Chapter III - Parties to Notes, Bills and Cheques
Section 30
Section 30: liability of drawer
Section 30 deals with the drawer’s compensation liability to the holder after dishonour of a bill or cheque, subject to due notice.
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Need advice on Section 30?
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
The drawer of a bill of exchange or cheque is bound, in case of dishonour by the drawee or acceptor thereof, to compensate the holder, provided due notice of dishonour has been given to, or received by, the drawer as hereinafter provided.
Applicability and limits
The drawer of a bill or cheque compensates the holder for loss caused by dishonour when the holder has given, or the drawer has received, due notice.
The notice condition matters; the section does not make the drawer liable for every claimed loss without proving dishonour and the statutory notice position.
Hypothetical example
Hypothetical: a supplier’s cheque is returned unpaid. The holder preserves the bank memo and notice proof before seeking compensation from the drawer.
Evidence and decision flow
Confirm the drawer and dishonour.
Establish due notice given or received.
Document loss resulting from dishonour.
Practical checklist
Do
- Preserve the instrument and the bank or drawee’s dishonour record.
- Record when and how notice of dishonour reached the drawer.
- Assess the separate cheque-offence rules in Chapter XVII only where their elements are present.
Avoid
- Do not treat the instrument label alone as conclusive; check the signed wording and related statutory conditions.
Glossary
- Drawer
- Person who draws the bill or cheque.
- Due notice
- Notice satisfying the Act’s dishonour-notice requirements.
Frequently asked questions
Does Section 30 itself create the Section 138 criminal offence?
No. Section 30 states a drawer’s compensation liability; Section 138 has separate offence elements and conditions.
Is a bank return alone enough for a Section 30 claim?
The section also refers to due notice and loss or damage caused by dishonour.
Where is notice manner addressed?
Sections 93 and 94 set important notice requirements.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026