Chapter III - Parties to Notes, Bills and Cheques
Section 32
Section 32: liability of maker of note and acceptor of bill
Section 32 states when the maker of a note and acceptor of a bill must pay, unless a contrary contract applies, and what follows from their default.
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Need advice on Section 32?
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
In the absence of a contract to the contrary, the maker of a promissory note and the acceptor before maturity of a bill of exchange are bound to pay the amount thereof at maturity according to the apparent tenor of the note or acceptance respectively, and the acceptor of a bill of exchange at or after maturity is bound to pay the amount thereof to the holder on demand.
In default of such payment as aforesaid, such maker or acceptor is bound to compensate any party to the note or bill for any loss or damage sustained by him and caused by such default.
Applicability and limits
Absent a contrary contract, the note maker and a bill acceptor who accepted before maturity must pay at maturity according to the apparent tenor of the note or acceptance. An acceptor who accepts at or after maturity must pay the holder on demand.
The statutory obligation is subject to any contract to the contrary; a default may create compensation liability to a party who sustained loss.
Hypothetical example
Hypothetical: an accepted bill matures and remains unpaid. The holder checks the accepted terms and any contrary contract before pursuing the acceptor.
Evidence and decision flow
Confirm maker or acceptor status, maturity and whether acceptance occurred before maturity or at or after maturity.
Review the apparent tenor and contrary agreement.
Preserve demand, non-payment and loss records.
Practical checklist
Do
- Identify the maker or acceptor and whether acceptance occurred before or at/after maturity.
- Check the apparent tenor and any contract to the contrary.
- Preserve demand, payment and loss records if default occurs.
Avoid
- Do not treat the instrument label alone as conclusive; check the signed wording and related statutory conditions.
Glossary
- Maker
- Person who undertakes payment under a promissory note.
- Acceptor
- Drawee who accepts a bill and assumes the stated payment obligation.
Frequently asked questions
Can a contrary contract change the position?
Section 32 expressly begins with an exception for a contract to the contrary.
Why review apparent tenor?
For a note maker or pre-maturity acceptor, payment at maturity follows the apparent tenor of the note or acceptance. A bill accepted at or after maturity is payable to the holder on demand.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026