Q: Is the dishonour of cheque defined in negotiable instrument act, 1881 ?

Ans: Dishonour of cheque meaning:- The word dishonour has not been defined in the Negotiable Instruments Act. However Black’s Law Dictionary defines the word “Dishonour”, which is as under:- “To refuse to accept or pay a draft or to pay a promissory note when duly presented. An instrument is dishonoured when a  acceptance is refused, or cannot be acquired within the prescribed time, or in case of bank collections, the instrument is reasonably returned by the midnight deadline; or presentment is excused and the instrument is not duly accepted or paid”.

Though the Negotiable Instruments Act does not define this term but the title of Section 138 lists the insufficiency of funds as being one of the situations that could contribute to a dishonour.

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