The document discusses key aspects of negotiable instruments under the Negotiable Instruments Act 1881. It defines negotiable instruments as promissory notes, bills of exchange, or cheques that are payable either to order or to bearer. It also discusses the characteristics of negotiable instruments like being freely transferable, providing better title, and allowing the holder to sue. The document outlines the essentials of promissory notes, bills of exchange, and cheques and compares some of their key differences. It also covers topics like endorsement, crossing of cheques, and presumptions under negotiable instruments.
The document discusses key aspects of negotiable instruments under the Negotiable Instruments Act 1881. It defines negotiable instruments as documents that allow the transfer of rights from one person to another. The Act recognizes promissory notes, bills of exchange, and cheques as negotiable instruments. It outlines essential characteristics like being freely transferable and certain presumptions that apply. The document also explains key parties and elements of promissory notes, bills of exchange, and cheques.
The document discusses the Negotiable Instruments Act of 1881 and defines key concepts related to negotiable instruments such as bills of exchange, cheques, promissory notes, holders, holders in due course, negotiation, endorsement and types of endorsement. It provides examples and explanations of these terms and concepts. The document is intended to educate about the legal definitions and principles governing negotiable instruments in India.
The document discusses negotiable instruments under Indian law, specifically focusing on promissory notes. It defines a promissory note according to the Negotiable Instruments Act and outlines its essential features, such as containing an unconditional promise to pay a certain sum of money. It discusses key parties to a promissory note like the maker and payee. It also provides examples from case law rulings related to determining what constitutes a promissory note under the Act.
The document discusses key concepts around negotiable instruments under the Negotiable Instruments Act of 1881 in India. It defines negotiable instruments and outlines the main types recognized by law: bills of exchange, checks, and promissory notes. For each type, it describes the essential elements and parties involved, using examples. It also briefly discusses concepts like dishonor, notary public, noting, and protest related to negotiable instruments.
The document discusses negotiable instruments under Indian law. It defines negotiable instruments as written and signed documents that entitle the holder to a specified sum of money and are freely transferable. The three main types of negotiable instruments are promissory notes, bills of exchange, and cheques. Promissory notes contain an unconditional promise to pay, bills of exchange contain an order to pay, and cheques are drawn on a bank and payable on demand. Key characteristics include being in writing, containing an unconditional obligation, and specifying a certain sum payable. Negotiable instruments can be transferred between parties either through negotiation (delivery or endorsement) or assignment.
The document discusses the Negotiable Instruments Act of 1881 in India. It defines key terms like negotiable instruments, promissory notes, bills of exchange, and cheques. It outlines the essential characteristics of negotiable instruments like property, title, rights, and presumptions. It also summarizes the key elements and differences between promissory notes, bills of exchange, inland/foreign bills, time/demand bills, trade/accommodation bills, and cheques as defined by the Act.
Law the negotiable instruments act 1881Adil Shaikh
The document summarizes key aspects of negotiable instruments under the Negotiable Instruments Act 1881 including promissory notes, bills of exchange, and cheques. It defines each instrument, outlines their essential elements and characteristics, and distinguishes between them. The key takeaways are that negotiable instruments must be freely transferable, give the holder clear title, and can be transferred indefinitely until maturity.
The document discusses key aspects of negotiable instruments under the Negotiable Instruments Act 1881. It defines negotiable instruments as documents that allow the transfer of rights from one person to another. The Act recognizes promissory notes, bills of exchange, and cheques as negotiable instruments. It outlines essential characteristics like being freely transferable and certain presumptions that apply. The document also explains key parties and elements of promissory notes, bills of exchange, and cheques.
The document discusses the Negotiable Instruments Act of 1881 and defines key concepts related to negotiable instruments such as bills of exchange, cheques, promissory notes, holders, holders in due course, negotiation, endorsement and types of endorsement. It provides examples and explanations of these terms and concepts. The document is intended to educate about the legal definitions and principles governing negotiable instruments in India.
The document discusses negotiable instruments under Indian law, specifically focusing on promissory notes. It defines a promissory note according to the Negotiable Instruments Act and outlines its essential features, such as containing an unconditional promise to pay a certain sum of money. It discusses key parties to a promissory note like the maker and payee. It also provides examples from case law rulings related to determining what constitutes a promissory note under the Act.
The document discusses key concepts around negotiable instruments under the Negotiable Instruments Act of 1881 in India. It defines negotiable instruments and outlines the main types recognized by law: bills of exchange, checks, and promissory notes. For each type, it describes the essential elements and parties involved, using examples. It also briefly discusses concepts like dishonor, notary public, noting, and protest related to negotiable instruments.
The document discusses negotiable instruments under Indian law. It defines negotiable instruments as written and signed documents that entitle the holder to a specified sum of money and are freely transferable. The three main types of negotiable instruments are promissory notes, bills of exchange, and cheques. Promissory notes contain an unconditional promise to pay, bills of exchange contain an order to pay, and cheques are drawn on a bank and payable on demand. Key characteristics include being in writing, containing an unconditional obligation, and specifying a certain sum payable. Negotiable instruments can be transferred between parties either through negotiation (delivery or endorsement) or assignment.
The document discusses the Negotiable Instruments Act of 1881 in India. It defines key terms like negotiable instruments, promissory notes, bills of exchange, and cheques. It outlines the essential characteristics of negotiable instruments like property, title, rights, and presumptions. It also summarizes the key elements and differences between promissory notes, bills of exchange, inland/foreign bills, time/demand bills, trade/accommodation bills, and cheques as defined by the Act.
Law the negotiable instruments act 1881Adil Shaikh
The document summarizes key aspects of negotiable instruments under the Negotiable Instruments Act 1881 including promissory notes, bills of exchange, and cheques. It defines each instrument, outlines their essential elements and characteristics, and distinguishes between them. The key takeaways are that negotiable instruments must be freely transferable, give the holder clear title, and can be transferred indefinitely until maturity.
The document summarizes key aspects of negotiable instruments law in India as defined by the Negotiable Instruments Act, 1881. It defines negotiable instruments as written documents that are freely transferable and create a monetary obligation. The three main types of negotiable instruments are promissory notes, bills of exchange, and cheques. It outlines the essential characteristics of each, including the parties involved, requirements for validity, methods of negotiation or assignment, and concepts of holders and holders in due course. The document provides an overview of key terms and processes regarding negotiable instruments under Indian law.
The document defines negotiable instruments and describes their key characteristics. Negotiable instruments include promissory notes, bills of exchange, and checks. They are freely transferable by delivery or endorsement, the holder has title free of defects, and they must be payable to order or bearer. Common types are also defined, including essential elements of each. In conclusion, negotiable instruments play an important role in the modern financial system by providing safety for financial transactions and requirements.
The Negotiable Instruments Act 1881: Nature and type of
negotiable instruments, Negotiation and assignment, Holder
in due course, Dishonor and discharge of negotiable
instrument
This document defines and explains the key characteristics of negotiable instruments including bills of exchange, promissory notes, and cheques. It states that a negotiable instrument is a device for transferring debt from one person to another and includes any document where ownership can be transferred through simple delivery. The document then outlines the essential elements and parties involved in promissory notes, bills of exchange, and cheques. It provides comparisons of their characteristics and differences between the instruments.
The document discusses various types of negotiable instruments such as promissory notes, bills of exchange, and cheques. It defines each instrument, describes the parties involved, and outlines their key characteristics and differences. Negotiable instruments are signed documents that promise payment of a specified amount on a future date or on demand.
The document summarizes key aspects of the Negotiable Instruments Act 1881 in India. It defines negotiable instruments as documents that allow the transfer of rights from one person to another. The Act covers three main instruments - promissory notes, bills of exchange, and cheques. It establishes characteristics of negotiable instruments like being freely transferable and the holder having title free of defects. The document also outlines parties, essentials, and types of the three instruments.
The document provides an overview of negotiable instruments under Indian law, including the Negotiable Instruments Act of 1881. It defines key terms like promissory notes, bills of exchange, cheques, negotiation and endorsement.
It outlines the essential elements and parties involved in different types of negotiable instruments. Promissory notes require a maker who promises to pay a sum to a payee. Bills of exchange require a drawer, drawee and payee. Cheques are drawn on a specified banker and payable on demand.
Negotiation allows an instrument to be transferred, making the transferee the new holder. This can occur through delivery for bearer instruments or endorsement and delivery for instruments payable
The document discusses negotiable instruments under Indian law. It defines negotiable instruments as written documents that are transferable by delivery, including promissory notes, bills of exchange, and cheques. It outlines the key features and types of negotiable instruments. Promissory notes are unconditional promises to pay a certain sum of money, while bills of exchange are orders to pay drawn by one party on another. Cheques combine qualities of bills of exchange and are always drawn on a bank and payable on demand. The document provides examples and definitions of the parties involved in each type of instrument.
This document provides an overview of negotiable instruments under Indian law. It defines negotiable instruments as documents that are transferable by delivery and includes promissory notes, bills of exchange, and cheques. It discusses key characteristics like being freely transferable, providing the transferee better title, and allowing the holder to sue in their own name. The document also covers presumptions related to negotiable instruments, defines different types of instruments like bills of exchange and promissory notes, and discusses endorsement, crossing, dishonour, discharge and other concepts related to negotiable instruments.
The document discusses negotiable instruments under Pakistani law. It defines a negotiable instrument as a promissory note, bill of exchange, or cheque according to Section 13(1) of the negotiable instrument Act, 1881. A negotiable instrument is a written document that creates a right to payment for the holder and can be freely transferred between parties. Key characteristics include free transferability, the holder having title free of defects, and the ability of the transferee to sue in their own name. The document also discusses the definitions, essentials, and parties involved in promissory notes, bills of exchange, and cheques.
The document discusses negotiable instruments under Indian law. It defines a negotiable instrument as one that is freely transferable from one person to another. The three main types of negotiable instruments specified in the Negotiable Instruments Act are promissory notes, bills of exchange, and cheques. Other instruments like railway receipts and pay orders have also become negotiable by custom. The key elements of a promissory note are also summarized, including that it must contain an unconditional promise to pay a sum of money to a specified person.
A document that promises payment to a specified person or the assignee. The payee (the person who receives the payment) must be named or otherwise indicated on the instrument. A check is considered a negotiable instrument. This type of instrument is a transferable, signed document that promises to pay the bearer a sum of money at a future date or on demand. Examples also include bills of exchange, promissory notes, drafts and certificates of deposit.
1) The document summarizes the key aspects of the Negotiable Instruments Act 1881, including definitions of negotiable instruments such as promissory notes, bills of exchange, and cheques.
2) It outlines the essential characteristics and elements of different types of negotiable instruments, parties involved, and legal presumptions.
3) The key concepts covered include negotiation, endorsement, accommodation bills, discharge of parties, and liabilities of parties to negotiable instruments.
A negotiable instrument is a written document that allows ownership rights to be transferred freely. The key characteristics are that it contains an unconditional promise to pay a certain sum of money, is in writing, and is freely transferable through delivery or endorsement. The main types of negotiable instruments are promissory notes, bills of exchange, and cheques. A promissory note contains a promise to pay, a bill of exchange contains an order to pay, and a cheque is a bill of exchange drawn on a bank and payable on demand.
The document provides an overview of the Negotiable Instruments Act 1881 in India. It discusses:
1) The history leading to the development and implementation of the Act in 1881 to standardize rules around negotiable instruments like promissory notes and bills of exchange.
2) Key definitions in the Act including what makes an instrument negotiable based on certain conditions, and definitions of holders in due course.
3) Essential elements for an instrument to be considered negotiable, including being in writing, unconditional promises to pay, and ability to transfer ownership through endorsement and delivery.
The document discusses key aspects of negotiable instruments under the Negotiable Instruments Act of 1881 in India. It defines negotiable instruments and outlines their key features. It describes the three main types of negotiable instruments - promissory notes, bills of exchange, and cheques. For each, it provides definitions, essential elements, examples and discusses parties involved. The document also covers topics like negotiation, endorsement, and obligations in cases of dishonour.
This document defines and explains key concepts related to negotiable instruments. It begins by defining a negotiable instrument as a transfer of debt that can include promissory notes, bills of exchange, or checks. It then discusses the Negotiable Instruments Act of 1881 and the characteristics of negotiable instruments such as being freely transferable. The document goes on to classify instruments, define the different types including promissory notes, bills of exchange, and checks, and compare their key elements and parties. It concludes by covering negotiation, assignment, presentment, dishonor, notice procedures, and discharge of negotiable instruments.
These future transaction (credit) done with help of documents called as Negotiable Instruments. The word Negotiable means ‘transferable by delivery’ & the word Instrument means ‘written document’. types of negotiable instruments like cheque and its types, promissory notes and its features and bill of exchange. endorsement and it types. crossing of cheque.
The document provides an overview of the Negotiable Instruments Act of 1881. It defines key terms like negotiable instrument and discusses the characteristics of negotiable instruments. It outlines the three main types of negotiable instruments - promissory notes, bills of exchange, and cheques. For each type, it provides examples and discusses their essential elements. It also compares and contrasts promissory notes and bills of exchange, and discusses additional qualifications for cheques. Finally, it covers topics like crossing of cheques and the different types of crossing.
Bill of exhange and promissery notes and cheques by tahseen ullah- 01Tahseen Ullah Shah
There are two main types of financial instruments discussed in the document: promissory notes and bills of exchange.
A promissory note contains an unconditional promise by the maker to pay a certain sum of money to the payee. It must be in writing, signed by the maker, and include an unambiguous promise to pay a definite amount of money in legal tender.
A bill of exchange is an unconditional order by the drawer for the drawee to pay a certain sum of money to the payee. It involves three parties: the drawer, drawee, and payee. While a promissory note only requires two parties: the maker and payee.
The document also discusses cheques
This document provides an overview of negotiable instruments under the Negotiable Instruments Act 1881. It defines key terms like promissory note, bill of exchange, cheque, inland and foreign instruments. It describes the essential elements and parties involved in promissory notes, bills of exchange and cheques. It also discusses negotiation, crossing of cheques, presumptions related to negotiable instruments and endorsement.
MODERN BANKING - The Negotiable Instruments Act24x7kannadanews
This document provides an overview of negotiable instruments including the Negotiable Instruments Act of 1881. It defines key terms like negotiable instrument, discusses the characteristics of negotiable instruments like being freely transferable and presuming consideration. It also covers specific instruments like promissory notes, bills of exchange, and cheques. For each it defines the instrument, essential elements, parties involved and how they can be discharged when rights under the instrument are extinguished.
The document summarizes key aspects of negotiable instruments law in India as defined by the Negotiable Instruments Act, 1881. It defines negotiable instruments as written documents that are freely transferable and create a monetary obligation. The three main types of negotiable instruments are promissory notes, bills of exchange, and cheques. It outlines the essential characteristics of each, including the parties involved, requirements for validity, methods of negotiation or assignment, and concepts of holders and holders in due course. The document provides an overview of key terms and processes regarding negotiable instruments under Indian law.
The document defines negotiable instruments and describes their key characteristics. Negotiable instruments include promissory notes, bills of exchange, and checks. They are freely transferable by delivery or endorsement, the holder has title free of defects, and they must be payable to order or bearer. Common types are also defined, including essential elements of each. In conclusion, negotiable instruments play an important role in the modern financial system by providing safety for financial transactions and requirements.
The Negotiable Instruments Act 1881: Nature and type of
negotiable instruments, Negotiation and assignment, Holder
in due course, Dishonor and discharge of negotiable
instrument
This document defines and explains the key characteristics of negotiable instruments including bills of exchange, promissory notes, and cheques. It states that a negotiable instrument is a device for transferring debt from one person to another and includes any document where ownership can be transferred through simple delivery. The document then outlines the essential elements and parties involved in promissory notes, bills of exchange, and cheques. It provides comparisons of their characteristics and differences between the instruments.
The document discusses various types of negotiable instruments such as promissory notes, bills of exchange, and cheques. It defines each instrument, describes the parties involved, and outlines their key characteristics and differences. Negotiable instruments are signed documents that promise payment of a specified amount on a future date or on demand.
The document summarizes key aspects of the Negotiable Instruments Act 1881 in India. It defines negotiable instruments as documents that allow the transfer of rights from one person to another. The Act covers three main instruments - promissory notes, bills of exchange, and cheques. It establishes characteristics of negotiable instruments like being freely transferable and the holder having title free of defects. The document also outlines parties, essentials, and types of the three instruments.
The document provides an overview of negotiable instruments under Indian law, including the Negotiable Instruments Act of 1881. It defines key terms like promissory notes, bills of exchange, cheques, negotiation and endorsement.
It outlines the essential elements and parties involved in different types of negotiable instruments. Promissory notes require a maker who promises to pay a sum to a payee. Bills of exchange require a drawer, drawee and payee. Cheques are drawn on a specified banker and payable on demand.
Negotiation allows an instrument to be transferred, making the transferee the new holder. This can occur through delivery for bearer instruments or endorsement and delivery for instruments payable
The document discusses negotiable instruments under Indian law. It defines negotiable instruments as written documents that are transferable by delivery, including promissory notes, bills of exchange, and cheques. It outlines the key features and types of negotiable instruments. Promissory notes are unconditional promises to pay a certain sum of money, while bills of exchange are orders to pay drawn by one party on another. Cheques combine qualities of bills of exchange and are always drawn on a bank and payable on demand. The document provides examples and definitions of the parties involved in each type of instrument.
This document provides an overview of negotiable instruments under Indian law. It defines negotiable instruments as documents that are transferable by delivery and includes promissory notes, bills of exchange, and cheques. It discusses key characteristics like being freely transferable, providing the transferee better title, and allowing the holder to sue in their own name. The document also covers presumptions related to negotiable instruments, defines different types of instruments like bills of exchange and promissory notes, and discusses endorsement, crossing, dishonour, discharge and other concepts related to negotiable instruments.
The document discusses negotiable instruments under Pakistani law. It defines a negotiable instrument as a promissory note, bill of exchange, or cheque according to Section 13(1) of the negotiable instrument Act, 1881. A negotiable instrument is a written document that creates a right to payment for the holder and can be freely transferred between parties. Key characteristics include free transferability, the holder having title free of defects, and the ability of the transferee to sue in their own name. The document also discusses the definitions, essentials, and parties involved in promissory notes, bills of exchange, and cheques.
The document discusses negotiable instruments under Indian law. It defines a negotiable instrument as one that is freely transferable from one person to another. The three main types of negotiable instruments specified in the Negotiable Instruments Act are promissory notes, bills of exchange, and cheques. Other instruments like railway receipts and pay orders have also become negotiable by custom. The key elements of a promissory note are also summarized, including that it must contain an unconditional promise to pay a sum of money to a specified person.
A document that promises payment to a specified person or the assignee. The payee (the person who receives the payment) must be named or otherwise indicated on the instrument. A check is considered a negotiable instrument. This type of instrument is a transferable, signed document that promises to pay the bearer a sum of money at a future date or on demand. Examples also include bills of exchange, promissory notes, drafts and certificates of deposit.
1) The document summarizes the key aspects of the Negotiable Instruments Act 1881, including definitions of negotiable instruments such as promissory notes, bills of exchange, and cheques.
2) It outlines the essential characteristics and elements of different types of negotiable instruments, parties involved, and legal presumptions.
3) The key concepts covered include negotiation, endorsement, accommodation bills, discharge of parties, and liabilities of parties to negotiable instruments.
A negotiable instrument is a written document that allows ownership rights to be transferred freely. The key characteristics are that it contains an unconditional promise to pay a certain sum of money, is in writing, and is freely transferable through delivery or endorsement. The main types of negotiable instruments are promissory notes, bills of exchange, and cheques. A promissory note contains a promise to pay, a bill of exchange contains an order to pay, and a cheque is a bill of exchange drawn on a bank and payable on demand.
The document provides an overview of the Negotiable Instruments Act 1881 in India. It discusses:
1) The history leading to the development and implementation of the Act in 1881 to standardize rules around negotiable instruments like promissory notes and bills of exchange.
2) Key definitions in the Act including what makes an instrument negotiable based on certain conditions, and definitions of holders in due course.
3) Essential elements for an instrument to be considered negotiable, including being in writing, unconditional promises to pay, and ability to transfer ownership through endorsement and delivery.
The document discusses key aspects of negotiable instruments under the Negotiable Instruments Act of 1881 in India. It defines negotiable instruments and outlines their key features. It describes the three main types of negotiable instruments - promissory notes, bills of exchange, and cheques. For each, it provides definitions, essential elements, examples and discusses parties involved. The document also covers topics like negotiation, endorsement, and obligations in cases of dishonour.
This document defines and explains key concepts related to negotiable instruments. It begins by defining a negotiable instrument as a transfer of debt that can include promissory notes, bills of exchange, or checks. It then discusses the Negotiable Instruments Act of 1881 and the characteristics of negotiable instruments such as being freely transferable. The document goes on to classify instruments, define the different types including promissory notes, bills of exchange, and checks, and compare their key elements and parties. It concludes by covering negotiation, assignment, presentment, dishonor, notice procedures, and discharge of negotiable instruments.
These future transaction (credit) done with help of documents called as Negotiable Instruments. The word Negotiable means ‘transferable by delivery’ & the word Instrument means ‘written document’. types of negotiable instruments like cheque and its types, promissory notes and its features and bill of exchange. endorsement and it types. crossing of cheque.
The document provides an overview of the Negotiable Instruments Act of 1881. It defines key terms like negotiable instrument and discusses the characteristics of negotiable instruments. It outlines the three main types of negotiable instruments - promissory notes, bills of exchange, and cheques. For each type, it provides examples and discusses their essential elements. It also compares and contrasts promissory notes and bills of exchange, and discusses additional qualifications for cheques. Finally, it covers topics like crossing of cheques and the different types of crossing.
Bill of exhange and promissery notes and cheques by tahseen ullah- 01Tahseen Ullah Shah
There are two main types of financial instruments discussed in the document: promissory notes and bills of exchange.
A promissory note contains an unconditional promise by the maker to pay a certain sum of money to the payee. It must be in writing, signed by the maker, and include an unambiguous promise to pay a definite amount of money in legal tender.
A bill of exchange is an unconditional order by the drawer for the drawee to pay a certain sum of money to the payee. It involves three parties: the drawer, drawee, and payee. While a promissory note only requires two parties: the maker and payee.
The document also discusses cheques
This document provides an overview of negotiable instruments under the Negotiable Instruments Act 1881. It defines key terms like promissory note, bill of exchange, cheque, inland and foreign instruments. It describes the essential elements and parties involved in promissory notes, bills of exchange and cheques. It also discusses negotiation, crossing of cheques, presumptions related to negotiable instruments and endorsement.
MODERN BANKING - The Negotiable Instruments Act24x7kannadanews
This document provides an overview of negotiable instruments including the Negotiable Instruments Act of 1881. It defines key terms like negotiable instrument, discusses the characteristics of negotiable instruments like being freely transferable and presuming consideration. It also covers specific instruments like promissory notes, bills of exchange, and cheques. For each it defines the instrument, essential elements, parties involved and how they can be discharged when rights under the instrument are extinguished.
The document defines and compares different types of negotiable instruments - promissory notes, bills of exchange, and cheques. It states that a negotiable instrument is a document that allows the transfer of rights from one person to another according to the Negotiable Instruments Act of 1881. It then provides details on the key characteristics and requirements for each type of instrument, such as needing to contain an unconditional promise to pay, having ascertainable parties, and being in writing. It also highlights some of the differences between these instruments, such as cheques requiring a specified banker as the drawee and always being payable on demand.
The document discusses key aspects of negotiable instruments under the Negotiable Instruments Act of 1881 in India. It covers:
1) The main types of negotiable instruments like promissory notes, bills of exchange, and cheques. It explains their essential elements and differences.
2) Key parties to negotiable instruments like drawers, drawees, makers, payees, holders, and endorsers. It also discusses capacities of different parties.
3) Important concepts like crossing of cheques, classification of instruments, presumption of consideration, and distinction between payment in due course vs other payments.
4) The characteristics and requirements to qualify as a holder in due course, who has additional rights
This document provides an overview of negotiable instruments. It defines a negotiable instrument as a written document that includes a promise to pay a certain amount of money to the bearer. Key points include:
- Negotiable instruments must be in writing, signed, include an unconditional order/promise to pay a certain sum of money, and include delivery.
- Common types of negotiable instruments are promissory notes, bills of exchange, and cheques.
- Features include being transferable, providing title to the transferee, and certain presumptions around consideration, dates, and titles.
The document discusses various types of negotiable instruments including promissory notes, bills of exchange, and checks. It provides details on the key features and parties involved in each type of instrument. Promissory notes represent unconditional written promises to pay a certain sum of money, while bills of exchange are written unconditional orders to pay drawn by a creditor on a debtor. Checks are written orders drawn by account holders on banks to pay a specified sum to a payee. The document outlines the differences between open checks, bearer checks, order checks, and crossed checks.
This document provides an overview of negotiable instruments under the Negotiable Instruments Act of 1881 in India. It defines key terms like promissory notes, bills of exchange, and cheques. It outlines the essential requirements for valid negotiable instruments and differences between types of instruments. It also discusses acceptance, transfer through endorsement, rights and liabilities of parties, and enforcement of secondary liability.
This document provides information on negotiable instruments under Indian law. It defines negotiable instruments as documents that can be freely transferred through endorsement and delivery, including promissory notes, bills of exchange, and cheques. The three main types recognized are cheques, bills of exchange, and promissory notes. Over time, additional instruments like bank drafts and traveller's cheques have emerged. Key features of negotiable instruments are their free transferability, the ability to transfer free of defects, and the holder's right to sue. The document then provides details on cheques, bills of exchange, and compares the two. It outlines the essential elements of a cheque and provides examples of different cheque types.
Negotiable instruments are legal documents that can be transferred between parties as a form of payment. Common examples include cheques, promissory notes, and bills of exchange. Cheques allow parties to transfer money from a bank account, while promissory notes and bills of exchange facilitate credit transactions. Negotiable instruments must meet certain legal requirements to be enforceable, such as being in writing, containing an unconditional order of payment, and specifying the amount to be paid. Misusing these instruments by forgery, fraud, or bouncing payments can result in legal penalties like fines and imprisonment according to Nepali law. Proper use of negotiable instruments is important for commercial and financial transactions.
NEGOTIABLE INSTRUMENTS E- PURSE TRUNCATION OF CHEQUENavya Jayakumar
NEGOTIABLE INSTRUMENTS
E- PURSE
TRUNCATION OF CHEQUE
The word “ negotiable” means “transferable from one person to another”
A negotiable instrument is a signed document that promises a sum of payment to a specified person
Negotiable instruments are transferable in nature
Sec.13 of the Indian Negotiable Instrument Act, 1881 defines a negotiable instruments as “ a promissory note, bill of exchange or cheque payable either to order or to the bearer.”
Commercial banks also deal with these instruments. The bank collects these instruments for the customers to grant loans and advances against these instruments
Cheque Truncation System (CTS) is a cheque clearing system undertaken by the Reserve Bank of India (RBI) for quicker cheque clearance
Cheque Truncation System (CTS) or Image-based Clearing System (ICS), in India, is a project of the Reserve Bank of India (RBI), commenced in 2010, for faster clearing of cheques.
CTS is based on a cheque truncation or online image-based cheque clearing system where cheque images and magnetic ink character recognition (MICR) data are captured at the collecting bank branch and transmitted electronically.
This document defines and explains key concepts related to negotiable instruments. It begins by defining negotiable instruments and listing their essential elements. It then describes the main types of negotiable instruments recognized by statute: promissory notes, bills of exchange, and cheques. For each instrument, it outlines their essential elements, parties involved, and types. The document also discusses concepts like crossing of cheques, endorsement and its types.
This document provides an introduction and overview of negotiable instruments under Indian law. It defines key terms like negotiable instrument, bill of exchange, promissory note, and cheque. It outlines the main objectives and features of the Negotiable Instruments Act of 1881. Examples of negotiable instruments are given and the essential features like writing, money, transferability etc. are summarized. Different types of negotiable instruments like accommodation bills, fictitious bills, inland vs foreign instruments are also defined. The document classifies and explains the parties and characteristics of bills of exchange, promissory notes, and cheques. Crossing of cheques and different bank drafts are briefly covered.
Negotiable instruments are written documents that entitle the holder to a sum of money. There are three main types: promissory notes, bills of exchange, and checks. A promissory note contains an unconditional written promise by the maker to pay a specified sum to the payee. A bill of exchange is an unconditional order in writing from the drawer to the drawee to pay a specified sum to the payee. A check is a written order from a depositor to their bank to pay a specified sum to the payee or bearer on demand.
Negotiable instruments are written documents that entitle the holder to a sum of money. There are three main types: promissory notes, bills of exchange, and checks. A promissory note contains an unconditional written promise by the maker to pay a specified sum of money. A bill of exchange is an unconditional order in writing from a drawer to a drawee requiring payment to a payee. A check is a written order from a depositor to a bank to pay a specified sum to a payee on demand.
The document discusses negotiable instruments under the Negotiable Instruments Act of 1881. It defines negotiable instruments as written documents that are freely transferable and create rights in favor of someone. The key types of negotiable instruments covered are bills of exchange, promissory notes, and cheques. It describes the characteristics and legal requirements for each, as well as classifications like demand vs. term bills, inland vs. foreign instruments, and bearer vs. order vs. crossed cheques. Presumptions under the Act regarding instruments are also outlined.
The document discusses crossing and endorsement of cheques. It defines crossing as drawing two parallel lines on a cheque to restrict how it can be cashed. There are two types of crossing - general crossing allows collection through any bank, while special crossing specifies a particular bank. Endorsement involves signing the back of a cheque to transfer it, with different types like blank, special, restrictive, and conditional endorsements. The document outlines the key features, significance and processes for crossing and endorsement of cheques under banking regulations.
1. The document discusses various types of negotiable instruments including promissory notes, bills of exchange, and cheques. It defines each instrument and outlines their key characteristics.
2. A promissory note contains an unconditional promise to pay a certain sum of money to a specific payee. A bill of exchange contains an unconditional order to pay money, and involves a drawer, drawee, and payee.
3. A cheque is a type of bill of exchange that is drawn on a bank and payable on demand. It must be dated, signed by the drawer, and the bank is obligated to pay the amount if the drawer has sufficient funds.
The document provides information on negotiable instruments under Indian law, specifically comparing bills of exchange and cheques. It defines bills of exchange and cheques, outlines the key parties involved for each (drawer, drawee, payee), and describes some of the distinguishing characteristics between the two types of negotiable instruments such as bills of exchange can be drawn on anyone while cheques must be drawn on a specified banker, and cheques are always payable on demand.
The document discusses negotiable instruments under Indian law as defined in the Negotiable Instruments Act of 1881. It defines a negotiable instrument as a written document that creates a right in favor of someone and can be freely transferred. The key types of negotiable instruments recognized are promissory notes, bills of exchange, and cheques. A promissory note contains a written promise to pay a stated sum, a bill of exchange is an unconditional order to pay signed by the maker, and a cheque orders payment from a bank account. Negotiable instruments must meet characteristics like being freely transferable, unconditional, and not requiring notice of transfer.
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2. Negotiable Instrument
• According to Section 13(i) “ a negotiable instrument means a
promissory note, bill of exchange or cheque payable either on
order or to bearer”.
• An instrument may be negotiable either by
1. Statute : Promissory Notes , bills of exchange and cheques
are negotiable instruments under Negotiable Instruments
Act 1881 .
2. By Usage : Bank Notes , Bank Drafts , scripts, treasury Bills etc
3. Transfer by Negotiation
• Negotiation is a transfer of an instrument from one
person to another in such a manner as to express
title & to represent the transferee the holder thereof.
• Passing of possession
• With intention to pass title
• Must be transferred in such a manner that the
transferee becomes holder thereof.
4. Methods of Negotiation
1. Negotiation by delivery
2. Negotiation by endorsement & delivery
3. Property is transferred to the endorsee
4. Endorsee get right to negotiate the instrument, sue on
instrument.
5. Characteristics
• It is freely transferable
• Better title
• Right to sue
• A negotiable instrument can be transferred any number of
times till its maturity
• A negotiable instrument is subject to certain presumptions
• Presumptions – certain presumptions as to consideration,
reasonable time etc., apply to all negotiable instruments.
6. Presumptions
1. Consideration : Every negotiable instrument is deemed to
have been drawn and accepted , endorsed, negotiated, or
transferred for consideration
2. Date : Every negotiable instrument must bear the date on
which it is made or drawn
3. Acceptance : Every Bill of exchange was accepted within a
reasonable time after the date mentioned therein and before
the date of its maturity
4. Transfer : Every transfer should be made before the expiry
7. Meaning of Endorsement
• When a maker or holder writes the person’s name on the face
or back of the instrument & puts his signatures thereto for the
purpose of negotiation, it is called ‘endorsement’.
• Person who signs – endorser
• To whom it is endorsed – endorsee.
• A legal term that refers to the signing of a document which
allows for the legal transfer of a negotiable from one party to
another.
• When an employer signs a check, they are endorsing the
transfer of money from the business accounts to the account
of the employee.
8. Essentials of valid endorsement
1. On the back or face of the instrument.
2. Must be made by maker or holder.
3. Must be properly signed by the endorser.
4. It must be for the entire negotiation instrument.
5. No specific form of words are necessary for endorsement.
9. Kinds of endorsement
1. Blank or general endorsement – where endorsee simply puts
his signature on the back of the instrument without writing
name of the person in whose favor the instrument is
endorsed.
2. Special or full endorsement – An endorsement with the
direction to pay amount mentioned in the instrument to a
specified person or his order & the endorser writes his
signature under it.
3. Partial endorsement – When an endorser is willing to
transfer to an endorsee only a part of the amount of the
instrument. Such an endorsement does not operate as a
negotiation of the instrument.
10. • The instrument is therefore payable to the bearer
• Restrictive endorsement – An endorsement is said to be
restrictive if it prohibits or restricts the further negotiability of
the instrument. The holder of such an instrument can only
receive the payment but he cannot negotiate it further. An
instrument can be made restrictive only by expressed words.
• Conditional endorsement – It limit the liability of the
endorser. E.G. – “ Pay A or order on his marrying B”.
11. Effects of Endorsement
• The property in instrument is transferred from
endorser to endorsee.
• The endorsee gets right to negotiate the instrument
further.
• The endorsee get the right to sue in his own name to
all other parties.
12. Promissory Notes
• Section 4 defines it as, “ A promissory note is an instrument in
writing containing an unconditional undertaking, signed by
the maker, to pay a certain sum of money only to or to the
order of a certain person or to the bearer of the instrument”.
• The person who makes the promissory note is called the
maker.
• The person to whom payment is to be made is called the
payee. e.g. –
• I promise to pay B or order rs. 500
• I promise to pay B Rs.500 on D’ death, provided D leaves me
enough to pay that sum
13. Essentials of Promissory Note
• It must be in writing
• It must contain express promise to pay :- ‘I am liable to pay’
• The promise to pay must be unconditional
• It must be signed by maker
• The maker must be certain- It must describe the name &
designation of the maker, sum of money
• There are 2 parties involved i.e. maker and the payee
• The payee must be certain- It is essential that it must contain a
promise to pay some person ascertained by name or designation.
• The sum payable must be certain
• The payment must be in legal money
• A currency note is not a promissory note
14. Bill of Exchange
• Section 5, is defined as “A bill of exchange is an instrument in
writing containing an unconditional order, signed by the maker,
directing a certain person to pay a certain sum of money only to or
to the order of a certain person or to the bearer of the instrument”.
• Parties to bill of exchange :
• Drawer – The person who makes/orders to pay bill of exchange.
• Drawee – The person who is directed to pay on bill. On acceptance
he becomes acceptor.
• Payee – The person to whom the payment is to be made.
• Drawer & Payee can be the same person.
• X sells goods worth Rs. 2000 to Y & allow him 3 months time to pay
the price. X then draws a bill on Y “ Three months after date, pay to
my order the sum of Rs. 2000 for value received”. X is drawer . Y is
Drawee.
15. Essential of Bills of Exchange
• It must be in writing
• It must contain an order to pay and a promise or request
• The order must be unconditional
• There must be 3 parties i.e. : drawer, drawee, and payee
• The parties must be certain
• It must be signed by the drawer
• Number, date and place are not essential
16. Cheques
• Section 6, defines it as “ A cheque is a bill of exchange drawn
on a specified banker & not expressed to be payable
otherwise than on demand”.
• It is always drawn on a bank
• It is payable to bearer on demand
• Parties To Cheque:
1. Drawer – who makes the cheque
2. Payee – to whom payment is to be made
3. Drawee – Bank .
17. Meaning of Crossing of Cheque
• Crossing of a cheque is a unique feature associated with a
cheque affecting to a certain level the responsibility of the
paying Banker and also its negotiable Character.
• Crossing of a Cheque is a direction to a particular Banker by
the Drawer that Payment should not be made across the
Counter. The payment on the crossed Cheque can be collected
only through a Banker.
• Crossing of the Cheque is affected by drawing two parallel
Transverse lines .
• The Cheque that is not crossed is an open Cheque.
18. Types of cheque
• There are two types of cheque:
1. Open cheque – those which can be en cashed across the
counter of the bank. Liable to great risk if stolen or lost.
Finder can get payment from bank.
2. Crossed cheque – which bears two transverse lines with or
without the words “ & co.”
19. Various kinds of Crossing
1. General Crossing:- which bears across its face the words “ &
co.” or the words “not negotiable”. For general crossing two
transverse lines on the face of cheque are essential. The
paying banker shall pay only to a banker. There are two
sloping parallel lines, marked across its face
• The cheque bears an short form "& Co. "between the two
parallel lines
• The cheque bears the words "A/c. Payee" between the two
parallel lines.
• The cheque bears the words "Not Negotiable" between the
two parallel lines.
21. 2. Special or Restrictive Crossing :- When a particular bank's name is
written in between the two parallel lines the cheque is said to be
specially crossed. Where a cheque bears across its face an addition
the name of banker either with or without the words “ not
negotiable”. It contains:
• The name of the banker across the face of cheque.
• With the words “ not negotiable”
• In addition to the word bank, the words "A/c. Payee Only", "Not
Negotiable" may also be written. The payment of such cheque is
not made unless the bank named in crossing is presenting the
cheque. The effect of special crossing is that the bank makes
payment only to the banker whose name is written in the crossing.
Specially crossed cheques are more safe than a generally crossed
cheques.
23. Why Crossing of Cheque is being used
• The important usefulness of a crossing cheque is that it cannot be
covered at the counter but can be collected only by a bank from the
drawee bank.
• Crossing provides a protection and safeguard to the owner of the
cheque as by securing payment through a banker it can be easily
detected to whose use the money is received. Where the cheque is
crossed the paying banker shall not pay it except to a banker.
• In case of not negotiable crossing the person holding such a cheque
gets no better title than that of his transfer and cannot suggest a
better title to his own transferee. In case of 'account payee' only
crossing, a direction is given to the collecting banker to collect
cheque and to place the amount to the credit of the payee only.
• A special crossing makes the cheque more safe than a general
crossing because the payee or holder cannot receive payment
except through the banker named on the cheque.
24. Who can cross a Cheque
1. The drawer of a Cheque
2. Holder of the Cheque
3. The Banker in whose favor the cheque has been crossed
specially
25. Promissory Note Bill of Exchange
1. It contains a promise to pay. 1. It contains an order to pay.
2. It is presented for payment 2. It is required to be accepted either
without any previous by the drawee or by some one else
acceptance by the maker. on his behalf, before it can be
presented for payment.
3. It cannot be made payable to
the maker himself. The maker 3. The drawer and payee or the
and the payee cannot be the drawee and the payee may be the
same person. same person.
4. There are three parties, drawer,
4. In the case of a promissory
drawee and payee.
note there are only two
parties, the maker and the 5. A bill of exchange cannot be
payee. drawn conditionally, but it can be
accepted conditionally with the
5. A promissory note can never consent of the holder.
be conditional.
6. A notice of dishonour must be
6. In case of dishonour no notice given in case of dishonour of a Bills
of dishonour is required to be of Exchange.
given by the Holder
26. Cheque Bill of exchange
1. Drawee: Cheque can be drawn 1. The drawee may be any person.
only on a banker. 2. A bill may be drawn payable on
2. Time of payment: A cheque is demand or on expiry of certain
payable on demand. period after date or sight.
3. Grace period: Cheque is payable 3. While calculating maturity three
on demand and no grace period is day’s grace is allowed.
allowed. 4. A notice of dishonour is required.
4. Notice of dishonour: Notice of 5. Bills require presentment for
dishonour is not necessary. acceptance and it is better to
5. Acceptance: A cheque is not present them for acceptance even
required to be presented for when it is not essential to do so.
acceptance. It needs to be 6. A bill of exchange cannot be
presented only for payment. crossed.
6. Crossing: A cheque may be 7. A bill may be drawn for any period.
crossed.
7. Validity period: A cheque is usually
valid for a period of six months.