Code: Section 123 – Bharatiya Sakshya Adhiniyam (BSA)
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.
Explanation of Section 123 – Bharatiya Sakshya Adhiniyam (BSA)
Section 123 of the Bharatiya Sakshya Adhiniyam outlines specific rules of estoppel concerning bills of exchange, bailment, and licensing relationships. The section emphasizes that once a party accepts certain roles or relationships—like accepting a bill, receiving goods as a bailee, or entering a property under a license—they cannot later deny the authority of the person from whom they received that right.
Key Provisions:
- Acceptor of a Bill of Exchange:
- Once a person accepts a bill of exchange, they are not allowed to deny that the drawer had the authority to draw or endorse it.
- However, they may deny the authenticity of the bill (i.e., they may claim the bill was forged).
- Bailee or Licensee:
- A person who receives goods (bailee) or occupies property (licensee) cannot dispute the authority of the bailor or licensor to have made that arrangement.
- However, if the bailee delivers the goods to someone other than the bailor, they may prove that such person had a better right to the goods.
This section ensures reliability and security in commercial and personal arrangements, especially where trust in documentation and possession is critical.
Illustration
Example 1: Bill of Exchange
A accepts a bill of exchange drawn by B. Later, A tries to claim that B had no authority to draw the bill. Under Section 123, A is estopped from making such a claim. However, A can challenge the bill if he proves it was not drawn by B at all (i.e., forged).
Example 2: Bailee and Goods
X delivers a laptop to Y for repair, making Y a bailee. Y cannot later claim that X had no authority to give him the laptop. If Y gives the laptop to Z, Y can justify it only if Z has a better right over the laptop than X.
Example 3: Licensee and Property Use
P gives Q permission (license) to operate a food cart on P’s land. Q cannot later dispute P’s right to have given such permission in the first place.
Common Questions and Answers on Section 123 – Bharatiya Sakshya Adhiniyam (BSA)
1. Can the acceptor of a bill deny its validity?
The acceptor cannot deny the authority of the drawer to issue the bill. However, they can deny that the bill was genuinely drawn by the named drawer (e.g., in case of forgery).
2. What is a bailee under this section?
A bailee is a person who receives goods from another (the bailor) for a specific purpose and under certain conditions. A bailee must not deny the authority of the bailor during or after the bailment.
3. Does this apply to oral agreements?
Yes. The principle of estoppel under Section 123 applies regardless of whether the relationship was formed via a written contract or an oral agreement, as long as the parties acted upon it.
4. What if the licensee finds out the licensor was not the actual owner?
Even in such a case, the licensee cannot deny the licensor’s authority to grant the license at the time it was granted. The law preserves the status quo for the sake of fairness and continuity.
5. How is this section different from Section 122?
While Section 122 deals with estoppel related to tenancy and immovable property, Section 123 covers movable goods (bailment), licenses, and financial instruments like bills of exchange.
Conclusion
Section 123 of the Bharatiya Sakshya Adhiniyam upholds the integrity of commercial and legal relationships. It ensures that parties cannot accept the benefits of a transaction or agreement and later deny the authority or legitimacy of the other party. By preserving trust and accountability, this provision protects the rights of those who act in good faith in financial, contractual, and property-related matters.
For more reliable insights and structured legal updates on Indian law, visit ApniLaw.
