NEGOTIABLE INSTRUMENTS
NEGOTIABLE
INSTRUMENTS
NEGOTIABLE INSTRUMENT
According to Section 13 (a) of the Act,
“Negotiable instrument means a promissory note, bill of exchange or cheque payable either to order or to bearer, whether the word “order” or “ bearer” appear on the instrument or not.”
A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, with the payer named on the document.
Examples of negotiable instruments include promissory notes, bills of exchange, and cheques.
PROMISSORY NOTE
A promissory note may be a negotiable instrument if it is an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand to the payee, or at fixed or determinable future time, certain in money, to order or to bearer. The law applicable to the specific instrument will determine whether it is a negotiable instrument or a non-negotiable instrument. Bank note is frequently referred to as a promissory note, a promissory note made by a bank and payable to bearer on demand.
According to the section 4 of the INDIAN
NEGOTIABLE ACT 1881, "a Promissory
Note is an writing (not being a bank note or 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 the bearer of the instrument."
CHEQUE
Section 6 of the Act defines “A cheque is a bill of exchange drawn on a specified banker, and not expressed to be payable otherwise than on demand”.
A cheque is bill of exchange with two more qualifications, namely,
(i) it is always drawn on a specified banker, and (ii) it is always payable on demand.
Consequently, all cheque are bill of exchange, but all bills are not cheque. A cheque must satisfy all the requirements of a bill of exchange; that is, it must be signed by the drawer, and must contain an 17 unconditional order on a specified banker to pay a certain sum
INSTRUMENTS
NEGOTIABLE INSTRUMENT
According to Section 13 (a) of the Act,
“Negotiable instrument means a promissory note, bill of exchange or cheque payable either to order or to bearer, whether the word “order” or “ bearer” appear on the instrument or not.”
A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, with the payer named on the document.
Examples of negotiable instruments include promissory notes, bills of exchange, and cheques.
PROMISSORY NOTE
A promissory note may be a negotiable instrument if it is an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand to the payee, or at fixed or determinable future time, certain in money, to order or to bearer. The law applicable to the specific instrument will determine whether it is a negotiable instrument or a non-negotiable instrument. Bank note is frequently referred to as a promissory note, a promissory note made by a bank and payable to bearer on demand.
According to the section 4 of the INDIAN
NEGOTIABLE ACT 1881, "a Promissory
Note is an writing (not being a bank note or 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 the bearer of the instrument."
CHEQUE
Section 6 of the Act defines “A cheque is a bill of exchange drawn on a specified banker, and not expressed to be payable otherwise than on demand”.
A cheque is bill of exchange with two more qualifications, namely,
(i) it is always drawn on a specified banker, and (ii) it is always payable on demand.
Consequently, all cheque are bill of exchange, but all bills are not cheque. A cheque must satisfy all the requirements of a bill of exchange; that is, it must be signed by the drawer, and must contain an 17 unconditional order on a specified banker to pay a certain sum