Chapter V - Of Presentment
Section 77
Section 77: liability of banker for negligently dealing with bill presented for payment
Section 77 addresses loss caused when a banker mishandles a duly presented, dishonoured bill payable at that bank.
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Need advice on Section 77?
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
When a bill of exchange, accepted payable at a specified bank, has been duly presented there for payment and dishonoured, if the banker so negligently or improperly keeps, deals with or delivers back such bill as to cause loss to the holder, he must compensate the holder for such loss.
Applicability and limits
This provision concerns a bill accepted payable at a specified bank, duly presented there and dishonoured, followed by the bank’s negligent or improper handling.
The holder must connect the handling to an actual loss; dishonour alone does not establish the banker’s compensation duty under this section.
Hypothetical example
Hypothetical: after dishonour, a bank loses the original accepted bill, leaving the holder unable to pursue an otherwise available claim. The handling and resulting loss require proof.
Steps and evidence
Retain the bill acceptance and specified-bank instruction.
Keep the bank’s presentment and dishonour record.
Document the bank’s handling and quantify the resulting loss.
Practical checklist
Do
- Confirm the bill was accepted payable at the specified bank.
- Preserve evidence of due presentment and dishonour.
- Identify the bank’s handling and the loss it caused.
Avoid
- The holder must connect the handling to an actual loss; dishonour alone does not establish the banker’s compensation duty under this section.
Glossary
- Specified bank
- The bank named as the place where the accepted bill is payable.
- Holder
- A person entitled in their own name to possess the instrument and recover its amount.
Frequently asked questions
Is any dishonoured bill enough to trigger this section?
No. Section 77 also requires the specified-bank, due-presentment, improper-handling and resulting-loss conditions.
Does Section 77 cover a cheque?
The section specifically describes a bill of exchange accepted payable at a specified bank.
What must cause the loss?
The banker’s negligent or improper keeping, dealing with or returning the dishonoured bill.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026