Introduction

The Negotiable Instruments Act was enacted, in India, in 1881. 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 English
Act with certain modifications. It extends to the whole of India except the State of Jammu and Kashmir. The
Act operates subject to the provisions of Sections 31 and 32 of the Reserve Bank of India Act, 1934. Section 31
of the Reserve Bank of India Act provides that no person in India other than the Bank or as expressly
authorised by this Act, the Central Government shall draw, accept, make or issue any bill of exchange, hundi,
promissory note or engagement for the payment of money payable to bearer on demand. This Section further
provides that no one except the RBI or the Central Government can make or issue a promissory note expressed
to be payable or demand or after a certain 3 time. Section 32 of the Reserve Bank of India Act makes issue of
such bills or notes punishable with fine which may extend to the amount of the instrument. The effect or the
consequences of these provisions are:

1. A promissory note cannot be made payable to the bearer, no matter whether it is payable on demand or after
a certain time.
2. A bill of exchange cannot be made payable to the bearer on demand though it can be made payable to the
bearer after a certain time.
3. But a cheque {though a bill of exchange} payable to bearer or demand can be drawn on a person’s account
with a banker.

MEANING OF NEGOTIABLE INSTRUMENTS

According to Section 13 (a) of the Act, “Negotiable instrument means a promissory note, bill of exchange or
cheque payable either to order or to bearer, whether the word “order” or “ bearer” appear on the instrument or
not.”

In the words of Justice, Willis, “A negotiable instrument is one, the property in which is acquired by anyone
who takes it bonafide and for value notwithstanding any defects of the title in the person from whom he took
it”.

Thus, the term, negotiable instrument means a written document which creates a right in favour of some person
and which is freely transferable. Although the Act mentions only these three instruments (such as a promissory
note, a bill of exchange and cheque), it does not exclude the possibility of adding any other instrument which
satisfies the following two conditions of negotiability:
1. the instrument should be freely transferable (by delivery or by endorsement. and delivery) by the custom of
the trade; and
2. the person who obtains it in good faith and for value should get it free from all defects, and be entitled to
recover the money of the instrument in his own name. As such, documents like share warrants payable to
bearer, debentures payable to bearer and dividend warrants are negotiable instruments. But the money orders
and postal orders, deposit receipts, share certificates, bill of lading, dock warrant, etc. are not negotiable
instruments. Although they are transferable by delivery and endorsements, yet they are not able to give better
title to the bonafide transferee for value than what the transferor has.

 This Act is enacted to define and amend laws relating to promissory note, bills of exchange and
cheque.
 This Act is applicable to whole of India including Jammu and Kashmir.
 This act came into force on 1st March 1882.
 Meaning of Negotiable instrument –

 A negotiable instrument is actually a written document and is transferrable.

 This document specifies payment to a specific person or the bearer of the instrument at a specific date.
 Act does not define ‘Negotiable instruments’ however section 13 provides for 3 kind
of negotiable instrument viz. promissory note, bills of exchange and cheque.

Kinds of negotiable
instruments - Section 13

Promissory note - Section 4 Cheque -

Bills of exchange -
Section 5 Section 6

CHARACTERISTICS OF A NEGOTIABLE INSTRUMENT

A negotiable instrument has the following characteristics:

1. Property: The possessor of the negotiable instrument is presumed to be the owner of the property contained
therein. A negotiable instrument does not merely give possession of the instrument but right to property also.
The property in a negotiable instrument can be transferred without any formality. In the case of bearer
instrument, the property passes by mere delivery to the transferee. In the case of an order instrument,
endorsement and delivery are required for the transfer of property.

2. Title: The transferee of a negotiable instrument is known as ‘holder in due course.’ A bona fide transferee
for value is not affected by any defect of title on the part of the transferor or of any of the previous holders of
the instrument.

3. Rights: The transferee of the negotiable instrument can sue in his own name, in case of dishonour. A
negotiable instrument can be transferred any number of times till it is at maturity. The holder of the instrument
need not give notice of transfer to the party liable on the instrument to pay.

4. Presumptions: Certain presumptions apply to all negotiable instruments e.g., a presumption that
consideration has been paid under it. It is not necessary to write in a promissory note the words ‘for value
received’ or similar expressions because the payment of consideration is presumed. The words are usually
included to create additional evidence of consideration.

5. Prompt payment: A negotiable instrument enables the holder to expect prompt payment because a dishonour
means the ruin of the credit of all persons who are parties to the instrument.

PRESUMPTIONS AS TO NEGOTIABLE INSTRUMENT

Sections 118 and 119 of the Negotiable Instrument Act lay down certain presumptions which the court
presumes in regard to negotiable instruments. In other words these presumptions need not be proved as they are
presumed to exist in every negotiable instrument. Until the contrary is proved the following presumptions shall
be made in case of all negotiable instruments:
1. Consideration: It shall be presumed that every negotiable instrument was made drawn, accepted or endorsed
for consideration. It is presumed that, consideration is present in every negotiable instrument until the contrary
is presumed. The presumption of consideration, however may be rebutted by proof that the instrument had
been obtained from, its lawful owner by means of fraud or undue influence.

2. Date: Where a negotiable instrument is dated, the presumption is that it has been made or drawn on such
date, unless the contrary is proved.

3. Time of acceptance: Unless the contrary is proved, every accepted bill of exchange is presumed to have been
accepted within a reasonable time after its issue and before its maturity. This presumption 6 only applies when
the acceptance is not dated; if the acceptance bears a date, it will prima facie be taken as evidence of the date
on which it was made.

4. Time of transfer: Unless the contrary is presumed it shall be presumed that every transfer of a negotiable
instrument was made before its maturity.

5. Order of endorsement: Until the contrary is proved it shall be presumed that the endorsements appearing
upon a negotiable instrument were made in the order in which they appear thereon.

6. Stamp: Unless the contrary is proved, it shall be presumed that a lost promissory note, bill of exchange or
cheque was duly stamped.

7. Holder in due course: Until the contrary is proved, it shall be presumed that the holder of a negotiable
instrument is the holder in due course. Every holder of a negotiable instrument is presumed to have paid
consideration for it and to have taken it in good faith. But if the instrument was obtained from its lawful owner
by means of an offence or fraud, the holder has to prove that he is a holder in due course.

8. Proof of protest: Section 119 lays down that in a suit upon an instrument which has been dishonoured, the
court shall on proof of the protest, presume the fact of dishonour, unless and until such fact is disproved.

TYPES OF NEGOTIABLE INSTRUMENT

Section 13 of the Negotiable Instruments Act states that a negotiable instrument is a promissory note, bill of
exchange or a cheque payable either to order or to bearer. Negotiable instruments recognised by statute are:

(i) Promissory notes

(ii) Bills of exchange
(iii) Cheques.

Presumptions – Section
118

A negotiable instrument is subject to certain presumptions (Section 118).

a) Consideration –
It shall be presumed that every negotiable instrument was made or drawn for consideration, and
that every such instrument when it was accepted, indorsed, negotiated or transferred, was
accepted, indorsed, negotiated or transferred for consideration.
b) Date –
Features of Negotiable Instruments –

1) It should be in writing
2) Freely transferable
3) It should create a right of a person to receive money and a corresponding liability
of a person to pay money.
4) Holder's title free from defects –
a) A holder in due course acquires a good title irrespective of any defect in a previous
holder's title.
b) A holder in due course is one who receives the instrument:
 for consideration;
 without notice as to the defect in the title of the transferor; i.e. in good faith and
 before maturity
5) Transferability –
A negotiable instrument can be transferred infinitum, i.e., can be transferred any number of
times, till its payment.
 Promissory Note – Section 4
Meaning –
A Promissory Note is a legal financial instrument issued by one party,
promising to pay the debt owed to another party

Definition –
“A Promissory note is an instrument in writing containing an unconditional
undertaking, signed by the maker, to pay a certain sum of money only to, or to
the order of, a certain person, or to the bearer of the instrument”.

Note – Bank note or currency note is not a promissory note.

Parties to promissory note –

Maker: The person who makes the promissory Payee: The person to whom the payment is to be
note and promises to pay is called the maker. made is called the payee.

Requisites (Essentials) of a Promissory Note –

The promissory note must be in writing.
It must contain an undertaking to pay There must be an express promise to pay.
The promise to pay should be unconditional
The promissory note must be signed by the maker.
The sum payable must be certain
The instrument must contain a promise to pay money and money only

Other important points –

a) The maker and payee must be certain.

b) Stamping of Promissory Note is essential under The Indian Stamp Act, 1899.
c) An unstamped promissory note is not admissible in evidence and no suit can
be maintained.
d) It must contain date
e) The limitation period for a promissory note to file a suit is 3 years from the date
of execution or from the date of acknowledgement
  Bills of Exchange – Section 5
Meaning –
Bill of Exchange can be understood as a written negotiable instrument, that carries an
unconditional order to pay a specified sum of money to a person or the holder of the
instrument, as directed in the instrument by the maker. The bill of
exchange is either payable on demand, or after a specified term.

Definition –
“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”.

Requisites (Essentials) of a Bill of Exchange –

Other important points –

1) A bill of Exchange must be drawn unconditionally, though the acceptor, or the indorser may
make his liability conditional, direction of payment by the drawer must not be made to
depend upon a contingency. Therefore, it is the essence of a bill of exchange that it should
be payable at all events and it must appear so on its face
2) It is essential that a bill of exchange should point out with certainty the party who enters
into the contract imported by its terms. Thus, the signature of the drawee is necessary and
there cannot be a bill, even if the instrument if accepted without the signature of the
drawee
3) It must indicate a drawee who should be called on to accept or pay it. The drawee must
 Types of Bills –
1) Inland Bills –
a) Two essential conditions to make an inland instrument are:
(1) the instrument must have been drawn or made in India; and
(2) the instrument must be payable in India or the drawee must be in India.

2) Foreign Bills –
All bills which are not inland are deemed to be foreign bills. Normally foreign bills are
drawn in sets of three copies.

3) Trade Bills –
A bill drawn and accepted for a genuine trade transaction is termed as a trade bill.
When a trader sells goods on credit, he may make use of a bill of exchange.

4) Accommodation Bill –
a) An accommodation bill is a bill in which a person lends or gives his name to oblige
a friend or some person whom he knows.
b) In other words, a bill which is drawn, accepted or endorsed without consideration is
called an accommodation bill.
c) The party lending his name to oblige the other party is known as the
accommodating or accommodation party, and the party so obliged is called the
party accommodated.
d) An accommodation party is not liable on the instrument to the party
accommodated because as between them there was no consideration and the
instrument was only for help.
e) But the accommodation party is liable to a holder for value, who takes the
accommodation bill for value, though such holder may not be a holder in due
course.

Trade Accommodation Bill

Bill
1. Trade bills are drawn and accepted 1. These bills are drawn and accepted
for same consideration. without any consideration.

2. These bills are legally enforceable. 2. These bills are not legally enforceable.

3. Trade bills are the acknowledgment of 3. Accommodation bills are not

the debt. the acknowledgment of debt.

4. The drawer can sue if bill is dishonored. 4. Drawer cannot sue if bill is dishonored.

5. Loss by way of discounting the bill is

5. Loss by way of discounting the bill is shared by drawer and drawee in the ratio
borne by drawer only. of their sharing in the proceeds of the bill.

5) Bills in Sets –
a) Foreign bills are usually drawn in sets to avoid the danger of loss.
b) They are drawn in sets of three, each of which is called “Via” and as soon as
any one of them is paid, the others become inoperative.
 c) All these parts form one bill and the drawer must sign and deliver all of them to the payee.
d) The stamp is affixed only on one part and one part is required to be accepted.
e) But if the drawer mistakenly accepts all the parts of the same bill, he will be liable
on each part accepted as if it were a separate bill.

When
BankaDraft
bill of
– exchange drawn by one bank on another bank, or by itself on its own branch, and is a
negotiable instrument then it is called as bank draft.

Bank Cheque
Draft
A bank draft can be drawn only by a bank Cheque can be drawn by any person
on another bank
It cannot so easily be counter-manded It can be counter-manded (Cancelled)
(Cancelled)
It cannot be made payable to bearer. It can be made payable to bearer

 Cheque – Section 6
Meaning –
Cheque refers to a negotiable instrument that contains an unconditional order to the bank to pay
a certain sum mentioned in the instrument, from the drawer’s account, to the person to whom it
is issued, or to the order of the specified person or the bearer. It also includes truncated cheque
and cheque in electronic form.

Definition –
“A cheque is a bill of exchange drawn upon a specified banker and payable on demand and it
includes the electronic image of a truncated cheque and a cheque in the electronic form”.
Note –
A cheque is a species of a bill of exchange; but it has the following two additional qualifications:
1. It is always drawn on a specified banker, and It is always payable on demand.
Requisites (Essentials) of a Cheque –
 A cheque must be an order in writing.

 It must contain an unconditional order

 A cheque must be signed by the maker

 The amount must be specifically mentioned in figures and words

 A cheque may be drawn payable to order or bearer. There are two kinds of cheques prevailing now
a days. They are: a) it may be a bearer or order cheque; and b) it may be a self cheque
 The cheque must contain the date. Payee to be certain
 Acceptance – Section 7
A) Meaning of Acceptance :
The acceptance of a bill is the indication by the drawee of his assent to the order of the
drawer. Section 7 states that an acceptance is the signature of the drawee of a bill who
has signed his assent upon the bill and delivered it. Thus, an acceptor is the drawee who
has signed his assent upon the bill and delivered it to the holder
B) Essentials of Valid Acceptance –
 In writing,
 Signed by the drawee or his agent,
 On bill of exchange,
 Completed by delivery to the holder.
 Writing the word 'Accepted' is immaterial.
 An oral acceptance or writing of the word 'Accepted' without the drawee's signature is
not an acceptance.
Acceptor for honour

1) Undertaking by a third party to accept and pay (in part or in full) a bill of exchange
that was dishonored, either by non-acceptance or by non-payment by the party on
whom it was drawn. Also called acceptance supra protest.

2) How acceptance for honor should be

A person desiring to accept the bill for honor must declare in writing that he accepts under
protest the protested bill for the honor of the drawer or a particular endorser whom he
names.

3) Rights and liabilities of acceptor for honor –

a) He binds himself to pay the amount mentioned in the bill if drawee fails to pay.
b) Liability of acceptor for honor is conditional and it arise only when the drawee
makes the default to pay.
c) He may recover all the losses and damages from the drawee.

The "holder"
1) Holder – Sectionof
8 a promissory note, bill of exchange or cheque means any person entitled in his own
name –
a) to the possession thereof; and
b) to receive or recover the amount due thereon from the parties thereto.
2) His rights and title are dependent on the transferor. He has a right to demand and receive
but does not have a right to sue.
 Note –
It is not every person in possession of the instrument who is called a holder.
To be a holder, the person must be named in the instrument as the payee, or the endorsee, or he must be the bearer th
A person who has obtained possession of an instrument by theft, or under a forged endorsement, is not a holder, as he
An agent holding an instrument for his principal is not a holder although he may receive its payment. The holder implie

A holder in due course is one who receives the instrument:

Holder in consideration;
a) for Due Course – Section 9
b) without notice as to the defect in the title of the transferor; i.e. in good faith; and
c) before maturity.

Note –
a) His rights and title are independent on the transferor.
b) He has a right to demand and receive and also have a right to sue.

a) Payment
Payment in DueinCourse
due course refers
– Section 10 to a payment in keeping with the evident tenor of the instrument,
in good faith & without negligence to any person in possession thereof.

b) A payment will be regarded as a payment in due course if:

 Payment is done as per apparent tenor of instrument
 It is made in good faith & without negligence
 It is made to the person who possesses the instrument who is entitled as holder to
obtain payment;
 Payment is made in money & money only.

A) Bearer of
Classification Instruments –
Negotiable Instruments –
a) There are two important conditions for negotiable instruments to become payable to bearers.
1) parties to the transactions must express it to be so payable; or
2) The only endorsement for it should be an endorsement in blank.
b) A person who is a holder of a bearer instrument can obtain the payment of
the instrument.
B) Order Instruments –
a) They are payable when the instruments expressly state them to be so.
b) They may be payable to order only to a specific person.
c) There should be no prohibition on their transferability.
C) Inland Instruments –
a) An inland instrument is one which is either:
1) drawn and made payable in India, or
2) drawn in India upon some persons resident , even though it is made payable in
a foreign country
D) Foreign Instruments –
 a) Every instrument that is not inland automatically becomes a foreign instrument.
b) These instruments are drawn in a foreign country but may be payable within or outside India.
c) it must be drawn in India and made payable outside India and drawn on a
person resident outside India.
E) Demand Instruments –
a) Negotiable instruments in which no time is mentioned is called as demand instrumnets.
F) Time Instruments –
a) Time instruments carry a fixed future date for payment.
b) Time instruments are payable at a fixed date in the future.
G) Ambiguous Instruments –
a) An ambiguous instrument is basically one that may be either a bill or a note for its holder.
b) Under such circumstances, the holder of such instruments may treat them either as
bills of exchange or as promissory notes.
c) For example, sometimes the drawee may be a fictitious person or he may be
incompetent to contract.
H) Incomplete instruments –
a) Incomplete instruments lack certain essential requirements of typical negotiable instruments.
b) In such cases, the holder of the instrument has the authority to complete it up to the
amount mentioned therein.
c) This, in turn, results in the creation of legally binding negotiable instrument payable by law.
d) Not only the first holder but also any subsequent holder who procures such
instruments can complete them.

If When
the amount undertaken
the amount stated or ordered
in words tofigures
and be paidareisdifferent
stated differently in figures and in words, the amount
– Section 18
stated in words shall be the amount undertaken or ordered to be paid.

A) Meaning
Maturity of 22
– Section Maturity –
23 and 24
The maturity of a promissory note or bill of exchange is the date at which it falls due.
B) Days of grace –
a) Every promissory note or bill of exchange which is not expressed to be payable on
demand, at sight or on presentment is at maturity on the third day after the day on
which it is expressed to be payable.
b) All instruments except for the instrument payable on demand are entitled for 3 days grace
period.
Note –
1) No grace period is allowed in the following cases –
 A cheque
 A bill or note payable ‘at sight’ or ‘on presentment’ or ‘on demand’, in which no time
is mentioned
2) Where the instrument is payable on installment then each installment is entitled for 3
days grace period.

C) Calculation of days of maturity –

 Where a negotiable instrument is payable on specified date then it shall become
payable on that specified date + 3 days of grace.
  Where a negotiable instrument is payable on a stated number of days after date or
after sight or after happening of certain event then it shall become payable on –
 The date on which the negotiable instrument is drawn + 3 days of grace.
 The date on which negotiable instrument is presented for sight + 3
days of grace.
 The date on which the event happens + 3 days of grace.

 Where a negotiable instrument is payable on a stated number of months after

date or after sight or after happening of certain event then it shall become
payable on –
 The corresponding day of relevant month (The date on which the
negotiable instrument is drawn) + 3 days of grace.
 The corresponding day of relevant month (The date on which
negotiable instrument is presented for sight) + 3 days of grace.
 The corresponding day of relevant month (The date on which the
event happens) + 3 days of grace.

Examples –
1. day
 If the last A negotiable
of grace instrument
is a publicdated 31st January,
holiday, then the2020, is madewill
instrument payable at one
be due on
months after date. The
preceding business day – Section 25 instrument is at maturity on the third day after the 28th
February, 2020, i.e. on 3rd March, 2020.
2.
 If the day ofA negotiable
maturity isinstrument dated or
an emergency 30th August, 2020,
unforeseen is made
holiday, payable
then three months
the maturity
after date. The instrument
day will be the following business day. is at maturity on 3rd December, 2020.
3. A negotiable instrument dated the 31st August, 2020, is made payable three
months
A) Meaning of Negotiation – after date. The instrument is at maturity on 3rd December, 2020.
Negotiation (Transfer) of negotiable instruments –
When the instrument is transferred from one person to another with a view to make the
other person as holder then the instrument is deemed to have been negotiated.
B) Modes of Negotiation –

In case of PN, BoE, payable to bearer by Delivery

Cheque
Mode of negotiation
In case of PN, BoE,
Cheque Payable to order endorsement + Delivery
C) Negotiation Back –
1) Where an endorser negotiates an instrument and again becomes its holder, the
instrument is said to be negotiated back to that endorser and none of the intermediary
endorsees are then liable to him.
Example –
Raju, the holder of a bill endorses it to Shyam, Shyam endorses to Babu Bhai, and
Babu Bhai to Anuradha, and endorses it again to Raju. Raju, being a holder in
due course of the bill by second endorsement by Anuradha, can recover the
amount thereof from Shyam, Babu Bhai, or Anuradha and himself being a prior
party is liable to all of them. Therefore, Raju having been relegated by the second
endorsement to his original position, cannot sue Shyam, Babu Bhai and
Anuradha.
2) Where an endorser so excludes his liability and afterwards becomes the holder
of the instrument, all the intermediate endorsers are liable to him.
Example –
An illustration will make the point clear. Raju is the payee of a negotiable
instrument. He endorses the instrument ‘sans recourse’ to Shyam, Shyam
endorses to Babu Bhai, Babu Bhai to Anuradha, and Anuradha again endorses it
to Raju. In this case, Raju is not only reinstated in his former rights but has the
right of an endorsee against Shyam, Babu Bhai and Anuradha.

The making, acceptance or endorsement of a promissory note, bill of exchange or cheque is completed
Delivery – Section 46
by delivery which may be actual or constructive.

A) Meaning of Endorsement –
a) Endorsement means signing at the back of the instrument for the purpose of negotiation.
b) The act of the signing a cheque, for the purpose of transferring to the someone
else, is called the endorsement of Cheque.
c) If no space is left on the instrument then the Endorsement may be made on a
separate slip to be attached to the instrument.

B) Definition of Endorsement –
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 (attached) thereto, or so signs for the same purpose a stamped paper
intended to be completed as a negotiable instrument, he is said to endorse the same, and
is called the “endorser”.

C) Kinds of Endorsement –
(a) Endorsement in Blank / General –
An endorsement is said to be blank or general when the endorser puts his signature
only on the instrument and does not write the name of anyone to whom or to whose
order the payment is to be made.

(b) Endorsement in Full / Special –

 An endorsement is 'special' or in 'full' if the endorser, in addition to his signature
also mention the name of the person to whom or to whose order the payment is to
be made.
  There is direction added by endorser to the person specified called the endorsee,
of the instrument who now becomes its payee entitled to sue for the money due
on the instrument.

- Partial Endorsement – Instrument which transfers the amount mentioned in

(c) Conditional Endorsement
the instrument partially–and not fully is called as partial endorsement.
 -An Asendorsement
per section 56isis conditional
invalid underor
law.qualified which limits or negatives the
liability of the endorser.

An endorser may limit his liability in

any of the following ways –

By making his liability depending

By sans recourse endorsement upon happening of a specified
(d) Restrictive Endorsement –
 Restrictive endorsement seeks to put an end the principal characteristics of a
Negotiable Instrument and seals its further negotiability.
 This may sound a little unusual, but the endorsee is very much within his rights
if he so signs that its subsequent transfer is restricted.
 This prevents the risk of unauthorized person obtaining payment through
fraud or forgery and the drawer losing his money.

(e) Endorsement Sans Recourse –

 Sans Recourse which means without recourse or reference.
 As such a when the property in a negotiable instrument is transferred sans
recourse, the endorser, negatives his liability and excludes himself from
responsibility to all subsequent endorsees.
 It is one of the commonest forms of qualified endorsement and virtually
prohibits negotiation since the endorser says in effect.

Every
Whosole
may maker, drawer,
negotiate payee–or
instrument endorsee,
Section 51 or all of several joint makers, drawers, payees or
endorsees, of a negotiable instrument may, indorse and negotiate the same.

 Whenobtained
Instrument a negotiable instrument
by unlawful hasorbeen
means lost or
unlawful consideration – Section 58
 has been obtained from any maker, acceptor or holder thereof by means of an offence or
fraud, or for an unlawful consideration,
  no possessor or endorsee who claims through the person who found or so obtained the
instrument is entitled to receive the amount due thereon from such maker, acceptor or
holder, or from any party prior to such holder,
 unless such possessor or endorsee is, or some person through whom he claims was, a
holder in due course.

A) Liability
Liabilities of a–minor –
of Parties
It may be noted that a minor, being incompetent to contract, cannot bind himself by
becoming a party to a negotiable instrument. Whether he is the drawer, maker, acceptor
or endorser, he is not liable on the instrument. Section 26 categorically excludes minor's
liability by stating that a minor binds all parties except himself.

B) Liability of an agent –
a) Every person capable of legally entering into a contract, may make, draw, accept
indorse, deliver and negotiate a promissory note, bill of exchange or cheque,
himself or through a duly authorized agent.
b) A general authority to transact business and to discharge debt does not confer
upon an agent the power to indorse bills of exchange so as to bind his principal.
c) An agent cannot escape personal liability unless he indicates that he signs as an
agent and does not intend to incur personal liability

C) Liability of Legal Representative –

A legal representative' of a deceased person, who signs his own name on an instrument,
is personally liable for the entire amount; but he may expressly limit his liability to the
extent of the assets received by him as legal representative.

D) Liability of Drawer:
a) Usually, the liability of the drawer of a bill or cheque is secondary and conditional.
b) The liability of the acceptor and maker of the bill and drawee of the cheque is
primary and unconditional.
c) The drawer's liability is conditional, i.e., it arises only in the event of a
dishonor by the drawee or acceptor.
d) Once there has been dishonor and the notice of dishonor has been given to the
drawer, he is liable to compensate the holder whatever be the state of the account
between himself and the drawee or acceptor.

E) Liability of drawee Bank of cheque –

Wrongful dishonor of customer's cheque entails exemplary damages against banker and
the amount of damages is inversely related to the amount of the cheque dishonored.

F) Liability of drawee of Bill of Exchange/ Maker of Promissory Note –

a) The maker of a promissory note is bound to pay the amount at maturity.
b) The liability of the drawee only arises when he accepts the bills.
c) Drawee's liability is primary and unconditional.
d) He is liable for Principal amount along with interest and noting/ protesting charges if any.
 G) Liability of maker, drawer and acceptor as principals –
a) The maker of a promissory note is liable as the principal debtor.
b) In a bill of exchange, the acceptor acts as a principal debtor and the drawer acts a
surety as drawer is liable to pay only if acceptor defaults.

H) Effect of forged indorsement on acceptor's liability –

a) A bill may be accepted before or after indorsement by the payee.
b) An acceptor of a bill of exchange already indorsed is not relieved from liability
by reason that such indorsement is forged.

I) Liability of acceptor of a bill drawn in a fictitious name –

The acceptor is not relieved from liability by proving that the drawer is fictitious.

J) Liability on an instrument made drawn etc. without consideration –

An instrument made, drawn, accepted, indorsed, or transferred without consideration
creates no obligation of payment between the parties to the instrument.

Presentment – Section 61 to section 67

Presentment is classified as follows -

Presentment for acceptance – A)Presentment for payment – BOE,

PN and Cheque must be presented for
payment

A) Presentment for acceptance –

a) Only Bills of exchange requires presentment for acceptance.
b) Bill of exchange should be presented within a reasonable time, on business day and
during business hours to the drawee for acceptance.
c) Following bills must be presented for acceptance –
1) A bill payable after sight – Presentment is necessary in order to fix maturity of the bills
2) Express condition – A bill in which there is an express condition shall be
presented for acceptance before it is presented for payment.
d) In case it is not presented for acceptance the bill is dishonored due to non-
acceptance and no party is liable.

B) Bills of exchange should be presented to whom for acceptance?

The following are the persons to whom a bill of exchange should be presented –
a) The drawee or his agent
 b) If there are many drawees, bill must be presented to all of them.
c) The legal representatives of the drawee if drawee is dead.
d) The official receiver or assignee of insolvent drawee.
e) To a drawee in case of need, if there is any
f) The acceptor for honour.

C) Drawee’s time for deliberation –

Holder of the bills of exchange should allow 48 hours to the drawee for accepting the bill
of exchange.

D) Presentment for payment –

a) Promissory notes, bill of exchange and cheques must be presented for payment to the
maker, acceptor or drawee thereof respectively, by or on behalf of the holder as
hereinafter provided.
b) In default of such presentment, the other parties thereto are not liable thereon to
such holder.

E) Hours for presentment –

Presentment for payment must be made during the usual hours of business and, if at a
banker’s, within banking hours.

A) To whom payment should Whenbe made? presentment unnecessary

Payment of the amount due on a promissory–note, bill of exchange or cheque must, in
Presentment
order tofor paymentthe
discharge is unnecessary, and thebe
maker or acceptor, instrument is dishonored
made to the holder of at
thethe due date for presentment,
instrument.
in any of the following cases:
 if the maker, drawee or acceptor intentionally prevents the presentment of the instrument, or
 If the instrument being payable at his place of business, he closes such place on a business day during
the usual business hours, or
 If the instrument being payable at some other specified place, neither he nor any person authorized to
pay it attends at such place during the usual business hours, or
 If the instrument not being payable at any specified place, he cannot after due search be found;
 if the maker has agreed to pay even without presentment.
 if the maker has done the part-payment even without presentment.

Presentment for acceptance is unnecessary in the following cases –

 Where the drawee cannot be found after reasonable search.
 Where drawee is a fictitious person.
 Where although the presentment is irregular, acceptance has been refused on some
other ground.
 Where drawee is incompetent to contract, e.g., minor or lunatic.

Payment and interest –

 Rate of interest

Where interest rate is specified in Where interest rate is not specified in

Negotiable instrument negotiable instrument

Rate specified should be considered interest rate should be take @ 18% p.a

Meaning –
Discharge from Liability
Discharge from liability implies when the liability of the parties ceases to exist.
Following are the different modes of discharge of instrument.
Modes of discharge:
One or more parties to a negotiable instrument may be discharged from liability in either of the
following ways:
1) By cancellation, Release or Payment:
a) By cancellation: Cancellation of acceptor’s name will discharge the instrument
and cancellation of any other party will discharge the party.
b) By release: Release of acceptor will discharge the instrument and release of any
other party will discharge the party.
c) By payment: When the amount due on the instrument is paid by the party primarily
liable on the instrument, the instrument is discharged.
2) By allowing drawee more than 48 hours: If the holder of a bill of exchange allows the
drawee more than 48 hours, exclusive of public holiday(s) to consider whether he will
accept the same, all previous parties not consenting to such allowance are discharged
from liability to such holder.
3) By delay in presenting cheques: If a cheque is not presented within a reasonable time of
its issue, and the bank fails and drawer suffers actual damages through such delay, he is
discharged from the liability to the holder to the extent of such damage.
4) Forgery of Endorser’s signature in case of Cheque: The Bank is discharged by PIDC
even if the signature of endorser is forged.
5) By qualified acceptance: If the holder of a bill of exchange agrees to accept qualified
acceptance, all the previous parties whose consent is not obtained to such acceptance are
discharged from liability, unless the holder gives notice thereof and the parties give their
assent to such qualified acceptance.
6) By material alteration.: Any material alteration of a negotiable instrument renders the
same void as against anyone who is a party thereto at the time of making such alteration
and does not consent thereto, unless it was made in order to carry out the common
intention of the original parties. Again, it may be noted that alteration should be material
and immaterial alterations will not affect the instrument and will not discharge any
liability.
 7) Discharge of Bank: As per Section 89, bank is discharged by payment in due course
in case of alteration not apparent from records.
8) As per Section 90, when the acceptor of bill of exchange or maker of promissory note
becomes holder on or after maturity, the instrument is discharged.

DISHONOUR OF BILL OF EXCHANGE/ PROMISSORY NOTE –

Dishonour is classified as follows -

Dishonour by Non-Acceptance Dishonour by Non-payment

(only for BOE)

A bill is said to be dishonoured by non- A

acceptance in the following cases –
a) When the drawee does not accept it
within 48 hours,
b) When presentment for acceptance is
excused and the bill remains
unaccepted
c) When the drawee is incompetent to
contract. promissory note, bill of exchange or
d) When the drawee is a fictitious person
or after reasonable search can not be

AnDishonor
instrument is of
of bill dishonored
exchange/by non- payment
promissory when
note by the party primarily
non-payment liable, makes default in payment.
– Section 92
Notice of dishonor (Section 93 & 94):
 By whom notice to be given: When an instrument is dishonored either by non-
acceptance or by non-payment, the holder thereof or some party thereto who remains
liable thereon must give notice of dishonor.
 To whom notice is to be given: Notice must be given to such parties whom the holder
proposes to charge with liability severally or jointly, e.g., the drawer and the endorsers.
Notice may be given either to the party himself or to his agent, or to his legal
representative on his death, or to the official assignee on his insolvency. It is not
necessary to give notice to the maker of a note or the drawee or acceptor of a bill or
cheque.
 Effect of non-service of notice: If a notice of dishonor is not sent to any prior party who
is entitled to such notice within a reasonable time, he is discharged from liability.
  Mode of service of notice : The notice, if written, may be given by post at the place of
business or at the residence of party for whom it is intended.

Notice of dishonor is not required in the following cases:

 When
When a promissory note or bill
there is no intention of exchange
to make hasliable.
prior party been dishonored by non-acceptance or non-
payment, the holder may
 When prior party is discharged.cause such dishonor to be noted by a notary public upon the
instrument, or upon
When drawer and adrawee
paper are
attached
same thereto, or partly upon each.
 When drawer is fictitious.
 Such
When themust
note priorbeparty
madehaswithin
signed athe indorsement
reasonable time ‘without recourse’.and must specify the
after dishonor,
dateWhen the partythe
of dishonor, entitled to notice
reason, if any,cannot,
assignedafter
forreasonable search,or,
such dishonor, beiffound.
the instrument has
notWhere
been expressly dishonored, the reason why the holder treats it asown
the party liable to give notice is unable, without any fault of its to give it, e.g.,
dishonored, and death
theornotary’s
serious illness
charges.of the holder or his agent or any other accident.
 When the prior party is incompetent.
When a promissory note or bill of exchange has been dishonored by non-acceptance or non-payment,
theNoting
holder– Section 99 andaProtest
may, within – Section
reasonable 100cause such dishonor to be noted and certified by a
time,
notary public. Such certificate is called a protest.

Protest for better security. When the acceptor of a bill of exchange has become insolvent, or his
credit has been publicly impeached, before the maturity of the bill, the holder may, within a
reasonable time, cause a notary public to demand better security of the acceptor, and on its
being refused may, within a reasonable time, cause such facts to be noted and certified as
aforesaid. Such certificate is called a protest for better security.

Foreign
Protestbills of exchange
of foreign must be104
bills – Section protested for dishonor when such protest is required by the law of the
place where they are drawn.

A)Meaning
Crossing of crossing
a cheque – a cheque –
Crossing a cheque refers to drawing two parallel transverse lines on the cheque on
the corner of the cheque.
by crossing the cheque the drawer instruct the banker to not to pay it over the counter but
only credit to the account of the person named therein.
It means the banker should pay the money only through banker.
It adds to the security and thus ensures payment to the payee or to his order
 The crossing of cheque had developed gradually as a
means of protection against misusing of cheques.
Payment is made to payee’s banker only, and not
directly to the person presenting it at the counter. This
ensures that payment is made to the actual payee.

B) Who can cross a cheque?

The drawer of a cheque
The holder of a cheque
–
Where a cheque is issued uncrossed it may be crossed by the holder generally or
specially The banker in whose favour the cheque has been crossed specially may again
cross it specially in favour of another banker. The later bank in such a case acts as the agent
of the former.

C) Object of Crossing –

to give protection and safeguard to the owner of the cheque

to prevent fraud

to prevent misutilization of cheque and detect the fraud

D) Kinds of crossing –
1) General crossing – Section 123
 Meaning –
Two parallel transverse lines are drawn on the face of the cheque, generally, on the top
left corner of the cheque
Holder or payee cannot get the payment at the counter but through the bank only
Including the name of the banker is not essential, hence, the amount can be
encashed by any banker
The words, “& Company”, “Not Negotiable”, “A/C. Payee” may or may not be
written It can be converted into Special Crossing.

 Effect of General Crossing –

the banker on whom it is drawn shall only pay to a
banker. this type of cheque cannot be paid at counter.
The payment should be made through an account only
General crossing gives protection and avoids fraudulent withdrawals.
It is the liability of the paying banker to verify proper payment in proper account.
The banker is answerable to his customer, if he pays the money to a third person
without the direction of his customer

2) Special Crossing – Section 124

 Meaning –
It is also known as Restricted Crossing
Two transverse lines are not necessary to be drawn
Name of the banker is added across the face of the cheque
 The Name of the Banker may or may not carry
the abbreviated word, ‘& Co.’, ‘Account payee’
or ‘Not Negotiable’
Payment can be made only through the bank
mentioned in the Crossing.
Specially Crossed Cheques can never be
converted to General Crossing.

 Effect of Special Crossing –

It prevents the fraudulent transactions
It is direction to the paying banker to pay the amount to the account holder of that
bank, but not to others.
If a cheque specially crossed on a particular bank, and if such cheque is presented in
another bank, the paying bank should refuse the payment.
Special crossing gives more protection than general crossing.

3) Account Payee Crossing –

 Meaning –
It has developed in the trade and in common to use these terms on the left side of the cheque
between the two transverse lines.
However, there is no law mentioned about this type of crossing
The terms mean that the amount should not be paid at counter but should be credited
into the account of the payee only.
However, the meaning of other crossings is also the same.
This type of crossing only gives additional protection to the cheque.

 Effect of Account Payee Crossing –

It is only in the form of direction to the receiving bank that the drawer desires to pay
the particular cheque into bank which keeps the account of the payee.
The collecting banker should credit the cheque only to the mentioned account of the
payee. If the banker credits the cheque to another’s account and not to the account of
the payee, the banker shall be held responsible for his negligence, and shall be held
liable to pay the
compensation.

4) Not Negotiable Crossing – Section 130

 Meaning –
A person taking a cheque crossed generally or specially, bearing in either case the
words not negotiable shall not have, and shall not be capable of giving, a better title
to the cheque than that which the person from whom he took it had.
It gives more protection than General Crossing and Special Crossing
It is a warning upon the paying and collecting bankers. Both of them should be very
careful in the transaction of this type of cheques.
Note –
The words “Not Negotiable” do not mean “not transferable”.
  Objective –
The true owner is protected by this type of crossing more perfectly.
If it is stolen, the finder cannot cash it so easily. The good title cannot be passed
to him. He will be compelled to return it to the true owner.
The owner’s right is preserved safely against any subsequent holder.

 Effects –
It gives more protection and safe to the holder of the
cheque. A third person cannot cash it so easily.
It can be transferred like any other cheque.
If the banker is negligent and transfers the amount of that cheque to another account,
he will be held responsible and he will be liable to make the compensation to the
sufferer.

Crossing after issue.

 Where a cheque is uncrossed, the holder may cross it generally or specially.


 Where a cheque is crossed generally, the holder may cross it specially.
 Where a cheque is crossed generally, or specially, the holder may add the words "not negotiable". Where a ch

In the following cases the banker may refuse to pay a customer’s cheque:
When Banker may Refuse Payment –
a) When the cheque is post-dated.
b) When the banker has no sufficient funds of the drawer with him and there is no
communication between the bank and the customer to honour the cheque.
c) When the cheque is of doubtful legality.
d) When the cheque is not duly presented, e.g., it is presented after banking hours
e) When the cheque on the face of it is irregular, ambiguous or otherwise materially altered.
f) When the cheque is presented at a branch where the customer has no account.
g) When some persons have joint account and the cheque is not signed jointly by all or
by the survivors of them.
h) When the cheque has been allowed to become stale, i.e., it has not been presented
within 3 months of the date mentioned on it.

In the following cases the banker must refuse to honour cheques issued by the customer –
When Banker must Refuse Payment –
a) When a customer countermands payment i.e., where or when a customer, after
issuing a cheque issues instructions not to honour it, the banker must not pay it.
b) When the banker receives notice of customer’s death.
c) When customer has been adjudged an insolvent.
d) When the banker receives notice of customer’s insanity.
 e) When an order of the Court, prohibits payment.
f) When the customer has given notice of assignment of the credit balance of his account.
g) When the holder’s title is defective and the banker comes to know of it.
h) When the customer has given notice for closing his account.

Protection
 Where of liability
a cheque of the payingto
payable banker
order– purports to be endorsed by or on behalf of the payee, the
drawee is discharged by payment in due course.
 Where a cheque is originally expressed to be payable to bearer, the drawee is
discharged by payment in due course to the bearer thereof, notwithstanding any
endorsement whether in full or in blank appearing, thereon, and notwithstanding that any
such endorsement purports to restrict or exclude further negotiation.
 Payment of cheque crossed generally – Where a cheque is crossed generally, the
banker on whom it is drawn shall not pay it otherwise than to a banker.
 Payment of cheque crossed specially - Where a cheque is crossed generally, the
banker on whom it is drawn shall not pay it otherwise than to the banker to whom it
is crossed, or his agent for collection.
 Payment in due course of crossed cheque. –
Where the banker on whom a crossed cheque is drawn has paid the same in due course,
the banker paying the cheque, and (in case such cheque has come to the hands of the
payee) the drawer thereof, shall respectively be entitled to the same rights, and be placed
in the same position in all respects, as they would respectively be entitled to and placed in
if the amount of the cheque had been paid to and received by the true owner thereof.
 Payment of crossed cheque out of due course. –
Any banker paying a cheque crossed generally otherwise than to a banker, or a cheque
crossed specially otherwise than to the banker to whom the same is crossed, or his agent
for collection, being a banker, shall be liable to the true owner of the cheque for any loss
he may sustain owing to the cheque having been so paid.
 Non-liability of banker receiving payment of cheque.– Section 131
A banker who has in good faith and without negligence received payment for a customer
of a cheque crossed generally or specially to himself shall not, in case the title to the
cheque proves defective, incur any liability to the true owner of the cheque by reason
only of having received such payment
In order to avail such protection, the banker needs to prove the following –
 The banker has received the payment of crossed cheque.
 That the collection was made by the bank on behalf of the customer.
 That the collecting bank must have acted in in good faith.

Dishonour of Cheque –
1) Sections 138 to 142 deals with dishonor of cheques and provides for criminal penalties in
the event of dishonor of cheques for insufficiency of funds.
2) Penalty for dishonour of cheque –
The drawer, under Section 138, may be punished with imprisonment up to 2 years or with
a fine up to twice the amount of the cheque or with both.
However, in order to attract the aforesaid penalties, following conditions must be satisfied:
 The cheque should have been dishonored due to insufficiency of funds in the
account maintained by him with a banker for payment of any amount of money to
another person from out of that account.
 The payment for which the cheque was issued should have been in discharge of a
legally enforceable debt or liability in whole or part of it.
 The cheque should have been presented within 3 months from the date on which
it is drawn.

It Presumption in favorthat
shall be presumed of holder - Section
the holder of a139
cheque received the cheque for the discharge of any debt or
other liability.

It Defense
shall notwhich
be a defense
may notin
beaallowed
prosecution
in anyofprosecution
an offenceunder
undersection
section138
138- Section
that the140
drawer had no reason
to believe when he issued the cheque that the cheque may be dishonored on presentment
because of insufficiency of funds

If Offences
the person committing- Section
by Companies an offence
141 is a company, every person, who at the time the offence was
committed and the company shall be jointly liable for the offence.

Procedure to be followed before charging penalty –

 Cheque is issued by drawer
 The payee/holder presents it for payment.


The collecting bank informs payee/holder about dishonor of cheque.
The payee or the holder in due course of the cheque should have given notice demanding payment within 30 d

 Notice can be served by ordinary post or even telegram.


 The drawer is liable only if he fails to make the payment within 15 days of such notice period.
The payee or holder in due course of the cheque dishonored should have made a complaint within one month
 Cognizance of offences – Section 142
A) Filing case –
1) Court shall take cognizance of any offence punishable under section 138 only if it is in writing.
2) Time limit for filing the complaint is 1 month.
3) No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the
first class shall try any offence punishable under section 138.

B) Place of Jurisdiction of court for the trail of offence:

The offence under section 138, which deals with the dishonor of cheque, shall be inquired
into and tried only by a court within whose local jurisdiction -
a) if the cheque is delivered for collection through an account, the branch of the bank
where the payee or holder in due course, as the case may be, maintains the account, is
situated; or
b) if the cheque is presented for payment by the payee or holder in due
course, otherwise through an account, the branch of the drawee bank where the drawer
maintains the account, is situated.

Provided
Power ofthat in the
Court case
to try of any
cases conviction
summarily in a summary
– Section 143 trial under this section, it shall be lawful for the
Magistrate to pass a sentence of imprisonment for a term not exceeding one year and an amount of fine
exceeding five thousand rupees.

Power to direct interim compensation

1. Notwithstanding – Section
anything contained 143A
in the Code of Criminal Procedure, 1973, the Court trying
an offence under section 138 may order the drawer of the cheque to pay interim
compensation to the complainant—
a) in a summary trial or a summons case, where he pleads not guilty to the accusation
made in the complaint; and
b) in any other case, upon framing of charge.
2. The interim compensation under sub-section (1) shall not exceed 20% of the
amount of the cheque.
3. The interim compensation shall be paid within 60 days from the date of the order or
within such further period not exceeding 30 days as may be directed by the Court on
sufficient cause being shown by the drawer of the cheque.
4. If the drawer of the cheque is acquitted, the Court shall direct the complainant to repay
to the drawer the amount of interim compensation, with interest at the bank rate as
published by the Reserve Bank of India, prevalent at the beginning of the relevant
financial year, within 60 days from the date of the order, or within such further period
not exceeding 30 days as may be directed by the Court on sufficient cause being shown
by the complainant.

Offences to be compoundable
Notwithstanding – Section
anything contained 147Code of Criminal Procedure, 1973 every offence punishable
in the
under this Act shall be compoundable.

Notwithstanding
1) Power anything
of Appellate Court contained
to order in pending
payment the Codeappeal
of Criminal Procedure,– 1973,
against conviction Sectionin148
an appeal by the
drawer against conviction under section 138, the Appellate Court may order the appellant to
deposit such sum which shall be a minimum of 20%. of the fine or compensation awarded by
the trial Court:

Provided that the amount payable under this sub-section shall be in addition to any
 interim compensation paid by the appellant under section 143A.
2) The amount mentioned above shall be deposited within 60 days from the date of the
order, or within such further period not exceeding 30 days as may be directed by the
Court on sufficient cause being shown by the appellant.

3) The Appellate Court may direct the release of the amount deposited by the appellant
to the complainant at any time during the pendency of the appeal:
Provided that if the appellant is acquitted, the Court shall direct the complainant to
repay to the appellant the amount so released, with interest at the bank rate as
published by the Reserve Bank of India, prevalent at the beginning of the relevant
financial year, within 60 days from the date of the order, or within such further period
not exceeding 30 days as may be directed by the Court on sufficient cause being shown
by the complainant
 A) Meaning
Hundis – –
1) Hundis are negotiable instruments written in an oriental language.
2) They are sometimes bills of exchange and sometimes promissory notes, and
are not covered under the Negotiable Instruments Act, 1881.
3) They are governed by the customs and usages in the locality but if custom is silent
on the point in dispute before the Court, this Act applies to the hundis.

B) Types of Hundis –
Types Description
Shah “Shah” means a respectable and responsible person or a man of worth in the bazar.
Jog Shah Jog Hundi means a hundi which is payable only to a respectable holder, as
Hundi opposed to a hundi payable to bearer. In other words the drawee before paying the
same has to satisfy himself that the payee is a ‘SHAH’.
Jokh A “jokhmi” hundi is always drawn on or against goods shipped on the vessel
mi mentioned in the hundi. It implies a condition that money will be paid only in the
Hundi event of arrival of the goods against which the hundi is drawn. It is in the nature of
policy of insurance. The difference, however, is that the money is paid before hand
and is to be recovered if the ship arrives safely
Jawabe According to Macpherson, “A person desirous of making a remittance writes to the
e payee and delivers the letter to a banker, who either endorses it on to any of his
Hundi correspondents near the payee’s place of residence, or negotiates its transfer. On
the arrival, the letter is forwarded to the payee, who attends and gives his receipt in
the form of an answer to the letter which is forwarded by the same channel of the
drawer or the order.” Therefore, this is a form of hundi which is used for remitting
money from one place to another.
 Nam It is a hundi payable to the party named in the bill or his order. The name of the
jog payee is specifically inserted in the hundi. It can also be negotiated like a bill of
Hundi exchange. Its alteration into a Shah Jog hundi is a material alteration and renders it
void.
Darsha This is a hundi payable at sight. It is freely negotiable and the price is regulated by
ni demand and supply. They are payable on demand and must be presented for
Hundi payment within a reasonable time after they are received by the holder.
Miadi This is otherwise called muddati hundi, that is, a hundi payable after a specified
Hundi period of time. Usually money is advanced against these hundis by shroffs after
deducting the advance for the period in advance. There are other forms of hundis
also like.
Dhani Jog A hundi which is payable to “dhani” i.e., the owner.
Hundi
Firman Jog which is payable to order if can be negotiated by endorsement and delivery
Hundi

References:

https://umeschandracollege.ac.in/pdf/study-material/busness-law/Negotiable%20Instrument%20Act.pdf

https://www.jkshahclasses.com/announcement/NegotiableInstruments.pdf

https://www.shobhituniversity.ac.in/pdf/econtent/Legal-Aspects-of-Business-Unit-3-Ms-Neha-Rani.pdf

https://www.umeschandracollege.ac.in/pdf/study-material/busness-law/Negotiable%20Instrument%20Act.pdf