Chapter IV - Of Negotiation
Section 59
Section 59: Acquisition after dishonour or maturity
Section 59 limits a holder acquiring after notified dishonour or after maturity to the transferor’s rights, with a separate accommodation-note-or-bill proviso.
On this page
Need advice on Section 59?
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 holder of a negotiable instrument, who has acquired it after dishonour, whether by non-acceptance or non-payment, with notice thereof, or after maturity, has only, as against the other parties, the rights thereon of his transferor:
Accommodation note or bill.—Provided that any person who, in good faith and for consideration, becomes the holder, after maturity, of a promissory note or bill of exchange made, drawn or accepted without consideration, for the purpose of enabling some party thereto to raise money thereon, may recover the amount of the note or bill from any prior party.
Illustration: The acceptor of a bill of exchange, when he accepted it, deposited with the drawer certain goods as a collateral security for the payment of the bill, with power to the drawer to sell the goods and apply the proceeds in discharge of the bill if it were not paid at maturity. The bill not having been paid at maturity, the drawer sold the goods and retained the proceeds, but indorsed the bill to A. A's title is subject to the same objection as the drawer's title.
Key rule and applicability
For acquisition after dishonour, the text includes notice of that dishonour; acquisition after maturity is separately stated. The proviso protects the described good-faith holder for consideration of an accommodation note or bill acquired after maturity.
Limits and related provisions
Do not attach the notice qualifier to the after-maturity limb as though maturity is irrelevant without notice. Equally, do not omit the accommodation proviso or treat it as covering every overdue commercial debt.
Hypothetical business example
Hypothetical: a financier buys an overdue bill and discovers a defence available against the transferor. It evaluates the transferor-rights limitation and checks whether the instrument and acquisition genuinely meet the specific accommodation proviso.
Practical decision flow
Record acquisition time against dishonour and maturity and any dishonour notice.
Identify the transferor’s rights and relevant objections.
Assess the accommodation purpose, good faith and consideration only if the proviso is relied upon.
Practical checklist
Do
- Record acquisition time against dishonour and maturity and any dishonour notice.
- Identify the transferor’s rights and relevant objections.
- Assess the accommodation purpose, good faith and consideration only if the proviso is relied upon.
Avoid
- Do not attach the notice qualifier to the after-maturity limb as though maturity is irrelevant without notice. Equally, do not omit the accommodation proviso or treat it as covering every overdue commercial debt.
Glossary
- Transferor’s rights
- The rights available to the person from whom the holder acquired the instrument.
- Accommodation proviso
- The exception for the specified note or bill used to enable a party to raise money.
Frequently asked questions
Does the dishonour limb mention notice?
Yes. It refers to acquisition after dishonour with notice thereof.
Is after-maturity acquisition a separate limb?
Yes. The section separately states acquisition after maturity.
Does the proviso cover every overdue instrument without conditions?
No. Its note-or-bill accommodation purpose, good faith and consideration requirements must be met.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026