Introduction

When a bill is discounted from a bank, it means that the bank has paid the value of the bill to the drawer before the due date. However, if the bill is dishonored on the due date, the drawer will have to draw a new bill to replace the dishonored one. The question here is whether the drawer will receive payment for the new bill after already discounting the previous bill.

Understanding the Process

To understand this situation, let's break down the process step by step:

1. Discounting the Bill: When the drawer presents the bill to the bank for discounting, the bank pays the drawer the present value of the bill. This means that the drawer receives the money before the due date.

2. Dishonor of the Bill: If the bill is dishonored on the due date, it means that the drawee (the party obligated to pay) did not honor their payment commitment. The reasons for dishonor can vary, such as insufficient funds, non-acceptance, or other breaches of agreement.

3. Drawing a New Bill: In order to replace the dishonored bill, the drawer can draw a new bill on the drawee or another party who is willing to accept it. This new bill will have a new due date and the same or amended terms as the previous one.

Receiving Payment for the New Bill

Now, coming to the question of whether the drawer will receive payment for the new bill after already discounting the previous bill, the answer is not straightforward. It depends on the specific agreement between the drawer and the bank.

1. Bank's Decision: The bank has the discretion to decide whether to discount the new bill drawn by the drawer. This decision can depend on various factors, including the creditworthiness of the drawer, the reason for the dishonor of the previous bill, and the bank's policies.

2. Bank's Assessment: Before deciding to discount the new bill, the bank may assess the drawer's financial situation, credit history, and the likelihood of the new bill being honored on its due date. If the bank finds the drawer to be reliable and the new bill acceptable, they may agree to discount it.

3. Terms and Conditions: The terms and conditions of the new bill will also play a significant role. If the terms are favorable and the bank is confident in the drawer's ability to honor the new bill, they may provide the necessary funds.

Conclusion

In conclusion, whether the drawer will receive payment for the new bill drawn after the dishonor of the previous bill depends on the bank's decision. The bank will consider various factors before discounting the new bill, including the drawer's creditworthiness, financial situation, and the terms of the new bill. It is important for the drawer to communicate with the bank and establish a mutually beneficial agreement to ensure a smooth transaction.

Once the bill is dishonored , the  bank will deduct  the amount that was earlier credited to his a/c... so the person will not receive double payment.