Negotiable Instruments Act, Section 34

Negotiable Instruments Act, Section 34: Acceptance by Several Drawees Not Being Partners

Section 34 of the Negotiable Instruments Act, 1881 deals with the situation where a bill of exchange is addressed to more than one drawee and such drawees are not partners. 

The provision clarifies the manner in which acceptance may be given in such cases and limits the authority of one drawee to bind another.

1. Multiple Drawees Under a Bill of Exchange

A bill of exchange may sometimes be drawn upon two or more persons jointly, and such persons are collectively referred to as drawees.

When such a bill is presented for acceptance, the question arises as to how acceptance is to be effected and who becomes liable as acceptor.

Section 34 specifically addresses cases where the drawees are not partners. 

This distinction is important because partners, by virtue of the law of partnership, generally have authority to bind the firm and each other in matters relating to the partnership business. 

However, where the drawees are independent persons and not partners, different principles apply.

2. Right of Each Drawee to Accept for Himself

The section provides that where there are several drawees who are not partners, each of them has the right to accept the bill for himself.

This means that any one of the named drawees may choose to signify his assent to the bill and undertake liability in his individual capacity. 

Upon acceptance, that drawee becomes bound as an acceptor to the extent of his acceptance.

However, such acceptance binds only the drawee who has signed and accepted the bill.

3. No Authority to Accept on Behalf of Another

Section 34 further makes it clear that none of the several drawees can accept the bill on behalf of another drawee without his authority.

In other words, one drawee cannot bind the other drawee by accepting the bill unless he has been expressly or impliedly authorized to do so. 

Acceptance is a serious legal act that creates primary liability to pay the amount of the bill at maturity. 

Therefore, the law does not permit one independent drawee to impose such liability upon another without proper authority.

If one drawee purports to accept the bill for another without authority, such acceptance will not bind the other drawee.

4. Distinction Between Partners and Non-Partners

The emphasis on “not partners” is significant. In a partnership, each partner is generally considered an agent of the firm and of the other partners for acts done in the ordinary course of business. 

Therefore, acceptance by one partner may bind the firm and, consequently, the other partners.

However, where the drawees are separate individuals without a partnership relationship, there is no such mutual agency. 

Each drawee acts independently and is responsible only for his own acceptance.

5. Effect of Acceptance by One Drawee

If only one of several non-partner drawees accepts the bill, he alone becomes liable as acceptor. 

The other drawees, having neither accepted nor authorized acceptance, are not bound by that act.

The holder of the bill may proceed against the accepting drawee according to the terms of the acceptance, but cannot enforce liability against the others unless they have also accepted or given authority.