What Is BSA Section 123?

Bhartiya Sakshya Adhiniyam, 2023 - Section 123: Estoppel of Acceptor of Bill of Exchange, Bailee or Licensee

No acceptor of a bill of exchange shall be permitted to deny that the drawer had authority to draw such bill or to endorse it; nor shall any bailee or licensee be permitted to deny that his bailor or licensor had, at the time when the bailment or licence commenced, authority to make such bailment or grant such licence.

Explanation 1.—The acceptor of a bill of exchange may deny that the bill was really drawn by the person by whom it purports to have been drawn.

Explanation 2.—If a bailee delivers the goods bailed to a person other than the bailor, he may prove that such person had a right to them as against the bailor.

Brief Detail

This section addresses the principle of estoppel for acceptors of bills of exchange, bailees, and licensees. It specifies that acceptors cannot deny the authority of the drawer of the bill, and bailees or licensees cannot challenge the authority of their bailors or licensors at the commencement of the bailment or license. However, it allows for certain denials under specified conditions.

Question & Answers

Q1: What does Section 123 of the Bhartiya Sakshya Adhiniyam, 2023 state?

A1: It states that acceptors of a bill of exchange cannot deny the authority of the drawer, and bailees or licensees cannot deny the authority of their bailors or licensors.

Q2: Can an acceptor deny the identity of the drawer?

A2: Yes, an acceptor may deny that the bill was drawn by the person it claims to have been drawn by.

Q3: What happens if a bailee delivers goods to someone other than the bailor?

A3: The bailee may prove that the person receiving the goods had a right to them against the bailor.

Q4: What is the purpose of this section?

A4: The purpose is to ensure that parties involved in transactions cannot deny established authorities, thus promoting trust and reliability in commercial dealings.

Example

1. Case Example: If a person accepts a bill of exchange, they cannot later claim that the person who issued the bill had no authority to do so, unless they are disputing the identity of the drawer.

2. Legal Application: A bailee who mistakenly delivers goods to the wrong person can still defend their actions if they can show that the recipient had a legitimate claim to those goods.

Summary

Section 123 of the Bhartiya Sakshya Adhiniyam, 2023 outlines the estoppel principles for acceptors of bills of exchange, bailees, and licensees. It prevents these parties from denying the authority of the respective drawer or bailor at the time of the transaction, while still allowing for specific defenses regarding the identity of the parties involved and the rights of third parties.