Chapter VII - Of Discharge from Liability on Notes, Bills and Cheques
Section 82
Section 82: Discharge by cancellation, release or payment
Section 82 distinguishes discharge by cancellation, release and payment, with different conditions for each route and the parties affected.
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Need advice on Section 82?
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 maker, acceptor or indorser respectively of a negotiable instrument is discharged from liability thereon—
(a) by cancellation.—to a holder thereof who cancels such acceptor's or indorser’s name with intent to discharge him, and to all parties claiming under such holder;
(b) by release.—to a holder thereof who otherwise discharges such maker, acceptor or indorser, and to all parties deriving title under such holder after notice of such discharge;
(c) by payment.—to all parties thereto, if the instrument is payable to bearer, or has been indorsed in blank, and such maker, acceptor or indorser makes payment in due course of the amount due thereon.
Key rule and applicability
Cancellation depends on the stated name cancellation and intent to discharge; release has its own holder and notice-linked downstream effect. The payment route concerns a bearer or blank-indorsed instrument and payment in due course by the specified liable party.
Limits and related provisions
Do not treat any physical mark, informal concession or payment as automatically releasing everyone. Identify the applicable clause, the relevant party, intent or notice where required, and the payment-in-due-course conditions.
Hypothetical business example
Hypothetical: a holder agrees to release an indorser and later transfers the instrument. The reviewing business identifies the release and the later recipient’s notice position under clause (b), rather than assuming all forms of discharge affect every downstream claim identically.
Practical decision flow
Identify whether cancellation, release or payment is relied upon.
Collect the evidence for that clause’s intent, notice or instrument-and-payment conditions.
Map which holder and downstream parties fall within the stated effect.
Practical checklist
Do
- Identify whether cancellation, release or payment is relied upon.
- Collect the evidence for that clause’s intent, notice or instrument-and-payment conditions.
- Map which holder and downstream parties fall within the stated effect.
Avoid
- Do not treat any physical mark, informal concession or payment as automatically releasing everyone. Identify the applicable clause, the relevant party, intent or notice where required, and the payment-in-due-course conditions.
Glossary
- Discharge
- Release from the instrument liability in the stated statutory setting.
- Payment in due course
- The defined payment standard relevant to the payment limb.
Frequently asked questions
Does clause (c) concern every payment form without qualification?
No. It refers to bearer or blank-indorsed instruments and payment in due course by the specified party.
Is intent relevant to cancellation?
Yes. Clause (a) states intent to discharge.
Does notice matter for a later title holder under the release limb?
Clause (b) expressly refers to deriving title after notice of the discharge.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026