Acceptor for Honour
As you know, a bill can be accepted only by drawee. But, when a bill of exchange has been noted or protested for non-acceptance or for better security, any person who is not already liable on the bill, may, with the consent of the holder, accept the bill for the honour of any party (section 108). This is called the acceptance for honour and the person who accepts is called the acceptor for honour.
Any person who is not liable on the bill can accept for honour. Even the drawee, though he may have refused to accept the bill generally, may accept it for the honour of any party thereto.
The Act provides that a bill can be accepted for honour only with the consent of the holder. The holder has the option to take or refuse such acceptance, and cannot be compelled to take it whether he likes it or not. The holder, as soon as the bill is dishonoured for non-acceptance, becomes entitled to maintain an action against all the parties who are liable to him on the bill. If he gives his consent to acceptance for honour, he waives his right of immediate action against the parties liable to him.
The person desiring to accept for honour is expected to write on the bill that the acceptance is under his hand and he should also declare in writing that he accepts to protest for the honour of the drawer or of a particular person whom he names or generally for honour. Law does not prescribe any particular form of such acceptance. If the requirements stated above are fulfilled, the acceptance is valid, such acceptance may be written across the bill or on any part of the bill. “Accepted supra protest” or Accepted S.P.” or “accepted supra protest for the honour of H.B. for Rs… … ….” will suffice.
Rights And Liabilities of Acceptor for Honour
The party accepting for honour is placed in the shoes of the party for whose honour he intervenes, both as regards his liability to subsequent parties and his rights against the antecedent parties, and, in addition, can recover against such party himself. A person accepting for honour is entitled to recover from the person for whose honour he accepts, even though the acceptance be given without the order, or the knowledge of the person for whose honour it is given.
A bill cannot be accepted for honour, unless it has been noted or protested for non-acceptance or for better security. The Question of Acceptance for honour does not arise in case of promissory notes or cheques.
