Negotiable Instruments Act 1881 Negotiable Instruments Act 1881 1Negotiable Instruments Act 1881.
Negotiable instruments
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Transcript of Negotiable instruments
GROUP -3
Name Roll No.
Hardik Dodia. 11
Rosita Fernandes. 1213
14
Aparna Gawde. 15
A negotiable instrument is one which entitles a person to a sum of money and which can be transferred from one person to another either by mere delivery, or by endorsement & delivery
DEFINITION Section 13, “ a promissory note, bill of exchange or cheque payable either to order or bearer, whether the words “order “ or “bearer” appear on the instrument or not”
Free transferability.
Holder’s title free from defects.
Recovery.
Presumptions of sec 118 & 119:- Date, Time of acceptance, Time of transfer, Order of endorsement, Stamp, Holder in due course, Consideration, Proof.
By Statue:-
a. Promissory Note
b. Bills of exchange
c. Cheques
By Usage:-
a. Share Warrants
b. Dock Warrants
c. Bearer Bonds
d. Exchequer Bills
e. Dividend Warrants
f. Circular Notes
g. Bank Notes / Drafts
h. Debentures
i. Government Promissory Note
j. Railway Receipts.
Inland Instruments [Section 11]
A promissory note, bill of exchange or cheque payable is an inland instrument both the following two conditions are fulfilled:-
a. It must be drawn in India
b. It must be payable in India, or it must be drawn upon any person resident in India
E.g.:- “A bill drawn in Delhi on a merchant in Agra
and accepted payable in London”.
Foreign Instruments [Section 1]
An instrument which is not an inland instrument is deemed to be a foreign instrument.
E.g.:- “A bill drawn in Delhi on a merchant in London
and accepted payable in London”.
“A bill drawn in London on a merchant in Delhi
and accepted payable in Delhi”.
Trade BillA bill drawn and accepted for a genuine trade transaction is termed
as a trade bill. This is drawn by a seller on the buyers purchasing goods on credit.
Time Bill An instrument in which time for payment is mentioned. Any
promissory note, bills of exchange is a time instrument when it expresses to be payble
a. After a specified periodb. After sightc. On the happening of event which is certain to happen
E.g.:- “I promise to pay Mr. A Rs 500 after 3 months”. “I promise to pay Mr. A Rs 500 after sight”. “I promise to pay Mr. A Rs 500 after Mr. B’s
death’.Accommodation BillAn accommodation bill is a bill which is drawn, accepted without
consideration.E.g.:- “X needs funds, draws a bill on Y who
accepts it & gets it discounted with his banker & on due date remits the requisite amount to Y to enable him to meet the bill, such a bill is an
accommodation bill”.
Bill in Sets
A bill of exchange drawn in parts is called bill in sets.
Documentary Bill
A bill to which the documents of title of goods (i.e. Railway Receipts, Bill of Lading) and other documents are attached is called a documentary bill.
Clean Bill
A bill to which no documents relating to goods (for the transaction of which the bill is being drawn) is attached is called a clean bill.