NEGOTIABLE
INSTRUMENTS

By
PraveenRaj B L
MBA I
DEFINITION
• Method of transferring a debt from one person
to another
• Means a
• promissory note
• Bill of Exchange
• Che...
CHARACTERISTICS
• Contract to pay
• Freely transferrable
• Can be transferred till maturity
• Possess the quality of negot...
PROMISSORY NOTE
• It is an instrument in writing containing an
unconditional undertaking, signed by the maker
to pay a cer...
ESSENTIAL ELEMENTS
• Writing
• Promise to pay
• Definite and unconditional
• Signed by the maker
• Certain parties
• Certa...
BILL OF EXCHANGE
• It is an instrument in writing containing an
unconditional order, signed by the maker to
certain person...
ESSENTIAL ELEMENTS
• Writing
• Contain an order to pay
• Order must be unconditional
• Requires three parties
• Parties mu...
CHEQUE
• A cheque is a bill of exchange drawn upon a
specified banker and payable on demand and it
includes the image of a...
TYPES OF CHEQUE
• Two types of cheques are there
• Open cheque
• Crossed cheque
one in which two parallel lines
TYPES OF CROSSING
General crossing
Drawee bank shall not pay it unless it is
presented by a banker

Special crossing
the b...
DISHONOUR
A bill may dishonoured
By non acceptance or
By non payment
THANK U….
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Negotiable instruments

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Negotiable instruments

  1. 1. NEGOTIABLE INSTRUMENTS By PraveenRaj B L MBA I
  2. 2. DEFINITION • Method of transferring a debt from one person to another • Means a • promissory note • Bill of Exchange • Cheque Payable either to order or bearer
  3. 3. CHARACTERISTICS • Contract to pay • Freely transferrable • Can be transferred till maturity • Possess the quality of negotiability • Transferor need not give any notice liable to pay the instrument • Transferee can use it in his own name • Good as cash • Expects the holder to make prompt payment • Capable of a proof as it has got special rules of evidence
  4. 4. PROMISSORY NOTE • It is an instrument in writing containing an unconditional undertaking, signed by the maker to pay a certain money only to certain person • People involved • Maker • Payee
  5. 5. ESSENTIAL ELEMENTS • Writing • Promise to pay • Definite and unconditional • Signed by the maker • Certain parties • Certain sum of money • Promise to pay money only • Bank note or currency note is not a promissory note
  6. 6. BILL OF EXCHANGE • It is an instrument in writing containing an unconditional order, signed by the maker to certain person to pay certain sum of money . • Parties to a bill of exchange • Drawer • Drawee • Payee
  7. 7. ESSENTIAL ELEMENTS • Writing • Contain an order to pay • Order must be unconditional • Requires three parties • Parties must be certain • Signed by drawer • Certain sum • Contain an order to pay money • Must have a stamp
  8. 8. CHEQUE • A cheque is a bill of exchange drawn upon a specified banker and payable on demand and it includes the image of a truncated cheque in the electronic form. • Always drawn on a specified banker • Always payable on demand
  9. 9. TYPES OF CHEQUE • Two types of cheques are there • Open cheque • Crossed cheque one in which two parallel lines
  10. 10. TYPES OF CROSSING General crossing Drawee bank shall not pay it unless it is presented by a banker Special crossing the banker on whom it is drawn shall pay it only to the banker on whom it is crossed or his agent for collection
  11. 11. DISHONOUR A bill may dishonoured By non acceptance or By non payment
  12. 12. THANK U….

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