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Understanding Negotiable Instruments

The document defines key terms related to negotiable instruments under Indian law. It states that a negotiable instrument includes promissory notes, bills of exchange, and cheques. It also lists some other documents that are considered negotiable instruments by law or custom, such as treasury bills and dividend warrants. The document goes on to define holder, holder in due course, and provides definitions for promissory notes, bills of exchange, and cheques under various sections of Indian law. It distinguishes between a holder and holder in due course.

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Pavan Kabra
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179 views15 pages

Understanding Negotiable Instruments

The document defines key terms related to negotiable instruments under Indian law. It states that a negotiable instrument includes promissory notes, bills of exchange, and cheques. It also lists some other documents that are considered negotiable instruments by law or custom, such as treasury bills and dividend warrants. The document goes on to define holder, holder in due course, and provides definitions for promissory notes, bills of exchange, and cheques under various sections of Indian law. It distinguishes between a holder and holder in due course.

Uploaded by

Pavan Kabra
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

MADE BY. PAVAN KABRA S.Y.

BBA

According to section 13(a) of this Act,

Negotiable instrument means, a promissory note, bill of exchange or cheque payable either to order or to bearer. Definition includes only three documents in negotiable instruments. But in practice, many other documents which meet the basic requirements of a negotiable instruments.

The following instrument are

characterized as negotiable instrument either by law or custom and tradition of a trade:1) treasury bill 2) government promissory note 3) dividend warrant 4) share warrant 5) bearer debentures 6) hundies

Transferability
Good title to transferee

Right of holder
Evidence of debt

Legal presumptions

According to section 13,negotiable

instrument includes following three documents: Promissory note

Bill of exchange
Cheque

According to section 4 of this Act,

Promissory note is an instrument, in writing(not being bank note or currency note) containing an unconditional undertaking signed by the maker, to pay certain sum of money only to or to the order of certain person or to bearer of the instrument.

According to section 5 of this Act, A

bill of exchange is an instrument in writing containing an unconditional order signed by the maker, directing a certain person to pay certain sum of money, only to or to the order of certain or to the bearer of the instrument.

According to section 6 of this Act, a cheque

is a bill of exchange drawn on a specified banker and not expresses to be payable, otherwise than on demand and it includes the electronic image of truncated cheque and a cheque in electronic form.

Bearer and order instruments. Demand and time instrument.

Inland and foreign instruments.

According to section 8 of this Act, the

holder of a negotiable instrument means any person, entitled in his own name to the possession thereof and to receive or recover, the amount due thereon from the party liable thereto..

According to section 9 of this Act, holder in due

course means any person who for the possessor of a negotiable instrument if payable to bearer or payee or indorsee thereof if payable to order before the amount mentioned in it became payable and without sufficient cause to believe that any defect existed in the title of a person from whom derived his title.

HOLDER
Instrument get possessed

HOLDER IN DUE COURSE


Gets an instrument before

on the name of the holder and recover from the party liable to pay Consideration is not necessary Can acquire an instrument after the date of maturity. Get same title as the transferor. Drawer,drawee and transferor are liable to pay

the period of maturity in good faith and for valuable consideration. Consideration is necessary. Have to acquire before the date of maturity. Gets a title better than that of transferor. All parties prior to him are liable to pay.

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