Professional Documents
Culture Documents
Law
Prepared by:
Harshal Naik (28) Vivek Naik(29) Dixita Patel(37) Sanjay Patel(43) Sumit Sharma(55)
Submitted to:
B.Law
Negotiable means transferable from one person to another person. The consideration is essential for transferability. Instrument means a written document creating a right in favour of any person. A written document which is transferable from one person to another person, and
B.Law
B.Law
PROMISSORY NOTE
A Promissory note is an instrument in writing (not being a bank note or currency note), 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, a certain person, or to the bearer of instrument.
B.Law
PAYEE:
The person with whom the promise to pay is made is called payee. i.e. the creditor.
B.Law
Conti
Signature by the maker Payment period Certain sum of money Certain payee
B.Law
Bills of Exchange
A Bill of exchange is an Instrument in writing containing an unconditional order, signed by the marker, directing a certain person, to pay on demand or at a fixed or determinable future time a certain sum of money only to or to the order of, a certain person or to the bearer of instrument." (Negotiable Instrument Act 1881.[Section 5]
B.Law
B.Law
B.Law
CHEQUE
In simple term: A written order of a depositor upon a banker to pay the designed party Or bearer a specific sum of money on demand. A Cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. (ACCORDING TO NEGOTIABLE INSTRUMENT ACT 1881.[Section 6])
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B.Law
PARTIES OF CHEQUE
Drawer:
The person who draws the cheque is called drawer.
Drawee
The bank on which the Cheque is drawn is known as drawee.
Payee
The Person to whom the Cheque is made payable is known as payee.
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B.Law
ESSENTIAL FEATURES
In Writing Clear Order to pay The order must be Unconditional Signature by Drawer Payment Period Maker must be Account Holder Drawn on Specified Bank Must be on Prescribed Performa Payment in Money Only Date
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B.Law
Conti
Other Legal Formalities:
It shall be properly and clearly written
Date should be mentioned. Amount should be stated both in words &figures
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B.Law
Holder (Sec. 8)
The holder of a promissory note. bill of exchange or Cheque means any person entitled in his own name
The possession thereof, and To receive or recover the amount due thereon from the parties thereto.
The holder is the person so entitled at the time of such loss or destruction.
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B.Law
A holder of a negotiable instrument will not be a holder in due course if He has obtained the instrument by gift or for an unlawful consideration or by some illegal method ; or He has obtained the instrument after its maturity; or He has not obtained the instrument bonafide.
B.Law
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B.Law
Inchoate stamped instrument Liability of prior parties Fictitious payee Negotiable instrument without consideration Conditional delivery Instrument cleansed of all dejects Instrument obtained by unlawful means or for unlawful Every holder is a holder in due course. Estoppels against denying original validity of instrument Estoppel against denying capacity of payee to indorse. Indorses not permitted to deny the capacity of prior prates
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B.Law
LIABILITY OF PARTIES
Liability of drawer Liability of drawer of Cheque to negotiable instruments Liability of maker of note and acceptor of bill Liability of indorses
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B.Law
May be dishonored by non-acceptance or by non-payment. A promissory note and Cheque are dishonored by non-payment only. When a negotiable instrument is dishonored, the holder must give a notice of Dishonour to all the prior parties in order to make them liable on the instrument. If he fails to do so, except in cases when notice of Dishonour may be excused, he forfeits his right of action against the prior parties entitled to the notice of Dishonour (Sec. 93).
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B.Law
NOTICE OF DISHONOUR
When a negotiable instrument is dishonoured either by non-acceptance or by non-payment, the holder of the instrument or some party to it who is liable thereon, must give a notice of Dishonour to all the prior parties whom he wants to makes liable on the instrument. If he does not give notice, except in cases when notice of dishonour may be excused, all the prior parties liable thereon are discharged of their liability (Sec. 93).
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B.Law
If the holder and the party entitled to notice of dishonour carry on business or live in different cities, the notice must be dispatched by the next post or on the day next after the day of honour.
If these parties carry on business or live in the same place, the notice must be dispatched in time to reach its destination on the day next after the day of dishonour.
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Contains of Noting:
The fact of dishonour The date of dishonour The reason, if any assigned for such dishonour. If the instrument has not been expressly dishonoured the reason why the holder treats it as dishonoured ; and The notarys charges (Sec. 99,).
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B.Law
Protest
When a promissory note or bill of exchange has been dishonoured by non-acceptance or non-payment. The holder may, within a reasonable time. Cause such dishonour to be noted and certified by a Notary Public Such certificate is called a protest (sec. 100)
Contents of PROTEST:
The instrument or a literal transcript of the instrument. The name of the person whom and against whom the instrument has been protested. The fact of, and reason for, dishonour. The place and time of dishonour. The signature of Notary Public.
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B.Law
Advantage of protest
It affords an authentic evidence of dishonour to the drawer and indorsers. 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.
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B.Law
Discharge of an Instruments
Modes of discharge of an instrument :
By payment in due course. By party primarily liable becoming holder. By express waiver. By cancellation By discharge as a simple contract.
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