Chapter VII - Of Discharge from Liability on Notes, Bills and Cheques
Section 86
Section 86: Qualified acceptance and non-consenting parties
Section 86 protects previous parties when a holder accepts a qualified or limited acceptance without obtaining their consent or the stated later assent.
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Need advice on Section 86?
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
If the holder of a bill of exchange acquiesces in a qualified acceptance, or one limited to part of the sum mentioned in the bill, or which substitutes a different place or time for payment, or which, where the drawees are not partners, is not signed by all the drawees, all previous parties whose consent is not obtained to such acceptance are discharged as against the holder and those claiming under him, unless on notice given by the holder they assent to such acceptance.
Explanation.—An acceptance is qualified— (a) where it is conditional, declaring the payment to be dependent on the happening of an event therein stated;
(b) where it undertakes the payment of part only of the sum ordered to be paid;
(c) where no place of payment being specified on the order, it undertakes the payment at a specified place, and not otherwise or elsewhere; or where, a place of payment being specified in the order, it undertakes the payment at some other place and not otherwise or elsewhere;
(d) where it undertakes the payment at a time other than that at which under the order it would be legally due.
Key rule and applicability
The provision covers the specified conditional, part-amount, changed-place or changed-time acceptances and the stated multiple-non-partner-drawee setting. Previous non-consenting parties are discharged against the holder and those claiming under that holder unless they assent on the holder’s notice.
Limits and related provisions
Do not assume a revised acceptance affects only the acceptor. Identify the qualification, earlier parties and the exact consent or notice-and-assent record. The explanation’s different place conditions should not be simplified into every mention of an address.
Hypothetical business example
Hypothetical: a drawee offers to accept only part of a bill’s sum and the holder agrees. Before relying on recourse against earlier parties, the holder examines whether their consent or the stated assent was obtained.
Practical decision flow
Compare the offered acceptance with the bill’s amount, conditions, time and place.
Identify the earlier parties affected and any relevant multiple-drawee facts.
Retain consent or the holder’s notice and resulting assent before assessing continuing liability.
Practical checklist
Do
- Compare the offered acceptance with the bill’s amount, conditions, time and place.
- Identify the earlier parties affected and any relevant multiple-drawee facts.
- Retain consent or the holder’s notice and resulting assent before assessing continuing liability.
Avoid
- Do not assume a revised acceptance affects only the acceptor. Identify the qualification, earlier parties and the exact consent or notice-and-assent record. The explanation’s different place conditions should not be simplified into every mention of an address.
Glossary
- Qualified acceptance
- The conditional or otherwise qualified acceptance described by the explanation.
- Assent on notice
- The agreement given after the holder’s notice referred to by the saving clause.
Frequently asked questions
Can accepting only part of the amount trigger this section?
Yes. Part-amount acceptance is expressly included.
Are earlier parties released even when the required assent is given?
The text preserves their position where, on the holder’s notice, they assent to the acceptance.
Does the rule mention changed payment time?
Yes. The explanation includes payment at a time different from when it would legally be due under the order.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026