Description
The PPT that explains the negotiable instruments law.
NEGOTIABLE INSTRUMENTS
WHAT IS A NEGOTIABLE INSTRUMENT
?
A promissory note, bill of exchange or cheque payable either to order or to bearer.
?
Negotiable instrument is a special type of contract for the payment of money that is unconditional and capable of transfer by negotiation.
EVOLUTION OF NEGOTIABLE INSTRUMENTS
Use of “Praescriptiones” (form of Cheque) since first Century BC. ? Punchmarked Coins ? Loan deeds – “Rnaptra or Rnalekhya” ? Mauryan Period – “Adesha” ? Mughal Period - “Dastawez-e-indultalab” and “Dastawez-e-miadi” ? Pay order – “Barattes” ? Hundis
?
FEATURES OF NEGOTIABLE INSTRUMENTS
Is freely transferable ? Must be negotiable ? Negotiability confers absolute and good title on the transferee ? Must be in writing ? Must involve unconditional order ? Must involve definite amount of money. ? The time of payment must be certain ? The payee must be a certain person ? Must bear the signature of its maker
?
TYPES OF NEGOTIABLE INSTRUMENTS
Promissory Note
Bill of Exchange
Cheques
Hundis
PROMISSORY NOTE
?
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.
Parties to a Promissory Note
? ? ? ?
The Maker or Drawer The Payee The Endorser The Endorsee
SPECIMEN
BILL OF EXCHANGE
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.
Parties to a Bill of Exchange
? ?
The Drawer The Drawee
?
The Payee
SPECIMEN
CHEQUES
A cheque as a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. Types of Cheque
?
Open cheque
?
? ? ? ? ? ?
Crossed cheque
Bearer cheque Order cheque Ante – dated cheque Stale cheque Mutilated cheque Post – dated cheque
SPECIMEN
DEMAND DRAFTS
?
?
It’s a pre-paid Negotiable Instrument, wherein the drawee bank undertakes to make payment in full when the instrument is presented by the payee for payment. The demand draft is made payable on a specified branch of a bank at a specified centre.
TRAVELLERS CHEQUE
?
Travellers cheques are a secure and convenient alternative to carrying cash. Travellers cheques can be replaced if they are lost or stolen at no additional cost.
?
HUNDIS
Oldest known instrument used for the purpose of transfer of money without its actual physical movement. It is often in the form of a bill of exchange drawn in any local language in accordance with the customs of the place.
Types of Hundis
?
?
? ? ? ? ? ?
Shah-jog Hundi Darshani Hundi Muddati Hundi Nam-jog hundi Dhani-jog hundi Jawabee hundi Jokhami hundi Firman-jog hundi
SPECIMEN
NEGOTIABLE INSTRUMENTS ACT 1881
?
Five basic ingredients of section 138
Cheque should be drawn in payment of a legal liability to discharge a debt. It should be presented within the validity period. Return memo by the drawer bank to the drawee bank and vice-versa, reporting that the cheque got unpaid is must. Giving notice to the drawer by the drawee within 15 days of the receipt of the information is must. The drawer fails to make the payment of the said amount to the holder within 15 days of the receipt of the notice.
•
• •
•
•
AMENDMENTS
Bouncing of cheque - Provisions amended are:
?
? ?
Provision for imprisonment up to 2 years.
Period for issuing notice to drawer increased to 30 days. Government Nominee Directors excluded from liability.
?
Court empowered to take cognizance of offence even if complainant
filed beyond one month. Evidence of complainant through affidavit permitted. Bank’s slip or memo indicating dishonor of cheque will be prima facie evidence.
? ?
LIABILITIES OF PARTIES TO A NEGOTIABLE
INSTRUMENT
? ? ? ? ? ? ? ?
Liability of agent signing Liability of drawer Liability of drawee of cheque Liability of maker of note and acceptor of bill Acceptance by several drawees not partners Liability of endorser
Liability of prior parties to holder in due course
Maker, drawer and acceptor principles
CASE
BIO-METRICS
It includes: ? Fingerprints ? Voice patterns ? Hand measurements ? Iris Significance: ? Used to verify identity. ? These characteristics are tightly connected to an individual and cannot be forgotten, shared, stolen or easily hacked.
FINGER SCANNING TECHNOLOGY
? ?
Oldest of the biometric sciences Utilizes distinctive features of the fingerprint to verify the identity of individuals.
FACIAL SCAN TECHNOLOGY
?
?
A digital video camera image is used to analyze facial characteristics such as the distance between eyes, mouth or nose. These measurements are stored in a database and used to compare.
RETINAL SCAN TECHNOLOGY
?
Makes use of the retina, which is the surface on the back of the eye that processes light entering through the pupil. Retinal Scan technology is based on the blood vessel pattern in the retina of the eye.
HAND GEOMETRY
It relies on measurements of the: ? Width, Height, length of the fingers ? distances between joints ? shape of knuckles
VOICE RECOGNITION
It identifies people based on: ? Differences in the voice resulting from physiological differences and learned speaking habits. When an individual is enrolled, the system captures samples of the person's speech as the individual says certain scripted information
E-COMMERCE
?
It consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks.
OTHER FORMS OF REVOLUTIONS
?
Mobile Banking
?
Travellers Cheque
?
Plastic Money
MOVING TOWARDS E-COMMERCE
ITEM
Volume (' 000s) 2007-08
Volume (' 000s) 2008-09
Value (Rs cr) 2007-08
Value (Rs cr) 2008-09
RTGS
5,840
13,366
2,73,18,330
3,22,79,881
MICR Clearing Retail Electronic Clearing Cards
12,01,045
11,40,492
60,28,672
58,49,642
2,18,800
2,80,610
9,71,485
4,16,419
3,16,509
3,87,215
70,506
83,903
RECOMMENDATION AND CONCLUSION
?
? ?
?
?
?
?
Necessary legislative support is required to establish the credibility of ECS and EFT schemes. Credit card owners need to be careful, to avoid misuse. Cheques would continue to be used due to their distinct advantages. Traditional bio-metric methods such as Finger printing need to be done away with. Bio-Metrics should be used as one of the layers of security and identification. Amendments to the N.I. Act has made it difficult to misuse the instruments. Regular amendment of the Act would be required to deal with the growing use of Bio-metrics.
THANK YOU!!
doc_550678221.pptx
The PPT that explains the negotiable instruments law.
NEGOTIABLE INSTRUMENTS
WHAT IS A NEGOTIABLE INSTRUMENT
?
A promissory note, bill of exchange or cheque payable either to order or to bearer.
?
Negotiable instrument is a special type of contract for the payment of money that is unconditional and capable of transfer by negotiation.
EVOLUTION OF NEGOTIABLE INSTRUMENTS
Use of “Praescriptiones” (form of Cheque) since first Century BC. ? Punchmarked Coins ? Loan deeds – “Rnaptra or Rnalekhya” ? Mauryan Period – “Adesha” ? Mughal Period - “Dastawez-e-indultalab” and “Dastawez-e-miadi” ? Pay order – “Barattes” ? Hundis
?
FEATURES OF NEGOTIABLE INSTRUMENTS
Is freely transferable ? Must be negotiable ? Negotiability confers absolute and good title on the transferee ? Must be in writing ? Must involve unconditional order ? Must involve definite amount of money. ? The time of payment must be certain ? The payee must be a certain person ? Must bear the signature of its maker
?
TYPES OF NEGOTIABLE INSTRUMENTS
Promissory Note
Bill of Exchange
Cheques
Hundis
PROMISSORY NOTE
?
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.
Parties to a Promissory Note
? ? ? ?
The Maker or Drawer The Payee The Endorser The Endorsee
SPECIMEN
BILL OF EXCHANGE
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.
Parties to a Bill of Exchange
? ?
The Drawer The Drawee
?
The Payee
SPECIMEN
CHEQUES
A cheque as a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. Types of Cheque
?
Open cheque
?
? ? ? ? ? ?
Crossed cheque
Bearer cheque Order cheque Ante – dated cheque Stale cheque Mutilated cheque Post – dated cheque
SPECIMEN
DEMAND DRAFTS
?
?
It’s a pre-paid Negotiable Instrument, wherein the drawee bank undertakes to make payment in full when the instrument is presented by the payee for payment. The demand draft is made payable on a specified branch of a bank at a specified centre.
TRAVELLERS CHEQUE
?
Travellers cheques are a secure and convenient alternative to carrying cash. Travellers cheques can be replaced if they are lost or stolen at no additional cost.
?
HUNDIS
Oldest known instrument used for the purpose of transfer of money without its actual physical movement. It is often in the form of a bill of exchange drawn in any local language in accordance with the customs of the place.
Types of Hundis
?
?
? ? ? ? ? ?
Shah-jog Hundi Darshani Hundi Muddati Hundi Nam-jog hundi Dhani-jog hundi Jawabee hundi Jokhami hundi Firman-jog hundi
SPECIMEN
NEGOTIABLE INSTRUMENTS ACT 1881
?
Five basic ingredients of section 138
Cheque should be drawn in payment of a legal liability to discharge a debt. It should be presented within the validity period. Return memo by the drawer bank to the drawee bank and vice-versa, reporting that the cheque got unpaid is must. Giving notice to the drawer by the drawee within 15 days of the receipt of the information is must. The drawer fails to make the payment of the said amount to the holder within 15 days of the receipt of the notice.
•
• •
•
•
AMENDMENTS
Bouncing of cheque - Provisions amended are:
?
? ?
Provision for imprisonment up to 2 years.
Period for issuing notice to drawer increased to 30 days. Government Nominee Directors excluded from liability.
?
Court empowered to take cognizance of offence even if complainant
filed beyond one month. Evidence of complainant through affidavit permitted. Bank’s slip or memo indicating dishonor of cheque will be prima facie evidence.
? ?
LIABILITIES OF PARTIES TO A NEGOTIABLE
INSTRUMENT
? ? ? ? ? ? ? ?
Liability of agent signing Liability of drawer Liability of drawee of cheque Liability of maker of note and acceptor of bill Acceptance by several drawees not partners Liability of endorser
Liability of prior parties to holder in due course
Maker, drawer and acceptor principles
CASE
BIO-METRICS
It includes: ? Fingerprints ? Voice patterns ? Hand measurements ? Iris Significance: ? Used to verify identity. ? These characteristics are tightly connected to an individual and cannot be forgotten, shared, stolen or easily hacked.
FINGER SCANNING TECHNOLOGY
? ?
Oldest of the biometric sciences Utilizes distinctive features of the fingerprint to verify the identity of individuals.
FACIAL SCAN TECHNOLOGY
?
?
A digital video camera image is used to analyze facial characteristics such as the distance between eyes, mouth or nose. These measurements are stored in a database and used to compare.
RETINAL SCAN TECHNOLOGY
?
Makes use of the retina, which is the surface on the back of the eye that processes light entering through the pupil. Retinal Scan technology is based on the blood vessel pattern in the retina of the eye.
HAND GEOMETRY
It relies on measurements of the: ? Width, Height, length of the fingers ? distances between joints ? shape of knuckles
VOICE RECOGNITION
It identifies people based on: ? Differences in the voice resulting from physiological differences and learned speaking habits. When an individual is enrolled, the system captures samples of the person's speech as the individual says certain scripted information
E-COMMERCE
?
It consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks.
OTHER FORMS OF REVOLUTIONS
?
Mobile Banking
?
Travellers Cheque
?
Plastic Money
MOVING TOWARDS E-COMMERCE
ITEM
Volume (' 000s) 2007-08
Volume (' 000s) 2008-09
Value (Rs cr) 2007-08
Value (Rs cr) 2008-09
RTGS
5,840
13,366
2,73,18,330
3,22,79,881
MICR Clearing Retail Electronic Clearing Cards
12,01,045
11,40,492
60,28,672
58,49,642
2,18,800
2,80,610
9,71,485
4,16,419
3,16,509
3,87,215
70,506
83,903
RECOMMENDATION AND CONCLUSION
?
? ?
?
?
?
?
Necessary legislative support is required to establish the credibility of ECS and EFT schemes. Credit card owners need to be careful, to avoid misuse. Cheques would continue to be used due to their distinct advantages. Traditional bio-metric methods such as Finger printing need to be done away with. Bio-Metrics should be used as one of the layers of security and identification. Amendments to the N.I. Act has made it difficult to misuse the instruments. Regular amendment of the Act would be required to deal with the growing use of Bio-metrics.
THANK YOU!!
doc_550678221.pptx