Chapter VIII - Of Notice of Dishonour
Section 98
Section 98: when notice of dishonour is unnecessary
Section 98 lists specific situations in which notice of dishonour is unnecessary.
On this page
Need advice on Section 98?
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
No notice of dishonour is necessary—
(a) when it is dispensed with by the party entitled thereto;
(b) in order to charge the drawer, when he has countermanded payment;
(c) when the party charged could not suffer damage for want of notice;
(d) when the party entitled to notice cannot after due search be found; or the party bound to give notice is, for any other reason, unable without any fault of his own to give it;
(e) to charge the drawers, when the acceptor is also a drawer;
(f) in the case of a promissory note which is not negotiable;
(g) when the party entitled to notice, knowing the facts, promises unconditionally to pay the amount due on the instrument.
Applicability and limits
Applies only when one of the seven listed exceptions removes the need for notice of dishonour.
The clauses have different conditions. For example, a countermand matters to charging the drawer; a later unconditional promise requires knowledge of the facts.
This general notice-of-dishonour provision does not remove the separate written payment-demand requirement in section 138, proviso (b). For a cheque-bounce prosecution under Chapter XVII, check those distinct conditions even where a section 98 exception, such as countermand of payment, appears relevant.
Hypothetical example
Hypothetical: a drawer stops payment before presentment. The holder records the stop-payment instruction before relying on clause (b) to dispense with notice to that drawer.
Steps and evidence
Identify the party to be charged and the precise clause (a)–(g).
Collect evidence for every element of that clause.
If no clause is established, use ordinary notice procedures.
Practical checklist
Do
- Identify the exact clause of Section 98 relied on.
- Preserve proof of the facts satisfying that clause.
- Otherwise follow the ordinary notice rules in Sections 93–94.
Avoid
- The clauses have different conditions. For example, a countermand matters to charging the drawer; a later unconditional promise requires knowledge of the facts.
Glossary
- Countermanded payment
- An instruction by the drawer stopping payment.
- Waiver
- Giving up the right to insist on notice, as described by the applicable exception.
Frequently asked questions
Does every dishonour dispense with notice?
No. Section 98 lists defined exceptions; ordinary notice requirements remain relevant outside them.
Is notice unnecessary whenever payment is refused?
No. A listed Section 98 exception must be established.
Does inability to locate the party automatically qualify?
Clause (d) refers to inability after due search or other inability without the notice giver’s fault.
Does a section 98 exception waive the written demand for a section 138 prosecution?
No. Section 138 has its own written payment-demand condition. Do not treat a general dishonour-notice exception as dispensing with that separate condition.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026