The Negotiable

Instruments Act, 1881

Negotiable Instrument
A negotiable instrument means a Promissory Note,
Bill of Exchange or Cheque payable either to
order or to bearer which are transferable from
hand to hand by way of negotiation but does not
contain words prohibiting transfer or indicating an
intention that it shall not be transferable.
Therefore, to identify negotiable instruments the
characteristics of negotiable instruments are to be
clarified which are as follows:

Negotiable Instrument (contd..)

The instruments like money are transferable from

hand to hand by way of negotiation.

The instruments like money are transferable from
hand to hand for value and are used for settlement
of debt.
The transferees title is not affected due to
transferor defective title if the transferee can prove
himself as a holder in due course.
The title of holder in due course does not affect for
defective title of his prior holders due to fraud.

Negotiable Instrument (contd..)

The holder in due course is entitled to sue in his own

name against all the prior parties to release proceeds of

the instrument.
Bearer
Bearer means a person who by negotiation comes into
possession of a negotiable instrument, which is payable to
bearer.
Material alternation
It means the alternation of important parts of negotiable
instruments. The material parts include date, the sum
payable, time and place of payment.

Negotiable Instrument (contd..)

Promissory note
A promissory note is an instrument in written form
containing an unconditional undertaking, signed
by the maker, to pay on demand or at a fixed or
determinable future time a certain sum of money
only to, or to the order of, or a certain person, or to
the bearer of the instrument.
Bill of exchange
A bill of exchange is an instrument in written form
containing an unconditional order, signed by the

Negotiable Instrument (contd..)

maker, directing a certain person to pay on demand
or at a fixed determinable future time a certain sum
of money only to or to the order of or to a certain
person or to the bearer of the instrument.
Cheque
A cheque is a bill of exchange drawn on a
specified banker and not expressed to be payable
otherwise than on demand.

Negotiable Instrument (contd..)

Holder
The holder of a negotiable instrument means the
payee or endorsee who is in possession of it or the
bearer thereof and does not include a beneficial
owner claiming through a benamdar.
Holder in due course
Holder in due course means any person who for
consideration becomes the possessor of a
negotiable instrument if payable to the bearer or
the payee or endorsee thereof, if payable to order,
before it becomes overdue, without notice that the

Negotiable Instrument (contd..)

title of the person from whom he derived his own title
was defective.
Essential conditions for a holder in due course
Who receives an negotiable instrument innocently,
i.e., in good faith and without negligence.
Who has paid value for the same.
Who has received the instrument before its maturity.
Who is in possession of the instrument as a bearer or
payee or endorsee.
For all legal purposes, the title of the holder in due
course is superior to that of the true owner.

Negotiable Instrument (contd..)

Rights and privileges of a holder in due course
He obtains a better title to the instrument than that
of the true owner.
The defective title of the previous endorsee (if
any) will not adversely affect his rights.
He can pass on a better title to others.
Until the instrument is finally discharge every
party to that instrument is liable to him.
Even the drawer of a negotiable instrument can
not claim invalidity of the instrument against him.

Negotiable Instrument (contd..)

His claim cannot be denied on the ground that the

payee has no capacity to endorse.

Payment in due course
Payment in due course means payment in
accordance with the apparent tenor of the
instrument in good faith and without negligence
to any person in possession thereof under
circumstances which do not afford a reasonable
ground for believing that he is not entitled to
receive payment of the amount therein
mentioned .

Negotiable Instrument (contd..)

Where amount is stated differently in figure and

words, the amount stated in words shall be the

amount ordered to be paid.
Liability of drawer
The drawer of the negotiable instrument will
remain responsible to the payee till it is paid off.
Liability of the drawee
The drawee of a cheque having sufficient fund of
the drawer in his hands properly applicable to the
payment of such cheque must pay the cheque when
duly required so to do, and is default of

Negotiable Instrument (contd..)

such payment, must compensate the drawer for any
loss or damage caused by such default.
Liability of prior parties to holder in due course
Every prior party to a negotiable instrument is
liable thereon to a holder in due course until the
instrument is duly satisfied.
Cheque drawn by one branch of a bank on
another payable to order where any draft, that
is, an order to pay money, drawn by one office of
a bank upon another office of the same bank for a

Negotiable Instrument (contd..)

sum of money payable to order on demand, purports
to be endorsed by or on behalf of the payee, the
bank is discharged by payment in due course.
Non-liability of banker receiving payment of
cheque A banker who had 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
proved defective incur any liability to the true
owner of the cheque by reason only of having
received such payment.

Money Laundering Prevention

Ordinance, 2008
Promulgation

date of money laundering

prevention act was April 5, 2002 and Act No. is
7. In this case the investigating authority was
Bangladesh Bank.
Promulgation date of money laundering
prevention ordinance was April 13, 2008 and
Ordinance No. is 12. In this case the investigating
authority is Anti Corruption Commission.

Money Laundering Prevention

Ordinance, 2008 (contd..)
Money laundering
Money laundering means to earn money through
predicate offences: Currency counterfeiting, fake
documentation, cheating, forgery of legal
documents, illegal arms trading, drug trafficking,
smuggling, kidnapping, keeping any one hostage
for extorting money, killing, injuring seriously
anyone, children & women trafficking, local &
foreign currency trafficking, robbery, human
trafficking & illegal immigration and dowry.

Money Laundering Prevention

Ordinance, 2008 (contd..)
Agencies to send reports
Agencies which are legally bound to send reports to
Bangladesh Bank regarding money laundering
according to this ordinance: Bank, financial
institution, insurance company, money changer,
money remitter or transferor, any other organization
doing such business under BB permission, any other
organization after approval from government which
are under the notice of BB.

Money Laundering Prevention

Ordinance, 2008
Punishment under Money Laundering Ordinance

is imprisonment for minimum 6 months and

maximum 7 years. According to
Money
Laundering Act it was exactly so.

Thank You