Chapter VII - Of Discharge from Liability on Notes, Bills and Cheques
Section 85
Section 85: Drawee discharge on payment of cheques
Section 85 describes discharge of the drawee through payment in due course for the specified order and originally bearer cheques.
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Need advice on Section 85?
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
(1) Where a cheque payable to order purports to be endorsed by or on behalf of the payee, the drawee is discharged by payment in due course.
(2) Where a cheque is originally expressed to be payable to bearer, the drawee is discharged by payment in due course to the bearer thereof, notwithstanding any endorsement whether in full or in blank appearing thereon, and notwithstanding that any such endorsement purports to restrict or exclude further negotiation.
Key rule and applicability
For an order cheque, the text refers to an apparent indorsement by or on behalf of the payee. For a cheque originally expressed payable to bearer, payment in due course to the bearer gives the stated discharge despite later full, blank or restrictive indorsement wording.
Limits and related provisions
Payment in due course remains essential; do not replace it with mere payment. Also distinguish the drawee’s discharge from a collecting banker’s qualified protection under section 131 or a recipient’s title position.
Hypothetical business example
Hypothetical: a bank pays an originally bearer cheque carrying a later full indorsement. It examines subsection (2) and the payment-in-due-course facts before determining its drawee-discharge position.
Practical decision flow
Identify the cheque’s original payment form.
For an order cheque, inspect the indorsement purporting to be by or for the payee.
Assess the payment-in-due-course conditions and record the actual recipient and payment.
Practical checklist
Do
- Identify the cheque’s original payment form.
- For an order cheque, inspect the indorsement purporting to be by or for the payee.
- Assess the payment-in-due-course conditions and record the actual recipient and payment.
Avoid
- Payment in due course remains essential; do not replace it with mere payment. Also distinguish the drawee’s discharge from a collecting banker’s qualified protection under section 131 or a recipient’s title position.
Glossary
- Drawee
- The banker directed by the cheque to pay.
- Originally bearer cheque
- A cheque originally expressed payable to bearer, as specified in subsection (2).
Frequently asked questions
Is any payment sufficient for discharge under this section?
The stated protection requires payment in due course.
Does a later full indorsement necessarily remove the originally-bearer limb?
Subsection (2) expressly addresses later indorsements while preserving its payment-in-due-course condition.
Is this the same as collecting-banker protection?
No. Section 131 addresses a different collection setting and its own conditions.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026