ancy lawe123
TRANSCRIPT
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SUBMITTED TO
Mrs.BABITHA ELSA OOMMEN
LECTURER
DEPT. OF MBA
MOUNT ZION COLLEGE OF ENGG.
KADAMMANNITTA
SUBMITTED BY
ANCYMOL C BABU2nd SEM MBA
MOUNT ZION COLLEGE OF ENGG
KADAMMANNITTA
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CONTENTSCONTENTS
INTRODUCTION
CHARACTERISTICS
CLASSIFICATION
KINDS OF INSTRUMENTS
BIBILIOGRAPHY
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INTRODUCTIONINTRODUCTION
The law relating to negotiable instruments
is contained in the negotiable instrument
act 1881.
It is an act to define and amend the lawrelating to promissory notes, bills of
exchange, and cheques.
The act does not affect the custom or
local usage relating to an instrument inoriental language i.e., hundi
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NEGOTIABLE INSTRUMENTNEGOTIABLE INSTRUMENT
A
CT , 1881A
CT , 1881MeaningNegotiable instrument means
that a document transferable from
one person to another
Examples of negotiable instrument arepromissory note ,bill of exchagne,cheque..
Section 13(1)
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DEFINITION
According to Section 13 of
Negotiable Instrument Act a negotiableinstrument means apromissory note,
bills of exchange, or cheque payable
either to order or to bearer.
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Definition
an instrument ,the
property in which is acquired by any onewho take it bonafide,and for value ,notwithstanding any defect of title in the
person from whom he took it, from which itfollows that an instrument cannot be
negotible unless it is such and in such a statethat the true owner could transfer the
contract or engagement contained thereinby simple delivery of instrument [Willis-The law of Negotiable Securities, page 6]
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CHARACTERISTICSCHARACTERISTICS
1) The holder of the instrument ispersumed to be the owner of the
property contained in it.2) They are freely transferable.
3) A holder in due course gets the
instrument free from all defects of tittleof any previous holder.
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4) The holder in due course is entittled to sue
on the instrument in his own name.
5)The instrument is transferable till maturityand in the case of cheques till it becomes
stale {on the expiry of 6 months from thedate of issue}.
6)Certain equal presumptions are applicableto all negotiable instruments unless thecontray is proved.
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CLASSIFICATIONCLASSIFICATION
1) BEARER INSTRUMENTS.
2) ORDER INSTRUMENTS.
3) INLAND INSTRUMENTS. (SECTION 11)4) FOREIGN INSTRUMENTS.
5) DEMAND INSTRUMENTS. (SECTION 19)
6) TIME INSTRUMENTS.
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BEARER INSTRUMENTSBEARER INSTRUMENTS
A promissory note, bills of exchange or
cheque is payable to bearer when
1. It is expressed to be so payable.
2. The only or last endorsement on theinstrument is an endorsement in blank.
A person who is a holder of a bearer
instrument can obtain the payment of theinstrument.
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ORDER INSTRUMENTSORDER INSTRUMENTS
A promissory note, bills of exchange or
cheque is payable to order
1. Which is expressed to be so payable.
2. Which is expressed to be payable to a
particular person, and does not contain anywords prohibiting transfer or indicating an
intension that it shall not be transfeable
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INLAND INSTRUMENTS (SECTIONINLAND INSTRUMENTS (SECTION
11)11)
A promissory note, bills of exchange orcheque drawn or made in india, and madepayable, or drawn up on any person, resident
in india shall be deemed to be an inlandinstrument.
An inland instrument is one which is either:
1. Drawn and payable in india,
2. Drawn in India upon some presons residenttherein, even though it is made payable in aforeign country.
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FOREIGN INSTRUMENTSFOREIGN INSTRUMENTS
An instrument which is not an inlandinstrument, is deemed to be a foreign
instrument. The essentials of a foregian
instrument include that:1. It must be drawn outside India and made
payable outside or inside India.
2. It must be drawn in India and made payableoutside India and drawn on a personresident outside India.
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DEMAND INSTRUMENTS (SECTIONDEMAND INSTRUMENTS (SECTION
19)19)
A promissory note or a bills of exchange in
which no time for payment is specified is aninstrument payable on demand.
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TIME INSTRUMENTSTIME INSTRUMENTS
Time instruments are those which arepayable at sometime in the future.
Therefore, a promissorynote or bill of exchange payable after a fixedperiod, or after sight , or on a specified day,
or on the happening of an event which iscertain to happen is known as a timeinstrument.
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KINDS OF INSTRUMENTSKINDS OF INSTRUMENTS
1. PROMISSORY NOTES.
2. BILLS OF EXCHANGE.
3. CHEQUE.
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PROMISSORY NOTESPROMISSORY NOTES
DEFINITION
According to Section 4 apromissory note is an instrument in
writting (not being a bank note orcurrency note) containing anunconditional undertaking signed bythe maker, to pay acertain sum of
money only to or to the order of , acertain person, or to the bearer of theinsrtument.
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PARTIES TOAPROMISSORYPARTIES TOAPROMISSORY
NOTENOTE
The maker
The payee
The holderThe endorser
The endorsee
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ESSENTIALSESSENTIALS
It must be in writing.
It must contain a promise or undertaking.
The promise to pay must be unconditional.
It must be signed by the maker.
The maker must be a certain person.
The payee must be certain.
The sum payable must be certain.The amount payable must be in leagal tender
money of I ndia.
Other formalities.
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BILLS OF EXCHANGEBILLS OF EXCHANGE
DEFINITION
Section 5 of thenegotiable Instruments Act defines a bill of
exchange as A bill of exchange is aninstrument in writting containing an
unconditional order, signed by the
maker, directing a certain person topay a certain sum of money only to,
or to the order of, a certain person or
to the bearer of instrument.
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PARTIES TO BILLS OF EXCHANGEPARTIES TO BILLS OF EXCHANGE
The drawer
The drawee
The acceptor
The payee
The holder
The endorser
The endorsee
Drawee in the case of need
Acceptor of honour
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CHEQUESCHEQUES
DEFINITION
Section 6 as substitued bynegotiable insrtuments( Amendent and
Miscellaneous Provisions) Act 2002 definescheque as A cheque is a bill ofexchange drawn on a specifiedbanker and not expressed to be
payable otherwise than on demandand it includes the electrinic imageof a truncated cheque and a chequein the electronic form.
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PARTIES TOA CHEQUEPARTIES TOA CHEQUE
The drawerThe drawee
The acceptor
The payeeThe holder
The endorser
The endorsee
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ESSENTIALSESSENTIALS
It is always drawn on a holder.
It is always payable on demand.
It does not require acceptance.
A cheque can be drawn on bank where the drawerhas an account.
Cheques may be payable to the drawer himself.
The banker is liable only to the drawer.A cheque is usually valid for fix months.
No stamp is required to be affixed on cheques.
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BIBILIOGRAPHYBIBILIOGRAPHY
M C Kuchhal; Business Law; Vikas Publishing
House Pvt Ltd; Delhi; 2005.
I C S I; Elements of Business Laws andManagement. ( Foundation programe )
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