Bills Of

Exchange
 Introduction

 Negotiable
Instrument
 According To Section 13(1) Of The
Negotiable Instrument Act, 1881,
“ A Negotiable
Instrument Means A Promissory Note,
Bill Of Exchange Or Cheque Payable
Either To Order Or To Bearer”
 Types Of Negotiable
Instrument
 Recognized By  Recognized By
Statute Usage Or
Custom
1. Bills Of
Exchange 1. Hundis
2. Promissory Notes 2. Share Warrants
3. Dividend Warrants
3. Cheques
4. Bearer Debentures
 Bills Of Exchange
 According to section 5 of Negotiable
Instrument Act,
 “A Bill Of Exchange is an instrument
in writing containing an unconditional
order, signed by the maker , directing a
certain person to pay a sum of money
only to or to the order of a certain person
or to the bearer of the instrument”
 Specimen Of A Bill Of
Exchange
JAMMU

27th Nov. 2006

Three months after due date, pay XYZ or order, the

Sum of Rs 1000(one thousand only) for value received. Stamp

To,
M/S ABC
Gandhi Nagar
Jammu
 Parts Of A Bill Of
Exchange
 Date
 Term

 Amount

 Stamp

 Parties
 Special features
1. A Bill Of Exchange is an instrument in writing
2. It must be signed by the maker
3. It contains an unconditional order
4. The order must be to pay money and money only
5. The sum payable must be specific
6. The amount must be paid within a stipulated time
7. The name of the drawee must be clearly mentioned
8. It must be dated and stamped
 Parties to a Bill Of
Exchange
Drawer
The person who draws or writes the
Bill Of Exchange is called the
Drawer. The Drawer must be the
seller or creditor to whom the
money is owing
 Drawee
 The Drawee is the person on
whom the bill is drawn. He is
the purchaser or debtor who is
ordered by the Drawer to pay
the amount
 Payee
 The person who has the right
to receive the amount of the
bill is called the Payee, the
Payee may be a third person or
the Drawer himself
 Advantages of Bill of
Exchange
1. A Bill of Exchange is used in settlement
of debts
2. It fixes the date of payment
3. It is a written and signed
acknowledgement of debt
4. A debtor enjoys full period of credit
5. A drawer can convert the bill into cash
by getting it discounted with the bank
 Kinds of Bills Of
Exchange

 Inland Bill  Foreign

Bill
 Kinds of Bills Of
Exchange

 Trade Bills Accommodatio



n Bills
 Kinds of Bills Of
Exchange

 Demand  Time Bill

Bill
Thank You