Negotiable instruments Act

Complex system,Confusion, slow growth

A Negotiable instrument means promissory note, bill of exchange, or cheque, payable either to order or to bearer

Freely Transferable

Absolute Title

In Writing

Unconditional

Certain Sum

Payee must be a certain PersonSignature a must.

Certain Time

Delivery Essential

Stamping is Mandatory.

Promissory Note

In writing, signed, stamped

Unconditional promise to pay

Money only Certain party On demand or certain

date Certain sum Parties – Drawer, Payee

Bill of Exchange Writing, signed, accepted, stamped

Unconditional order to pay

Money only Certain party Certain sum Parties – Drawer,

Drawee & Payee

CHEQUES

Writing, signed Unconditional order Issued by specified

banker, certain payee

On demand Certain amount Must bear a date

HUNDIS

Drawn in any local language in accordance with the custom of the place

For transfer of money without its actual physical movement

CHEQUEBILLS OF

EXCHANGE

Insufficient balance. Invalid Signature. Specific Reasons eg “a/c

closed, stopped payment”.

Cancellation on cheques. Tampered cheques. When “payable at par” is

not mentioned for outstation cheques.

Non-acceptance by Drawee. Drawee does not accept

within 24 hrs Drawee not entitled to

accept. Drawee is a fake person, or

disappears. Bill is conditional. Not signed by all

drawees(in case of partnership)

Non payment by Drawee at maturity

Fraud Intentional wrong doing To cause loss or harm To get personal benefit

Measures To Avoid Fraud.

o After online payment make sure you call customer care of your bank.

o Make sure you keep secrecy regarding your negotiable instrument.

The JVG Scandal Troubles started in June 1997 Issued Post dated cheques for principal & interest which bounced. Investors complained under NI act.

Government asked to wind up the company.

Three Held With Shahrukh Khan’s Credit Cardo On Feb10, Vinay Vijay Tambe (22),

James Paul Peremal (28), Shekar Jadhav (44),went to Shopper’s Stop and did shopping of Rs.25000 with Shahrukh’s credit card.

Funds transfer through EFT. Common egs

Direct Deposit Plastic money ATMs Points of Sale Mobile banking

Cheque Truncation

Need for Legislations & Regulations

Individual Feels Free To Trade Globally.

Smooth Flow of Trade.

Negotiable Instruments As Legal Proof