Section 117 Evidence Act: Estoppel of Acceptor of Bill of Exchange, Bailee or Licensee
Section 117 of the Indian Evidence Act, 1872 laid down a specific rule of estoppel for persons accepting bills of exchange and for bailees and licensees. Its corresponding current provision is Section 123 of the Bharatiya Sakshya Adhiniyam, 2023 (BSA).
Meaning and purpose of estoppel
Estoppel is a rule that prevents a person from contradicting certain facts or authority that the law requires that person to accept in a particular relationship. In this context, an acceptor ordinarily cannot deny the drawer's authority to draw or endorse a bill; similarly, a bailee or licensee ordinarily cannot deny the authority under which the bailment or licence began. The rule does not mean that every allegation concerning the transaction is beyond challenge.
Section 123 of the Bharatiya Sakshya Adhiniyam, 2023
The current provision is titled "Estoppel of acceptor of bill of exchange, bailee or licensee" and appears in Chapter VIII (Estoppel).
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.
Read the authoritative legislation in the official India Code PDF of the Bharatiya Sakshya Adhiniyam, 2023.
Former Section 117 of the Indian Evidence Act, 1872
Section 117 provided that an acceptor of a bill of exchange could not deny the drawer's authority to draw or endorse it. A bailee or licensee could not deny that the bailor or licensor had authority to create the bailment or grant the licence when the relationship commenced. It included two express explanations: an acceptor could contest whether the purported drawer actually drew the bill; and a bailee delivering goods to another person could establish that the recipient had a superior right to the goods as against the bailor.
The substantive statutory language is preserved in Section 123 of the BSA. The older section remains important when reading judgments and dealing with matters governed by the earlier legislation.
Important legal terms
Acceptor and drawer of a bill of exchange
A bill of exchange is a negotiable instrument containing an unconditional written order, signed by its maker, directing a certain person to pay a certain sum of money as specified by law. The drawer makes the bill; the acceptor is the drawee who signifies acceptance. See the Negotiable Instruments Act, 1881, particularly Sections 5 and 7.
Bailor and bailee
Under Section 148 of the Indian Contract Act, 1872, bailment generally involves delivery of goods by one person to another for a purpose, upon a contract that they will be returned or otherwise dealt with according to the directions of the person delivering them when the purpose is accomplished. The person delivering is the bailor; the recipient is the bailee.
Licensor and licensee
A licensor grants permission or a right to do something that would otherwise be unlawful without that permission; the recipient is the licensee. In relation to immovable property, Section 52 of the Indian Easements Act, 1882 defines a licence without creating an interest in the property.
How Section 123 operates
| Relationship | Rule of estoppel | Statutory qualification |
|---|---|---|
| Acceptor and drawer | The acceptor cannot deny the drawer's authority to draw or endorse the bill. | The acceptor may dispute whether the purported drawer actually drew it. |
| Bailee and bailor | The bailee cannot deny the bailor's authority to create the bailment at its commencement. | A bailee who delivers goods to a third person may prove that person's superior right as against the bailor. |
| Licensee and licensor | The licensee cannot deny the licensor's authority to grant the licence when it commenced. | The rule concerns authority at commencement, not an unlimited guarantee of all later rights. |
Practical illustrations
Example 1: Accepted bill of exchange
A accepts a bill apparently drawn by B. In a dispute arising from that acceptance, A generally cannot deny B's authority to draw or endorse it. However, A may contend and prove that B did not actually draw the instrument, as permitted by Explanation 1.
Example 2: Goods kept in custody
A hands goods to B for safekeeping under a bailment. B ordinarily cannot deny A's authority to make that bailment when it began. If B delivers the goods to C, B may rely on Explanation 2 by proving that C had a better right to the goods as against A.
Example 3: Licence to use premises
A permits B to use premises under a licence. B generally cannot dispute A's authority to grant that licence at the start of the arrangement merely to defeat the basis on which B obtained permission. The facts, nature of the permission and other applicable laws remain relevant.
Difference between general and specific estoppel
Section 121 BSA (formerly Section 115 Evidence Act) addresses general estoppel arising from a representation and reliance. Section 122 BSA (formerly Section 116) concerns tenants and persons entering immovable property under licence. Section 123 BSA (formerly Section 117) specifically addresses acceptors of bills of exchange, bailees and licensees. Each provision has its own statutory conditions.
Commencement and pending proceedings
The BSA commenced on 1 July 2024 and repealed the Indian Evidence Act, 1872. Section 170 contains a savings clause for applications, trials, inquiries, investigations, proceedings and appeals pending immediately before commencement, providing for their continuation under the earlier Act as specified. The applicable evidentiary law therefore depends on the procedural circumstances of the particular matter; the commencement date should not be treated as automatically displacing the earlier Act in every pending case.
Frequently asked questions
What replaced Section 117 of the Indian Evidence Act?
Section 123 of the Bharatiya Sakshya Adhiniyam, 2023 is the corresponding current provision.
Can an acceptor challenge a forged bill?
Explanation 1 expressly allows the acceptor to deny that the bill was actually drawn by the person it purports to identify as drawer. The outcome depends on proof and other applicable law.
Can a bailee prove a third party's better title?
Yes, in the situation described by Explanation 2: where the bailee delivers the goods to someone other than the bailor, the bailee may prove that the recipient had a right to the goods as against the bailor.
Does Section 123 establish criminal punishment?
No. It is an evidentiary rule of estoppel, not a standalone penal offence.
Official legal references
Bharatiya Sakshya Adhiniyam, 2023 (official India Code PDF) - Sections 121 to 123 and 170.
India Code - official legislative database for the Indian Evidence Act, 1872, Indian Contract Act, 1872, Indian Easements Act, 1882 and Negotiable Instruments Act, 1881.
Legal information for general reference. Application to a particular dispute depends on the facts and governing law.