Order XXXVII Rule 6 CPC - Recovery of Noting Expenses for Dishonoured Bills or Notes

Order XXXVII Rule 6 of the Code of Civil Procedure, 1908 (CPC) provides a summary-suit remedy for expenses incurred by the holder of a dishonoured bill of exchange or promissory note in connection with noting its dishonour. The rule places recovery of these expenses on the same procedural footing as recovery of the amount due on the instrument.

Text of Order XXXVII Rule 6 CPC

Meaning and scope of Rule 6

The rule addresses expenses incurred because a bill of exchange or promissory note has been dishonoured. In suitable cases, the holder can seek recovery of such expenses using the remedies available under Order XXXVII for the principal amount. The provision does not itself establish that every asserted expense is recoverable; the claimant must demonstrate the relevant instrument, dishonour, expense and legal entitlement.

Important legal terms

• Bill of exchange: Under Section 5 of the Negotiable Instruments Act, 1881, an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument.
• Promissory note: Section 4 of the Negotiable Instruments Act defines a written instrument (other than a bank-note or currency-note) containing an unconditional undertaking, signed by its maker, to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument.
• Holder: Section 8 describes the person entitled in his own name to possession of the instrument and to receive or recover the amount due thereon from the parties thereto.
• Dishonour: Non-acceptance of a bill or non-payment of a bill or note, as governed by Sections 91 and 92 of the Negotiable Instruments Act.
• Noting: Under Section 99 of the Negotiable Instruments Act, the notary public's noting of dishonour on the instrument or a paper attached to it, or partly on each, recording prescribed particulars.

When can noting expenses be recovered?

Where a bill or note is dishonoured, expenses properly incurred in noting its non-acceptance or non-payment may be claimed under Rule 6. Section 117 of the Negotiable Instruments Act also addresses rules for compensation, including expenses properly incurred in presenting, noting and protesting the instrument. The applicability of each provision depends on the facts and the nature of the claim.

Procedure under Order XXXVII

Rule 1 specifies the courts and classes of suits to which the summary procedure applies. Rule 2 governs institution of summary suits, including the required statement that the suit is under Order XXXVII. Rule 3 provides for the defendant's appearance, summons for judgment and application for leave to defend.

In preparing a claim for noting expenses, a plaintiff should identify the instrument, relevant dates, manner of dishonour, supporting notarial documents and itemised expenses. Applicable jurisdictional rules, limitation requirements and any local amendments should also be considered.

Related statutory provisions and official sources

For the statutory framework, consult the India Code official legislation portal for the Code of Civil Procedure, 1908 and the Negotiable Instruments Act, 1881, particularly Sections 4, 5, 8, 91, 92, 99 and 117. The precise text applicable to a proceeding should be checked against current legislation and any relevant state or High Court amendments.

Conclusion

Order XXXVII Rule 6 CPC allows the holder of a dishonoured bill of exchange or promissory note to pursue noting expenses through the same summary remedies available for the amount of the instrument. Whether recovery is granted depends on the applicable law, pleadings and proof.