Chapter XI - Of Acceptance and Payment for Honour and Reference in Case of Need
Section 111
Section 111: Liability of acceptor for honour
Section 111 identifies who may claim against an acceptor for honour, the compensating parties and a specific presentment timing condition for liability to the holder.
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Need advice on Section 111?
This article is for general information. Refer to the Negotiable Instruments Act, 1881 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
An acceptor for honour binds himself to all parties subsequent to the party for whose honour he accepts to pay the amount of the bill if the drawee do not; and such party and all prior parties are liable in their respective capacities to compensate the acceptor for honour for all loss or damage sustained by him in consequence of such acceptance.
But an acceptor for honour is not liable to the holder of the bill unless it is presented, or (in case the address given by such acceptor on the bill is a place other than the place where the bill is made payable) forwarded for presentment, not later than the day next after the day of its maturity.
Key rule and applicability
The acceptor for honour undertakes payment to parties subsequent to the honoured party if the drawee does not pay. The honoured party and prior parties owe the stated compensation in their respective capacities. Liability to the holder also depends on the required presentment or forwarding by the day after maturity.
Limits and related provisions
The timing alternative for forwarding is tied to the acceptor’s stated address being in a different place from the bill’s payment place. Do not treat every dispatch as sufficient without that condition, and read section 112’s further charging requirements.
Hypothetical business example
Hypothetical: the acceptor for honour gives an address in another place from where the bill is payable. The holder records maturity and evidence that the bill was forwarded for presentment no later than the next day, while also checking the drawee-dishonour requirements.
Practical decision flow
Identify the honoured party and map the earlier and later parties.
Record maturity, the acceptor’s on-bill address and the payment place.
Retain timely presentment or qualifying forwarding evidence and examine section 112 before claiming payment.
Practical checklist
Do
- Identify the honoured party and map the earlier and later parties.
- Record maturity, the acceptor’s on-bill address and the payment place.
- Retain timely presentment or qualifying forwarding evidence and examine section 112 before claiming payment.
Avoid
- The timing alternative for forwarding is tied to the acceptor’s stated address being in a different place from the bill’s payment place. Do not treat every dispatch as sufficient without that condition, and read section 112’s further charging requirements.
Glossary
- Subsequent party
- A party after the person for whose honour acceptance was made.
- Forwarding for presentment
- The timing alternative available in the different-place setting described in the section.
Frequently asked questions
Is the acceptor for honour liable to every party without qualification?
The provision identifies subsequent parties and states additional conditions for liability to the holder.
What is the specified presentment deadline?
Not later than the day next after maturity, using the permitted presentment or qualifying forwarding route.
Who may owe the acceptor compensation?
The honoured party and prior parties, in their respective capacities, for the stated loss or damage.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026