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    Negotiable Instruments ACT OF 1881

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    rahulggn
    The document defines and discusses various types of negotiable instruments according to the Negotiable Instruments Act of 1881. It defines a negotiable instrument as a promissory note, bill of exchange, or cheque payable to order or bearer. It outlines the essential features of negotiable instruments including free transferability and the ability of a holder in due course to file recovery suits. It then discusses the specifics of promissory notes, bills of exchange, cheques, negotiation, endorsement, crossing of cheques, and hundis.

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    Negotiable Instruments ACT OF 1881

    Uploaded by

    rahulggn
    47 views12 pages
    The document defines and discusses various types of negotiable instruments according to the Negotiable Instruments Act of 1881. It defines a negotiable instrument as a promissory note, bill of exchange, or cheque payable to order or bearer. It outlines the essential features of negotiable instruments including free transferability and the ability of a holder in due course to file recovery suits. It then discusses the specifics of promissory notes, bills of exchange, cheques, negotiation, endorsement, crossing of cheques, and hundis.

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    The document defines and discusses various types of negotiable instruments according to the Negotiable Instruments Act of 1881. It defines a negotiable instrument as a promissory note, bill of exchange, or cheque payable to order or bearer. It outlines the essential features of negotiable instruments including free transferability and the ability of a holder in due course to file recovery suits. It then discusses the specifics of promissory notes, bills of exchange, cheques, negotiation, endorsement, crossing of cheques, and hundis.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    47 views12 pages

    Negotiable Instruments ACT OF 1881

    Uploaded by

    rahulggn
    The document defines and discusses various types of negotiable instruments according to the Negotiable Instruments Act of 1881. It defines a negotiable instrument as a promissory note, bill of exchange, or cheque payable to order or bearer. It outlines the essential features of negotiable instruments including free transferability and the ability of a holder in due course to file recovery suits. It then discusses the specifics of promissory notes, bills of exchange, cheques, negotiation, endorsement, crossing of cheques, and hundis.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 12

    NEGOTIABLE INSTRUMENTS ACT OF 1881

    Definition Section 13 states negotiable instrument means: promissory note or bill of exchange or cheque payable to order or the bearer whether the words order or bearer appear on the instrument or not. Negotiable Instrument means any document transferable from one person to another.
    2


    1. 2. 3. 4. 5.
    3

    Essential features of negotiable instrument:


    Free transferability Offer better title to the transferee. Holder in due course is the owner. Holder in due course can file recovery on suits The instrument is transferable till maturity.

    TYPES OF NEGOTIABLE INSTRUMENT *PROMISSORY NOTES Instrument in writing containing unconditional undertaking signed by the maker to pay a certain sum of money to or to the order of a certain person or to only the bearer of the instrument

    Parties : Maker, payee, holder, endorser, endorsee.

    1.
    2. 3.

    4.
    5. 6. 7.
    5

    Essentials of Promissory note: Instrument in writing Undertaking to pay The undertaking to pay is unconditional. It must be signed by the maker. Amount payable must be certain and in money form. The payee must be certain. Must be duly stamped as per the Stamp Act.

    BILLS OF EXCHANGE

    IS AN INSTRUMENT IN WRITING AN UNCONDITIONAL ORDER SIGNED BY THE MAKER DIRECTING A CERTAIN PERSON TO PAY A CERTAIN SUM OF MONEY ONLY TO OR THE ORDER OF CERTAIN SUM OR TO THE BEARER OF THE INSTRUMENT.

    Parties: Drawer, Drawee, Acceptor, payee, holder, endorser, endorsee, drawee, acceptor

    1. 2. 3. 4. 5. 6. 7. 8.
    7

    Essentials of Bills of Exchange It must be in writing It must be an order to pay The order to pay must be unconditional It must be signed by the drawer. The parties to the bill must be certain. The order to pay must be in money. The formalities like date , stamp and others should be there. Maturity, grace period

    Negotiation and indorsement Negotiation is a process of transferring from one person to another ( first hand transfer). Thus also confirms the right of the owner to bring a legal suit if necessary. indorsement ( indorsement) means writing of the persons name on the back of the instrument for the purpose of negotiation.The person who signs is endorser, who receives is called endorsee. In blank In full

    NEGOTIATION BY ENDORSEMENT AND DELIVERY Types: -BLANK OR GENERAL: SIGNS OR WRITES AT THE BACK PAYABLE TO BEARER. -SPECIAL OR FULL: ORDERED TO SPECIFIC PERSON -RESTRICTIVE : PROHIBITS OR RESTRICTS FURTHER NEGOTIATION OF INSTRUMENTS. -PARTIAL : ENDORSEMENT OF HALF OF THE AMOUNT -CONDITIONAL OR QUALIFIED : CONDITIONS STIPULATED

    CHEQUE A cheque is a bill of exchange drawn on a specified banker and not expressed to be paid otherwise than on demand. -It is a B/E with two additional features: -Always drawn on a banker. -Always payable on demand. A cheque could be open cheque( payable across counter ) or closed cheque ( named with two parallel lines.)

    10

    TYPES OF CROSSINGS General Crossingshown by two parallel lines

    Special Crossings

    mentions name of the banker on the face of cheque Not negotiable may or may not be written. Adopted for commercial or banking usage.

    Restrictive Crossings

    11

    HUNDIS
    ARE NEGOTIABLE INSTRUMENTS NOT COVERED UNDER THE ACT. THEY MAY AT TIMES BE B/E OR P/N

    TYPES:

    SHAH JOG: PAYABLE TO A RESPECTABLE HOLDER. JOKHMI : DRAWN ON GOODS TO BE SAILED ON SHIP. JAWABEE HUNDI: USED FOR REMITTING MONEY FROM ONE PLACE TO ANOTHER. NAM JOG : PAYABLE TO THE PARTY NAMED IN THE BILL DARSHANI HUNDI : PAYABLE AT DEMAND AND PRESENTED AT DEMAND. MIADI HUNDI : PAYABLE AFTER A SPECIFIC PERIOD OF 12 TIME

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