Documentos de Académico
Documentos de Profesional
Documentos de Cultura
NEGOTIABLE
INSTRUMENTS
Presented
By Anu Kumari
B.Com I-A, 4245
Introduction
The law relating to negotiable
instruments is contained in the
Negotiable Instruments Act. 1881
which applies and extends to the
whole of India.
Definition of Negotiable
Instrument
Bill of Exchange:-
The Drawer
Promissory Note:- The Drawee Cheque:-
The Maker The Acceptor The Drawer
The Payee The Payee The Drawee
The Holder The Endorser The Payee
The Endorser The Endorsee The Holder
The Endorsee The Holder The Endorser
Drawee in case of The Endorsee
need
Acceptor for honour
1.
Holder & Holder in due
course
Holder :- According to section Holder in due course:- means
(8) of the Act holder of a any person who for the
negotiable instrument means consideration becomes the
any person (a) who is possessor of a promissory
note, a bill of exchange or a
entitled in his own name to
cheque if payable to bearer,
the possession of the or the payee or endorsee
negotiable instrument and thereof, if payable to order,
(b) who has also the right to before the amount
receive or recover the mentioned in it becomes
amount due thereon from payable and without having
the parties thereto. sufficient cause to believe
that any defect existed in
the title of the person from
whom he derived his title
(section 9) .
Privileges of a holder in due
course
Points of Difference b/w Holder &
Holder in due course
3. A holder of an instrument may
acquire the instrument if it
1. A holder can obtain an becomes payable. But the
instrument without person is not treated as a
consideration while a person holder in due course if he
cannot be a holder in due acquires an instrument when it
course unless he obtains an becomes payable.
instrument with
4. A holder need not bother
consideration and for value. about the defect, if any, in
2. If an instrument is the title. But no holder is
inchoate, a holder of such considered a holder in due
instrument cannot get good course who acquires an
title in the instrument. instrument knowingly the
While holder in due course defect of the title.
acquires a good title even if
the instrument is inchoate.
Presentment
Placing of a negotiable instrument before
a drawee is called presentment.
Presentment may be for any of the
following three purposes:
a) Presentment for acceptance.
b) Presentment for sight.
c) Presentment for payment.
Negotiation
According to section 14,
“It is a process of transferring the
ownership, right, title, interest of a
person in a negotiable instrument to
another person so as to give a good
title to the transferee and make a
transferee a holder of such
instrument.”
Continued…
Negotiation does not mean a simple
transfer. Simple transfer may not
necessarily involve the transfer of property
in the negotiable instrument but negotiation
implies the transfer of property or
ownership.
E.g. -X hands over a chequeto Mr. Y here
Mr. X has negotiates the instrument.
But if he hands over a cheque to Mr. Y
asking him to keep the same in his safe, the
cheque is not negotiated to Mr. Y, Mr. Y
Essentials of negotiation
üThere must be transfer of a negotiable
instrument to another person.
üAs a result of such transfer, the
transferee must become the holder of
the instrument.
ü
Modes of negotiation
qNegotiation by delivery – The negotiable
Instrument is transferred by delivery,
actual or constructive.” It is physical act
of delivering the instrument or handing
over the delivery, actual possession of the
instrument is not passed.
qNegotiation by endorsement and delivery –
The negotiable Instrument payable to
order is negotiable by the holder by
Endorsement
“Literal meaning of the term endorsement
is writing on an instrument.”
Endorser - The person who signs on the
back or on the face of the instrument or
on the slip is an endorser.
Endorsee - The person to whom the
instrument is endorsed is called the
endorsee.
Various types of
Endorsement
DRAWER
BEWARE
Because, by the said amendment the
DISHONOURED CHEQUE is being
TREATED as an CRIMINAL OFFENCE
NOTING AND PROTESTING
Noting means nothing but the recording of the fact of dishonor of
the instrument by a notary public within a reasonable time after
dishonour. Of course, nothing is not compulsory neither it affects
the rights of the holder thereon,
Thank You