Академический Документы
Профессиональный Документы
Культура Документы
Sec.13. A negotiable instrument means a promissory note, bill of exchange or cheque payable either to order or to bearer.
Six months after date I promise to pay Sor order the sum of Rupees Ten Thousand only for value received. To S Nitte Institute of Technology Yelahanka.
Six months after date pay to X or order the sum of Rupees Ten Thousand Only for value received. To S Nitte Institute of Technology Yelahanka.
Specimen of a Cheque
07-04-2005 PAY s________________________________
____________________________________________OR BEARER RUPEES TEN THOUSAND ONLY----------------------------------------------Rs. 10,000/UTI BANK LTD. YELAHANKA ___________________
(Signature of the Account Holder)
The presumptions:
1. consideration. Every negotiable instrument is deemed to have been made, drawn, accepted, endorsed, negotiated or transferred for consideration.
The presumptions:
2. Date. Every negotiable instrument bears the date on which it is drawn.
The presumptions:
3.Acceptance. Every bill of exchange was accepted within a reasonable time after the date mentioned therein and before maturity date.
The presumptions:
4. Transfer Every transfer was made before maturity date.
The presumptions:
5.Order of endorsements: All endorsements were made in the same order as they appear thereon.
The presumptions:
6. Lost instruments: The lost instruments were duly stamped and the stamp was duly cancelled
The presumptions:
7. Holder-in-due-course. Holder of the instrument is a holder in due course.
The presumptions:
8. Dishonour. On proof of protest, the court shall presume the fact of dishonour, unless it is disproved.
Examples of Negotiable Instruments Negotiable Instruments : Bills of Exchange, Promissory Notes, Cheques, Govt. Promissory Notes, Treasury Bills, Dividend Warrants, Share Warrants, Bearer Debentures, Port Trust/Improvement Trust Debentures, Hundis, Railway Bonds payable to bearer, etc.
Non-negotiable instruments:
Money Orders, Postal Orders, Fixed Deposit Receipts, Share Certificates, Letters of Credit.
PROMISSORY NOTE:
A promissory note is an instrument in writing (not being a bank note or a currency note) containing an unconditional undertaking, signed by the maker to pay a certain sum of money to, or to the order of, a certain person, or to the bearer of the instrument.
BILL OF EXCHANGE:
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.
2. In Pro-note, the maker cannot be the payee. In Bill of Exchange, the drawer and Payee can be one person Pay to me or my order. 3. Promise and Order: Pro-note, promise to make payment. In Bill, an order to make payment. 4. Acceptance: Pro-note requires no acceptance. In Bill, It must be accepted by the drawee.
5. Nature of liability : Pro-note liability is primary. B/E secondary and conditional. Only when the acceptor does not honour, the liability falls on the drawer. 6. Makers position : Pro-note contains an unconditioinal promise to pay. He stands in immediate relation to the payee and cannot make the pro-note conditional. B/E Acceptor may accept the bill conditionally (S.86) However drawer has to make an unconditional order to pay.
7. Payable to bearer: A pro-note cannot be payable to bearer. B/E can be drawn to bearer provided it is not payable to bearer on demand. 8. Notice of dishonour: Pro-note No notice necessary. B/E Notice of dishonour must be given by holder to all prior parties liable to pay. 9. Certain provisions: Provisions relating to presentment for acceptance, acceptance, acceptance supra protest and drawing in sets, are applicable only to B/E. Not for Pro-Note.
CHEQUE:
A cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.
Cheque 1. A cheque is always drawn on a banker. 2. A cheque can only be drawn payable on demand. 3. A cheque drawn payable to bearer on demand is valid. 4. A cheque does not require any acceptance by the drawee before payment can be demanded. 5. A cheque does not require any stamp.
Bill Of Exchange 1. A Bill may be drawn on any person including a banker. 2. A bill may be drawn payable on demand or on the expiry of a certain period after date or sight. 3. A Bill drawn payable to bearer on demand is absolutely void and illegal. 4. A Bill requires acceptance by the drawee before he can be made liable thereon. 5. A Bill of Echange must be properly stamped.
6. A cheque is always payable on demand; there is no question of allowing any days of grace. 7. A chque can be crossed. 8. Payment of a cheque can be countermanded. 9. There is no system of Noting or Protest in the case of a cheque. 10.A cheque can be presented for payment within 6 months from the date of drawal.
6. Three days of grace are allowed while calculating the maturity date in the case of time bills. 7. A Bill of Exchange cannot be crossed. 8. Payment of a bill cannot be countermanded. 9. Bills require Noting and Protest in case of dishonour. 10. The drawer of a bill is discharged from liability, if it is not duly presented for payment.
Bills in Sets. Accommodation Bills. Fictitious Bill V. Forged Bill. Documentary Bill. And Clean Bills. Bank Draft. Hundis. Inland and Foreign Instruments. Time and Demand Instruments. Ambiguous Instruments. Inchoate Instruments. Escrow
INDORSEMENT:
When the maker or holder of a negotiable instrument signs the same otherwise than as such maker, for the purpose of negotiation, on the back or face thereof or on a slip of paper annexed thereto, or so signs for the same purpose a stamped paper intended to be completed as negotiable instrument, he is said to indorse the same, and is called the indorser.
Kinds of indorsement
1. Blank or general indorsement: If the indorser just signs his name only without specifying the name of the indorsee, the indorsement is said to be blank. The blank indorsement converts the order instrument into a bearer instrument.
Kinds of indorsement
2. Indorsement in full or special indorsement: If in addition to his signature, the indorser adds a direction to pay to, or to the order of a specified person, the endorsement is said to be in full. After such an indorsement, only the indorsee is entitled to receive the payment of the instrument or to further negotiate the instrument by his indorsement.
Kinds of indorsement
3. Partial indorsement: Partial indorsement which transfers the rights to receive only a part payment of the amount due on the instrument is invalid. An indorsement purporting to transfer the instrument to two or more indorsees separately and not jointly, is treated as partial indorsement and hence invalid. Where an instrument has been paid in part, a note to that effect may be indorsed on the instrument and it may then be negotiated for the balance.
Kinds of indorsement
4. Restrictive indorsement: An indorsement which, by express words, prohibits the indorsee from further negotiating the instrument or restricts the indorsee to deal with the instrument as directed by the indorser is called a restrictive indorsement. The indorsee under a restrictive indorsement gets all the rights of an indorser except the right of further negotiation.
Kinds of indorsement
5. Conditional indorsement: If the indorser, by express words in the indorsement, makes his liability, dependent on the happening of a specified event, although such event may never happen, such indorsement is called a conditional indorsement. Since law permits conditional indorsement, it does not in any way affect the negotiability of the instrument. The liability of the indorser, would arise only on the happening of the event specified, but the indorsee can sue the other prior parties, if instrument is not duly met on maturity, even if specified event did not happen.
Kinds of indorsement
6. Sans recourse indorsement: When the indorser expressly excludes his own liability on the negotiable instrument to the indorsee or any subsequent holder in case of dishonour of the instrument, the indorsement is known as sans recourse indorsement. Such indorsement is generally made by adding the words sans recourse, without recourse , without recourse to me, ..at his own risk etc.
Kinds of indorsement
7. Facultative indorsement: When the indorser expressly gives up some of his rights under the negotiable instrument, the indorsement is called a facultative indorsement. Notice of dishonour waived is a facultative indorsement. By this indorsement, the indorser remains liable to the indorsee for non-payment of the instrument, even though no notice of dishonour has been given to him.