Q.20. Under what circumstances a bill of exchange is dishonoured
When a bill of exchange is drawn in
the favour of a specified person or firm, it is not necessary that the bill
will be accepted. Due to some complexities the drawee does not accept the bill.
The circumstances under which a bill of exchange is dishonoured are as follows.
Dishonour By Non-Acceptance
When a bill of exchange is drawn
against the drawee and the drawee defuses to accept the same, this refused is
called dishonour by non-acceptance.
Dishonour By Non-Payment
When the bill is presented to the
drawee for its payment, sometimes the drawee fails to pays it. This failure of
the drawee to the payment of the bill dishonours the bill by non-payment. In
such a situation the drawer of the bill holds the complete right to take lawful
action against the drawer.
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