Sections 95-97 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.
Section 95 says a party who receives notice of dishonour must pass it on to any prior party he wants to make liable to himself. Section 96 gives an agent holding the instrument for presentment the same time to notify his principal as a holder would have, and gives the principal a further like period. Section 97 says notice sent to a party who has died, without the sender knowing of the death, is sufficient. This article reads all three as per the consolidated text consulted.
A party who receives notice of dishonour must, to make a prior party liable to himself, give that prior party notice within a reasonable time, unless the prior party otherwise receives due notice as provided by section 93 (section 95). An agent holding the instrument for presentment gets the same time to notify his principal as a holder would, and the principal gets a further like period (section 96). If the party to whom notice is sent is dead and the sender does not know it, the notice is sufficient (section 97).
The chain of notice
Section 93 requires the holder, or a party who remains liable, to give notice of dishonour to the parties he seeks to charge; see notice of dishonour: who gives it and how. Section 94 covers the mode of notice. Sections 95 to 97 deal with how the notice travels along the line of parties. Think of a bill with several indorsers: the holder gives notice to some or all of them, and each indorser who receives it will want to pass it back to the party before him. If you are managing such a chain and need to word the notices correctly, our legal notice drafting service can help you keep each step within the Act.
Section 95: a party receiving notice must transmit it
Section 95 reads: "Any party receiving notice of dishonour must, in order to render any prior party liable to himself, give notice of dishonour to such party within a reasonable time, unless such party otherwise receives due notice as provided by section 93."
Break it down:
- Who: any party who receives notice of dishonour.
- Purpose: "in order to render any prior party liable to himself". The duty is tied to his wish to hold a prior party liable.
- What: give notice of dishonour to that prior party.
- When: "within a reasonable time". No day count is given.
- Exception: "unless such party otherwise receives due notice as provided by section 93". If the prior party has already received due notice from another source, a separate notice is not needed.
The rule is conditional. A party who does not intend to look to a prior party need not give notice. A party who does, must give notice within a reasonable time or else risks losing the claim against that prior party. The text does not say what the consequence is in terms; it frames the notice as the step required "in order to render" the prior party liable.
| Situation | Position under section 95 |
|---|---|
| Party wants to hold a prior party liable to himself | Must give that prior party notice within a reasonable time |
| The prior party has already received due notice under section 93 | No separate notice required |
| Party does not seek to hold any prior party liable | The text does not require him to give notice |
Example 1. A bill is dishonoured. The holder, Fakir Chand, gives notice to indorser Gill & Sons. Gill & Sons want to recover from the previous indorser, Hari Textiles. Under section 95, Gill & Sons must give notice of dishonour to Hari Textiles within a reasonable time, unless Hari Textiles has otherwise received due notice under section 93.
Example 2. Fakir Chand also gave notice directly to Hari Textiles. Gill & Sons need not send a separate notice, because Hari Textiles has otherwise received due notice as provided by section 93.
Section 96: the agent for presentment
Section 96 provides: "When the instrument is deposited with an agent for presentment, the agent is entitled to the same time to give notice to his principal as if he were the holder giving notice of dishonour, and the principal is entitled to a further like period to give notice of dishonour."
Two limbs:
- The agent's time. The agent has the same time as a holder would have to give notice to his principal.
- The principal's further time. The principal then has "a further like period" to give notice of dishonour to the parties he seeks to charge.
The result is a stacking of periods. The Act does not say how long a reasonable time is, so this stacking is stated in terms of "the same time" and "a further like period". It does not convert into a number of days. For agency in general, see Section 182 of the Indian Contract Act, 1872: Agent and Principal Defined.
The section applies where the instrument is "deposited with an agent for presentment". A common modern example is a bank asked to collect an instrument on behalf of its customer; the text consulted does not mention banks in this section, so the example is only an illustration of the idea of an agent for presentment.
Example 3. Ibrahim Traders deposits a bill with an agent to present for payment. The bill is dishonoured. Under section 96, the agent has the same time as a holder to give notice to Ibrahim Traders. Ibrahim Traders then has a further like period to give notice of dishonour to the indorsers it wants to charge.
Section 97: notice to a party who has died
Section 97 states: "When the party to whom notice of dishonour is despatched is dead, but the party despatching the notice is ignorant of his death, the notice is sufficient."
The conditions:
- The notice is despatched to a party.
- That party is dead.
- The party despatching the notice is ignorant of his death.
Result: the notice is sufficient.
Compare section 94, which allows notice to be given to a deceased person's legal representative; see notice of dishonour: who gives it and how. Section 97 covers the case where the sender did not know of the death and sent the notice to the person himself. It does not say what happens if the sender knew of the death. In that case, the route described in section 94, notice to the legal representative, is the one the text provides.
Example 4. Jaggi Enterprises sends notice of dishonour to an indorser, Kamat, at his place of business. Kamat had died a week earlier and Jaggi Enterprises did not know. Under section 97, the notice is sufficient.
Practical points
- Move quickly down the chain. Section 95 requires notice within a reasonable time; do not wait for the holder's instruction.
- Check what the prior party already knows. If the holder has already given notice to the prior party, a second notice is not required, but a record of what each party received is useful.
- Using an agent adds time, not certainty. Section 96 gives the agent and the principal their periods, but the Act gives no day count.
- Check for deaths before sending. If you know a party has died, send the notice to the legal representative.
- Keep copies and proof of despatch. Each section turns on the notice having been given or despatched.
- Do not mix with section 138. The cheque-bounce notice has its own timing, covered in time limits under section 138.
Need help managing notices along a chain of parties?
If you hold or have received notice of dishonour and need to pass it on, or you are an agent or principal handling a dishonoured instrument, our legal notice drafting team can prepare each notice to fit the Act. Bring the instrument, the list of indorsers and the dates you received notice.
Key takeaways
- Section 95: a party who receives notice must give notice to a prior party within a reasonable time to make him liable to himself, unless the prior party otherwise receives due notice under section 93.
- Section 96: an agent holding the instrument for presentment has the same time as a holder to notify his principal; the principal has a further like period.
- Section 97: notice despatched to a party who has died, with the sender ignorant of the death, is sufficient.
- The Act gives no day count for "reasonable time" in these sections.
Read next
- Notice of dishonour: who gives it and how (sections 93-94)
- Dishonour by non-acceptance and by non-payment (sections 91-92)
- Reply to a Section 138 notice: draft for drawer
- Service of documents on a company: how legal notices work
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.