Chapter II - Of Notes, Bills and Cheques
Section 7
Section 7: Drawer, drawee, acceptor and payee
Section 7 assigns the principal party names used throughout the law of bills and cheques. Correctly identifying each role is the starting point for notices, payment and liability.
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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
“Drawer” “Drawee”.—The maker of a bill of exchange or cheque is called the “drawer”; the person thereby directed to pay is called the “drawee”.
“Drawee in case of need”.—When in the Bill or in any indorsement thereon the name of any person is given in addition to the drawee to be resorted to in case of need such person is called a “drawee in case of need.”
“Acceptor”.—After the drawee of a bill has signed his assent upon the bill, or, if there are more parts thereof than one, upon one of such parts, and delivered the same, or given notice of such signing to the holder or to some person on his behalf, he is called the “acceptor”.
“Acceptor for honour”.—When a bill of exchange has been noted or protested for non-acceptance or for better security, and any person accepts it supra protest for honour of the drawer or of any one of the indorsers, such person is called an “acceptor for honour”.
“Payee”.—The person named in the instrument, to whom or to whose order the money is by the instrument directed to be paid, is called the “Payee”.
Key rule and applicability
The drawer makes the bill or cheque; the drawee is directed to pay; the named recipient is the payee. A bill’s drawee becomes its acceptor through the stated signed assent and delivery or notice process.
Limits and related provisions
A drawee is not automatically an acceptor merely because the bill names that person. A drawee in case of need and an acceptor for honour are separate roles with their own conditions; do not merge them into the ordinary drawee role.
Hypothetical business example
Hypothetical: a supplier draws a bill directing its customer to pay the supplier’s financier. The supplier is the drawer, the customer the drawee, and the named financier the payee. The customer becomes the acceptor only when the statutory acceptance steps are satisfied.
Practical decision flow
Read the face and any indorsements to identify the maker, directed payer and named payee.
For an alleged acceptance, retain the signed assent and evidence of delivery or notice.
Record any additional drawee in case of need or acceptance for honour separately.
Practical checklist
Do
- Read the face and any indorsements to identify the maker, directed payer and named payee.
- For an alleged acceptance, retain the signed assent and evidence of delivery or notice.
- Record any additional drawee in case of need or acceptance for honour separately.
Avoid
- A drawee is not automatically an acceptor merely because the bill names that person. A drawee in case of need and an acceptor for honour are separate roles with their own conditions; do not merge them into the ordinary drawee role.
Glossary
- Drawee
- The person whom the bill or cheque directs to pay.
- Payee
- The named person to whom or to whose order payment is directed.
Frequently asked questions
Are drawer and drawee the same role?
No. The drawer makes the bill or cheque; the drawee is directed to pay.
Does a drawee become an acceptor just by being named?
No. Section 7 describes signed assent on the bill and delivery or notice of that signing.
Is an acceptor for honour the ordinary drawee?
Not necessarily. The definition describes a person accepting supra protest for the honour of the drawer or an indorser under the stated circumstances.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026