguished when one of the parts, if a separate bill, would be extinguished."
Points to take from it:
- Permission. Bills "may" be drawn in parts. Nothing in the text makes it compulsory.
- What each part must contain. It is numbered, and it contains a provision that it continues payable only so long as the others remain unpaid.
- One bill. "The whole set constitutes only one bill." Payment of one part does not leave the other parts payable as new bills.
- Extinguishment. The set is extinguished when one part, if a separate bill, would be extinguished. If one part is paid, the whole bill is discharged. For the Act's rules on discharge by payment, see Sections 82 and 83.
The Exception
The text: "Exception —When a person accepts or indorses different parts of the bill in favour of different persons, he and the subsequent indorsers of each part are liable on such part as if it were a separate bill."
If a person accepts or indorses different parts in favour of different persons, then he, and the later indorsers of each part, are liable on that part as though it were a separate bill. This is a protection for those who took a part from such a person. The copy consulted prints the Exception without a full stop after "Exception" and uses a dash; it is quoted as printed.
Section 133: holder of the first acquired part is entitled to all
The text: "As between holders in due course of different parts of the same set, he who first acquired title to his part is entitled to the other parts and the money represented by the bill."
The test is the order in which the holders in due course acquired title to their parts. The earliest acquirer is entitled to the other parts and to the money represented by the bill. The rule applies "as between holders in due course", so it is a rule among those holders; the text does not say how it works against a person who is not a holder in due course. The definition of a holder in due course is in Section 9.
Comparison
| Point | Section 132 | Section 133 |
|---|---|---|
| Subject | What a set is; extinction of the set; Exception | Who is entitled to all parts |
| Key test | Whole set is one bill; extinguished when one part would be | Who first acquired title to his part, as between holders in due course |
| Result | One liability, discharged once | Earliest acquirer takes the other parts and the money |
Worked example
Example. Tanveer Exports draws a bill of exchange on Uppal Importers in three numbered parts, each stating that it remains payable only so long as the others are unpaid. Part 1 is sent to Verma Bank, part 2 to Wagle Finance and part 3 is kept. Under Section 132 the three parts together are one bill, not three. If Uppal Importers pays on part 1, the bill is extinguished, as it would be had part 1 been a separate bill. Suppose instead Uppal Importers accepts part 1 for Verma Bank and also accepts part 2 for Wagle Finance, who are different persons. Under the Exception, Uppal Importers and the later indorsers of each part are liable on that part as if it were a separate bill. If Verma Bank and Wagle Finance are both holders in due course who each want the money, Section 133 favours the one who first acquired title to his part.
Points to watch
- Numbering and the "so long as" wording. Section 132 says each part is numbered and carries the provision. The text does not say what follows if a part lacks it.
- Acceptance and indorsement of different parts. The Exception bites when different parts go to different persons.
- Holder in due course. Section 133 speaks only of holders in due course.
- Not about cheques. Cheques are not mentioned in these sections.
- No dates or fees. The text gives none.
Need help with a set of bills?
If you hold one part of a set, or a counterparty holds another, who may demand payment is a question of timing and title. A legal consultation with us can help you line up the dates against Sections 132 and 133.
Key takeaways
- A set is a bill drawn in numbered parts, each payable only so long as the others remain unpaid.
- The whole set is one bill, extinguished when one part would be.
- Under the Exception, acceptance or indorsement of different parts in favour of different persons makes the person and later indorsers liable on each part as if separate.
- Among holders in due course, the first to acquire title to his part is entitled to the other parts and the money.
Read next
- Sections 131 and 131A: protection of collecting banker and drafts
- Sections 134 to 137: foreign instruments and which law applies
- Section 5: bill of exchange, meaning and essentials
- Bill of exchange in export trade
Disclaimer: Based on a consolidated text of the Negotiable Instruments Act, 1881 stating the position as of 26 December 2015 and on the Negotiable Instruments (Amendment) Act, 2018, as consulted on 2 October 2026. Later amendments and current criminal procedure law should be checked. This article is general information, not legal advice; check the official text before acting.