Section 98 of NIA : Section 98: When Notice Of Dishonour Is Unnecessary

Explanation using Example

Example of Section 98 of The Negotiable Instruments Act, 1881:

Imagine John issues a cheque to Alice for the amount of $500. Before the cheque is presented for payment, John realizes that his account does not have sufficient funds and he instructs his bank to stop payment on that cheque. When Alice presents the cheque, it gets dishonoured due to the stop payment request. In this scenario, according to Section 98(b), Alice does not need to send a formal notice of dishonour to John to hold him liable, as John himself has countermanded the payment.