CHAPTER X OF R E A S O N A B L E T I M E

Section 106: Reasonable time of giving notice of dishonour

If the holder and the party to whom notice of dishonour is given carry on business or live (as the case may be) in different places, such notice is given within a reasonable time if it is dispatched by the next post or on the day next after the day of dishonour.

If the said parties carry on business or live in the same place, such notice is given within a reasonable time if it is dispatched in time to reach its destination on the day next after the day of dishonour.

Questions on this section

1 question in 4 of our papers cite Section 106. Try these from the free papers:

1. H, the holder of a bill, and E, an indorser, carry on business in different towns. The bill is dishonoured on 10th June, and no public holiday intervenes. Under Section 106 of the Negotiable Instruments Act, 1881, H's notice of dishonour to E is given within a reasonable time if it is:

Practise questions on Negotiable Instruments Act, 1881