mSection 13 of Negotiable instruments Act,1881, defines a

negotiable instrument as ³a negotiable instruments

means a promissory note,bill of exchange or cheque
payable either to order or to bearer´

The Negotiable Instruments Act 1881

mA ³promissory note´ is 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.

The Negotiable Instruments Act 1881

mjriting
mUnconditional
mSigned
mCertain person
mSpecific sum
mPromise to pay must be money only
mStamping
mUndertaking to pay

The Negotiable Instruments Act 1881

Rs.5,000

on demand I promise to pay ABC ,the

sum of Rs 5,000 only.

Bombay
20thseptember,2006
XYZ

The Negotiable Instruments Act 1881

mA Bill of exchange is 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 an
instrument.

The Negotiable Instruments Act 1881

mjriting
mUnconditional
mSigned
mCertain person
mSpecific sum
mMoney only
mStamping
mOrder to pay
mPartie„

The Negotiable Instruments Act 1881

Rs.5,000 Bombay

20thseptember,2006
Sixty days after date pay to ABC or
order the sum of five thousand rupees
only for value received.

To,
PQR, Lentin Road,Bombay.
Signed
XYZ
The Negotiable Instruments Act 1881
mA cheque is a µBill of exchange¶ drawn on a specified
banker and not expressed to be payable otherwise than
on demand

The Negotiable Instruments Act 1881

0 Œrawing of the cheque,
0 Presentation of the cheque to the bank,
0 Returning the cheque unpaid by the drawee
bank,
0 Giving notice in writing to the drawer of the
cheque demanding payment of the cheque
amount.
0 Failure of the drawer to make payment within 15
days of the receipt of the notice.

The Negotiable Instruments Act 1881

0 The drawer in payment of a legal liability to
discharge the existing debt should have drawn
cheque.
0 any cheque given say by way of gift would not
come within the purview of the section.
0 It should be a legally enforceable debt;
therefore time barred debt and money-lending
activities are beyond its scope.

The Negotiable Instruments Act 1881

0 Œrawer

0 Œrawee

0 Payee

0 Indorsee

The Negotiable Instruments Act 1881

A person is the holder of the instrument if he is:-
m Entitled in his own name to the possession of the
negotiable instrument

m Entitled to receive or recover the amount due

thereon from the parties thereto

The Negotiable Instruments Act 1881