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
 Types Of Negotiable
Instrument
 Recognized  Recognized
By Statute By Usage Or
Custom
3. Bills Of
Exchange 3. Hundis
4. Promissory 4. Share
Notes Warrants
5. Cheques 5. Dividend
Warrants
 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
 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
A Bill Of Exchange is an instrument
in writing
 It must be signed by the maker
 It contains an unconditional order
 The order must be to pay money
and money only
 The sum payable must be specific
 The amount must be paid within a
stipulated time
 The name of the drawee must be
clearly mentioned
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
 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
 Kinds of Bills Of
Exchange

Inland
 Foreign
Bill Bill
 Kinds of Bills Of
Exchange

 Trade  Accommoda
Bills tion Bills
 Kinds of Bills Of
Exchange

Demand
 Time Bill
Bill
Thank You