F.Y.

BMS

NAGOTIABLE INSTRUMENTS

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DEFINITION OF A NEGOTIABLE INSTRUMENT

I.

A negotiable instrument is defined as every document that entitles a person to a sum of money which is transferred from person to person by delivery or by endorsement & can be called a negotiable instrument

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TYPES OF NAGOTIABLE INSTRUMENST

Negotiable instrument are namely three 1. CHEQUES 2. PROMESERRY NOTE 3. BILL OF EXCHANGE

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1. A CHEQUE
date_____ Pay_______________________________________________________________ ______ __________________________________________________________________ _______ Rupees____________________________________________________________ ______ A/C no. LF. INTS Rs

State bank of India Poonam chambers,worli-400032 092854 11200235610

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PROMISSORY NOTE
Mumbai 1 june2000

Rs 5,000/-

On demand ,I promise to pay Mr. xyz or order the sum of rupees five thousand with interest at 18 per cent for value received
To Xyz Neel kamala, stamp Mumbai 400052

SD/-

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JOINT PROMISSORY NOTE

Mumbai Rs 5,000/1 june2000

On demand ,I promise to pay Mr. xyz or order the sum of rupees five thousand with interest at 18 per cent for value received
1. signature

address 2.signatur address

to xyz Neel kamala, stamp Mumbai 400052 stamp

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BILL OF EXCHANGE
Mumbai 1 June 2000 Rs. 10.000/-

Five months after date pay. Tarun or (to his) order the sum of rupees . Ten Thousand only for value received

To stamp Sameer

Accepted

Sameer

S/d
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DEFINATION:CHEQUE
A bill of exchange on a specified banker and not expressed to be payable otherwise than on demand There are four types of cheaques Open cheque Crossed cheque Bearer cheque Order cheque
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a) b)

c)
d)

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DEFINITION : A BILL OF EXCHANGE

A bill of exchange is an instruments in writing containing an unconditional order, signed by the maker, directing a certain person to pay a sum of money to or to the order of a certain person or to the bearer of the instrument There are three parties to draw a bill of exchange a) Drawer b) Drawee c) Payee
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PROMISSORY NOTE
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 Types of promissory note Promissory notes payable on demand Promissory notes payable after date Joint promissory notes Joint and several promissory notes

a)

b)
c) d)

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FEATURES OF A CHEQUE
1.

2. 3. 4. 5.

6.

A cheque must be in writing and duly signed y the drawer It contains an unconditional order It is issued on a specified bank only The amount specified is always certain The payee is always certain Its always payable on demand

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FEATURES OF A BILL OF EXCHANGE

1. 2. 3. 4. 5. 6.

7.
8.

A bill of exchange is an instrument in writing It must be signed by the maker It contains an unconditional order The order must be to pay money and to pay money only The sum payable must be specified The amount must be paid within a stipulated time It must be dated and stamped The names of the drawer must be clearly mentioned
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FEATURES OF A PROMISSORY NOTE

1.

2. 3. 4. 5.

6.

A promissory note must be in writing duly signed and stamped It must contain an undertaking promise to pay The promise to pay must not be conditional It must contain a promise to pay money only The parties to promissory note may be payable on demand or after a certain date The sum payable mentioned must be certain or capable of being made certain
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