Chapter XI - Of Acceptance and Payment for Honour and Reference in Case of Need
Section 115
Section 115: Drawee in case of need and dishonour
Section 115 makes the named drawee in case of need relevant to when a bill is treated as dishonoured.
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Need advice on Section 115?
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
Where a drawee in case of need is named in a bill of exchange, or in any indorsement thereon, the bill is not dishonoured until it has been dishonoured by such drawee.
Key rule and applicability
The additional drawee may be named on the bill itself or in an indorsement. If named, the bill is not dishonoured until that drawee has dishonoured it.
Limits and related provisions
Do not stop the analysis at refusal by the ordinary drawee while ignoring a named drawee in case of need. Check the actual bill and indorsements rather than relying only on a transaction summary.
Hypothetical business example
Hypothetical: the ordinary drawee refuses a bill, but an indorsement names another business as drawee in case of need. The holder checks the additional drawee’s position before treating the bill as dishonoured under this rule.
Practical decision flow
Inspect the bill and each indorsement for a drawee in case of need.
Identify that drawee and retain the relevant response or dishonour evidence.
Apply the rule before proceeding on the assumption that the bill is already dishonoured.
Practical checklist
Do
- Inspect the bill and each indorsement for a drawee in case of need.
- Identify that drawee and retain the relevant response or dishonour evidence.
- Apply the rule before proceeding on the assumption that the bill is already dishonoured.
Avoid
- Do not stop the analysis at refusal by the ordinary drawee while ignoring a named drawee in case of need. Check the actual bill and indorsements rather than relying only on a transaction summary.
Glossary
- Drawee in case of need
- The additional drawee named for resort in case of need.
- Dishonour condition
- The further dishonour required where that drawee is named.
Frequently asked questions
Can the additional drawee be named in an indorsement?
Yes. The section expressly includes that location.
Is ordinary-drawee refusal always enough in this setting?
No. The bill is not dishonoured until dishonoured by the named drawee in case of need.
Which related provision addresses acceptance and payment without protest?
Section 116 deals with that drawee’s ability to accept and pay without previous protest.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026