it is a presentation about law of negotiable instrument of Business Law.

1. Assalamu Alaikum

2. Presentation Topic:
Introduction to the Law of
Negotiable Instruments
Presented by:
Firoz Ahmed (CC)
ID: 1935201501
Program: BBA
Batch: 52
City University
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3. The Law of Negotiable Instruments
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• Common prototypes of bills of exchanges and promissory notes originated
in China, where special instruments called feitsyan were used to safely
transfer money over long distances during the reign of the Tang Dynasty in
the 8th century.
• In the mid-13th century, the Ilkhanid rulers of Persia printed the ‘cha’ or
‘chap’ which was used as paper money for limited usage.
• Later such documents were used for money transfer by Middle Eastern
merchants.

4. The Law of Negotiable Instruments
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The Negotiable Instruments (NI) Act was
enacted in 1881. Prior to its enactment, the
provisions of the English Negotiable
Instruments Act were applicable in this area,
and the present Act is also based on the
English Act with certain modifications. Some
provisions of the Act have become redundant
due to passage of time, change in methods
of doing business and technology changes.
However, the basic principles of the Act are
still valid and the Act has stood test of time.
The Act extends to the whole of Bangladesh.

5. What is Negotiable Instruments ?
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Negotiable Instruments are written contracts whose benefit could be
passed on from its original holder to a new holder. In other words,
negotiable instruments are documents which promise payment to the
assignee (the person whom it is assigned to/given to) or a specified
person.
• According to Duhaime’s Law Dictionary, “A negotiable instrument is a
document of an amount of money, or a title, which is readily
transferable to another.”
• According to Justice K.C. Willis, “A negotiable instrument is one, the
property in which is accuired by anyone who takes it bonafide and for
value notwithstanding any defect of title in the person from whom he
took it.”
• According to section 13 of the Negotiable Instruments Act-1881, “A
negotiable instrument means a promissory note, bill of exchange or
cheque payable either to order or to bearer.”

6. ESSENTIAL FEATURES OF A
NEGOTIABLE INSTRUMENT
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Essential features of a negotiable
instrument are listed below:
1. In Writing:
2. Signature:
3. Parties:
4. Unconditional Order:
5. The Time of Payment must be Certain:
6. The payee must be a certain Person:
7. Easy Transferability:
8. Popularity:
9. Notice of Transfer:
10. Property:
11. Title:
12. Right To File Suit:
13. Presumptions:
14. Prompt Payment:
15. Consideration:
16. Date:
17. Acceptance:
18. Dishonour:
19. Exchange:
20. The Number of Transfer:
21. Delivery
22. Stamping

7. Kinds of Negotiable Instrument
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Section 13 of the Negotiable Instruments Act, 1881 recognizes
only three kinds of negotiable instruments. Many Other
documents are also recognized as negotiable instrument on the
basis of custom and usage.
Different Types of Negotiable Instrument are
mentioned Below:
1. Promissory Note:
2. Bill of Exchange:
3. Cheque:
4. Bank Draft:
5. Hundis:
6. Inland Instrument:
7. Foreign Instrument:

8. Presumptions Concerning Negotiable
Instruments
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A presumptions is a rule of law that is used by courts or juries
from where they obtain a particular inference from a particular
fact or evidence, unless and until the truth of such an inference
is disproved. Sections 118 and 119 of the Negotiable Act,1881
lay down certain presumptions.
The Presumptions are mentioned Below:
1. Consideration:
2. Date:
3. Time of Acceptance:
4. Time of Transfer:
5. Order of Endorsement:
6. Stamp:
7. Holder in Due Course:
8. Proof of Protest:

9. Transferee Can Get Better Title than
Transferor
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Ordinarily, the transferor cannot give a better title than he himself has.
For example; the transferee obtains the document with the same
Privileges, obligations and liabilities of the transferor. Therefore, if the
Tranferor’s title is defective, transferee's title will also be detective.
However, negotiable instrument forms an exception to the general rule.
A bonafide transferee of a negotiable instrument for value, without notice of any
defect acquires the instrument free of any
Defects, example, he acquires a better title than that of the transferor
irrespective of the transferor’s title being defective.

10. Holder of Negotiable Instrument
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Section 8 of the Negotiable Instruments Act, 1881 provides, "The
holder of a promissory note, bill of exchange or cheque means the
payee or indorsee who is in possession of it or the bearer thereof but
does not include a beneficial owner claiming through benamidar."
Holder in Due Course of
Negotiable Instrument
Section 9 of the Negotiable Instruments Act, 1881 provides. "Holder
in due course means any person who for consideration becomes the
possessor of a promissory note, bill of exchange or cheque if payable to
bearer, or the payee or indorsee thereof, if payable to order, before
it became overdue, without notice that the title of the person from
whom he derived his own title was defective.’’

11. Privileges of a Holder in Due Course
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A holder in due course enjoys some privileges. Those are mentioned
below:
1. He gets a better title than that of the transferor.
2. He gets Privilege in case of inchoate stamped instruments.
3. He gets Liability of prior parties.
4. He gets Privilege in case of fictitious bills.
5. He gets Privilege when an instrument delivered conditionally.
6. No effect of absence of consideration or presence of an unlawful
consideration.
7. Estoppel against denying original validity of instrument.
8. Estoppel against denying capacity of payee to indorse.
9. Estoppels against endorser to deny signature and capacity of parties.

12. Maturity of Negotiable Instruments
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Section 22 of the NI Act, 1881 provides, "The
maturity of a promissory note or bill of exchange
is the date at which it falls due. Every promissory
note or bill of exchange which is not expressed to
be payable on demand, at sight or on
presentment is at maturity on the third day after
the day on which it is expressed to be payable.’’

13. Hundis
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A hundi is a financial instrument that developed in medieval period in Indian
sub-continent for use in trade and credit transactions. Hundis are used as a
form of remittance instrument to transfer money from place to place, as a
form of credit instrument to borrow money and as a bill of exchange in trade
transactions.
Types of Hundis:
1. Darshani Hundi:
2. Miadi Hundi:
3. Shahjog Hundi:
4. Namjog Hundi:
5. Dhanijog Hundi:
6. Jokhmi Hundi:
7. Jawabee Hundi:
8. Zikri Hundi:
9. Dekhandor Hundi:
10. Firmanjog Hundi:

14. Thank You All