Description
A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, without conditions in addition to payment imposed on the payer. Cheques or promissory notes are common examples. Negotiable instruments are often defined in legislation
Topic : Negotiable Instruments Act 1881
Syllabus
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1. Indian Contract Act 1872: (Sec 01 – 10) Essentials of Valid Contract, Free Consent - Types of Contract, (Sec 13 -23) Termination of Contract by Breach of contract, by Performance of contract, Remedies of breach of Contract. Duties and Responsibilities of Principals & Agent. 2. Negotiable Instruments Act 1881: Kinds of negotiable instruments, Crossing of Cheques, Right of True Owner, Discharge and Dishonor of Negotiable Instrument. (Sec 138-142) Penalties in case of dishonor of a cheque for insufficiency of Funds. 3. Sale of Goods Act 1930 : Definition of Sale, Distinction between Sale and Agreement to Sale, Goods, Price, Time, Provisions of Conditions and Warranties, Express and Implied conditions, Doctrine of Caveat Emptor its exceptions , Performance of contract of sale, Rights of an Unpaid Seller. 4. Companies Act 1956 : Definition, Characteristics and Kinds of Companies, Steps in formation of a Company, Memorandum and Articles of Association, Contents of Prospectus, Various kinds of Shares, Kinds of Debentures. Directors: Appointments, Powers, Duties and Liabilities of directors. Types of Meetings, Auditor, Their Appointment, Rights and Liabilities. 5. Consumer Protection Act 1986 : Definition of Complainant , Complaint, Consumer. Concept of Consumer Redressal Forum, District Forum, State Commission, and National Commission. 6. Right to Information Act : Concept, rights and benefits. 7. Intellectual Property Right : Introduction , Concepts and role of UNCITRAL.
Negotiable Instrument Act, 1881
? Meaning :The term negotiable instrument literally means a
written documents which creates a right in favour of some body and is freely transferable. Literally a word mean Negotiable (Transferable by Delivery)and instrument,
? Definition : A written document transferable by delivery . ? As Per Act- A negotiable instrument means a promissory note ,
bill of exchange or cheque payable either too order or to bearer.
? Judge Wills defines a negotiable instrument as “one , the
property in which is acquired by any one who takes it bonafide for value , not with standing any defect of title in the person from whom he took it.
? Drawer : A person who draws/prepares the NI.
? Drawee : On whom the cheque / NI is drawn. ? Payee : A Person who is physically going to paythe ? ? ? ?
Negotiable Instrument. Negotiability : Acceptable by all ( by law). Holder in due course : Holder of NI, Endorsement : Nominated to pay other then payee. Proof of Protest : Proof to prove in the court for dishonuor. (Counter evidence)
Negotiable Instrument Act, 1881
? ? ? ? ? ? ? ? ? ? ?
Characteristics of Negotiable Instrument : Free negotiability must be in Writing Signed by the drawer / maker Should be promise to pay or order to pay Promise or order must be unconditional Recovery from certain date. Payable to order or bearer Payment in money with certain amount Drawee must be named Must be described with reasonable certainty
Kinds Negotiable Instruments
? A) Negotiable by Status :
? 1)Bills of Exchange: “A bill of exchange is an instrument
in writing containing an unconditional order , signed by maker, directing a certain person to pay a certain sum of money only to, a certain person or to the bearer of the instrument.”
MARCH 17 , 2010 Rs 10000/- Only, Three month after date , pay to Mr .Alok Agarwal, or order the sum of Rupees Ten thousand for value received. To, Alok Agarwal Rajnagar,Mumbai -400001
Mr Shivanand
2) Cheque : “ A cheque is a bill of exchange drawn on a specified banker and not expressed to payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form. Drawer, Drawee,Payee Specimen
, Lokmangl Branch, Pune Date : 24th July 2010. PAY Prof Shivanand SV _______________________or BEARER RUPEES Twenty thousand only.___________________________ A/No______________ Rs. 2000/-
? 3)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 only to , or to the order of, a certain person, or to the bearer of the instrument. As per the RBI Act provisions issue of PN have been prohibited. Essentials of Promissory Note: Must be in writing Must contain a promise or undertaking to pay Must be unconditional Must be signed by maker / drawer Must be certain drawer / maker Payable sum must be certain Proper stamping is required if needed
Specimen : Promissory note
? Shivanand Sanmath
? R/22 Radhanagar, ? New Delhi.02
? Dt : 20 th Aug 2010.
?
Three months after the date , I promise to pay to Mr Ramachandran or to his order the sum of Rupees Ten thousand of the value received .
? To Ramachandraan, ? SavaiMadhav Pura, ? Mumbai
• Shivanand Sanmath
Kinds Negotiable Instruments
? B ) Negotiable by Custom or usages : ? Hindis ? Treasury bills ? Bank Drafts ? Share, Share warrant, Debenture, ? Money Orders ? Posta Orders ? Fixed Deposits ? Bills of landing ? Dock Warrant ? Railway Receipt
Negotiable Instrument Act, 1881
? Presumptions as to Negotiable instruments :
? Consideration ? Date
? Time of acceptance
? Transfer ? Stamping ? Holder in due course. ? Proof of protest ?
Negotiable Instrument Act, 1881
? Crossing of Cheque ; Sec 123 to 126) A Cheque is said to be ?
? ? ? ? ? ?
crossed when two parallel Transverse lines with or without any words, are dreawn on the left hand top corner of the cheque. Sec 123 _General Crossing : “ & co” “Not Negotiable” or both, (Mean not pay other then the banker / Specified banker” or whose name is written on cheque , pay to him only. ( On his account) 1) _____________________ ________________________ 2) ______________________ ________& CO___________ 3)______________________ _________Not negotiable____
Crossing of Cheque
con’t…
? Sec 126_ Special Crossing – Bank or Maharashtra & Not
Negotiable or both. (Cheque is paid to the banker /or his agent ,whose name is written on the cheque other wise if it is presented by any other bank will not be paid positively) ? 1) _______________________
?
BANK OF MAHARASHTRA
? 2)
?
_______________________
BANK OF INDIA _____Not Negotiable___________
? 3)
_______________________________
_ Not Negotiable Bank of India Account Payee________________________
? Sec 125_ Restrictive crossing –”A/c payee only” Amount
of the cheque is to be credited to particular account only. ? 1)______________________ ? ________A/C payee______ ? 2)__________________________
A/c Payee only __Not Negotiabl;e_____________
Right of the true owner/ Holder in due course
? Must be hold the of instrument.
? Must be a holder for valuable consideration ? Must hold the Negotiable instrument before the due
date. ? Must hold the instrument on the good faith. ? Liabilities of prior parties.
Dishonour of the Negotiable Instuments
? Bill of exchange & Promissory Note can be by Non
? ? ? ? ?
acceptance even. Cheque is only for non- payment also Two Types of Dishonour A) By non – payment Sec - 91 B) By non – acceptance Sec – 92
? Cases for the non acceptance :? a) When Several Drawees are there and every one refuses
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? ?
to accept the NI. b) Within 48 hrs the drawee does not accept or honour the bill, then also it is said that the bill is dishonour. c) When drawee is not competent to enter in contract d) When presentment of bill is excused and remained as unaccepted. e) When drawee is factitious person. f) When Drawee gives a qualified acceptance and physically payment is not done.
? Sec 92 – Cases for the non payment of Negotiable
instruments : ? A) If Drawer / maker, drawee or payee or acceptor intentionally prevents the presentment of the NI. ? B)As against any party sought(Require / want) to be charged there with, if he has engaged to pay not with standing non-payment . ? C) With knowledge of any of the party, the bill itself is not presented for payment. (Partly payment or waives off)
? Punishment for the dishonour of the Negotiable
Instruments ? If the following conditions are fulfilled, then only the person is liable for the punishment :
? 1. NI should have been dishonoured, due to non availability of
? ?
?
?
sufficient funds: a) Payment stop instruction to payee bank by drawer. b) Request to payee, not to present till further of his instructions. c) With remarks “Account is closed” by payee bank & the cheque is returned 2. N Instrument must be presented within its validity ( Six months)
? 3. NI should have been issued for legal object / legal
debts. ? 4. Payee must give a notice within 30 days for the dishonour of the cheque. ? 5.Drawee is liable to be prosecuted only if he fails to make a payment with in 15 days from the date of notice. ? 6)If made, a written compliant to the Metropolitan Magistrate or Judicial Magistrate or First class Magistrate , within one month of cause of action.
? Punishment against Negotiable Instruments.
? A) Two yrs Imprisonment . ? B) Double of Amount the NI amount
? C)Or both
doc_574221789.pptx
A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, without conditions in addition to payment imposed on the payer. Cheques or promissory notes are common examples. Negotiable instruments are often defined in legislation
Topic : Negotiable Instruments Act 1881
Syllabus
? ? ?
?
? ? ? ? ? ?
1. Indian Contract Act 1872: (Sec 01 – 10) Essentials of Valid Contract, Free Consent - Types of Contract, (Sec 13 -23) Termination of Contract by Breach of contract, by Performance of contract, Remedies of breach of Contract. Duties and Responsibilities of Principals & Agent. 2. Negotiable Instruments Act 1881: Kinds of negotiable instruments, Crossing of Cheques, Right of True Owner, Discharge and Dishonor of Negotiable Instrument. (Sec 138-142) Penalties in case of dishonor of a cheque for insufficiency of Funds. 3. Sale of Goods Act 1930 : Definition of Sale, Distinction between Sale and Agreement to Sale, Goods, Price, Time, Provisions of Conditions and Warranties, Express and Implied conditions, Doctrine of Caveat Emptor its exceptions , Performance of contract of sale, Rights of an Unpaid Seller. 4. Companies Act 1956 : Definition, Characteristics and Kinds of Companies, Steps in formation of a Company, Memorandum and Articles of Association, Contents of Prospectus, Various kinds of Shares, Kinds of Debentures. Directors: Appointments, Powers, Duties and Liabilities of directors. Types of Meetings, Auditor, Their Appointment, Rights and Liabilities. 5. Consumer Protection Act 1986 : Definition of Complainant , Complaint, Consumer. Concept of Consumer Redressal Forum, District Forum, State Commission, and National Commission. 6. Right to Information Act : Concept, rights and benefits. 7. Intellectual Property Right : Introduction , Concepts and role of UNCITRAL.
Negotiable Instrument Act, 1881
? Meaning :The term negotiable instrument literally means a
written documents which creates a right in favour of some body and is freely transferable. Literally a word mean Negotiable (Transferable by Delivery)and instrument,
? Definition : A written document transferable by delivery . ? As Per Act- A negotiable instrument means a promissory note ,
bill of exchange or cheque payable either too order or to bearer.
? Judge Wills defines a negotiable instrument as “one , the
property in which is acquired by any one who takes it bonafide for value , not with standing any defect of title in the person from whom he took it.
? Drawer : A person who draws/prepares the NI.
? Drawee : On whom the cheque / NI is drawn. ? Payee : A Person who is physically going to paythe ? ? ? ?
Negotiable Instrument. Negotiability : Acceptable by all ( by law). Holder in due course : Holder of NI, Endorsement : Nominated to pay other then payee. Proof of Protest : Proof to prove in the court for dishonuor. (Counter evidence)
Negotiable Instrument Act, 1881
? ? ? ? ? ? ? ? ? ? ?
Characteristics of Negotiable Instrument : Free negotiability must be in Writing Signed by the drawer / maker Should be promise to pay or order to pay Promise or order must be unconditional Recovery from certain date. Payable to order or bearer Payment in money with certain amount Drawee must be named Must be described with reasonable certainty
Kinds Negotiable Instruments
? A) Negotiable by Status :
? 1)Bills of Exchange: “A bill of exchange is an instrument
in writing containing an unconditional order , signed by maker, directing a certain person to pay a certain sum of money only to, a certain person or to the bearer of the instrument.”
MARCH 17 , 2010 Rs 10000/- Only, Three month after date , pay to Mr .Alok Agarwal, or order the sum of Rupees Ten thousand for value received. To, Alok Agarwal Rajnagar,Mumbai -400001
Mr Shivanand
2) Cheque : “ A cheque is a bill of exchange drawn on a specified banker and not expressed to payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form. Drawer, Drawee,Payee Specimen
, Lokmangl Branch, Pune Date : 24th July 2010. PAY Prof Shivanand SV _______________________or BEARER RUPEES Twenty thousand only.___________________________ A/No______________ Rs. 2000/-
? 3)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 only to , or to the order of, a certain person, or to the bearer of the instrument. As per the RBI Act provisions issue of PN have been prohibited. Essentials of Promissory Note: Must be in writing Must contain a promise or undertaking to pay Must be unconditional Must be signed by maker / drawer Must be certain drawer / maker Payable sum must be certain Proper stamping is required if needed
Specimen : Promissory note
? Shivanand Sanmath
? R/22 Radhanagar, ? New Delhi.02
? Dt : 20 th Aug 2010.
?
Three months after the date , I promise to pay to Mr Ramachandran or to his order the sum of Rupees Ten thousand of the value received .
? To Ramachandraan, ? SavaiMadhav Pura, ? Mumbai
• Shivanand Sanmath
Kinds Negotiable Instruments
? B ) Negotiable by Custom or usages : ? Hindis ? Treasury bills ? Bank Drafts ? Share, Share warrant, Debenture, ? Money Orders ? Posta Orders ? Fixed Deposits ? Bills of landing ? Dock Warrant ? Railway Receipt
Negotiable Instrument Act, 1881
? Presumptions as to Negotiable instruments :
? Consideration ? Date
? Time of acceptance
? Transfer ? Stamping ? Holder in due course. ? Proof of protest ?
Negotiable Instrument Act, 1881
? Crossing of Cheque ; Sec 123 to 126) A Cheque is said to be ?
? ? ? ? ? ?
crossed when two parallel Transverse lines with or without any words, are dreawn on the left hand top corner of the cheque. Sec 123 _General Crossing : “ & co” “Not Negotiable” or both, (Mean not pay other then the banker / Specified banker” or whose name is written on cheque , pay to him only. ( On his account) 1) _____________________ ________________________ 2) ______________________ ________& CO___________ 3)______________________ _________Not negotiable____
Crossing of Cheque
con’t…
? Sec 126_ Special Crossing – Bank or Maharashtra & Not
Negotiable or both. (Cheque is paid to the banker /or his agent ,whose name is written on the cheque other wise if it is presented by any other bank will not be paid positively) ? 1) _______________________
?
BANK OF MAHARASHTRA
? 2)
?
_______________________
BANK OF INDIA _____Not Negotiable___________
? 3)
_______________________________
_ Not Negotiable Bank of India Account Payee________________________
? Sec 125_ Restrictive crossing –”A/c payee only” Amount
of the cheque is to be credited to particular account only. ? 1)______________________ ? ________A/C payee______ ? 2)__________________________
A/c Payee only __Not Negotiabl;e_____________
Right of the true owner/ Holder in due course
? Must be hold the of instrument.
? Must be a holder for valuable consideration ? Must hold the Negotiable instrument before the due
date. ? Must hold the instrument on the good faith. ? Liabilities of prior parties.
Dishonour of the Negotiable Instuments
? Bill of exchange & Promissory Note can be by Non
? ? ? ? ?
acceptance even. Cheque is only for non- payment also Two Types of Dishonour A) By non – payment Sec - 91 B) By non – acceptance Sec – 92
? Cases for the non acceptance :? a) When Several Drawees are there and every one refuses
? ? ?
? ?
to accept the NI. b) Within 48 hrs the drawee does not accept or honour the bill, then also it is said that the bill is dishonour. c) When drawee is not competent to enter in contract d) When presentment of bill is excused and remained as unaccepted. e) When drawee is factitious person. f) When Drawee gives a qualified acceptance and physically payment is not done.
? Sec 92 – Cases for the non payment of Negotiable
instruments : ? A) If Drawer / maker, drawee or payee or acceptor intentionally prevents the presentment of the NI. ? B)As against any party sought(Require / want) to be charged there with, if he has engaged to pay not with standing non-payment . ? C) With knowledge of any of the party, the bill itself is not presented for payment. (Partly payment or waives off)
? Punishment for the dishonour of the Negotiable
Instruments ? If the following conditions are fulfilled, then only the person is liable for the punishment :
? 1. NI should have been dishonoured, due to non availability of
? ?
?
?
sufficient funds: a) Payment stop instruction to payee bank by drawer. b) Request to payee, not to present till further of his instructions. c) With remarks “Account is closed” by payee bank & the cheque is returned 2. N Instrument must be presented within its validity ( Six months)
? 3. NI should have been issued for legal object / legal
debts. ? 4. Payee must give a notice within 30 days for the dishonour of the cheque. ? 5.Drawee is liable to be prosecuted only if he fails to make a payment with in 15 days from the date of notice. ? 6)If made, a written compliant to the Metropolitan Magistrate or Judicial Magistrate or First class Magistrate , within one month of cause of action.
? Punishment against Negotiable Instruments.
? A) Two yrs Imprisonment . ? B) Double of Amount the NI amount
? C)Or both
doc_574221789.pptx