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A holder seeks to hold a prior indorser liable after dishonour of a cheque. Under sections 93 and 98 of…

Section 93 requires ordinary notice of dishonour to a party the holder seeks to hold liable, subject to the exceptions in section 98. Waiver, absence of possible damage and…

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A holder seeks to hold a prior indorser liable after dishonour of a cheque. Under sections 93 and 98 of the Negotiable Instruments Act, 1881, in which case must the holder give that indorser notice? Assume no other exemption applies.

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Answer and explanation

Correct answer D

Section 93 requires ordinary notice of dishonour to a party the holder seeks to hold liable, subject to the exceptions in section 98. Waiver, absence of possible damage and an unsuccessful due search are three exceptions. On the stated facts, the reachable indorser who would suffer damage remains entitled to notice.

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Option A

Section 98(a) dispenses with notice if the entitled party waives it.

Option B

Section 98(c) dispenses with notice in these circumstances.

Option C

Section 98(d) dispenses with notice if the person cannot be found after due search.

Option D

Section 93 requires notice to a party the holder seeks to hold liable, and none of the stated exceptions applies here.

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