A Cheque is a specially printed paper form issued by the banks to their customers to draw money or pay monies to third parties from their running account like SB/Current Account, Cash Credit Account etc. that contains following features. When you look at a cheque, you find the name of the bank and address of…
The bills of exchange are a kind of negotiable instruments generally arising out of trade transactions. Demand bills, Usance bills, Clean bills, Documentary Bills, Accommodation bills, etc. are the examples of bills of exchange in usage for different types of trade transactions. A cheque is also a kind of bill of exchange. However, cheque has some…
Section 5 of the NI Acts 1881 defines a bill of exchange as under “A 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 to, or to the order of, a certain person or the bearer…
Section 22 of Negotiable instrument act 1881 provides that “every promissory note, bill of exchange which is not expressed to be payable on demand, at sight or on presentment is at maturity on the third day after the date on which is expressed to be payable”. Thus, in the case of Usance bills, three days…
A cheque is defined in section 6 of Negotiable Instruments acts 1881 which provides that, “A cheque is a bill of exchange, drawn on a specified banker and expressed to be payable otherwise than on demand”. The electronic image of a truncated cheque and a cheque in the electronic form (e-cheque) are also termed as ‘cheque’ after coming into…
(The similarities in usage of Hundis in India and Hawala system prevalent in the Middle East and North African countries are discussed in this post) Hundis have been in usage in India from ancient times but usages are not uniform and they are different at different places. Being a part of the informal system, Hundi…
Demand bills, Usance bills, clean bills, Documentary Bills, Accommodation bills, Hundis etc. are a different kind of bills of exchange in usage for different types of trade transactions. A cheque is also a kind of bill of exchange. However, cheque has some peculiarities from other bills of exchange. If a bill of exchange drawn or made…
Section 4 of NI Act 1881 states that “ A promissory note is an instrument in 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 to the bearer of the…
Meanings of maker/drawer, drawee, payee, holder, holder in due course, endorser, endorsee, endorsement, drawee in the case of need, Acceptor for honour, who are parties to a negotiable instrument is explained below. Maker/drawer: the person who makes or executes the note promising to pay the amount stated therein. Drawee: The person directed to pay the…
A promissory note or bill of exchange or cheque payables either to the order or bearer are deemed as the instruments under negotiable instrument acts of 1881. The promissory note is actually an undertaking from the debtor to pay a certain sum of amount to the creditor or to his order. The bill of exchange…