Payee and Acceptor


The person named in the instruments, to whom or to whose order the money is by the instrument directed to be paid, is called the payee (Sec7). The term payee does not include the term endorsee or the endorser. Payee is, therefore the person named by the drawer o whom or to whose order the amount is directed to be paid.

Acceptor (Sec 7)

After the drawee of a bill has signed his assent upon the bill, or if there are more parts thereof than one, upon one of such parts and delivered the same, or given notice of such signing to the holder or to some person on is behalf he is called an acceptor.

Who can accept?

No person except the drawee of a bill of exchange or all or some of several drawees or person named therein as a drawee in case of need, or an acceptor for honor, can bind himself by an acceptance (Sec 33). Drawee is not liable on the bill until acceptance. He therefore cannot be sued on the bill till has accepted the same.

Where there are several drawees of a bill of exchange who are not partners, each of them can accept it for himself but none of tem ca accept it for another without his authority (sec 34). The following persons can be acceptors of a bill of exchange:

1) the drawee of a bill;
2) the drawee in case of need;
3) when there are more than one drawee, all or some of several drawees;
4) an acceptor for honor;
5) when several drawees are not partners, each drawee has to accept it for himself; and
6) a stranger can accept the bill as acceptor for honor.

If more than one drawee is partner, any of them can accept the bill on behalf of all the other partners.
Where the bill is addressed to the firm any partner can accept it on behalf of the firm. However, where a bill is addressed to the partner personality, he cannot accept it on behalf of the firm. He shall be personally liable. If they are not partners each drawee can accept on behalf of himself and not on behalf of another without his authority. The drawees who have accepted the bill in case where there are several drawees, shall be found by their acceptance notwithstanding that all drawees have not accepted. In a bill, there cannot be drawee addressed in the alternative.

Essentials of valid acceptance:

(1) Acceptance must be written on the bill. Any words may be used to signify acceptance. It may also be on the back of the bill. ‘
(2) It must be signed by the drawee. Mere signature without words accepted is sufficient. However, if the drawee writes the words accepted without signing it, it is not acceptance.
(3) The drawee shall deliver the acceptance bill to the drawer.

Acceptance may be conditional or qualified. Acceptance cannot be oral. It cannot be on the copies of the bill or on a separate paper. It must be made clear and unequivocal terms. Acceptance is necessary in case of bills of exchange. Promissory notes and cheques do not require acceptance. The liability of the drawee arises only when he accepts the bill. What is requisite for fixing the drawee with liability is the acceptance by him of the instrument and not an acknowledgement of liability ( JM Vithlani v M /s Ranchoddas Meghiji – AIR 1954 SC 554).
Specimens of Acceptance on Bills of Exchange

(1) 5,000.00 Bombay, 1st may, 2005

Three months after date pay to ABC or order the sum of five thousand rupees for value received.
PQR, Lentin Road, Bombay. Accepted Sd.


(2) Rs 5000.00 Bombay, 1st May 2005

Thirty days after date pay to ABC or bearer the sum of five thousands rupees only.


PQR Lentin Road, Bombay Accepted payable at
Bank of India Bombay.


(3)Rs. 5,000.00 Bombay, 1st May, 2005

One month after date pay to my order the sum of five thousand rupees for value received.

To, PQR Lentin Road Bombay. Accepted Payable to
Bank of India only and not elsewhere PQR.