​Indian Evidence Law – Bharatiya Sakshya Adhiniyam 2023 – Estoppel of Acceptor of a Bill of Exchange, Bailee or Licensee [Section 123]

Section 123 incorporates the doctrine of estoppel in respect of three specific categories of persons, namely:

1. the acceptor of a bill of exchange,
2. the bailee, and
3. the licensee.

The essence of this provision is that a person who has accepted the authority of another at the commencement of a legal or contractual relationship cannot subsequently deny that authority in order to escape liability.

1. Estoppel against the Acceptor of a Bill of Exchange
When a person accepts a bill of exchange, he acknowledges the authority of the drawer to draw or endorse the bill. Consequently, the acceptor is estopped from later denying the drawer’s authority to draw or endorse it.

However, Explanation 1 provides a qualification to this rule. The acceptor is permitted to deny that the bill was actually drawn by the person by whom it purports to have been drawn. Thus, while denial of authority is barred, a plea of forgery remains open.

2. Estoppel against the Bailee
A bailee, by accepting goods under a bailment, recognises the authority of the bailor to deliver those goods. Therefore, the bailee cannot subsequently deny that the bailor had the authority to make such bailment at the time when the bailment commenced.

Nevertheless, Explanation 2 allows the bailee to prove that a third person, to whom the goods were delivered, had a better title or superior right to the goods as against the bailor.
Illustration:
If A gives his car to B for servicing, a bailment is created. If C, who has a lawful claim over the car, takes delivery of the car from B, the bailee may justify such delivery by proving that C had a superior right to the goods.

3. Estoppel against the LicenseeA licensee, having accepted a licence from the licensor, is similarly estopped from denying that the licensor had authority to grant the licence at the time it commenced. The licensee referred to in this Section is distinct from the licensee mentioned under Section 122 and includes licences relating to proprietary or contractual rights such as patents or trademarks.

Scope and Underlying Principle
Section 123 applies the doctrine of estoppel to:

• acceptors of bills of exchange,
• bailees, and
• licensees.

The principle underlying this Section is that a person who has voluntarily entered into a legal relationship and accepted its benefits cannot later repudiate the authority of the other party to avoid obligations arising out of that relationship.

Judicial Illustration
In T.A. Umapati v. T.A. Musilamani (AIR 1987 Mad 156), the Madras High Court observed that once execution of a promissory note is admitted, a presumption arises that it was supported by consideration. The burden then lies on the executant to prove absence of consideration. This reflects the broader principle of estoppel embodied in Section 123.

Conclusion
Estoppel is a fundamental principle under the Indian Evidence Law – Bharatiya Sakshya Adhiniyam, 2023, preventing parties from making contradictory assertions after having accepted a particular state of affairs. Chapter VIII (Sections 121–123) deals comprehensively with estoppel:

• Section 121 defines estoppel,
• Section 122 addresses estoppel of tenants and licensees of persons in possession, and
• Section 123 governs estoppel of the acceptor of a bill of exchange, bailee, and licensee.

These provisions collectively ensure consistency, fairness, and reliability in legal transactions and judicial proceedings.