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CS Executive · Jurisprudence, Interpretation and General Laws · Law relating to Negotiable Instruments

A cheque is drawn and indorsed in India but is made payable at a bank in France. On presentment it is dishonoured, and the indorsee gives notice of dishonour as required by French law, though not as required by the Indian rules for bills that are not foreign. Is the notice sufficient?

The notice is sufficient. When a cheque is payable at a place different from where it was made or indorsed, the law of the place of payment, here France, determines what constitutes dishonour and what notice of dishonour is sufficient.

  1. ANo, because the cheque was drawn and indorsed in India, so only Indian rules apply
  2. BYes, because the law of the place where the cheque is payable determines what constitutes dishonour and what notice is sufficientCorrect
  3. CNo, because notice must comply with both French and Indian rules
  4. DYes, but only if the drawer expressly agreed to French law

Explanation

Where an instrument is made payable in a different place from where it is made or indorsed, the law of the place of payment decides what is dishonour and what notice is sufficient. The notice given under French law therefore suffices, and no dual compliance or agreement is needed.

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