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I. Non-acceptance:
A bill of exchange is non accepted in the following cases. I. When the drawer or one of several drawers fails to accept the bill within 42 hrs of its due presentment for acceptance. II. When the presentment is exceed and the bill remains unaccepted. III. Where the drawee has not capacity to contract. IV. Where the drawee gives the conditional acceptance. V. Where a drawee in case of need is named in a bill of exchange, or any endorsement thereon, the bill not dischonoured until it has been dishonoured by such drawee.
3. Effect of dishonour:
The drawer and all the endorsers of the bill become liable to the holder if the bill is dishonoured either by non-payment provided that he gives them notice of such dishonour.
4. Notice of dishonour:
The holder must give a notice of dishonour to all parties against whom he wants to file suit.
Exception:
Maker of a note acceptor of a bill or drawee of a cheque. (ii) In case of persons jointly liable, notice to any one of them is sufficient. (iii) To the official assignee if the person has been declared insolvent.
7. Form of notice:
It may be (i) oral (ii) written.
8. Time of notice:
Notice must be given within reasonable time.
9. Effect of notice:
(i) When the party to whom notice of dishonour is dispatched is dead, the party dispatching the notice is ignorant of his death, the notice is sufficient. (ii) If the notice is duly directed and sent by the post and miscarries, such miscarriage does not render the notice invalid.
(i) When it is dispensed with by the party entitled to notice. (ii) In order to charge the drawer, when he has countermanded payment. (iii) When the party charged could not suffer damage for want of notice. (iv) When the party entitled to notice can not after due search, be found. (v) To charge the drawers, when the acceptors is also a drawer. (vi) In case of promissory note. (vii) When after knowing the facts, the party entitled to notice promises to pay unconditionally.
11. Conclusion:
To conclude I can say that, a negotiable instrument is said to be dishonoured when the drawee refuse to accept it or not make payment. in such situation a notice of dishonour must be given to the drawee under the negotiable instrument act a person is entitled for compensation with out giving the notice of dishonour in some cases.