The maker of a promissory note, bill of exchange or cheque stands in immediate relation with the payee, and the endorser with his endorsee. This shows that "delivery" is essential in negotiable instruments.
A cheque can be made payable to bearer. The sum payable may be "certain", within the meaning of this section and section 4, although it includes future interest or is payable at an indicated rate of exchange, or is according to the course of exchange, and although the instrument provides that, on default of payment of an instalment, the balance unpaid shall become due.
A customer to whom a cheque has been endorsed, would request his banker to collect a cheque.
The words as appearing in clause b of S. For example, a cheque payable to bearer is crossed generally and is marked "not negotiable". Of the ten sections comprising the chapter of the Act, section creates statutory offence in the matter of dishonour of cheques on the ground of insufficiency of funds in the account maintained by a person with the banker.
Failure to verify the regularity of endorsements, collecting a cheque payable to the account of the company to the credit of the director, etc. As a cheque is a bill of exchange, drawn on a specified banker, the drawee of a cheque must always be a banker. Therefore, A having been relegated by the second endorsement to his original position, cannot sue B, C and D.
Inserted by Act 2 ofSection 9. A person, who on the refusal by the original drawee to accept the bill or to furnish better security, when demanded by the notary, accept the bill supra protest in order to safeguard the honour of the drawer or any endorser, is called the acceptor for honour.
An employee who was granted leave on medical ground shall not return to duty without, first producing a certificate of fitness from the medical authority specified by the Bank in this behalf.
In this case, A is not only reinstated in his former rights but has the right of an endorsee against B, C and D. When acceptor for honor may be charged: Whoever takes it can recover the amount from all parties previous to such holder.
The Bill had to be redrafted in However, the courts take a lenient view in such cases and the accused is set free or punished lightly. Endorsement Sections 15 and 16 Where 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 called Allongeor so, signs for the same purpose, a stamped paper intended to be completed as a negotiable instrument, he is said to endorse the same Section 15the person to whom the instrument is endorsed is called the endorsee.
Liability of a Banker By opening a current account of a customer, the banker becomes liable to his debtor to the extent of the amount so received in the said account and undertakes to honour the cheques drawn by the customer so long as he holds sufficient funds to the customer's credit.
Liability of legal representative signing: Liability of Prior Parties Section 36 Every prior party to a negotiable instrument is liable thereon to a holder in due course until the instrument is duly satisfied. The person to whom it is clear that the direction is given or that payment is to be made may be a "certain person", within the meaning of this section and section 4, although he is mis-named or designated by description only.
A crossing is a direction to the paying banker to pay the money generally to a banker or to a particular banker, and not to pay otherwise. The reason is that cheque is crossed "not negotiable" and hence the true owner's holder's right supersedes the rights of the holder-in-due-course.
Alok is not discharged, for he has not suffered actual damage through any delay in presenting the cheque. Where a cheque is issued not for the purposes of discharge of any debt or other liability, the maker of the cheque is not liable for prosecution under section of the Act.
Dishonour of cheque for insufficiency, etc. The drawee of the bill of exchange is not liable thereon until acceptance in the manner provided by this Act. An illustration will make the point clear.Section of the Negotiable Instruments Act: Advent of cheques in the market have given a new dimension to the commercial and corporate world, its time when people have preferred to carry and execute a small piece of paper called Cheque than carrying the currency worth the value of cheque.
Negotiable instruments, it is seen have a great significance over the modern business world. It has to be noted that these instruments have gained significant prominence as the principle instruments for paying and discharging business obligation.
So what essentially is a negotiable instrument?
A. Below given is the Negotiable Instruments Act Notes.
This notes contains Features of Negotiable Instruments, Characteristics of negotiable Instruments, Meaning of Negotiation as per Negotiable Instruments Act etc. The Negotiable Instruments Act is the Law relating to Promissory Notes, Bills of Exchange and Cheques in India.
The Act applies to the whole of India except the Indian Paper Currency Act,Section 21, or affects any local usage relating to any instrument in an oriental language.
It is an act which deals with cases relating to bills of exchange,promissory notes,cheques and demand drafts. it is used to pass judgements in courts normally in cases where a bill is dishonoured.
The Negotiable Instruments Act was enacted, in India, in Prior to its enactment, the provision of the English Negotiable Instrument Act were applicable in India, and the present Act is also based on the.Download