Law Commission of India Report No. 11
Negotiable Instruments Act, 1881
Forwarded to the Union Minister of Law and Justice, Ministry
of Law and Justice, Government of India by M.C. Setalvad, Chairman, Law
Commission of India, on September 26, 1958
Chairman,
My Dear Minister,
Law Commission, New Delhi. September 26, 1958 I have great pleasure in forwarding herewith the Eleventh Report of the Law Commission on the Negotiable Instruments Act. 2. At its first meeting held on the 17th September, 1955, the Commission decided to take up the revision of the Negotiable Instruments Act and entrusted the task to a Committee consisting of Shri D. Narasa Raju and Shri S. M. Sikri. 3. It was subsequently decided that Shri P. Satyanarayana Rao, the senior Member of the section of the Commission dealing with Statute Law Revision should assist the Committee in drawing its Report. The consideration of the subject was initiated by Shri Rao who formulated a scheme for the revision of the Act. The principles underlying the scheme were discussed at the meetings of the Statute Revision Section held on the 22nd September, 1956 and 21st October, 1956. At the meeting held on the 22nd September, 1956, it was also decided to include Shri V. K. T. Chari in the Committee on the Negotiable Instruments Act in view of Shri Narasa Raju's ill health. A draft Report prepared on the basis of the scheme was circulated to all Members and their views invited thereon. These views together with the draft Report were discussed at the meetings of the Statute Revision Section held on the 26th January, 1958 and the 29th March, 1958. Some of the suggestions made by Members at these meetings were accepted and it was left to the Chairman to finally settle the Report in the light of the discussion. 4. The Commission wishes to acknowledge the services rendered by its Joint Secretary, Shri D. Basu, in connection with the preparation of the Report. Yours sincerely, M.C. Setalvad. Shri Ashok Kumar Sen, Minister of Law, Government of India, New Delhi. |
Negotiable Instruments Act, 1881
The Negotiable Instruments Act, 1881
1. History of the
Legislation.— "Mercantile usage is the raw material, mercantile law is the
manufactured article", said Sir McKenzie Chalmers1 while speaking
about the state of the English law before the Bills of Exchange Act, 1882. This
statement brings out clearly the process of evolution of mercantile law which
includes the law of negotiable instruments. The mercantile community found in
such instruments an easy mode of payment of money by the endorsement and
delivery or by mere delivery of these instruments. With the expansion of trade
and commerce, negotiable instruments have assumed international importance.
1. Introduction to the 1st Edn., of Chalmers' Negotiable
Instruments Act, p. 9.
2. An attempt at the codification of mercantile usages was made in
France as early as 1818 and the French Commercial Code was later adopted as a
model by other countries on the Continent. In England, the movement for
codification was not started till 1880 when Sir McKenzie Chalmers drafted a bill
on the subject. This was enacted as the Bills of Exchange Act, 1882. In India,
an effort in the same direction was made earlier, in 1867, when the (third)
Indian Law Commission prepared a bill. But, for various reasons it was kept in
cold storage for a number of years. In 1879 Mr. Arthur Phillips, the then Law
Secretary and a member of the Calcutta Bar, redrafted the bill. Criticisms were
invited on it from banks, chambers of commerce and leading merchants. This bill,
after passing through Select Committees more than once, was again referred to a
new Law Commission in 1879. The recommendations of the Commission were
considered by another Select Committee and eventually the bill, in a modified
form, became the Negotiable Instruments Act, 1881.
3. The principal source for codification of this law both in
England and in India was the English common law of contracts as modified by the
law merchant. But, curiously, there has been a considerable divergence, whether
intended or not, between the two Acts though the raw material for both was the
same. The arrangement of the sections in the English Act is more logical and the
principles enunciated therein are more comprehensive than in the Indian Act.
4. Materials for revision.—The Indian Negotiable Instruments Act
has been on the Statute Book for over 75 years and except for amendments made
now and then, the question of revising the Act as a whole has never been raised
before. In revising the Act we have considered the provisions of the English
Bills of Exchange Act, the Uniform Negotiable Instruments Law1 of the
U.S.A., the decisions under the English and Indian Acts and the suggestions made
by the Chambers of Commerce, Bankers' Associations and members of the public.
1. Drafted by the National Conference of Commissioners on
Uniforms States Law in 1896 and since revised from time to time.
5. Suggestions of Chambers and Bankers' Associations
considered.—Immediately after the work was taken up by us a press note was
issued inviting suggestions for reform from the public. Apart from this,
important commercial bodies, such as the Chambers of Commerce1 as
well as the State Governments were addressed individually for their suggestions.
Some of these commercial bodies2 offered their views in writing.
Besides Shri G. N. Das, Member (assisted by Joint Secretary, Shri Basu) had
discussions with the representatives of the Chambers at Calcutta, while Shri P.
Satyanarayana Rao and Shri V.K. Thiruvenkatachari, Members, had discussions with
the representatives of similar Associations at Madras, on the basis of their
memoranda received earlier. Two Associations of Bombay sent their memoranda
subsequent to the Commission's visit to that place. The Bombay Shroffs'
Association sent a deputation to us and we heard their representatives on
certain questions. We desire to express our thanks for the valuable suggestions
made by these Chambers of Commerce and Associations. The major suggestions made
by them will be considered presently; the rest will be considered in their
appropriate places when dealing with the relevant provisions of the Act.
1. Vide App IV.
2. Vide App V.
6. It has to be mentioned at the outset that the title "Negotiable
Instruments Act" is somewhat misleading as it conveys the idea, at first sight,
that it is a comprehensive enactment relating to all negotiable instruments
whether recognised as such by law or by usage or custom. A perusal of section 13
of the Act shows, however, that the Act is confined only to three specific types
of negotiable instruments, viz., promissory note, bill of exchange and cheque.
The codified law in India relating to negotiable instruments thus deals, as in
England, only with the aforesaid three instruments.
7. Suggestions that hundis and other negotiable instruments should be
included.—But an instrument for securing payment of money may become
negotiable not only by statute but also by custom or usage of the mercantile
community. The principal advantages of a negotiable instrument under the Act are
that the property in the instrument and all rights under it pass, by operation
of law, to a bona fide transferee for value by mere delivery or by endorsement
and delivery, without the necessity of the complicated procedure of executing a
deed of assignment and that the rights of the transferee are not in any manner
affected by any defect in the title of the transferor. It has been urged before
us that the foregoing and other statutory benefits conferred by the Act should
be extended to two other classes of instruments viz., (1) indigenous instruments
known as hundis and (2) instruments other than promissory notes, bills of
exchange and cheques which are, for the time being, recognised by usage or
custom as negotiable. Since this suggestion was made persistently by important
commercial bodies, it has to be discussed at the outset in order to clear the
ground.
8. Hundis which conform to the Act.—Section 1 of the Act now saves
usages in respect of all instruments in an oriental language unless an intention
is expressed in any such instrument that it would be governed by the provisions
of the Act. The section clearly indicates that an instrument, even if it be
within the definition of a promissory note, bill of exchange or cheque will, if
written in an oriental language, be governed by usage, if any, applicable to it
and not by the provisions of the Act.
Reference may be made to the case of Jambu Chetty v. Palaniappa
Chettiar, where the Madras High Court, proceeding on the assumption that
the hundi in question in that case was either a bill or a note, observed—
"If any local usage relating to bills and notes in an oriental
language—the operation of which usage is saved by section 1, though such usage
may be at variance with the Act—be relied upon, such usage should be alleged and
established by the party relying upon it."
The Court thus took the view that
if a contrary usage were established, an instrument in an oriental language,
even though it conformed to the requirements of a negotiable instrument as laid
down in the Act, would be governed not by the provisions of the Act, but by such
usage; but that in the absence of proof of any such usage, such instrument
(though in an oriental language) would be governed by the provisions of the Act.
This view seems to have recently been followed by the Hyderabad High
Court.1
1. Chandulal v. Ramchander, AIR 1955 NUC 2363 Hyd.
In Champaklal v. Keshrichand, (1925) 50 Bom 765 (781),
Mirza J. of the Bombay High Court observed—
"Supposing that this hundi were not a Shah Jog hundi and were
an ordinary hundi to which the Negotiable Instruments Act applied...."
This
observation also suggests the view that an 'ordinary' hundi which conforms to
the requirements of a negotiable instrument under the Act would normally be
governed by its provisions.
The two decisions in Pannalal v. Hargopal, ILR (1919) 1 Lah
80 and Surajmal v. Kashi Prasad, air 1933 Nag 389. also
illustrate the above proposition. Both related to a hundi of the nature of a
bill of exchange which required acceptance. In the former case1 the
Lahore High Court held that a usage of oral acceptance in Delhi having been
established by the evidence, such acceptance was valid in Delhi. In the Nagpur
case,2 on the other hand, there was no allegation or proof of any
usage in Bombay contrary to the provisions of section 7 and so it was held that
acceptance must be in writing as required by section 7 of the Act.
1. ILR (1919) 1 Lah 80.
2. AIR 1933 Nag 389.
9. Language should not exclude an instrument if it comes within the
definition of the Act.—We are, however, of the opinion that in cases of this
kind, any usage contrary to the provisions of the Act should not be allowed to
be established. There is no reason to exclude the applicability of any of the
provisions of the Act to an instrument (in whatever language it may be written)
which fulfils the requirements of one or other of the instruments dealt with
under the Act. Thus, if a hundi, in spite of the name that is given to it in the
document by the parties, comes within the definition of a promissory note, or a
bill of exchange or a cheque, it should be governed by the provisions of the Act
alone, notwithstanding any usage or custom applicable to it which may be at
variance with such provisions. To this extent, we think, indigenous instruments
should be brought within the scope of this Act. With this end in view we have
proposed a new provision1 in place of the existing saving clause in
section 1. We would also like to point out that with the increasing emphasis on
the use of Indian language a growing number of negotiable instruments will come
to be made in these languages and it is necessary that these instruments should
be brought within the ambit of the provisions of the Act: Many of the commercial
bodies consulted by us have expressed agreement with our proposal.
1. Section 3 of App I.
10. Other hundis cannot be brought under the Act if abolished.—As
regards hundis which do not conform to the definition of any of the negotiable
instruments dealt with in the Act, a different problem arises.
It is clear that no provision of the Act as it stands can possibly be
applied to such hundi1 and that they must be governed exclusively by
usage unless, of course, the provisions of the Act are imported by the agreement
of the parties themselves.
1. Champaklal v. Kehsrichand, (1925) 50 Bom 765 (781); Raja
Komalsing v. Rambharosa, AIR 1943 Nag 99 (Shah Jog hundi).
11. It may be recalled that the framers of the Act, though they
did not desire to abolish the local usages suddenly, cherished the desire that
the introduction of the Act which imported the English law would facilitate the
assimilation of the practice of the local merchants to that of the English
merchants. When the Bill was before the Select Committee, the Chief Justice of
Bengal and the Bank of Bengal urged that the provisions of the Act should be
made applicable to hundis also in order to bring about uniformity in the law and
to avoid uncertainty. The Government of the Punjab, however, was for the total
exclusion of hundis from the Bill. A via media was adopted in the Act by
providing that usages might be excluded by expressing in the instrument an
intention to be governed by the provisions of the Act. It was hoped that in
course of time the mercantile community would realise the necessity of uniform
rules governing all instruments and gradually choose to be governed by the
provisions of the Act. In the words of the Select Committee of 1879 on the
Negotiable Instruments Bill, "the effect of the Bill will be to induce the
native mercantile community gradually to discard them for the corresponding
rules contained in the Bill. The desirable uniformity of mercantile usage will
thus be brought about without any risk of causing hardship to Native bankers and
merchants. How long this change will take, it is of course impossible to
prophesy". But though over three quarters of a century have passed the practice
of the local mercantile community has belied the expectations of the Select
Committee. The option contained in the saving clause does not appear to have
been availed of and our businessmen still continue to stick to the bewildering
usages governing these instruments.
12. In pursuance of a suggestion that the use of indigenous
instruments should be discontinued altogether after the lapse of a specified
period, we sought the views of representative commercial bodies once again on
the specific question of omitting the saving clause as to local usage on the
expiry of a specified period. If this suggestion had been accepted, it would
have meant that after an appointed date only those instruments which conform to
the requirements of the Negotiable Instruments Act,—irrespective of the language
in which they are written,—would get the protection of the law and that no other
instrument or any usages relating thereto would have any legal sanction.
The suggestion did not, however, find favour with the commercial bodies
except in those parts of the country where mercantile transactions are rarely
carried on through the medium of hundis or similar indigenous instruments having
special incidents.
13. Having given our anxious consideration to the question, we are
of the opinion that hundis and the shroffs who finance commercial transactions
through hundis do a very useful service over the larger part of the country,
particularly in the villages where the modern banking system has not so far been
extended. Though it would have been a great advance towards securing uniformity
of the law if all negotiable instruments could be brought under the codified
law, we cannot afford to prevent the use of the hundis so long as we are not in
a position to have an efficient Bank in each village. As things are, we cannot
prevent the operation of the indigenous system without causing a serious
dislocation of our trade and commerce.
14. The suggestion made by some of the Chambers, however, was that
hundis should be allowed to retain their peculiar incidents according to usage
and that those usages should be codified by us. It is, however, not easy to
define a hundi or to discover its essential attributes. It would appear from the
text-books1 and judicial decisions that no less than a dozen
varieties of hundis are in vogue in this country. The usages differ so widely as
between these species and from place to place that we can discover only a few
characteristics or incidents which may be attributed to hundis in general; for
instance—
(1) Hundis payable to a specified person or order are
negotiable without endorsement by the payee;2
(2) a holder is entitled to sue on a hundi without an
endorsement in his favour;
(3) a hundi accepted by the drawee could be negotiated without
endorsement;3
(4) if a hundi is lost, the owner could claim a peth
(duplicate) or parapeth (triplicate) from the drawer and present it to the
drawee for payment;4
(5) interest above 6 per centum per annum can be charged where
usage is established.5
(6) even though a hundi is silent as to payment of interest,
the market rate of interest is payable, according to usage.6
1. Cf. Bhashyam & Adiga Negotiable Instruments Act, 10th Edn., pp. 18
et seq.; Singh Law of Mercantile Usages in India, 1939, pp. 131-141.
2. Rajroopram v. Buddo, (1863) I Ind Jur (OS) 93.
3. East India Bank v. Khojah Vullie, (1866) 1 Ind Jur (NS)
247.
4. Mulchand v. Suganchand, 1 Bom 23.
5. Komal Singh v. Rambharosa, AIR 1943 Nag 99.
6. Har Narain v. Bihari Lal, AIR 1932 Lah 582.
15. Apart from a few common features such as the above, each kind
of hundi has its own peculiar characteristics and incidents. Though it is not
necessary for our purpose to analyse these features exhaustively we shall refer
to the characteristics of some of those types of hundis which cannot possibly
claim to be one of the three instruments governed by the Act—only to demonstrate
the impracticability of any attempt to codify the usages relating to them.
Thus, a Shah Jog hundi, a most commonly used form of hundi, has
been held to be neither a bill of exchange nor a promissory note. It is not
payable to a specified person or his order or to bearer. It is payable to a
Shah, that is, a respectable person, a man of worth and substance known in the
bazar though not specified in the instrument. The drawee, before making payment,
has to satisfy himself that the person demanding payment is a
'Shah'.1 It is not usually presented for acceptance on the due date
and may be accepted orally.
1. Champaklal v. Keshrichand, (1926) 50 Bom 765; Keshrichand
v. Asharam, AIR 1916 Cal 888; Murli Dhar v. Hukam Chand, AIR 1932 Lah
312.
A Nam Jog hundi is payable to the person whose name is specified
in the body of the instrument. It is similar in form to a Shah Jog hundi
except that in place of 'Shah' the name of a particular person as the payee is
specified. It has been held3 that all that the drawer of a Nam Jog hundi
guarantees is that the drawee will honour and pay the hundi when it is presented
to him on maturity, and if the drawee fails to do so, then the drawer would
repay the amount thereof provided the hundi is returned to him in an
undischarged state. Where, however, the drawee is not in a position to return
the hundi in an undischarged state, it is the drawee who shall be liable in
damages to the owner of the hundi for wrongful conversion, the measure of
damages being the amount of the hundi.1
1. Lallubhai v. Ratnachand, AIR 1940 Bom 82.
A Dhani Jog hundi, on the other hand, has been held1 to
be an instrument "payable to the person who purchases it, as distinguished from
Shah Jog,—an ephithet.....importing that the person presenting it is
worthy and may be trusted with the cash answering to payable to bearer
(Molesworth)" and the word 'dhani' has been held not to be equivalent to
"bearer" in the sense that word is used in the Negotiable Instruments Act. In
the result, a mere bearer of a Dhani Jog hundi is not, as such, entitled to
payment. It is, accordingly, not a negotiable instrument within the meaning of
the Act.2
1. Champaklal v. Kehsrichand, (1926) 50 Bom 765; Keshrichand
v. Asharan, AIR 1916 Cal 888; Murli Dhar v. Hukam Chand, AIR 1932 Lah 312.
2. Jetha Parkha v. Ramchandra Vithoda, (1892) 16 Bom 689 (699).
A Jokhmi hundi is payable only in the event of arrival of goods.
It is both a contract of insurance and an instrument for payment of money.
Sargent J., in Jadowji Gopal v. Jetha Shamji, (1879) 4 Bom
333(340) summarised the incidents of this species of hundi as follows-
".......a jokhmi hundi is always drawn on or against
goods shipped on the vessel mentioned in the hundi; and, lastly, that the price
paid for a jokhmi hundi depends on the rate of exchange, the vessel in
which the goods are shipped, the season, and the nature of the goods. A
jokhmi hundi would thus appear to have been designed with a double
purpose, viz., to put the drawer of the hundi in funds, and, at the same time,
to effect an insurance upon the goods themselves, by reversing the position of
the insurer and insured from that which obtains in ordinary policies, the
insurer being the buyer of the hundi who pays the insurance money down, and is
entitled to recover it with a premium (together making the amount of the hundi)
in case the vessel arrives safely."
A Jowabi hundi is described by
Macpherson on Contracts at p. 166 as follows:
"A person desirous of making a remittance writes to the payee
and delivers the letter to a banker who either endorses it on to any of his
correspondents near the payee's place of residence or negotiates its transfer.
On its arrival, the letter is forwarded to the payee who attends and gives his
receipt in the form of an answer to the letter, which is forwarded by the same
channel to the drawer of the order."
A Zikrichit hundi is a letter of
protection which is given to the holder of a hundi by the drawer or any other
prior party to be used by him in case the hundi gets dishonoured. It is mostly
in use amongst Marwari Shroffs.
16. The foregoing account of some of the hundis would suffice to
show that it is not possible to evolve uniform rules applicable to hundis of the
various kinds for the purpose of codification. The Bharat Chamber of Commerce,
Calcutta, furnished us with a copy of Rules which have had the approval of
eleven trade associations. But these Rules relate to one kind of hundis only,
namely, Darshani hundis, and we have not been able to discover whether there are
any agreed Rules governing the other kinds of hundis, or whether the Rules
referred to by the Bharat Chamber are accepted throughout the country.
Codification not being possible, we must leave such instruments in use as
at present. We, therefore, propose to make it clear1 that the Act
will be confined in its application to the three kinds of instruments, viz.,
bills of exchange, promissory notes and cheques, but that it will apply to them
irrespective of the language in which they are written. Instruments which do not
answer the requirements of the Act in respect of any of these three kinds of
instruments will remain outside the purview of the Act, so that no saving clause
is required to save the usages relating to such instruments.
1. Vide section 3 of App I.
17. Whether other types of negotiable instruments should be
included.—Another major suggestion made by some of the Chambers is that
certain other types of instruments recognised in the mercantile world should
also be brought within the ambit of the Act. These documents fall under two
categories:
(1) Documents under which money is payable, such as (i)
debentures, (ii) bonds issued by companies, (iii) bearer bonds, (iv) bearer
scrips, (v) bearer debentures, (vi) treasury bills, (vii) postal orders, (viii)
share certificates, (ix) insurance certificates, (x) deposit receipts, and (xi)
pay warrants.
(2) Documents relating to delivery of goods known as
mercantile documents of title to goods, which are described in section 137 of
the Transfer of Property Act.
The second class of documents referred to above
are obviously outside the purview of the Act as they relate to delivery of goods
arid not payment of money.
As regards the other class of documents which are negotiable by usage or
custom we feel that no specific purpose would be served by including them in the
Act except to give statutory recognition to the usage or custom, if any, by
which they are negotiable. They will not be subject to the other provisions of
the Act, such as presentment for payment or acceptance, notice of dishonour, or
the liability of parties. It is also not possible to make a complete and
exhaustive list of such instruments without undertaking an elaborate inquiry.
Some of them are governed by special laws such as the Companies Act and the
Insurance Act. We, therefore, feel that it is neither useful nor practicable to
bring them within the Act.
18. Certification of cheques.—Two suggestions relating to cheques
deserve particular mention. The first is that certification of cheques should be
treated as equivalent to acceptance as in the case of bills. In the Bank
of Baroda cases1 the Privy Council examined this question and
held that certification of cheques as practiced in England and also by some
banks in India did not amount to acceptance in the sense in which it was
understood in the case of bills. Under the American Uniform Negotiable
Instruments Law (sections 187 to 189), on the other hand, certification is
treated as equivalent to acceptance, and the effect of certification is to
discharge the drawer and all indorsers from liability thereon (section 188). The
point for consideration, therefore, is whether we should follow the American
law, or leave the law as settled by the Privy Council unaltered. Some of the
bankers whom we interviewed were not in favour of adopting the American law. We
have been told that certification is not resorted to very frequently in India
and that in cases where an assurance is needed that funds of the drawer are
available with the Bank, the practice followed, as in Australia, is for the Bank
to issue its own cheques. In the circumstances, we think no alteration of the
law is required.
1. Bank of Baroda Ltd. v. Punjab National Bank Ltd., AIR 144
PC 58.
19. Cheques marked "Account payee."—The second question is—to what
extent we should accord legislative recognition to the practice of marking
cheques "account payee". It has been found by experience that a cheque with
general or special crossing does not afford sufficient protection to the true
owner. It was at one time supposed in England that the addition of words "not
negotiable" in the crossing would enlarge the protection. But the Courts have
belied this expectation by holding that a cheque crossed 'not negotiable' is
still transferable.1 In the meanwhile, businessmen were evolving for
their own security a method of crossing cheques "account payee". The object of
such crossing is to make it obligatory on the collecting bank to credit the
amount received from the paying bank to the payee's account with the former. But
a decision of the Court of Appeal,2 again, introduced a complication.
It was held that notwithstanding such crossing the cheques remained negotiable
as the words "account payee" did not prohibit transfer under section 8 of the
Bills of Exchange Act. But if a cheque crossed "account payee" still remains
negotiable, it unnecessarily enhances the duty of inquiry on the part of the
collecting bank3 without a corresponding gain in security to the
parties, for, the law or practice relating to the "account payee" cheque has not
yet been settled. The acceptance of the suggestion that the custom of crossing
cheques "account payee" should be recognised will not result in any substantial
advantage unless such cheques are made not negotiable by the law. In that case,
the payee only would be entitled to deliver the cheque for collection. Even if
his signature is forged by somebody, the collecting bank will credit the amount
in the payee's account and the forger would derive no benefit. The risk of the
banks would also be minimised, and none but a bank having an account in the name
of the payee would then accept such a cheque for collection. We have, therefore,
provided4 that if a cheque is marked "account payee" it shall cease
to be negotiable and that it shall be the duty of the banker collecting the
amount under the cheque to credit it only in the account of the payee named in
the cheque.
1. Fisher v. Roberts, (1890) 116 TLR 354 CA.
2. National Bank v. Skills, (1891) 1 QB 435.
3. Chalmers Bills of Exchanges, 12th Edn., p. 254; Byles Bills of
Exchange, 21st Edn., pp. 43, 47.
4. Section 144 of App I.
We have added a provision for the protection of a banker who bona fide
collects the payment of a cheque in which the crossing "account payee" has been
obliterated or altered.
20. Having dealt with the main suggestions, we now proceed to
explain the broad features of the revision proposed by us.
21. Scheme adopted for revision and major changes proposed.—The
Act as it stands is not exhaustive. Wherever the Act is silent, the principles
of English law have been followed by our courts.1 We have thought it
advisable to adopt more of these principles as codified in the Bills of Exchange
Act instead of leaving the courts to inquire into the uncertain rules of the law
merchant and to apply them to particular cases or to determine whether the
principle embodied in any particular provision of the English Act is applicable
to such cases.
1. Muthur Sahib v. Kabir Sahib, (1905) 28 Mad 544; Veerappa
v. Vellayan, 1919 MWN 780; Royal Bank of Scotland v. Rahim (1924) 49 Bom
270.
A comparative study of the English Bills of Exchange Act and the American
Uniform Negotiable Instruments Law as well as the suggestions received from
commercial bodies have also induced us to propose other changes in our Act.
22. The existing scheme of arrangement of the Act is
confusing1 and illogical. A scrutiny of the provisions of the Act
will reveal that some of them are applicable to all the three
instruments—promissory notes, bills of exchange and cheques, while some are
peculiar to bills of exchange, some to promissory notes and some to cheques.
This suggests that the sections which are of a general nature and applicable to
all the three instruments should be grouped in one part, while the provisions
peculiar to each of these instruments should be placed in separate parts.
Following this natural division, we have arranged the sections of the Act in
four parts: Part I containing general provisions; Part II relating to bills of
exchange; Part III to promissory notes; and Part IV to cheques.
1. Benares Bank Ltd v. Hormusji, (1930) 52 All 696
(697).
23. Conflict of laws.—While we shall explain our detailed
proposals in the course of our examination of the existing provisions of the
Act, we consider it proper to accord a special treatment to one major topic
which has been largely modified and recast by us, namely, the provisions
relating to Conflict of Laws.
24. The first thing that strikes one on this subject is the lack
of uniformity in the principles embodied in the English and the Indian
enactments and also as between such principles and those followed in other
countries. This want of uniformity is regrettable, particularly in view of the
fact that negotiable instruments have become the usual medium of the ever
expanding international trade and commerce. An attempt to evolve uniform rules
in this behalf was indeed made at the Geneva Convention of 1930. The nations who
were parties to that Convention agreed:—
(a) to adopt a uniform law for bills of exchange and
promissory notes;
(b) to settle questions of private international law arising
in connection with bills and notes; and
(c) to unify the rules concerning stamp
duties.1
The Conventions agreed upon2 were adopted by
Austria, Belgium, Denmark, Dunkirk, Finland, France, Germany, Greece, Italy,
Japan, Monaco, Netherlands, Norway, Portugal, Sweden and Switzerland. They were
not, however, adopted by England (except on one matter), the United States and
the Commonwealth countries.
1. Vide Cheshire Private International Law, 4th Edn., p.
247.
2. League of Nations Doc C 346 (1), M 142 (1), 1930
(II).
As India has not adopted them we are free to incorporate such rules as
are widely acknowledged and are consonant with the general principles of Private
International Law, justice and equity.
25. The primary reason for disturbing the existing provisions as
contained in sections 134-137 of our Act is that they do not deal with all the
questions which ordinarily arise in this branch of the law. The English Act is
no better guide on this subject because it deals with the entire subject in one
section (section 72) which is no more exhaustive than the provisions of our Act.
Moreover, the English section has been severely criticised as "ambiguous" and
"unintelligible".1
1. Cheshire Private International Law, 4th Edn., p.
253-254.
26. The principal questions which require to be solved in
connection with international dealings in negotiable instruments are—the
capacity of parties, the formal and essential validity of the contract, the
liability of the parties including the formalities regulating presentment for
acceptance, presentment for payment, notice of dishonour for non-acceptance and
non-payment, noting and protest. Our Act does not provide for the first two at
all. We shall now examine the principles relevant to each of these questions.
27. For determining the capacity of the parties the choice is
between lex domicilii (law of domicile) and lex loci contractus
(law of the place where the contract took place).
In England, the current opinion is that so far as mercantile contracts
are concerned, there is a presumption that the parties submitted to the law of
the place of contract and that governs the matter unless the presumption is
rebutted.1 This view has been accepted by the Madras High
Court.2
1. Schmitthoff Conflict of Laws, 3rd Edn., p. 117-118; Dicey
Conflict of Laws, 6th Edn., p. 621.
2. T.N.S., Firm v. Md. Husain, AIR 1933 Mad 756.
As pointed out by Cheshire,1 under modern conditions of trade,
the domicile of the parties cannot be allowed to govern the question of
capacity, for, in that case, a foreigner, contracting in another country, would
be allowed to escape liability on the ground, for instance, that according to
the law of his own country, which may not be known to the other party, a person
does not attain majority even at the age of 21. It can hardly be overlooked that
the Geneva Convention (on Conflict of Laws) which starts with the general rule
based on lex domicilii has to make an exception on the basis of lex
loci contractus. Thus, while the first clause of Article 2 of the Convention
says that the capacity of a person to bind himself should be determined by his
national law, the second clause of that. Article provides that "a person who
lacks capacity according to law specified in the preceding rule shall
nevertheless be bound if his signature had been given in any territory in which
according to law in force there, he would have the requisite capacity." We would
prefer to adopt the lex loci contractus instead of any such compromise
formula which would introduce unnecessary complications.
1. Private International Law, 4th Edn., p. 213.
28. But though we elect in favour of the lex loci
contractus, we would not prevent the parties from having their own choice in
the matter of the law which would govern their contract, by an express
stipulation in the instrument itself.
We have, accordingly, proposed the simple rule that in the absence of any
contract to the contrary, the capacity of the parties to an instrument shall be
determined by the law of the country where the contract constituted by the
negotiable instrument was made.
29. But this rule, without more, would be incomplete, for, a
negotiable instrument involves a composite contract. It consists not only of the
original contract between the parties to the instrument but also of "supervening
contracts" (to adopt the expression used by the Bills of Exchange Act) made by
the acceptor or indorser. Each of these contracts may be entered into at
different places and the validity of each must naturally be determined according
to the place where such contract was made.1 We have made this clear
in our proposal.2
1. Cf. Palaniappa Chetty v. Peria Karuppanchetty, 17 Mad
262.
2. Section 108(a) of App I.
30. In formulating the foregoing rule, we have followed the
provision in subsection (1) of section 72 of the English Act, but as that
sub-section shows, the rule should be made subject to two exceptions:
(a) The first exception is in respect of the requirement of
stamp. The rule recognised by English private international law in this behalf
was that if under the law of the place where the contract is made an instrument
is void for want of proper stamp, it should not be recognised as valid in any
other country.1 If, however, the want of requisite stamp makes the
instrument only inadmissible in evidence under the law of the place of contract
its validity is not affected as it is only a rule of evidence.2 The
Bills of Exchange Act has done away with this distinction and laid down that a
bill issued outside the United Kingdom is not invalid by reason only that it is
not stamped in accordance with the law of the place of issue. Its admissibility
or enforceability in the U.K. will depend upon the requirements of English law
in that behalf.
1. Alves v. Hodgson, (1797) 7 TR 275.
2. Bristow v. Sequeville, (1850) 5 Ex 275.
In India, the Act is silent and the old rule was applied in
Venkatarami v. Seetharama, ILR (19300) 53 Masd 968, and
Manattil Ali v. Vazhapulli Varial, (1914) 1 MLJ 35 n. Under our
stamp law a document is not void but becomes inadmissible in evidence even in
cases where the defect of stamp is not curable under section 35 of the Stamp
Act. A foreign instrument, when brought into India, has to be stamped according
to our law (vide section 19 of the Stamp Act). Hence, there is no justification
for invoking the technicality of a foreign law relating to stamp revenue to
invalidate the instrument in India and the liberal rule introduced by the
English Act should be adopted by us. It may be noticed that a similar view was
expressed by Whitley Stokes.1
1. Anglo-Indian Code, vol. 1, p. 664.
(b) The other exception recognised by the Proviso (b) to section 72(1) of
the English Act, is already embodied in section 136 of our Act. It may be
mentioned that paragraph 2 of Article 3 of the Geneva Convention is also to the
same effect. Hence, we do not think it necessary to disturb the existing
provision.
31. Regarding the liability of the parties, section 134 of our Act
makes a distinction between the maker or drawer of a foreign instrument on the
one hand, and the acceptor or indorser, on the other. The liability, in the case
of the maker or drawer, is determined by the law of the place where the
instrument is made but in the case of an acceptor or indorser it is determined
by the law of the place where the instrument is made payable. But the liability
of the maker of the note should, according to the true principles of
international law, be governed by the law of the place where it is payable (lex
loci solutionis). In the case of a drawer the place of drawing is, of course,
usually the place of payment. The acceptor being the principal debtor, his
liability is also determined by the place of payment in accordance with the
contract of acceptance. The liability of the indorsers should naturally follow
the liability of the principal debtor.
We have, accordingly, suggested a clear provision that the liability of
all parties to the instrument shall be governed by the law of the place where
such instrument is payable.
32. It follows that the conditions governing liability, such as
what constitutes dishonour and what notice of dishonour is sufficient, the due
date,1 or the duties of the holder with respect to presentment for
acceptance or payment must be governed by the law of the place where the money
is payable. This principle is, in substance recognised by section 135 of our
Act, though not fully developed. The corresponding provision in sub-section (3)
of section 72 of the English Act is ambiguous and has been rightly criticised as
verging "perilously on the unintelligible".2
1. Rouquette v. Overmann & Sohan, (1874-75) 10 QB 525;
Section 72(5), B.E. Act; Article of the Geneva Convention.
2. Cheshire Private International Law, 4th Edn., p. 253
We have suggested simpler provisions.
33. All questions relating to payment and satisfaction including
interest should, logically, be governed by the law of the place where the
instrument is payable.1
1. Foote Private International Law, 5the Edn., pp. 460-1,
quoted in Cheshire, 4th Edn., pp. 253-4.
As section 72(4) of the Bills of Exchange Act provides, the rate of
exchange at which payment is to be made, being an incident of payment, should
also be governed by the place of payment, if the instrument is expressed in a
foreign currency. Representations having been made before us that in the absence
of a provision in our Act in this behalf considerable inconvenience is
experienced, we have proposed a clear provision regarding this matter.
34. Examination of the provisions of the Act, indicating the changes
proposed.—Having dealt with the broader questions, we now proceed to examine
the provisions of the Act seriatim, pointing out the problems which have arisen
and indicating, broadly, our proposals for their solution.
35. Section 1.—The Act has already been extended to the State of
Jammu and Kashmir by the Jammu and Kashmir (Extension of Laws) Act, 1956 (62 of
1956), and the words "except the State of Jammu and Kashmir" in section 1 and
the definition of "India" in section 3 have been omitted by that Act.
We have substituted the Saving Clause in section 1 by two new sections:
one of them1 refers to the provision in section 31 of the Reserve
Bank of India Act, 1934, which has taken the place of section 21 of the Indian
Paper Currency Act, 1871. The other section2 seeks to replace the
existing provision regarding instruments in oriental languages.
1. Section 2 of App I.
2. Section 3 of App I.
In pursuance of our views as explained in paragraphs 9 and 16, ante, we
have made it clear that—
(a) The scope of the Act is restricted to 'negotiable
instruments' as defined in the Act, that is, promissory notes, bills of exchange
and cheques. It would follow that no provision in the Act would extend to or
affect any usage relating to any instrument other than these three.
(b) If, however, an instrument conforms to the definition of a
negotiable instrument, it shall be governed exclusively by the provisions of
this Act, whatever the language in which it is written. In other words, if an
instrument is a 'negotiable instrument' within the meaning of this Act, no usage
relating to such instrument shall be permitted to defeat or modify the
provisions of the Act. In any case, language will no longer be a test for
determining whether the provisions of the Act are applicable to an instrument or
not.
36. Section 3 — "India".—As pointed out above,1 the
definition of "India" has already been omitted by the Legislature.
1. Para. 35, ante.
37. "Banker".--The definition of "banker" has been recently
substituted by the Negotiable Instruments (Amendment) Act, 1955 (37 of 1955);
but the definition still remains unsatisfactory inasmuch as it does not explain
what constitutes the business of banking so as to make a person engaged in such
business a "banker". We have removed this defect by adopting the definition of
'banking' given in section 5(1)(b) of the Banking Companies Act, 1949 (10 of
1949), which follows the definition given in Hart on Banking1 and has
so far been accepted as comprehensive.
1. 4th Edn., Vol. I, pp. 1-2.
38. "Notary public".—The definition of "notary public" has been
omitted by section 6 of the Notaries Act, 1952. That Act has taken away the
power to appoint 'notaries public' under the Negotiable Instruments Act and has,
instead, provided for the appointment of 'notaries', who shall exercise, inter
alia, the functions of a notary under the Negotiable Instruments Act. But the
omission of the definition from the Negotiable Instruments Act, is not happy
inasmuch as the words "notary public" are still used in Chapter IX of the
Negotiable Instruments Act. Some explanation of that expression, accordingly,
seems necessary. We have, therefore,
(a) inserted a definition of 'notary', referring to the
Notaries Act, 1952; and
(b) substituted the word 'notary' for the words 'notary
public' wherever they occur in this Act.
39. Besides modifying the
existing definitions, we have added a number of new definitions which, we
believe, would be conducive to a better understanding of the Act. Thus,—
(a) "Accommodation party".—Section 59 of the Act refers
to an "accommodation note or bill" but the term "accommodation party" is not
defined in the Act. This omission has been supplied by adding a definition in
the light of section 28(1) of the Bills of Exchange Act.
(b) "Bearer".—We have added a definition of "bearer",
for reasons which will be explained while dealing with the definition of
"holder".
(c) "Bill", "Note", "Instrument".—For the sake of
economy of words, we have, following the American law, added the definitions of
"bill", "note" and "instrument", defining them as bill of exchange, promissory
note and negotiable instrument, respectively.
(d) "Delivery".—In order to avoid a repetition of the
words "actual or constructive" wherever the word "delivery" is used in the Act,
we have introduced a definition of "delivery", following the definition given in
section 2 of the Bills of Exchange Act.
(e) "Issue".—We have considered it necessary to include
a definition of "issue", for, the word which is used in several provisions of
the Act has a technical meaning. It is restricted to the first delivery of an
instrument to a holder after the instrument is drawn up and completed. If a
promissory note, bill, or cheque is executed but kept without delivery, it does
not become effective. It is in this sense that the word 'issue' is defined in
section 2 of the Bills of Exchange Act, 1882, and we have adopted that
definition.
(f) "Maker".—The words "maker" and "drawer" are
indifferently used in the Act. While the maker of a bill of exchange or cheque
is defined as a "drawer" in section 7, there is no separate definition of the
word "maker" to denote the maker of a promissory note. On the contrary, in
sections 5 and 7 and the Explanation to section 44, the word 'maker' is used in
a general sense, referring to instruments other than promissory notes as well.
In section 51, on the other hand, both the terms 'maker' and 'drawer' are used
in juxtaposition to each other. This has naturally led to a confusion and two
decisions1-2 of the Lahore High Court have taken contradictory views
as to whether the word 'drawer' includes the maker of a promissory note. To
remove this uncertainty, we have inserted a definition of "maker" so as to
confine it to the executant of a promissory note, leaving it to the word
"drawer" to refer to the executant of a bill of exchange or cheque.
Consequential changes have also been made in the various provisions of the Act
to make this clear.
1. Shiv Nath v. Bishambar, AIR 1935 Lah 153.
2. Sheikh Muhammad v. Abdul, AIR 1937 Lah 259.
(g) "Material alteration."—Though sections 87-89 deal
with the effects of material alteration, there is no provision in the Act to
explain what constitutes a 'material alteration'. In general, courts in India
have followed the English common law and held that anything which has the effect
of altering the legal relationship between the parties1 or the
character of the instrument or the sum payable amounts to a material alteration.
Since it is difficult to exhaust all the circumstances which might possibly
constitute a material alteration we prefer to adopt the provision in section
64(2) of the Bills of Exchange Act, which is illustrative and not
exhaustive.
1. Subramania v. Porathana, AIR 1942 Mad 709.
(h) "Representative".—By adding a definition of the
word "representative" we have sought to effect an economy of words in several
sections, e.g., 75, 94.
40. Besides adding the foregoing new
definitions„we have transferred to the Definition Clause a number of other
definitions which are, at present, interspersed amongst the substantive
provisions of the Act, such as "Promissory Note", "Bill of Exchange", "Cheque"
and the like, with modifications which will be explained in their proper places.
41. Section 4.—As would appear from the second paragraph of
section 5 and section 21, a promissory note may be payable either 'on demand' or
'at a fixed or determinable future time'. But though the law in .India is not
different from that in England, this is not quite clear from the existing
definition of "promissory note". We have, accordingly, added these words to the
definition of "promissory note", and also added a separate
provision,1 on the lines of section 11 of the English Act, to explain
what is meant by "at a determinable future time".
1. Section 17 of App I.
42. Section 5, para 1.—The words "on demand or at a fixed or
determinable future time" have similarly been added to the definition of "bill
of exchange" contained in the first paragraph of section 5, for, the existing
provision is silent as to the time of payment of a bill of exchange though a
cheque is defined as a bill of exchange "not expressed to be payable otherwise
than on demand." The English and American provisions do not leave it to
inference and we prefer to follow these precedents.
Some of the Chambers of Commerce suggested that sub-section (4) of
section 3 of the Bills of Exchange Act should be adopted and a provision should
be made that an instrument, which is not dated or in which the value or the
place where it is drawn or payable are not mentioned, should be valid. We do not
consider it useful to give effect to this suggestion, having regard to the
conditions prevalent in India. The date is important in several respects and
there is a presumption under section 118 in favour of execution on the date
given in an instrument. Apart from this it can hardly be overlooked that,
notwithstanding section 3(4)(a) of the Bills of Exchange Act, in
practice1 no undated cheque is paid by a banker in England and such
practice has recently been judicially noticed.2 It would not be
advisable therefore, to incorporate an express provision to the effect that
dating is not necessary to give validity to the instrument.
1. Byles on Bills of Exchange, 21st Edn., p. 13.
2. Griffiths v. Dalton, (1940) 2 KBN 264.
On the other hand, there is no need to include similar statements
relating to the payment of consideration or the place of execution or that for
payment, for, the definitions in our Act relating to the several instruments do
not require these matters to be in stated in any of the instruments. On the
contrary, so far as consideration is concerned there is, in section 118(a), a
presumption in favour of its payment as regards every negotiable instrument.
43. Paras 2-4.—Paragraphs 2 to 4 of section 5 deal with certain
general conditions, such as 'certainty', which are applicable to all negotiable
instruments. Hence, they should logically come under Chapter II, as proposed by
us.1
1. Section 13 of App I.
We have elaborated the provision relating to an unconditional order or
promise to pay, by incorporating the provision contained in section 3(3) of the
Bills of Exchange Act, which is not inconsistent with the principle embodied in
paragraph 2 of section 5 of our Act.
As regards paragraph 3 of the section dealing with certainty of the sum
payable, we have elaborated it by adopting the provision in section 9(1)(c) of
the English Act relating to stipulation for payment by instalment with a default
clause. We have also substituted the ambiguous words 'according to the course of
exchange' by the words 'current rate of exchange.'
At the end of the clause relating to 'certain person', we have added the
condition of 'reasonable certainty' which occurs in section 7(1) of the Bills of
Exchange Act and has also been applied in India.1
1. Venkatarami v. Maharaja, 53 Mad 968.
We have also stated, in this context, what would be the effect where the
payee is fictitious or non-existent, by adopting the provisions of section 7(3)
of the English Act, which is founded on good reason.-1
1. Cf. Chalmers Bills of Exchange, 12th Edn., p. 25.
44. Sections 6-7 - "Cheque", "drawer", "drawee", "acceptor",
"payee".—We have shifted the definitions of "cheque", "drawer", "drawee' and
"drawee in case of need", "acceptor", "acceptor for honour", and "payee", to the
Definition Clause proposed by us, without any change in principle.
In the definition of "payee", we have added the word 'undertaken' since
that would be more appropriate when the instrument is a promissory note.
45. Section 8 -- "Holder".—While similarly transferring the
definition of "holder", we have made substantial changes, which require a fuller
explanation.
It may, however, be observed at the outset that the changes introduced do
not seek to alter the law but to obviate the conflict of judicial opinions and
the criticism of commentators which the existing definition has given rise to.
The expression "persons entitled in his own name to the possession of the
instrument and to receive and recover the amount" is ambiguous. If the
expression be literally construed, a bearer would be excluded from the
definition as his name does not appear on the instrument. But if all that is
meant by the expression is that he should be entitled to possession in his own
name and to sue upon it though his name does not appear on it, a bearer may then
be within the definition.1 As pointed out by a Full Bench of the
Madras High Court2 the expression "in his own name" was introduced
only for the purpose of ruling out the plea that the holder of an instrument was
a benamidar for some other person. That the beneficial owner cannot claim to be
a holder may now be taken as the prevailing view.3 We have adopted
this view in order to put a stop to all controversy on the point, and have
expressly excluded the beneficial owner from the definition of "holder".
1. Ramanadan Chettiar v. Gundu Ayyar, AIR 1928 Mad 1238
(1243).
2. Sinna Narayana v. Ramaswami, (1907) 30 Mad 88 (FB).
3. Harkishore v. Gure Mia, (1930) 58 Cal 752; Virappa v. Mahadebappa, AIR
1934 Bom 356; Bacha Prasad v. Janki, AIR 1957 Pat 380 (FB).
46. The principal source of difficulties is the use of the word
"entitled". This word is of a very wide implication.
A person may be entitled to an instrument either as a payee or indorsee,
or, as a bearer if the instrument is one payable to bearer. He may be entitled
to it also by other modes of transfer of the interest in the instrument, such as
assignment as an actionable claim, in accordance with sections 130 and 132 of
the Transfer of Property Act or legal devolution. It may not be in accordance
with the scheme of the Act to recognise persons other than a payee, indorsee or
a bearer as holders, even though they may be entitled to the possession of the
instrument and to recover the debt due under the instrument. A person may become
owner of the debt and sue for its recovery if there is an assignment of the debt
or if there is legal devolution, but that does not make him a "holder" within
the meaning of the Act. Of course, a single Judge of the Madras High
Court1 and a Bench of the 'Calcutta High Court2 have held
that an assignee is a holder within the meaning of section 8, but the contrary
view, which has been consistently maintained by the Allahabad High
Court,3 appears to be preferable. In these cases,3 the
Allahabad High Court has made it clear that a transferee by legal devolution is
entitled to recover the amount due on the instrument not because he is the
'holder' but because he, as the owner of the debt, is entitled to give a valid
discharge even apart from the provisions of section 78 of the Negotiable
Instruments Act.
1. Seshanchalam Naid v. Venkatachalam Chetty, (1954) 2 MLJ
471.
2. Surathcnadra v. Narayan Chandra, (1934) 61 Cal 425.
3. Parsotam v. Bankey lal, AIR 1935 All 1041; Jang Bahadur v. Chandra,
AIR 1939 All 279; Ramkishore v. Ramprasad, AIR 1952 All 245 (FB).
The right of negotiation is conferred by the Act only upon a maker,
drawer, payee or indorsee (vide section 51) and in the case of a bearer
instrument, upon the bearer. In the case of an instrument payable to order,
section 48 lays down that it is negotiable by a 'holder' by indorsement and
delivery thereof. The "holder" in this context does not mean an assignee or a
person who has acquired rights under the instrument by legal devolution. An
assignee, not being an indorsee cannot claim any rights under the Act against
prior parties and his rights are governed by the provisions of the Transfer of
Property Act which lay down that the transferee takes the rights under the
assignment subject to the equities to which the transferor was subject at the
time of the transfer. In this connection, it must be remembered that the
Transfer of Property Act expressly saves the mode of transfer by negotiation
though it does not prevent the assignment of rights under a negotiable
instrument qua an actionable claim.
We, therefore, think that the position should be made clear, by omitting
from the definition of 'holder' the words "entitled in his own name to the
possession thereof" and expressly enumerating the persons who are entitled to be
a holder, as in section 2 of the Bills of Exchange Act, viz., "the payee or
indorsee of an instrument who is in possession the instrument or the bearer
thereof."
47. The English Act, however, defines 'bearer' as meaning "a
person in possession of a bill or note which is payable to bearer". In the case
of instruments payable to order, it is clear that a person cannot be a holder
unless he is the payee or the indorsee thereof and the indorsement is on the
instrument itself; a person whose name does not appear on the instrument as
indorsee cannot claim his rights thereunder. But in the case of a bearer
instrument, since negotiation is only by delivery and no indorsement is
required, possession alone is material. The English definition of "bearer" does
not require that possession should be a lawful possession. The possession of a
finder or a thief may, therefore, be a good possession to make him a bearer and,
therefore, a holder. Under the existing provisions of our Act, such persons are
excluded because of the word "entitled" in the definition of "holder". Section
58 of the Act makes it clear that such a person is not entitled to receive the
amount due thereon from the maker, acceptor, or holder or from any party prior
to the holder. He is, therefore, not entitled to sue and recover the money but,
as it very often happens, a third party dealing with such a person may presume
the latter's possession to be lawful, acquire rights under the instrument from
him for consideration and thus become a "holder in due course". The rights of a
third party who thus becomes a holder are protected by section 48. But suppose a
person makes a payment to a finder or a thief, believing him to be the lawful
holder of the instrument. Such a payment is also protected, because under
section 82(c), if an instrument is payable to bearer or has been indorsed in
blank, the maker, acceptor or indorser who makes a payment in due course of the
amount due thereof gets, a complete discharge. These provisions, thus, amply
protect under our law a third party dealing with a person in possession of a
bearer instrument but do not give that person a right to recover the amount due
under it in his own right by suing upon the instrument unless his possession is
lawful.
48. As stated above, the English law is different. But there is no
justification, in our opinion, to clothe any person in mere possession with a
right to sue and enable him to recover the amount. We, therefore, propose to
adopt an altered definition of "bearer" as meaning a person who comes into
possession of an instrument payable to bearer by negotiation, that is, by
delivery from the lawful holder. Finders, thieves, and such other persons as are
enumerated in section 58 will thus be excluded as they cannot be "holders" under
our Act. The implications of the word "entitled" in the existing definition of
"holder" will thus be fully covered by the changes proposed by us.
49. We have omitted the words "and to receive or recover the
amount due thereon from the parties thereto" as the rights of a "holder" have
been specified in a separate section proposed by us.1
1. See Section 47 of App I.
50. The language of the second paragraph of section 8 is also
unsatisfactory. It has been criticised by Chalmers1 thus—
1. Negotiable Instruments in British India, 2nd Edn., p.
46.
"it is a strain upon language to describe the original owner
of a lost instrument as the holder of it. Suppose a cheque payable to bearer is
lost, and the person who finds it negotiates it to some other person who takes
it in good faith and for value. The latter becomes the holder in due course of
the instrument. There are then two holders of the same cheque in this case,
according to the Act."
As Bhashyam and Adiga1 suggest, this
absurdity may be avoided if we construe the word 'lost' as "lost to the world"
and "not found again". We have made a verbal change to this effect and also made
it clear that the holder before such loss or destruction "shall be deemed to
continue to be its holder."
1. Negotiable Instruments Act, 10th End., p. 72.
51.Section 9 – "Holder in due course".—In the definition of
"holder in due course", we have substituted the word "become overdue" for the
words "became payable", as the latter cannot aptly be applied to the case of
instruments payable on demand. It is well-established that in the case of an
instrument payable on demands, limitation for an action on the instrument
starts, immediately after its execution. If that rule were to be applied to
section 9, it would exclude the possibility of a person ever becoming a holder
in due course in the case of instruments payable on demand, for they become due
immediately after execution.1 To overcome this difficulty, we have
considered it advisable to adopt the language of the English Act and the
American Uniform Negotiable Instruments Law, viz., "became overdue". Further, we
have added a section [on the lines of section 36(3) of the English Act] laying
down the test to be applied in determining when an instrument payable on demand
becomes overdue.2
1. Ram Sarup v. Hardeo, 50 All 309 (312); Dungarmull v.
Sambhu, AIR 1951 Cal 55.
2. Section 15, App I.
52. For reasons to be explained hereinafter, we have added an
Explanation to the definition of "holder in due course" to clarify what is meant
by the words "defect in title" in the definition.
53. Section 10 – "Payment in due course".—It was suggested by the
Indian Banks Association that the words "without negligence" should be omitted
from the definition of "payment in due course". But we are unable to accept this
suggestion since we agree with the principle enunciated in Sahu Lalta
Prasad v. Campbell, (1905) 9 CWN 841 that there should exist an
obligation to act without negligence, while making payment of a negotiable
instrument.
54. Sections 11-12 – "Inland" and "Foreign" instruments.—Since the
existing definition of a "foreign instrument" in section 12 explains it with
reference to the definition of "inland instrument" in section 11, we have
combined the two sections for a better understanding of the two terms.
55. Section 13 – "Negotiable instruments".—The alterations
recommended in section 13 relating to "negotiable instrument", are merely
formal: sub-section (1) has been taken out to form a definition of "negotiable
instrument", referring to the three kinds of instruments,—bills, notes and
cheques. The first two Explanations to sub-section (1) have, similarly, been
taken out to make two separate definitions of "Instruments payable to bearer"
and "payable to order".
The third Explanation to sub-section (1), and sub-section (2) have been
included in two separate sections.1
1. Sections 18 and 25 of App I.
56. Section 14 - "Negotiation".—The definition of "negotiation"
has been shifted to the Definition Clause, with only verbal changes.
57. Section 15 - "Indorsement".—The definition of "indorsement"
has similarly been transferred to the Definition Clause, with verbal changes.
The definition of "indorsee" is at present included in section 16(1) and refers
exclusively to the indorsee of an 'indorsement in full' (otherwise known as
special indorsement). In fact, however, the word 'indorsee' is used to denote
"not only the person to whom a bill is specially indorsed, but also the bearer
of a bill indorsed in blank— that is, any person, who makes title to a bill
through an indorsement".1 It is in this wider sense, that the word
'indorsee' is used even in several other sections of our Act, e.g., section 87.
We have, accordingly, made the definition of indorsee a part of the definition
of indorsement in general.
1. Chalmers, 12th Edn., p. 9; Halsbury's, 3rd Edn., Vol. 9,
p. 146.
58. Section 16.—That portion of sub-section (1) of section 16
which deals with indorsement "in blank" and "in full" has been shifted to the
Chapter on Negotiation1 because it describes different kinds of
indorsement. The wording has also been changed in the light of section 34(1)(2)
of the English Act.
1. See section 34 of App I.
As stated before, the remaining portion of sub-section (1) has been
tacked on to the definition of indorsement.
Sub-section (2) has been made an independent section1 in the
Chapter on Negotiation.
1. See section 35, App I.
59. Section 17.—No change is proposed in section 17.
60. Section 18.—To section 18, we have added a Proviso, in the
light of section 17(1) of the American Uniform Negotiable Instruments Law, to
make it clear that if the words are ambiguous and uncertain, reference may be
had to figures to fix the amount.
61. We have added two new sections relating to signatures.
One of them provides that a person may sign in a trade or assumed name
and become liable on such instrument. In the absence of a specific provision
corresponding to section 23(1) of the Bills of Exchange Act, our Courts had to
rely on general principles to come to a similar conclusion.1 We have
thought it better to engraft a specific provision2 as in the English
Act.
1. Zujya v. Manmohan, AIR 1940 Bom 164.
2. See section 26 of App I.
The other section1 deals with the effects of a forged or
unauthorised signature. Though we have no provision corresponding to section 24
of the English Act, our Courts have held2 that forgery conveys no
title. Several Chambers have suggested that we should have a specific provision
in this behalf instead of leaving it to case law. We have, accordingly, adopted
the provisions of section 24 of the Bills of Exchange Act.
1. See section 27 of App I.
2. See Venkateshwarlu v. Hymavatamma, AIR 1944 Mad 471.
62. Section 19.—We have replaced section 19 and the first part of
section 21 by a comprehensive provision,1 in the light of section 10
of the Bills of Exchange Act, including the various circumstances in which an
instrument is payable on demand.
1. See section 14, App I.
63. We have also engrafted a new provision1 following
section 36(3) of the English Act, to explain when an instrument payable on
demand shall be deemed to be overdue, for reasons already explained.
1. See Section 5, App I.
64. As stated before, we have added another new
provision1 to explain what is meant by "payable at a determinable
future time".
1. See section 17, App I.
65. There is no provision in our Act relating to ante-dating and
post-dating as in section 13(2) of the English Act. But notwithstanding the
absence of such a provision, the Privy Council, in the Bank of Baroda
case,1 held that post-dated cheques are not invalid. The
practice of ante-dating and post-dating cheques seems to be prevalent in this
country, as in other countries, though there is no statutory recognition of such
practice in India. One of the Chambers of Commerce has suggested that we should
make a provision treating such instruments as valid. We have thought it
necessary to give statutory recognition to the practice by inserting a
section2 on the lines of section 13(2) of the Bills of Exchange Act.
But even in England, ante-dating may amount to forgery where the object is to
defraud a third party.3 We have, accordingly, improved upon the
English provision by adding that an ante-dated or post-dated instrument will not
be valid where it is done for an illegal or fraudulent purpose.
1. Bank of Baroda Ltd. v. Punjab National Bank Ltd., AIR
1944 PC 58.
66. Section 20.—Substantial changes had to be made in section 20
relating to inchoate instruments:
(a) The section has been split up into several sub-sections
for convenience of reference.
(b) In a recent Bombay case1 it was pointed out
that the word 'holder' in this section was creating some difficulty inasmuch as,
in this context, the word only means the person who receives the paper and not a
"holder" as defined in the Act. We have made this clear by verbal
changes.
1. Tarachand v. Sikri Bros,. AIR 1953 Bom 920.
(c) Both in the Bills of Exchange Act (section 20) and the
uniform Negotiable Instruments Law (section 14) certain additional conditions
are mentioned for inferring an authority to complete such instruments. These
should be inserted in our Act in order to clarify the position. These are-
(i) That the delivery of the inchoate instrument must be made
"in order that it may be converted into a negotiable instrument". (In the
absence of such words, a person to whom an inchoate instrument is delivered for
some other purpose, e.g., safe custody, may be in a position to utilise the
section to his advantage.)
(ii) That it must be filled up "within a reasonable time and
strictly in accordance with the authority given", but that in case of
negotiation to a holder in due course after completion of the instrument, no
such objection should lie against the holder in due course.
We have inserted
these conditions into the section.1
1. See section 20, App 1.
67. There is another material difference between the provision in
section 20 of our Act and the corresponding provision in section 20 of the Bills
of Exchange Act. The first paragraph of sub-section (1) of section 20 of the
English Act is confined to the completion of an instrument where there was a
blank paper delivered by the signer so that it might be converted into a bill.
The delivery of such a paper under the circumstances is treated as a prima
facie authority to fill it up as a complete bill for any amount the stamp
will cover. The provision in section 20 of our Act substantially corresponds to
the said sub-section of the English section.
But the provision in the English Act has a second limb under which, if a
bill is wanting in any material particular, the person in possession of it has a
prima facie authority to fill up the omission. It has been suggested to
us that this part of the English provision should also be incorporated into our
Act, but we are unable to accept that suggestion for the following reasons. Our
Act speaks of the paper being either wholly blank or "having written thereon an
incomplete negotiable instrument", that is, partly blank. The definition of
indorsement in section 15 of our Act refers to signature on a stamped paper
intended to be completed as a negotiable instrument and the person so signing is
treated as an indorser. Both these provisions under the Indian law deal with an
incomplete instrument and not an instrument which is otherwise complete except
for a material particular.
In England, in a case where a bill payable to a drawer's order contained
the signature of a person who intended to become answerable if the acceptor
defaulted in payment and thereafter the drawer indorsed the instrument, the
question arose whether the first indorser would be liable to the second or not.
It was decided by the House of Lords1 that it was an instance of a
material particular not being filled in though the instrument was otherwise
complete, and, therefore, under section 20 of the English Act the drawer had
authority to indorse and as the indorsement by the drawer in point of time was
later to the earlier indorsement, it should prevail. This was followed in
another case.2 A situation in this form may not directly arise in
India under the existing law. The only question under the Act will be whether it
was a wholly blank or partly blank instrument bearing stamp. If the person had
signed intending to be an indorser, he will be an indorser; if he signed
intending to make himself liable in any other capacity, he will be liable in
that capacity.
1. MacDonald & Co. v. Nash & Co., 1924 AC 625.
2. National Sates Corpn. v. Bernard, (1931) 2 KB 188.
Even under the English and the American law, the person who receives the
paper and fills it in is not treated as a holder in due course. It is only a
person who takes an instrument which is regular and complete on its face who can
be a holder in due course.1
1. Chalmers Bill of Exchange, 12th Edn., p. 48.
We do not, therefore, see any reason to alter the law on this point.
68. Section 21 - "At sight" etc.—As stated before,1 the
earlier part of section 21, etc., relating to instruments on demand has been
incorporated into a new section.2 The latter part of the section,
relating to the expression "after sight" has been retained as it is.
1. Vide para. 62, ante.
2. Section 14, App I.
69. Since we have introduced the words "on demand or at a fixed or
determinable future time" in the definitions of bill of exchange, and promissory
note, these words require an explanation. We have, accordingly, added a
section1 on the lines of section 11 of the English Act.
1. Section 17, App I.
70. Section 22. - "Maturity".—We have split up the contents of
section 22, and removed its first part to the Definition Clause, without any
change.
As regards the second part of the section, dealing with days of grace, we
have amalgamated it with the provisions of sections 23, 24 and 25 into a new
section1 to give a comprehensive view of all the rules for
determining when a bill or note not payable on demand falls due.
1. Section 29, App I.
71. Days of grace.—We have received conflicting suggestions
relating to the provision for days of grace.
One view is that no days of grace should be allowed at all and the reason
assigned is that if a person contracts to pay the amount due under an instrument
on demand he could as well have fixed a time limit to suit his convenience. This
view has the support of Chalmers.1 The Geneva Convention of 1930 has
also abolished days of grace.
1. Chalmers Negotiable Instruments Act, Introduction to the
1st Edn., p. 18.
The Bharat Chamber of Commerce, Calcutta, and the Indian Merchants
Chamber, Bombay are, however, against any alteration and are of the view that
days of grace should be retained as merchants have become accustomed to this.
The Bengal National Chamber of Commerce has, on the other hand, suggested that
this provision should be made subject to variation by contract, if any, between
the parties.
We are of the opinion that any alteration of the existing provision would
lead to confusion in dealing between the merchants, and do not, accordingly,
recommend any change relating to days of grace.
72. Sections 23-24.—No change is considered necessary in sections
23-24.
73. Section 25.—In section 25, we have substituted the words
"succeeding business day" for "next preceding business day". Section 10 of the
General Clauses Act (X of 1897) provides that where a law requires something to
be done in any office on or within a certain day on which the office happens to
be closed, the Act may be considered as duly done if it is done on the next day
on which the office is open. Section 25 of the Negotiable Instruments Act which
lays down a contrary rule for commercial transactions, causes inconvenience to
the business people and all the Chambers of Commerce have urged the change we
have proposed. It is to be noted that the Geneva Convention has also adopted the
"succeeding business day" rule.
74. Section 26.—We are of the opinion that not much purpose is
being served by the first paragraph of section 26.
Where there is no codified law relating to contract it may be necessary
in an Act relating to negotiable instruments to enumerate the general principles
of the law of contract which are applicable to negotiable instruments. The Bills
of Exchange Act, therefore, enacted provisions dealing with capacity and
authority of parties, consideration and other matters which are governed by the
law of contract. Similar provisions were reproduced in our Negotiable
Instruments Act, even though we had our law of contract codified prior to that
Act. In our opinion, it is necessary to include in our Act provisions relating
to matters such as what constitutes good consideration or when consideration is
illegal or capacity of parties and so on. It is, however, necessary to include
in this Act such of the provisions as modify the law under the Contract Act, as
for example, section 39. To make this provision clear we have
proposed1 that the provisions of the Contract Act save in so far as
they are not inconsistent with the provisions of this Act should apply to all
negotiable instruments. Such a provision, though unnecessary,2 is not
uncommon in Indian legislation (vide Transfer of Property Act, section 4 and
Sale of Goods Act, section 3).
1. Section 5 of App I.
2. Cf. Subbanarayana v. Ramaswami, 28 Mad 244.
75. As regards minors, the existing provision puts forth a
proposition which is directly contradictory to the principle laid down in
section 11 of the Contract Act. We think the import of the second .paragraph of
section 26 would be better conveyed if modified, as we have done,1 in
the light of sub-section (2) of section 22 of the Bills of Exchange Act.
1. Section 6 of App I.
76. The third paragraph of section 26 has been taken out to form a
separate section,1 with verbal changes making it clear that a
corporation's power to draw, indorse or accept an instrument is limited to the
extent of its authority recognised by the law for the time being in force
relating to corporations. Thus, section 47 of the Companies Act, 1956,
prescribes the extent and limits of the power of companies registered under that
Act.
1. Section 7 of App I.
77. Section 27.—No change has been proposed in section 27 except,
that instead of the words "as mentioned in section 26" explanatory words have
been substituted to elucidate the meaning of the section that anybody who is
capable of being bound by a transaction relating to a negotiable instrument may
be so bound either by his own act or by the act of his duly authorised agent.
78. We have introduced a new provision relating to partners to
make it clear that the partner's authority extends to bind all the partners of
the firm in the case of an instrument made in the name of the firm. If it is not
made or drawn in the name of the firm, the other partners cannot be made
liable.1
1. Rangaraju v. Devi Chand, AIR 1945 Mad 439.
79. We have introduced a separate Chapter1 on liability
of parties and included all the provisions of the Act relating to liability in
that Chapter. A negotiable instrument is a composite contract. There is the
original contract under which the instrument is made and added to it are the
supervening contracts of the acceptor in the case of a bill and indorsers in the
case of all instruments. The liability of the original parties is different from
that of the subsidiary parties under supervening contracts. The liability of the
different parties arises if and when certain conditions are fulfilled by the
holder. We have first defined the liability of each of the parties and then
stated the conditions under which such liability arises.
1. Ch V of App I.
The manner and method of carrying out the conditions such as presentment
for acceptance in the case of bills, presentment for payment, notice of
dishonour for non-acceptance and non-payment and the circumstances under which
such presentment either for non-acceptance or non-presentment is excused have
been relegated to separate chapters as they are more or less of a procedural
character though quite essential to the accrual of the liability. This is made
clear in an introductory provision.1
1. Section 54. App I.
80. The position of a stranger signing an instrument and his
liability are nowhere stated in the Act. A. presumption is laid down in section
63 of the American Uniform Negotiable Instrument Law that such a person should
be presumed to be an indorser unless a contrary intention is expressed. In our
opinion, this presumption is founded on sound principle and is conducive to the
certainty of the law. We have, accordingly, inserted a new section1
embodying this presumption.
1. Section 54, App I.
81. Section 28.—Section 28 does not specify the manner in which an
agent should indicate that he has signed as an agent so as to exclude his
personal liability. Nor have any definite tests been laid down by our Courts so
far.
In section 26(1) of the English Act it is provided that where a person
signs a bill as drawer, indorser or acceptor, and adds words to his signature,
indicating that he has signed for or on behalf of a principal, or in a
representative character, he is not personally liable thereon; but the mere
addition to his signature of words describing himself as an agent, or as filling
a representative character, does not exempt him from personal liability. It is
to be gathered from the instrument whether the covenant to pay is, in essence,
given by the person executing the document on his own behalf or on behalf of
some other. We have, accordingly, adopted the provision in section 26(1) of the
English Act, with some verbal modifications.1
1. Section 66 of App I.
82 Section 29.—No change is proposed in section 29.
83. There is no section in the Act which defines the liability of
the bearer who negotiates an instrument. In the case of an instrument payable to
bearer, he can negotiate it by mere delivery. He is not an indorser, and
therefore he does not become liable under the instrument by reason of the
negotiation. As section 58 of the English Act says, he is only a transferor by
delivery and is not liable on the instrument as his name does not appear on it.
His only liability is that he warrants by his negotiation that he has the right
to transfer the instrument and that at the time of the transfer he was not aware
of any fact which renders it valueless, and no more. We think it is necessary to
engraft a provision so defining the liability of a bearer who negotiates an
instrument payable to bearer and we have, accordingly, added a
section1 on the lines of section 58 of the English Act.
1. Section 68, App I.
84. Sections 30-32 and 41.—We have taken sections 30-32 and 41
together and replaced them by three provisions1 dealing with the
liability of—(a) drawer and acceptor of a bill, (b) drawer and drawee of a
cheque, and (c) maker of a note, respectively.
1. Section 55, 57 and 58, App I.
We have redrafted sections 30 and 31 in the light of section 55(1)(a) of
the Bills of Exchange Act. Our Act nowhere says that the drawee is not liable
until acceptance though it is assumed in various sections. We have made this
clear in a new sub-section.
In section 32 verbal changes have been. made in the light of section
54(1) of the English Act, relating to the acceptor's liability. The provision in
section 41 of our Act, which also relates to the acceptor's liability, has been
placed in the same section.1
1. Section 56(4), App I.
85. Sections 33-44.—Since the provisions in sections 33-34 relate
only to a bill of exchange, they have been placed in Part II of Appendix I,
without any change.
86. Sections 34 as well as 91 assume the possibility of joint
drawees but there is no specific provision in our Act corresponding to section
6(2) of the Bills of Exchange Act (or section 128 of the Uniform Negotiable
Instruments Law) to indicate the proper mode of addressing a bill to two or more
drawees. Since the principle embodied in the English provision is not
inapplicable in India we have incorporated it in a new section.1
1. Section 111 of App I.
87. Similarly, we have no provision in our Act corresponding to
section 5(1) of the English Act to provide that a bill may be drawn payable to
the drawer or the drawee or to the order of either. Though the words 'certain
person' in section 5 of our Act are wide enough to include the drawer or drawee,
we have made this clear by inserting a new provision.1
1. Section 113, ibid.
88.Section 35.—We have redrafted section 35, relating to the
liability of the indorser1 in the light of section 55(2) of the Bills
of Exchange Act.
1. Section 59, ibid.
89. Section 36.—We have inserted the words "the acceptor and" at
the beginning of section 36, to make it clear that the acceptor is liable even
though his acceptance may take place subsequently to the holder's getting
possession of the instrument.1
1. Section 63, ibid.
90. Sections 37-38.—We have combined sections 37 and 38 into one
section1 since the provisions are complementary in their nature,
dealing with parties who are liable on the instrument as principal debtors or
sureties.
1. Section 60, ibid.
We have also inserted a new section1 to indicate which of the
provisions relating to liability are subject to the provisions of "a contract to
the contrary" instead of repeating those words in each of those sections.
1. Section 61, ibid.
91. Section 39.—No change is recommended in section 39.
The section gives the holder the power to expressly reserve his rights to
charge the other parties when he enters into such a contract with the acceptor
as would have the effect of discharging the surety under section 134 or 135 of
the Contract Act. This variation from the law in section 134 or 135 of the
Contract Act is restricted only to the case of a contract between the holder and
the acceptor of a bill of exchange. It was, however, suggested that this liberty
to reserve the right to charge the other parties and prevent the discharge of
the surety when there is an alteration of the contract between the principal
debtor and the principal creditor should be extended to other cases also, such
as the holder and the maker of a promissory note. Curiously, in a decision of
the Madras High Court1 it was held that section 39, though it is
confined to bills of exchange, has not abrogated the common law principle,
namely, that when a contract between the principal creditor and the principal
debtor which discharges the latter reserves the right of the creditor against
the surety, the surety is not discharged by the variation of the contract
between the principal debtor and the creditor. This view makes the section
otiose. Neither section 134 nor section 135 of the Contract Act recognises such
a right of reservation.
1. Bank of Hindustan v. Govindarajulu, (1933) 57 Mad
482.
In fact, if the law has been correctly laid down in the Madras decision,
there is really no need to extend the provisions of section 39 to other cases.
If, on the other hand, the law in India be different from the English common
law, we see no reason to extend the privilege to other cases as it would result
in great hardship to the surety if the entire burden were to be thrown upon him
either by discharging the principal debtor or by giving up rights against him in
any other manner. The right of contribution which accrues under section 140 of
the Contract Act to the surety after he discharges the debt is no consolation to
him if he should be treated as the principal debtor. Under section 134, the
surety is automatically discharged whether there is a reservation or not. We
think, therefore, that there is no justice or equity in favour of the extension
of the scope of section 39 to other cases.
92. Sections 40-41.—No alteration other than a rearrangement has
been proposed in sections 40-41. Section 40 has been transferred to the Chapter
relating to Discharge1 and section 41 to the Chapter on
Liability.2
1. Section 78(3), App I.
2. Section 56(4), ibid.
93. Section 42.—The provisions of section 42 have been transferred
to the Chapter on Bills of Exchange, without any change.1
1. Section 116, ibid.
94. Sections 43-45.—As has been already indicated, sections 43-45
have been included in the Chapter relating to Form and
Interpretation1 except the two Exceptions to section 43 which have
been included in the Chapter on Liability of Parties,2 with verbal
changes.
1. Section 10-12, ibid.
2. Section 64(3), ibid.
Exception I to section 43 refers to an accommodation party but it
requires to be supplemented as it does not contain all the relevant provisions
relating to such a party. In the Chapter on Liability we have introduced two new
provisions to indicate the liability of the accommodation party and the
accommodated party, respectively. The first1 follows section 28(2) of
the English Act. The second2 follows from the principle embodied in
section 140 of the Contract Act, viz., that the relationship between an
accommodation party and the accommodated party being one of surety and principal
debtor, the former should be entitled to recover any amount paid by him, from
the latter.
1. Section 64(1), ibid.
2. Section 64(2), ibid.
95. The words 'parties standing in immediate relation' are used in
sections 44, 45 and 46, but there is an Explanation of the expression only in
section 44 while there is none in section 46; nor is there anything in section
46 to indicate that the same Explanation is applicable to it.
Since the Explanation is based on the English decisions which are of a
general application1, we have transformed the Explanation into a
separate section laying down a rule of interpretation of the expression,
wherever it is used in the Act.
1. Vide Chlamers Bills of Exchange, 12th Edn., p. 95.
96. Section 45A.—Though it may be somewhat impracticable to
enforce by suit the right conferred by section 45A, we have thought it safe to
retain the section, and even to extend it to all instruments; for, there is no
justification to restrict it to a bill. In Baldeo v. Grish, 2 All
754, a case before the Act, the right to a duplicate of a cheque was
recognised and this was followed in Udho Ramchandi v. Hemraj, AIR 1924 Lah
198, in the case of a lost hundi. We have followed these decisions in
widening the provision1.
1. Section 53 of App I.
97. Sections 46-48.—No change has been proposed in the first three
paragraphs of section 46.
The last two paragraphs of section 46 and sections 47 and 48 deal with
the modes of negotiation for different kinds of instruments, with some
repetition. We have combined them into a single section.1 The
Exception to section 47 has been made a separate section.2
An introductory section3 has also been proposed, specifying
the different kinds of indorsements.
1. Section 30, ibid.
2. Section 42, ibid.
3. Section 33, ibid.
98. Section 49.—Some drafting changes have been made in section
49, following section 34(4) of the English Act.1
1. Section 36, ibid.
99. Section 50.—Section 50 has been recast in order to simplify
it. It consists of two parts. The latter part refers to a restrictive
indorsement but does not explain what constitutes a restrictive indorsement.
There is no provision in our Act corresponding to section 35 of the Bills of
Exchange Act or section 36 of the Uniform Negotiable Instruments Law. We have
remedied this lacuna by adopting a new provision1 which combines the
principles embodied in the English and American provisions, just cited.
The earlier part of section 50 gives the effects of or the rights
following from indorsement. In the new section2 which represents that
part, we have made it clear that the effect, which is generally stated, is
subject to the provisions relating to restrictive, conditional and qualified
indorsements.
1. Section 39, Ibid.
1. Section 45, ibid.
100. Section 51.—Since we have defined 'holder' as including payee
and indorsee, we have avoided repetition of these words in section 51 by using
the word 'holder' in their place.1
1. Section 31, ibid.
101. Section 52.—The contents of section 52 have been split into
two sections as they deal with two separate matters, viz.,
conditional1 and qualified2 indorsements.
As regards a conditional indorsement, we have no provision in our Act
corresponding to section 33 of the Bills of Exchange Act and section 39 of the
Negotiable Instruments Law which make the conditional indorsement operative only
as between indorser and indorsee and give the payer (acceptor or maker) the
liberty to pay the indorsee regardless of the condition. There is no such
liberty to the payer in India. As has been pointed out by Bhashyam and
Adiga,3the Indian law is still based upon the old common law
rule4 which has been discarded both in England and the USA. The old
rule operates harshly upon the acceptor of a conditional indorsement who is not
in a position to discover whether the condition has been fulfilled and yet
cannot dare dishonour the instrument.
There is no reason why we should not adopt the modern principle as
embodied in the English and American law. We have, accordingly, adopted that
principle in two new sub-sections.
1. Section 40, ibid.
2. Section 41, ibid.
3. Negotiable Instruments Act, 1956, 10th Edn., p.
303.
4. Robertson v. Kensignton, (1811) 4 Taunt 30; Byles on
Bills of Exchanges, 21st Edn., p. 169.
102. Following section 38 of the English Act, we have introduced
two new sections,1 which together state the rights of 'holder' and
'holder in due course' which have now to be gathered from different provisions
of the Act.
1. Section 47 and 52, App I.
103. There is no provision in our Act, corresponding to section 37
of the Bills of Exchange Act, giving the effects of 'negotiation back before
maturity'. Under the English provision, if there is negotiation back of the
instrument before maturity to the maker, drawer or to a prior indorsee or to the
acceptor, such persons are entitled to further negotiate the instrument. But it
would be inequitable to allow a right to enforce payment under the instrument
against any of the parties who were liable before the instrument was indorsed
back. This is avoided by the latter part of the English section. We have
incorporated the two parts of the English provision in two sections, one
explaining what is negotiation back1 and the other, the rights of a
person who acquires an instrument through the process of negotiation
back.2
1. Section 44. ibid.
2. Section 48, ibid.
104. Section 53.—Section 53 has been redrafted1 in the
light of section 29(3) of the Bills of Exchange Act, to make the meaning more
clear. The English provision expressly states that a person who is a party to
any fraud or illegality affecting an instrument cannot be a holder in due
course.
We have added a new sub-section, on the lines of sub-section (3) of
section 38 of the English Act, to explain the rights of a holder whose title is
defective. What is a defective title is explained in another
provision.2
1. Section 51, ibid.
2. Section 25, ibid.
105. Sections 54-55.—No alteration has been proposed in sections
54-55.
106. Section 56.—We have recast section 56 to make it clear that
the existing provision is only an exception to the general rule that a transfer
by endorsement must be of the entire rights in the instrument. In
redrafting1 the section, we have followed sub-section (2) of section
32 of the English Act.
1. Section 32, ibid.
107. Section 57.—No change is proposed in section 57.
108. Section 58.—There is no definition of "defective title"
though the expression is used in the definition of "holder in due course". We
have already provided1 that a forged instrument conveys no title. If
the title is acquired by means of an offence or fraud or for an unlawful
consideration the title is only defective and the person holding such title may
convey a better title to a holder in due course. This is provided in section 58.
We have retained that section, subject to verbal changes.2
1. Para. 61, ante.
2. Section 28, App I.
109. Section 59.—The two paragraphs of section 59 deal with two
different matters. They have, accordingly, been placed under two separate
sections.
What is meant by the words 'rights of his transferor' in the first part
is that the holder who acquires an instrument after dishonour or after maturity,
acquires the instrument 'subject to the equities to which his transferor was
subject at the time of acquisition by such holder'. We have added these words,
by way of abundant caution, to make the meaning clear.1
The second part, which is at present in the nature of a Proviso is, in
fact, a substantive provision as to the rights of a person who becomes the
holder of an accommodation instrument, after maturity. No change is proposed in
this provision.2
1. Section 49, ibid.
2. Section 50, ibid.
110. Section 60.—No change is proposed in section 60, except to
include a reference to a restrictive indorsement which is also one of the modes
of termination of negotiability, as would appear from another provision, namely,
section 50.
111. Section 61.—We have replaced section 61 by a comprehensive
provision1 and have incorporated therein other rules relating to
presentment for acceptance which are now dispersed over several sections.
1. Section 120, ibid.
Since presentment for acceptance is a special incident of bills of
exchange, we have included all the provisions relating to presentment for
acceptance in Part II which deals with such instruments in particular.
112. Section 61 of the Act makes it obligatory upon the holder to
present a bill for acceptance only in the case of a bill payable after sight. In
that case presentment for acceptance is absolutely necessary to fix the date for
payment. In the case of other bills there is no express provision in the Act
requiring presentment for acceptance before presenting them for payment: But
this omission has been held to be a drafting defect in several decisions
starting with Veerappa v. Vellayan, 1919 MWN 780 where it has been
held that presentment for acceptance must precede presentment for payment in the
case of every bill, in order to fix the drawee with liability. In the Madras
case,1 this view was supported by pointing out that sections 91 to 93 of the Act
were applicable to bills payable on demand as well.
Recently, the Supreme Court had an occasion to examine the question in
Jagjivan v. Ranchhoddas, AIR 1954 SC 554 Reference was made in
that decision to sections 61 and 64 of the Act and it was observed that in the
case of a bill payable after sight there are two distinct stages, firstly, when
it is presented for acceptance and later, when it is presented for payment;
section 61 deals with the former while section 64 deals with the latter. The
observation of the Bombay High Court in Ram Ravji v. Pralhaddas, (1895) 20
Bom 133 (141) that "presentment for acceptance must always and in every
case precede presentment for payment" was noticed and the comment made by the
learned Judges of the Supreme Court was that in the case of a bill payable on
demand both stages synchronise and there is only one presentment which is both
for acceptance and payment. Had the learned Judges stopped there the matter
would not have created any difficulty. But they proceeded to observe:
"But whether the bill is payable after sight or at sight or on
demand, acceptance by the drawee is .necessary before he can be fixed with
liability on it. It is acceptance that establishes privity on the instrument
between the payee and the drawee and we agree with the learned Judges of the
High Court that unless there is such acceptance, no action on the bill is
maintainable by the payee against the drawee".
In view of the above
observation of the Supreme Court and the defective provisions of the Act, we are
of the opinion that the law should not be left in a dubious state and effect
must be given to the decision of the Supreme Court, making it obligatory in the
case of every bill to present it for acceptance before it is presented for
payment. The drawee can be made liable only if he accepts. If the bill is
dishonoured by non-acceptance no question of any presentment for payment arises.
We have, accordingly, inserted a provision1 that a bill must be
presented for acceptance before it is presented for payment.
1. Section 117, App I.
113. That part of section 61 which deals with the duty of
presentment for acceptance of a bill payable after sight has been taken out to
form a separate provision1 in the light of section 40(1)(2) of the
English Act to make it clear that if the holder does not either present it for
acceptance or negotiate it within a reasonable time, the drawer and all
indorsers prior to that holder shall be discharged.
1. Section 119, ibid
114. As regards the persons by whom and to whom presentment for
acceptance is to be made, we have substituted a clearer provision,1
combining the relevant provision in sections 61 and 75.
1. Section 120(1)(a), ibid.
115. As to the place of presentment for acceptance, the provision
in para. 3 of section 61 is not adequate. Elaborate provisions relating to place
of presentment for payment are contained in sections 69, 70 and 71. We have
adopted similar rules for presentment for acceptance.1
1. Section 120(1)(b), ibid.
116. We have also thought it necessary to engraft a
provision1 on the lines of section 41(1)(b), relating to presentment
to joint drawees.
1. Section 120(1)(c), ibid.
117. We have also adopted a detailed sub-section1
including all the cases where presentment is excused. It would appear from
section 91 that where presentment is excused, a bill is deemed to be dishonoured
by non-acceptance. As to the cases where such constructive dishonour takes
place, we have two instances contained in paragraphs 2 and 3 of section 61, but
there is no provision enumerating the cases where presentment is excused. The
provisions in sub-section (2) of section 41 of the English Act being elaborate
on this point, we have adopted them, with the addition of the case specified in
section 39(4) of that Act. The rule relating to delay being excused has been
taken from section 75A which combines the rules in respect of both presentment
for acceptance as well as for payment. There being an enumeration of cases where
presentment for acceptance is excused, it has become necessary also to
incorporate the provision in section 41(3) as to when presentment is not
excused.
1. Section 120(3), ibid.
118. No change has been proposed in the fourth paragraph of
section 61.
119. There is no specific provision in the Act stating the effects
of the acceptance of a bill after it has become overdue, although from some of
the provisions of the Act it would appear that such an acceptance is not void.
Section 18(2) of the Bills of Exchange Act as well as section 138 of the
Uniform Negotiable Instruments Law specifically state that "A bill may be
accepted***** when it is overdue or after it has been dishonoured by a previous
refusal to accept or by non-payment".
Clause (2) of section 39 of the Bills of Exchange Act speaks of the
presentment for acceptance of a bill payable elsewhere than at the residence or
place of the business of the drawee and clause (4) of the same section
provides1 as follows:—
1. See section 147 of the Negotiable Instruments Law.
"Where the holder of a bill, drawn payable elsewhere than at
the place of business or the residence of the drawee has no time with the
exercise of reasonable diligence to present the bill for acceptance before
presenting it for payment on the day that it falls due, the delay caused by
presenting the bill for acceptance before presenting it for payment is excused,
and does not discharge the drawers and indorsers."
This shows that the drawer
and indorsers would be discharged in any other case. This view finds support
from Chalmers1 who observes—"A bill should clearly be presented for
acceptance before maturity. It may be accepted when overdue....Such acceptance
preserves or revives the liability of the drawer and indorsers only in the case
provided by section 39(4) i.e. domiciled bill arriving late." The same view is
taken by Halsbury: "the drawee may, however, accept when the bill is overdue, if
he is willing to do so."2 "The want of presentment, however, will
result in the holder losing his right of recourse against the drawer and
indorsers...., except in the case of bill drawn payable elsewhere than at the
place of business or residence of the drawee where the holder has not time to
present for acceptance before he has to present the bill for
payment."3
1. Bill of Exchange, 12the Edn., p. 132.
2. Halsbury's Laws of England, 3rd Edn., No 1.
3. Halsbury's, ibid., p. 194 f.n. (f).
There being no provision in our Act which is inconsistent with the
propositions discussed above, we have thought fit to remove all doubts by adding
a new section1 providing that the acceptance of an overdue bill is
not void but such acceptance does not preserve or revive the liability of a
drawer or indorser who would be discharged by reason of non-presentment of the
bill before maturity.
1. Section 118, App I.
120. Section 62.—We have transferred the contents of section 62 to
the new Part on Promissory Notes, with verbal changes.1
1. Section 140, App I.
121. Section 63.—We have combined the provisions of section 63
with those of section 83, since the latter section states the consequences of
allowing more time than as prescribed in section 63.
122. Section 64.—While presentment for acceptance relates only to
bills, presentment for payment is a condition common to all instruments. We
have, therefore, separated the provisions relating to the two kinds of
instruments.
The provisions of section 64 have been modified to explain more clearly
where presentment for payment is or is not necessary.1 The Exception
has been redrafted in order to obviate the conflict of judicial opinion which
has arisen as to its scope.2
Further, we have grouped together, with suitable verbal changes, the
rules relating to presentment for payment in one section3 with
different clauses relating to the persons by whom and to whom presentment is to
be made, and the time, hour and place of presentment, following the plan we have
adopted with respect to presentment for acceptance.
The later part of the of the first paragraph of section 64 states a rules
of discharge for non-presentment. We have, accordingly, shifted it to the
Chapter on Discharge, with verbal changes to make it comprehensive4.
1. Section 69, ibid.
2. Cf. Oudh Commercial Bank v. Gur Din, 59 IC 604;
Ramkrisnayya v. Kasim, 13 Mad 172; Manik v. Parkash, 45 CWN 545.
3. Section 73, App I.
4. Section 79, ibid.
123. We have added a new provision1 laying down clearly
what constitutes presentments for payment. Several Chambers have urged that
since usage varies regarding the mode of presentment, there should be a definite
provision in the Act. Difficulty is often experienced in having to send the
original instrument for presentment. It is risky to send the original as it may
be lost or it may not be returned. We have, therefore, suggested that the
sending of a copy would be sufficient but that the inspection within a
reasonable time the presentment shall be deemed to be invalid.
1. Section 74, ibid.
Under Paragraph 2 of section 64, personal presentment is obligatory
unless presentment through post is authorised by agreement or usage. As pointed
out by some of the Chamber of Commerce, the existing provision is somewhat
restrictive in view of the changed conditions of the commercial intercourse.
There is no apparent reason why the case of postal communication should depend
on agreement or usage. We have left it to the option of the party, who is to
make the presentment, to adopt any effective means convenient to him.
124. Section 65-67.- Apart from the re-arrangement referred to
above, no other change is proposed in respect of sections 65, 66 and 67, except
the omission from section 67 of the "and non-payment ....maturity", which have
created some confusion and are considered by us to be unnecessary.
125. We have combined1 section 68 and 69, because there
is no substantial distinction between the circumstances contemplated by the two
sections and these separate provisions complicate the matter. It is not clear
from what source the provision in section 68 has been drawn. If an instrument is
payable at a specified place, it follows that it is payable 'elsewhere'.
1. Section 73(6)(i), App I.
126. Section 70- We have introduced a new provision1 on
the lines of section 45(4)(b) of the Bills of Exchange Act to deal with the case
where no place of payment is specified but the address of the maker, acceptor or
drawee is given in the instrument. Section 70 of our Act has been modified by us
to deal with the case where even such address is not given in the
instrument2.
1. Section 73(6)(ii), ibid.
2. Section 73(6)(iii), ibid.
127. Section 71.- Verbal alternation have been proposed in section
71 to indicate that it is the residuary provision1 relating to the
place presentment.
1. Section 73(6)(iv), ibid.
128. We have added an Explanation1 to clarify what is
meant by the words "specified place" in the foregoing group of provisions as
there are conflicting decisions regarding the interpretation of these
words.2 The question arose particularly where the name of a town was
mentioned without giving any address within the town. In conformity with the
result of these decisions, we have provided that "specified place" means a place
described with sufficient particularity in the instrument to enable the person
presenting an instrument to identify the place where the person sought to be
charged with liability is to be found. It is not sufficient merely to say, for
example, "city of Calcutta" but a specified place in that city should be
mentioned.
1. Expl., to section 73, ibid.
2. Shaik Md. v. Abdul, AIR 1937 Lah 259; Dungarmull v.
Shambu, AIR 1951 Cal 55.
129. Sections 72-74.—No change, other than verbal, has been
proposed in sections 72 to 74.
130. Section 75.—Section 75 governs both presentment for
acceptance and presentment for payment. As already stated, we have split up the
provision and assigned the portions relating to presentment for acceptance to
the Chapter on Bills of Exchange. The portion relating to presentment for
payment has been included in the Chapter of Presentment for Payment and
supplemented by an Explanation on the lines of section 45(6) of the English Act,
to cover the case of presentment to more than one person liable on an
instrument.
131. Section 75A.—No alteration has been made in section 75A,
except that it had to be repeated in connection with presentment for acceptance
and for payment.
132. Section 76.—In section 76, apart from some verbal changes, we
have added some new clauses.1
(a) Where the drawee is a fictitious person, it is obvious
that nobody can be held liable for non-presentment. The new clause (h) imports
this rule from section 46(2)(b) of the English Act.
(b) There is no provision in our Act corresponding to section
46(2) of the English Act providing when presentment is not necessary to charge
an indorser. This is now provided in the new clause (i).
(c) The principle which we find in paragraph 2 of section 61
of our Act with respect to presentment for acceptance should also apply as
regards presentment for payment. We have, therefore, incorporated the new clause
(j), following section 46(2)(a) of the English Act.
(d) No less important is the provision in the new clause (k),
namely, that no question of presentment for payment should arise where a bill
has been dishonoured for non-acceptance. This would follow from the principle
embodied in section 43(2) of the English Act, which we have adopted,2
that when a bill is dishonoured by non-acceptance, an immediate right of
recourse against the drawer and indorser accrues to the holder, and no
presentment for payment is, accordingly, necessary.
An Explanation has been
added at the end of the section to embody the rule in section 48(2) of the
English Act laying down that the holder's belief that the instrument would be
dishonoured even if presented does not absolve him from the duty to present.
1. Section 75, App I.
2. Section 122(2), App I.
133. Section 77.—No change has been made in section 77.
134. There is a distinction between discharge of an instrument by
payment and discharging of a particular party liable under an instrument. This
distinction is not clearly brought out by the provisions of our Act, though some
indication of it may be had from section 60. We have re-arranged the several
provisions relating to discharge to make this distinction clear.
135. We have grouped together all the provisions relating to
discharge by payment in one section,1—including existing sections 78,
82(c) and 89, with modifications. The case of payment of an accommodation
instrument has also been included in a new sub-section.
1. Section 76, App I.
136. Sections 79-80.—As regards interest payable on instruments,
no difficulty is experienced when the instrument provides for payment of
interest and specifies the rate. The contract between the parties is, however,
subject to any law for the time being in force for the relief of debtors which
authorises the courts to scale down the interest and give relief to the debtors.
Section 34 of the Code of Civil Procedure, on the other hand, gives a discretion
to the court regarding interest from the institution of the suit till the date
of decree and thereafter till payment. When, however, the contract is silent as
regards interest or it refers to interest but does not mention the rate, the
question arises whether any rate of interest should be allowed or not. The
existing section 80, which deals with this question, is somewhat unintelligible.
The difficulty is created by the words—notwithstanding any agreement relating to
the contract between any parties to the instrument" which must necessarily refer
to an independent agreement, as the section starts by saying that the provision
would apply only when no rate of interest is specified in the instrument. It is
also not clear from the section whether it is intended to apply only where the
parties contemplated payment of interest under the instrument but did not
provide for the rate of interest or also where the contract is silent on both
matters. To avoid all these difficulties we have combined sections 79 and 80
with verbal changes and have provided for the two liabilities in one
section.1 The provision has also been made subject to the law for the
time being in force relating to the relief of debtors and to section 34 of the
Code of Civil Procedure.
1. Section 82 App I.
The Explanation to section 80 has been omitted because on principle there
is no basis for making any distinction between the two cases mentioned under
sections 79 and 80. If the indorser's liability is as a surety, it must be
co-extensive with that of the principal debtor so that there is nothing to
distinguish between the two cases specified in sections 79 and 80. We have,
accordingly, considered it fit to omit the Explanation.
137. Section 81.—Except for verbal changes, no alteration has been
recommended in section 81.
138. Section 82.—As indicated earlier, the provisions of clauses
(a) and (b) of section 82 have been included in a new section1
relating to the discharge of the liability of particular parties. In that
section we have also included some other provisions relating to the discharge of
particular parties, such as that contained in section 40 and the principle
underlying section 90 which has been extended by us to all instruments,—the
principle being one of general application, providing for a merger in the case
of a union of the rights of the creditor and of the debtor. Another
rule2 engrafted by us in this section is a corollary from the
provision in section 39 of the Act relating to a surety. It states that when the
holder of an accepted bill enters into a contract with the acceptor of the
nature referred to in sections 134 or 135 of the Contract Act, the other parties
liable on the bill would be discharged, unless the holder expressly reserves his
right to charge them.
1. Section 78, ibid.
2. Section 78(2).
139. Section 83.—Since section 83 relates solely to bills of
exchange, it has been transferred to the Chapter relating to bills, and combined
with section 63 to which it is complementary.
140. Section 84.—Similarly, section 84, which relates exclusively
to cheques, has been transferred to the chapter dealing with such
instruments,1 excepting sub-section (2) which has been omitted as
being unnecessary in view of the comprehensive provision proposed by
us2 relating to reasonable time.
1. Section 155 of App I.
2. Section 98, ibid.
141. Sections 85-85A.—Sections 85-85A have been transferred to the
Chapter on cheques, without any alternation.
142. Section 86.—In section 86, we have expressly made provision
for the right of the holder to refuse to take a qualified
acceptance,1 by adopting sub-section (1) of section 44 of the Bills
of Exchange Act.
The first paragraph of section 86, stating the consequences of
acquiescence in a qualified acceptance, practically provides a rule relating to
discharge. We have, accordingly, shifted this paragraph to the Chapter on
Discharge.2
No change has been proposed in the Explanation to section 86.
In connection with a qualified acceptance, we have adopted a new
provision3 following section 52(2) of the English Act, to make it
clear that non-payment for payment in cases of qualified acceptance does not, in
the absence of an express stipulation to that effect, discharge the acceptor.
1. Section 123, App I.
2. Section 80, ibid.
3. Section 124, ibid.
143. Section 87.-We have redrafted section 87 in the light of
section 64(1) of the Bills of Exchange Act, which is more comprehensive.
The proviso, which has been added, is based on the decision in
Gourochandra v. Krushnacharana, AIR 1941 Mad 383 (385) which
applied the principle laid down by the Privy Council in Hongkong and
Shanghai Banking Corporation v. Lo Lee Shi, 1928 AC 181 which was a case
of a material alteration resulting from an accident, to the case of a material
alteration "made by a meddlesome or maliciously minded stranger without the
consent of the holder of the instrument and without any fraud or negligence on
his part". The second part of the Proviso retains the existing provision that an
alteration made to carry out the common intention of parties should not affect
the liability.
144. Section 88.-Section 88 has been amalgamated with section 87.
145. Section 89.-No change is necessary in the provision in
section 89 insofar as it is applicable to instruments other than
cheques.1
The part relating to cheques has been taken out and added as a
Proviso2 to existing section 129, after modifying it in the light of
the Proviso to section 79(2) of the English Act.
1. Section 76(5) of App I.
2. Prov. to section 149, ibid.
146. Section 90.-Section 90, as it stands, is confined to bills of
exchange. As already stated, there is no reason why the principle of merger by
unity of debtor and creditor embodied therein should not apply to other
instruments. We have, accordingly, made it a general provision.1
1. Section 78(1)(c), ibid.
147. Section 91.-Since section 91 relates only to bills of
exchange we have transferred it to Part II of Appendix I. For the purpose of
simplification, we have split the section into several sub-sections. We have
also added a new provision1 on the lines of section 43(2) of the
English Act as our Courts have already followed the principle contained
therein.2
1. Section 122(2), App I.
2. Ram Ravji v. Prahlad, (1895) 20 Bom 133; Miller v.
National Bank of India, (1891) 19 Cal 146.
148. Since dishonour may take place either by non-acceptance or by
nonpayment, we have inserted an introductory section1 to that
effect.
1. Section 83, ibid.
149. Section 92.-In section 92, the cases of constructive
dishonour already included in section 75 have been referred to in order to give
a comprehensive view of the law.1
1. Seciton 84, ibid.
150. Sections 93-94.-Section 93 deals with dishonour by
non-acceptance as well as by non-payment. Hence, the provision had to be
repeated with necessary modifications in two Chapters, according to our
scheme.1
As regards notice of dishonour for non-acceptance, we have adopted the
provisions of section 48 of the Bills of Exchange Act, to explain clearly the
effects of failure to give such notice.
That part of section 94 which deals with parties to whom notice is to be
given, has been amalgamated with section 93, with some verbal changes to make
the meaning clear.2
The remaining part of section 94 has been placed under three
sections,3 dealing respectively with—(a) the mode of giving notice;
(b) the time and place of giving notice; and (c) the effect of miscarriage in
post. As to the mode of giving notice we have omitted oral notice in order to
impart more certainty to this important act.
1. Section 70, 125, ibid.
2. Section 85, ibid.
3. Section 86-88, ibid.
151. Section 95.—No change has been proposed in section 95.
152. Section 96.—Since section 96 also gives a rule relating to
the time for giving notice, it has been combined1 with the relevant
part of section 94.
1. Section 87(2), ibid.
153. Section 97.—No change is considered necessary in section 97.
154. Section 98.—Clause (f) of section 98, which deals with
non-negotiable instruments, has been omitted, as such instruments are outside
the scope of the Act.
155. Sections 99-104A.—There is no substantial change in the
Chapter on Noting and Protest, and the existing law is reproduced subject to a
few verbal alterations. Section 104 of the Act has been transposed to the
Chapter on Liability,1 as protest is obligatory in the case of a
foreign bill when it is so required by the law of the place where it is drawn.
1. Section 71 of App I.
156. Section 105.—Since the enumeration of the purposes in section
105 may not be exhaustive, we have extended the principle1 to all the
purposes of the Act and thus avoided the need for a separate provisions like
that in section 84(2).
1. ibid.
157. Section 106.—We have abolished the present distinction in
section 106 based on the places of business and substituted two simpler
rules1—one relating to service of notice by post and the other
relating to service otherwise than by post, say, by messenger. The latter mode
will, of course, be permissible only when the two parties reside or carry on
business at the same place. The provisions proposed by us will obviate all the
controversy arising out of the expression 'next post'.
1. Section 99, ibid.
158. Section 107.—No change is proposed in section 107.
159. Sections 108-113.—No alteration has been considered necessary
in sections 108-113, except that they have been transferred to the Part on Bills
of Exchange and that sections 111 and 112 have been combined into one
section.1
1. Section 133, ibid.
A new provision1 has been added, following section 65(5) of
the English Act to make it clear that when a bill payable after sight is
accepted for honour, its maturity shall be calculated from the date of the
noting for non-acceptance, and not from the date of its acceptance for honour.
1. Section 137, ibid.
160. Section 114.—To section 114 we have added a new
sub-section1 on the lines of section 68(6) of the English Act to
explain the rights of the payer for honour which are not fully provided for in
the existing section. On the other hand, we have made it clear that the payer
for honour, according to the doctrine of subrogation succeeds not only to the
rights but also to the duties of the holder. We have also inserted a new
provision2 corresponding to section 68(2) of the English Act to
resolve the question of precedence where more than one person offers to pay a
bill for the honour of different parties.
1. Section 136(1), ibid.
2. Section 135, ibid.
161. Sections 115-116.—No change has been proposed in sections
115-116.
162. Section 117.—Some improvements have been made in section 117,
in the light of the corresponding English provision. As is evident from section
57(1) of the English Act, in case of dishonour, the holder, indorser and drawer
are all entitled to recover not only the amount due on the instrument but also
the interest due thereon; but interest is not mentioned, in the existing clause
(a) of our section 117 which relates to the holder. The word 'indorsee' in the
first paragraph of the section is a misprint for 'indorser' We have removed
these defects and also made it clear from which parties the holder, drawer or
indorser shall be entitled to recover. Corresponding changes have been made in
clause (c). We have added a new clause1 to provide for the case of
the drawer who has been compelled to pay the amount due on the instrument which
is not mentioned in the section at all.
1. Section 101(1)(b) of App I.
Clause (e) has been split up into two sub-sections for the purpose of a
better understanding of the provision.
163. There is a difference in the provisions of clauses (b) and
(d) of section 117 of the Act. Under clause (b), the rate of exchange in the
case of a holder who pays the amount is to be determined at the current rate of
exchange between the place where the person charged resides and the place at
which the instrument was payable. Under clause (d), if the person charged and
the indorser are at different places, the rate of exchange between the two
places determines the quantum of liability. The place where the instrument is
payable has no relevance under clause (d). On principle there should be no
difference between the rights of a holder and of an indorser in this respect.
In our opinion, the problem arises not because of the residence of the
parties being at different places but because of the fact that the currency in
which the amount payable is expressed is other than that of the country where
the amount i§ payable. We can simplify the problem by confining ourselves to
cases where the amount is payable in India.
Now, the amounts payable are of two kinds—(a) the amount due upon the
instrument; and (b) the expenses incurred on presenting, noting, protesting and
the like.
(a) As regards the sum due on the instrument, no difficulty
arises where the instrument specifies it in Indian currency. Where it is
expressed in a foreign currency, the payment in India must obviously be made in
Indian currency and here the question of rate of exchange comes in. We have
provide1 that in such'a case the sum is to be paid in Indian currency
at the current rate of exchange obtaining between India and the foreign country
concerned on the date on which such sum became payable
(b) The same principle should be followed as regards sums paid
on account of protesting and the like in a foreign country except that the rate
of exchange to be applied in this case should be that which was prevalent on the
date on which such expenses were incurred by the holder or indorser, as the case
may be. We have provided accordingly.2
1. Section
101(d)(i(ii), ibid.
2. Section 101(e, ibid.
164. Sections 118-120.—No change has been proposed in sections
118-120. We have however inserted a new provision1 relating to the
estoppel of the acceptor of a bill in the light of section 54(2) (a) of the
English Act. At present, the primary rule as to the acceptor's estoppel is
contained in the Evidence Act instead of in the Negotiable Instruments Act.
Section 117 of the Evidence Act, 1872 provides—
1. Section 104, ibid.
"No acceptor of a bill of exchange shall be permitted to deny
that the drawer had authority to draw such a bill or to endorse
it....
Explanation (1).—The acceptor of a bill of exchange may deny
that the bill was really drawn by the person by whom it purports to have been
drawn.....
When the Negotiable Instruments Act was enacted subsequently, it was
presumably considered unnecessary to repeat the principle in that Act. But since
the above rule of evidence is a special rule relating to negotiable instruments
and Chapter XIII of the Negotiable Instruments Act contains various rules of
evidence relating to such instruments, purporting to be exhaustive, it would
seem proper to transfer the above rule from the Evidence Act to the Negotiable
Instruments Act.
The substance of the said provision in the Evidence Act is that the
acceptor of a bill is prevented from denying the drawer's authority to draw the
bill or to indorse it but he may deny that the bill was really drawn by the
person by whom it purports to have been drawn. In other words, he may show that
the drawer was a fictitious person or that the signature was not genuine.
Section 54(2) of the English Act provides that the acceptor is precluded from
denying to a holder in due course the existence of the drawer, the genuineness
of the signature after acceptance would introduce to draw the bill. Thus, while
under the English law the acceptor is prevented also from denying the
genuineness of the signature of the drawer, under the Indian law it is
otherwise. We are of the view however that at the time of acceptance, the drawer
should satisfy himself whether the drawer's signature is genuine or not. To
permit him to deny the genuineness of his signature and his capacity and
authority uncertainty into the law and innocent parties would be made to suffer.
The English principle being just and equitable, should be preferred to the
provision in section 117 of the Evidence Act.
We have, accordingly, adopted a provision1 on the lines of the
English Act and recommended that the provision in the Evidence Act should be
deleted in so far as it relates to the acceptor.
1. Section 104 of App I.
165. Sections 121-122.—No change has been proposed in sections
121-122, except that a clause has been added to section 122, on the lines of
section 55(2)(c) of the English Act, to prevent the indorser from denying the
validity of the instrument and his title to it at the time of the indorsement.
166. As stated earlier, all provisions exclusively relating to
cheques have been put in a separate Part, and in that Part we have included the
following new provisions, in order to make it comprehensive:
(i) When a banker's authority may be revoked is not stated in
the Act. We have adopted the provision in section 75 of the English Act and
amplified by adding notice of insolvency as a third ground.1
(ii) We have introduced a new provision2 relating
to cheques marked "account payee", for the reasons already
explained,3 and as a sequel to this new provision, it has become
necessary to add another provision4 to protect a banker who, bona
fide fails to carry out the "account payee" direction because of the
obliteration or alteration of such crossing on the cheque.
(iii) That crossing is also a material part of the cheque is
not stated in the Act and is not included in the definition of material
alteration. We have inserted an express provision,5following section
78 of the English Act.
(iv) We have made it clear6 that a cheque does not
amount to an assignment of part of the funds of the drawer in the bank to the
payee, following section 53(1) of the Bills of Exchange Act (as applied to
cheques by the second paragraph of section 73 of that Act).
1.
Section 142, ibid.
2. Section 144 of App I.
3. Para. 19, ante
4. Section 153 of App I.
5. Section 146, ibid.
6. Section 154, ibid.
167. Sections 123-127.—Only a verbal change has been proposed in
sections 123-127. But to section 125, we have added a new clause,1
incorporating the rule contained in section 77(6) of the Bills of Exchange Act,
to enable a collecting banker to specially cross a cheque to himself.
1. Section 145(6), ibid.
168. Section 128.—In section 128, we have inserted the condition
of good faith and absence of negligence, following the provisions of section 80
of the English Act.
169. Section 129.—Section 129 of our Act corresponds to section
79(2) of the English Act, but omits to specify the exceptions which are
contained in the Proviso thereto. The exceptions are founded on a sound
principle, namely, that there should be no liability where the crossing is not
apparent or obliterated or altered in an unauthorised manner and the banker pays
in good faith. We have, accordingly, adopted the Proviso.
170. Section 130.—No alteration is proposed in section 130.
171. Section 131.—In view of the recognition of "account payee"
cheques, an exception relating thereto had to be made in section
131.1
1. Section 152, ibid.
172. Our attention has been drawn to the recent legislation in
England relating to cheques (Cheques Act, 1957-5 and 6 Eliz. 2, c. 36).
The main purpose of the Act seems to be to extend the legal protection to
paying and collecting banks, acting in good faith, in respect of uncrossed
cheques, banker's drafts and like instruments which, prior to this Act, was
confined to crossed cheques, and practically to exonerate the paying banks from
the duty of insisting on the endorsement of the payee (except where the cheque
is negotiated), provided that payment is made bona fide and in the ordinary
course of business.
The implications of these provisions have not yet been clearly
appreciated even by the Banks in England as appears from an article in The Law
Times, Vol. 224, p. 207. The Banks in England have issued instructions to their
branches to move cautiously in this behalf and they have not taken full
advantage of the provisions of the Act.
The instructions issued by the Banks contain the following directions:
Cases in which endorsement will not be required are:—
(a) where the cheques are paid into the account of the
payee;
(b) where they are paid in for the credit of a joint or
partnership account. Endorsement will still be necessary in the following
cases:
(i) cheques cashed or exchanged over the counter;
(ii) negotiated cheques, that is, those tendered for the
credit of an account other than that of the ostensible payee;
(iii) cheques payable to joint payees, if tendered for the
credit of an account to Which all are not parties; and
(iv) bills of exchange (other than cheques) and promissory
notes.
Having regard to the conditions in India, it may be dangerous to enact
legislation on the lines of the Cheques Act, 1957. As the learned writer in the
Law Times points out, "nothing is said in the new Act about the users of
cheques". It looks solely to the convenience and protection of the bankers and
we are not sure what repercussions it may have upon the interests of the
customers, in a country like India. Further, there appears to have been no
demand that we in India should have a legislation on those lines.
We think it advisable that we should wait until the implications of the
Cheques Act, 1957, are fully known, and until there is sufficient demand by the
banks and the members of the public in India for such a legislation.
173. Section 131A.—No change has been considered necessary in
section 131A.
174. Sections 132-133.—No change is proposed in sections 132-133,
except that they have been included in the Part dealing with Bills of Exchange.
175. Sections 134-136.—The provisions relating to conflict of laws
and foreign instruments in sections 134-136 have been replaced by a new sections
framed in the light of the principles arrived at in paragraphs 27-33, ante.
176. Section 137.—In section 137, the words "or the State of Jammu
and Kashmir" have already been omitted by the Jammu and Kashmir (Extension of
Laws) Act (62 of 1956).
177. Sections 138-139.—Sections 138-139 have been omitted by the
Notaries Act (LIII of 1952).
178. In order to give a concrete shape to our proposals, we have,
in Appendix I, put them into the form of draft sections of the Act. The Appendix
is not, however, to be treated as a draft Bill.
As in our previous Reports, we have omitted all illustrations from the
text.
Appendix II contains two comparative Tables: Table A shows the sections
in the existing Act with the corresponding sections in Appendix I; while Table B
shows the sections in Appendix I with the corresponding sections of our Act as
well as of the Bills of Exchange Act and the Negotiable Instruments Law,
respectively.
Appendix III contains the suggestions made by us regarding other Acts.
Appendix IV gives a list of commercial bodies and associations who were
addressed individually for their suggestions and Appendix V specifies such of
them as gave their views in writing.
M.C. Setalvad Chairman
M.C. Chagla, Member
K.N. Wanchoo, Member
P. Satyanarayana Rao, Member
N.C. Sen Gupta*, Member
V.K.T. Chari, Member
D. Narasa Raju, Member
S.M. Sikri, Member
G.S. Pathak, Member
G.N. Joshi, Member
N.A. Palkhivala. Member
*. Being unable to came to Delhi to sign the Report, these
Members have authorised Chairman to sign the Report on their behalf.
K. Srinivasan, Durga Das Basu,
Joint Secretaries
New Delhi.
Dated: 26th September, 1958.
Appendix I
Proposals As Inserted In The Body Of The Existing Act (This
Is, However, Not To Be Treated As A Draft Bill)
[Corresponding sections
of the existing Act are noted within the brackets and additions to the
provisions of the existing Act are shown in the text in italics, wherever
possible.]
The Negotiable Instruments Act, 19....
Part I
General
Chapter I
Preliminary
1. Short title, extent, and
commencement.—(1) This Act may be called the Negotiable Instruments Act, 19
(2) It extends to the whole of India.
(3) It shall come into force on the 1st day of 19....
2. Saving.—......Nothing herein contained affects the
provisions of section 31 of the Reserve Bank of India Act, 1934......
(Section 1, para. 2, part.]
3. Operation of the Act on
negotiable instruments.—.....Every negotiable instrument shall be
governed by the provisions of this Act, and no usage or custom at variance with
any such provision shall apply thereto.
[New]
4. Definitions.—In this Act, unless the
context otherwise requires—
(1) "acceptor" means the drawee of a bill who has
signed his assent upon it, or, if there are more parts thereof than one, upon
one of such parts, and delivered the same, or given notice of such signing to
the holder or to some person on his behalf......
("Acceptor" (Section 7, para. 3)]
(2) "acceptor for honour" means a person who, when a
bill has been noted or protested for non-acceptance or for better security,
accepts it supra protest for honour of the drawer or of any one of the indorsers
("Acceptor for honour" (Section 7, para. 4.)]
(3) an "accommodation party" means a person who has signed
an instrument as a maker, drawer, acceptor or indorser without receiving the
value thereof and for the purpose of lending his name to some other
person;1
("Accommodation party" (New)]
(4).....the expressions "at sight" and "on presentment" mean
on demand; and the expression "after sight" means, in the case of a note, after
presentment for sight, and, in the case of a bill, after acceptance or noting
for non-acceptance or protest for non-acceptance;
("At sight", "on presentment", after sight" (Section 21)]
(5) "banker" means a person carrying on the business of
accepting, for the purpose of lending or investment, of deposits of money from
the public, repayable on demand or otherwise and withdrawable by cheque, draft,
order or otherwise, and includes any post office savings bank;
("Banker" (Section 3 amplified)]
(6) "bearer" means a person who by negotiation comes into
possession of an instrument payable to bearer;2
("Bearer" (New)]
(7)(i) "bill" means a bill of exchange;
("Bill" (New))
(ii) a "bill of exchange" is an instrument in writing
containing an unconditional order, signed by the drawer, directing a certain
person to pay on demand or at a fixed or determinate future
time3 a certain sum of money only to, or to the order of, a
certain person or to the bearer of the instrument;
["Bill of Exchange" (Section 5, para. 1)]
(8) a "cheque" is a bill drawn on a specified banker and not
expressed to be payable otherwise than on demand;
("Cheque" (Section 6)1
(9) "delivery" means transfer of possession, actual or
constructive, from one person to another;4
("Delivery" (New)1
(10) a person making a bill or cheque is called the
"drawer" and the person thereby directed to pay is called the "drawee";
("Drawer" and "drawee" (Section 7, para. 11
(11) when in the bill or in any indorsement thereon the name
of any person is given, in addition to the drawee, to be resorted to in case of
need such person is called a "drawee in case of need";
("Draweee in case of need" (Section 7, para. 2)1
(12) "holder" means the payee or indorsee of an instrument
who is in possession of the instrument or the bearer thereof, but does not
include a beneficial owner claiming through a benamidar;5
["Holder" (Section 8)]
Explanation.— When an instrument is
lost and not found again, or is destroyed, its holder at the time of such loss
or destruction shall be deemed to continue to be its holder, notwithstanding
such loss or destruction;
(New)
(13) "holder in due course" means any person who, for
consideration, becomes the possessor of an instrument if payable to
bearer, or the payee or indorsee thereof if payable to order, before the amount
mentioned in it became overdue6 and without having sufficient
cause to believe that any defect existed in the title of the person from whom he
derived his title;
Explanation.—For the purposes of this clause, a defect
is said to exist in the title of a person to an instrument when he is not
entitled to receive the amount due thereon, by virtue of the provisions of
section 28;
("Holder in due course" (Section 9)
(14) when the maker or drawer or holder of an
instrument signs the same, otherwise than as such maker or drawer, for
the purpose of negotiation, on the back or face thereof or on a slip of paper
annexed thereto, or so signs for the same purpose a stamped paper intended to be
completed as a negotiable instrument, he is said to indorse the same and is
called the "indorser"; and the person in whose favour the indorsement is made
is called the "indorsee".....
("Indorsement", indorser" and " indorsee" (Section 15)) (Section
16(1) part.]
(15) an instrument drawn or made in India, and made
payable in, or drawn upon any person resident in, India, is an Inland
instrument, and every instrument not so drawn, made or made payable is a
foreign instrument;
("Inland instrument" and "foreign instrument" (Sections 11 &
12)1
(16) "Instrument" means a negotiable instrument;
["Instrument" (New)]
(17) "instrument payable to bearer" means an instrument
which is expressed to be so payable or on which the only or last indorsement is
an indorsement in blank;
("Instrument payable to bearer" (Section 13(1), Expl. (ii)]
(18) "instrument payable to order" means an instrument
which is expressed to be so payable or which is expressed to be payable to a
particular person, and does not contain words prohibiting transfer or indicating
an intention that it shall not be transferable;
("Instrument payable to order", (Section 13(1), Expl. (i)11
(19) "issue" means the first delivery of an instrument
complete in form to a person who takes it as a holder;7
("Issue" (New))
(20) "maker" means the executant of a promissory
note;
("Maker" (New)]
(21) "material alteration", in relation to an instrument,
includes any alteration of the date, the sum payable the time of payment or the
place of payment, and, where an instrument has been accepted generally, the
addition of a place of payment without the acceptor's
assent;8
("Material alteration" (New)]
(22)... "maturity" of a note or bill is the date at which it
falls due;
("Maturity" (Section 22, para. 1)]
(23)...."negotiable instrument" means a promissory note, bill
of exchange or cheque....;
["Negotiable instrument" (Section 13(1), main para.]
(24) when an instrument is transferred in the manner
provided by this Act to any person so as to constitute that person the
holder thereof, the instrument is said to be negotiated;
("Negotiation" (Section 14)1
(25) "notary" means a person appointed as such under the
Notaries Act, 1952;9
("Notary" (New)]
(26) "note" means a promissory note;
("Note" (New)]
(27) "payee" means the person named in the instrument,
to whom or to whose order the money is by the instrument undertaken or
directed to be paid......
("Payee" (Section 7, para. 5)]
(28) "payment in due course" means payment in accordance with
the apparent tenor of the instrument in good faith and without negligence to any
person in possession thereof under circumstances which do not afford a
reasonable ground for believing that he is not entitled to receive payment of
the amount therein mentioned;
("Payment in due course" (Section 10)]
(29) a "promissory note" is an instrument in writing (not
being a bank-note or a currency-note) containing an unconditional undertaking,
signed by the maker, to pay on demand or at a fixed or determinate future
time10 a certain sum of money only to, or to the order of, a
certain person, or to the bearer of the instrument;
("Promissory note" (Section 4)]
(30) "representative" means?
(i) in the case of a person who is dead, his legal
representative;
(ii) in the case of a person who has been adjudicated an
insolvent, the official assignee or official receiver in whom his property has
vested;
(iii) in the case of a company in liquidation, the
liquidator thereof
and includes a duly authorised agent.
("Representative" (New)]
1. See section 28(1),
BEA.
2. See section 2, BEA.
3. See section 3(1), BEA.
4. See section 2, BEA.
5. See section 2, BEA.
6. See section 29(1)(a) BEA, section 52, NIL.
7. See section 2, BEA.
8. See section 64(2), BEA.
9. The definition of 'notary' in the existing Act was
deleted by the Notaries Act, 1952.
10. See section 83(1) BEA; Section 184 NIL (USA).
Chapter II
Form And Interpretation
5. Applicability of the Contract
Act. — The provisions of the Indian Contract Act, 1872, shall, save in so
far as they are inconsistent with the provisions of this Act, apply to all
negotiable instruments.
[Section 26, para. 1, modified]
6. Incapacity of minor.
— Where an instrument is made, drawn or negotiated by a minor, the making,
drawing or negotiation entitles the holder to receive payment of the instrument
and to enforce it against any other party thereto except the
minor.1
1. See section 22(2), BEA.
[Section 26, para. 2, modified]
7. Corporation's power.
— No corporation has power to make, draw, indorse or accept an instrument
except in the manner and to the extent authorised by the law for the time being
in force relating to corporations.
[Section 26, para. 3]
8. Agent's authority.—(1) Every
person capable of binding himself or of being bound......by the making,
drawing, acceptance or negotiation of an instrument may so bind himself or
be bound by a duly authorised agent acting in the name of such person.
(2) A general authority of an agent to transact business and to receive
and discharge debts does not confer upon him the power of accepting or indorsing
instruments so as to bind his principal.
(3) An authority to draw instruments does not of itself import an
authority to indorse. [Section 27]
9. Authority of partners. — A partner acting in the firm name
may, to the extent authorised by the law for the time being in force relating to
partnership, bind the firm by the making, drawing, acceptance or negotiation of
an instrument.
(New)
10. Instrument made without consideration.—(1)
An instrument made, drawn, accepted indorsed or transferred without
consideration, or for a consideration which fails, creates no obligation of
payment between the parties to the transaction.......
[Section 43, para. 1, earlier half]
(2)......If any such party
has transferred the instrument with or without indorsement to a holder for
consideration, such holder, and every subsequent holder deriving title from him,
may recover the amount due on such instrument from the transferor for
consideration or any party to the instrument at the time of the transfer.
[Section 43, para. 1, latter half]
11. Partial absence or
failure of money consideration.—When the consideration for which a person
signed an instrument consisted of money, and was originally absent in part or
has subsequently failed in part, the sum which a holder standing in immediate
relation to the person so signing is entitled to receive from him is
proportionately reduced.
[Section 44, para. 1]
12. Partial failure of consideration
not consisting of money.—Where a part of the consideration for which a
person signed an instrument, though not consisting of money, is ascertainable in
money without collateral enquiry, and there has been a failure of that part, the
sum which a holder standing in immediate relation to the person so signing is
entitled to receive from him is proportionately reduced.
[Section 45]
13. "Certain sum", "unconditional", "certain
person" and fictitious payee. — In an instrument—
(a) the sum payable may be "certain" although it includes
future interest or is payable at an indicated rate of exchange, or is payable
at the current rate of exchange, and although it is to be paid in stated
instalments with a provision that upon default in payment of an instalment
or interest, the whole shall become due;
[Section 5, para. 31
(b) an undertaking or order to pay may be
"unconditional".....although the time for payment of the amount or any
instalment thereof is expressed to be on the lapse of a certain period after the
occurrence of a specified event which, according to the ordinary expectation of
mankind, is certain to happen, although the time of its happening may be
uncertain;
[Section 5, para. 2]
(c) an order to pay out of a particular fund is not
unconditional; but an unqualified order to pay, coupled with-
(i) an indication of a particular fund out of which the
drawee is to reimburse himself or a particular account to be debited with the
amount, or
(ii) a statement of the transaction which gives rise to
the instrument, is unconditional;1
$1 $2
(New)
(d) a person may be a 'certain person',.....although he
is misnamed or designated by description only, provided the person intended
can reasonably be ascertained from the instrument;2
[Section 5, para. 4]
(e) where the payee is a fictitious or non-existing person,
the instrument may be treated as payable to bearer;3
(New)
1. See section 3(3), BEA.
2. See section 7(1), BEA.
3. See section 7(3), BEA.
14. Instruments payable on demand. — An instrument is payable
on demand—
(a) where it is expressed to be payable on demand, or at
sight, or on presentment;1 or
[Section 21, earlier half]
(b) where no time for payment is specified therein; or
[Section 19, part]
(c) where the instrument is a cheque; or
[Section 19, part]
(d) where the instrument is issued, accepted or indorsed
after it is overdue, as regards the person so issuing, accepting or
indorsing.2
(Section 35, para. 2, modified]
1. See section
10(1)(a), BEA.
2. See section 10(2), BEA.
15. When instrument payable on demand overdue. — An instrument
payable on demand shall be deemed to be overdue when it appears on the face of
it to have been in circulation for an unreasonable length of
time.1
1. See section 36(3), BEA.
(New)
16. "After sight".—The expression "after sight"
means—
(a) in a note, after presentment for sight, and
(b) in a bill, after acceptance or noting for non-acceptance
or protest for nonacceptance.
[Section 21, latter half]
17. Instrument payable at a
determinable future time. — An instrument is payable at a determinate
future time where it is expressed to be payable—
(a) at a fixed period after date or sight; or
(b) on, or at a fixed period after, the occurrence of a
specified event which is certain to happen though the time of happening may be
uncertain.1
1. See section 11, BEA.
(New)
18. Effect of drawing or indorsing instrument payable
to order.—Where an instrument, either originally or by indorsement,
is expressed to be payable to the order of a specified person, and not to him or
his order, it is nevertheless payable to him or his order at his option.
[Section 13(f), Expl. (iii)]
19. Effect of ante-dating and
post-dating. — An instrument is not invalid for the reason only that it
is ante-dated or post-dated, provided the ante-dating or post-dating was not
done for an illegal or fraudulent purpose.1
1. See section 13(2), BEA and section 12, NIL.
(New)
20. Inchoate instrument.—(1) Where one person
signs and delivers to another a paper stamped in accordance with the law
relating to stamp duty chargeable on instruments and either wholly blank
or having written thereon an incomplete instrument, in order that it may be
converted or completed into an instruments he thereby gives prima
facie authority to the person who receives the paper to make or
complete, as the case may be upon it an instrument, for the amount if any
specified therein, or, where no amount is specified, for any amount, not
exceeding in either case the amount covered by the stamp.
(2) The person so signing shall, subject to the provisions of
sub-section (3), be liable upon such instrument, in the capacity in which he
signed the same, to any holder in due course, for the amount specified in the
instrument or filled up therein:
Provided that no person other than a holder in due course shall receive
from the person so signing the paper anything in excess of the amount intended
by him to be paid thereunder.
(3) In order that any such instrument when completed may be
enforceable against any person who became a party thereto prior to its
completion, it must be filled up within a reasonable time and strictly in
accordance with the authority given;
Provided that if any such instrument after completion is negotiated to
a holder in due course, it shall be valid and effectual for all purposes in his
hands, and he may enforce it as if it had been filed up within a reasonable time
and strictly in accordance with the authority given.1
1. See section 20, BEA.
[Section 201
21. Negotiable instrument when
complete.—(1) The making, acceptance or indorsement of an instrument is
completed by delivery.........
[Section 46, para. 11
(2) As between parties standing in
immediate relation, delivery to be effectual must be made by the party making,
accepting or indorsing the instrument or by a person authorised by him in that
behalf.
[Section 46, para. 21
(3) As between such parties and any
holder of the instrument other than a holder in due course, it may be shown that
the instrument was delivered conditionally or for a special purpose only, and
not for the purpose of transferring absolutely the property therein.
[Section 46, para. 31
22. Immediate parties. — For
the purposes of this Act—
(a) the drawer of a bill stands in immediate relation
to the acceptor;
(b) the maker of a note, or the drawer of a bill or cheque
stands in immediate relation to the payee, and the indorser to his indorsee;
(c) other persons who sign may, by agreement, stand in
immediate relation to a holder. (Section 44, Expl.1
23. Difference in
figures and words.—If the amount undertaken or ordered to be paid is stated
differently in figures and in words, the amount stated words shall be the amount
undertaken or ordered to be paid:
Provided that if the words are ambiguous or uncertain, reference may
be had to the figures to fix the amount.1
1. See section 17(1), NIL (USA).
[Section 18]
24. Ambiguous instruments.—Where an
instrument may be construed either as a note or bill, the holder may at his
election treat it as either, and the instrument shall be thenceforward treated
accordingly.
(Section 17)
25. Payees may be joint. — An
instrument may be made payable to two or more payees jointly, or it may be
made payable in the alternative to one of two, or one or some of several,
payees.
(Section 13(2))
26. Signature in trade or assumed name.
— Where a person signs an instrument in a trade or assumed name, he is liable
thereon to the same extent as if he had signed it in his own
name;1
1. See section 23(1), BEA.
(New)
27. Forged or unauthorised signature. —
Subject to the provisions of this Act, where a signature on an instrument is
forged or placed thereon without the authority of the person whose signature it
purports to be, it is wholly inoperative, and no right to retain the instrument
or to give a discharge therefor or to enforce payment thereof against any party
thereto can be acquired through or under such signature, unless the party
against whom it is sought to retain or enforce payment of the instrument is
precluded from setting up the forgery or want of authority:
Provided that nothing in this section shall affect the ratification of
an unauthorised signature not amounting to a forgery.1
1. See section 24, BEA.
(New)
28. Defective title.—When an instrument
has been lost or has been obtained from any maker, drawer, acceptor or
holder thereof by means of an offence or fraud, or for an unlawful
consideration, neither the person who finds or so obtains the instrument nor
any possessor or indorsee who claims through such person is entitled to
receive the amount due thereon from such maker, drawer, acceptor or
holder, unless such possessor or indorsee is, or some person through whom he
claims was, a holder thereof in due course.
[Section 58, modified]
29. Maturity, how determined. —
The maturity of a note or bill not payable on demand is determined as
follows:—
(1) Every such note or bill is at maturity on the third
day after the day on which it is expressed to be payable.
[Section 22, para. 2]
(2) In calculating the date at which a note or bill,
made payable a stated number of months after date or after sight or after a
certain event, is at maturity, the period stated shall be held to terminate on
the day of the month which corresponds with the day on which the instrument is
dated, or presented for acceptance or sight, or noted for non-acceptance, or
protested for non-acceptance, or the event happens, or, where the instrument is
a bill made payable a stated number of months after sight and has been accepted
for honour, with the day on which it was so accepted. If the month in which the
period would terminate has no corresponding day, the period shall be held to
terminate on the last day of such month.
[Section 231
(3) In calculating the date at which a note or bill
made payable a certain number of days after date or after sight or after a
certain event is at maturity, the day of the date, or of presentment for
acceptance or sight, or of protest for non-acceptance, or on which the event
happens, shall be excluded.
[Section 241
(4) When the day on which a note or bill is at maturity is a
public holiday, the instrument shall be deemed to be due on the next
succeeding business day.
Explanation.—The expression "public
holiday" includes Sundays and any other day declared by the Central Government,
by notification in the Official Gazette, to be a public holiday.
[Section 251
Chapter III
Negotiation
30. Mode of negotiation. — An
instrument is negotiable—
(a) by.....delivery thereof, if payable to bearer;
[Section 46, para. 4 and Section 47, main part]
(b)......by indorsement and delivery thereof, if payable to
order.
[Section 46, para. 5 and Section 48]
31. Persons entitled
to negotiate.—Every sole maker, drawer...or holder, or all of several
joint makers, drawers....or holders, of an instrument may, if the
negotiability of such instrument has not been restricted or excluded as
mentioned in section 39, indorse and negotiate the same.
Explanation.—Nothing in this section enables a maker or drawer to
indorse or negotiate an instrument unless he is in lawful possession or is
holder thereof....
[Section 51]
32. Requisites of indorsement. — (1)
Negotiation by indorsement must be of the entire instrument.1
(2) An indorsement......which purports to transfer to the indorsee
only a part of the amount payable, or which purports to transfer the
instrument to two or more indorsees severally, is not valid as a negotiation of
the instrument;2 but where such amount has been paid in part, a
note to that effect may be indorsed on the instrument, which may then be
indorsed for the balance.
1. See section 32(2), BEA.
2. See section 32(2), BEA.
[Section 56]
33. Kinds of indorsements. — An
indorsement may be either in blank or in full, and may be restrictive or
conditional or qualified.
[New]
34. Indorsement in blank and in full.—(1) An
indorsement in blank specifies no indorsee.
(2) An indorsement in full specifies the person to whom or to whose
order the instrument is to be payable.1
1. See section 34(1)(2), BEA.
[Section 16(1), part]
35. Provisions for payee to apply to
indorsee.—The provisions of this Act relating to a payee shall apply with
the necessary modifications to an indorsee.
[Section 16(2)]
36. Conversion of indorsement in blank into
indorsement in full. — When an instrument has been indorsed in blank, any
holder......may, without signing his own name.....convert the indorsement in
blank into an indorsement in full by writing above the ndorser's signature a
direction to pay the amount to or to the order of himself or some other
person; and the holder does not thereby incur the responsibility of an
indorser.1
1. See section 34(4), BEA.
[Section 49]
37. Instruments indorsed blank.—Subject to
the provisions hereinafter contained as to crossed cheques, an instrument
indorsed in blank is payable to the bearer thereof, even though originally
payable to order.
[Section 54)
38. Indorsement in blank followed by
indorsement in full. — If an instrument, after having been indorsed
in blank, is indorsed in full, the amount of it cannot be claimed from the
indorser in full, except by the person to whom it has been indorsed in full, or
by one who derives title through such person.
[Section 55]
39. Restrictive indorsement. — (1) An
indorsement is restrictive which either—
(a) restricts or excludes the further negotiation of the
instrument; or
(b) constitutes the indorsee the agent of the
indorser....
Provided that the mere absence of words implying power to
negotiate does not make the indorsement restrictive.
(2) A restrictive indorsement confers upon the indorsee the right—
(a) to receive payment of the instrument;
(b) to sue any party thereto that his indorser could have
sued, but gives him no power to transfer his rights as indorsee unless it
expressly authorises him to do so.
(3) Where a restrictive indorsement
authorises further transfer, all subsequent indorsees take the instrument with
the same rights and subject to the same liabilities as the first indorsee under
the restrictive indorsement.1
1. See section 36 and 37, NIL. (USA) and section 35,
BEA.
[Section 50, latter half, modified]]
40. Conditional
indorsement.—(1) The indorser of an instrument may, by express words
in the indorsement.........make his liability or the right of the indorsee to
receive the amount due thereon depend upon the happening of a specified event,
although such event may never happen.
(2) Such a condition is valid only as between the indorser and the
indorsee.
(3) Where an instrument purports to be indorsed conditionally, the
condition may be disregarded by the payer, and payment to the indorsee is valid
whether the condition has been fulfilled or not.1
1. See section 33, BEA and section 39, NIL (USA).
[Section 52, para. 1, part]
41. Qualified
indorsement.—(1) The indorser of an instrument may, by express words
in the indorsement, exclude his own liability thereon.
[Section 52, para. 1, part]
(2) Where an indorser so excludes
his liability and afterwards becomes the holder of the instrument, all
intermediate indorsers are liable to him.
[Section 52, para. 2]
42. Conditional delivery.—An
instrument delivered on condition that it is not to take effect except in a
certain event is not negotiable (except in the hands of a holder for
consideration without notice of the condition) unless such event happens.
[Section 47, Exception]
43. Negotiation by legal
representatives.—The legal representative of a deceased person cannot
negotiate, by delivery only, an instrument payable to order and indorsed
by the deceased but not delivered.
[Section 57]
44. Negotiation back before maturity. —
Where an instrument is negotiated back before maturity to the maker or drawer
or a prior indorser or to the acceptor, such party may, subject to the
provisions of this Act, reissue and further negotiable the
instrument.1
1. See section 37, BEA, part.
(New)
45. Effect of negotiation. — Subject to the
provisions contained in this Chapter relating to restrictive, conditional and
qualified indorsements, the person in whose favour an instrument is negotiated
acquires the property therein with the right of further negotiation.....
[Section 50, earlier half modified]
46. When negotiability
ceases. — An instrument may be negotiated (except by the maker,
drawer, drawee or acceptor after maturity) until payment or satisfaction thereof
by the maker, drawer, drawee or acceptor at or after maturity, but not after
such payment or satisfaction, or after it has been restrictively
indorsed.1
1. See section 36(1)(a), BEA.
[Section 601
Chapter IV
Rights Of Holder And Holder In Due Course
47. Rights of
holder. —A holder may sue on the instrument in his own name, receive
payment in due course thereunder and further negotiate it in the manner provided
by this Act.
(New)
48. Rights of holder of an instrument negotiated back
to him. —A person acquiring an instrument in the circumstances mentioned
in section 44 is not entitled to enforce payment of such instrument against any
intervening party to whom he was previously liable.1
1. See section 37, BEA, part.
(New)
49. Instrument acquired after dishonour or when
overdue.—A holder who has acquired an instrument after
dishonour, whether by non-acceptance or non-payment, with notice thereof, or
after maturity, has only, as against the other parties, rights thereon of his
transferor, and is subject to the equities to which the transferor was
subject at the time of acquisition by such holder.
[Section 59, main para.]
50. Accommodation note or
bill. —....Any person who, in good faith and for consideration, becomes the
holder, after maturity, of a note or bill made, drawn or accepted without
consideration, for the purpose of enabling some party thereto to raise money
thereon, may recover the amount of the note or bill from any prior party.
[Section 59, Proviso]
51. Holder claiming through holder
due in course.—(1) A holder.....who derives his title through a
holder in due course, and who is not himself a party to any fraud or
illegality affecting the instrument, has all the rights thereon of that
holder in due course as regards the acceptor and all parties to the
instrument prior to that holder.1
[Section 53, modified]
(2) Where the title of the holder is
defective—
(a) if he negotiates the instrument to a holder in due
course, that holder obtains a good and complete title to the instrument;
and
(b) if he obtains payment of the instrument, the person who
pays him in due course gets a valid discharge for the
instrument.2
1. See section 29(3), BEA.
2. See section 30(3), BEA.
[New]
52. Rights of holder in due course. —A holder
in due course holds the instrument free from any defect of title of prior
parties, and free from defences available to prior parties among themselves, and
may enforce payment of the instrument for the full amount thereof against all
parties liable thereon.1
1. See section 38(2), BEA.
(New)
53. Holder s right to duplicate of lost
instrument.—(1) Where an instrument has been lost before it is
overdue, the person who was the holder thereof may apply to the maker or
drawer to give him another instrument of the same tenor, giving security
to the maker or drawer, if required, to indemnify him against all persons
whatever in case the instrument alleged to have been lost shall be found again.
(2) If the maker or drawer on request as aforesaid refuses to give
such duplicate instrument, he may be compelled to do so.
[Section 45A]
Chapter V
Liability Of Parties
54. Scope of Chapter. — The
liability of the original parties to an instrument, and of persons who become
parties thereto under supervening contracts, such as acceptors, indorsers and
acceptors for honour, shall, subject to the other provisions of this Act, be as
defined in this Chapter.
(New)
55. Stranger signing instrument presumed to be
indorser. —A person placing his signature upon an instrument otherwise
than as maker, drawer or acceptor, is presumed to be an indorser, unless he
clearly indicates by appropriate words his intention to be bound in some other
capacity.1
1. See section 63, NIL (USA) and section 56, BEA.
(New)
56. Liability of drawer or acceptor of a bill of
exchange.—(1) The drawer of a bill, by drawing it, engages that on due
presentment it shall be accepted and paid according to its tenor, and that if it
be dishonoured he will compensate the holder or any indorser who is compelled to
pay it.1
[Section 30, part, modified'
(2) The drawee of a bill is
not liable thereon until acceptance in the manner provided by this Act.
(New)
(3) ....The acceptor before maturity of a bill, by
accepting it, engages that he will pay it according to the tenor of his
acceptance.....and in default of such payment.....such....acceptor is bound
to compensate any party to the bill for any loss or damage sustained by him
and caused by such default.2
[Section 32, part modified]
(4) The acceptor of a
bill already indorsed is not relieved from liability by reason that such
indorsement is forged, if he knew or had reason to believe the indorsement to be
forged when he accepted the bill.
[Section 411
1. See section 55(1), BEA.
2. See section 54(1), BEA.
57. Liability of drawer or drawee of cheque.—(1) The drawer of a
cheque, by drawing it, engages that in case of dishonour by the drawee he
will compensate the holder....1
1. See section 73, para. 2, read with section 55(1),
BEA.
[Section 30, part)
(2) The drawee of a cheque having
sufficient funds of the drawer in his hands properly applicable to the payment
of such cheque shall pay the cheque when duly required so to do, and, in default
of such payment, shall compensate the drawer for any loss or damage caused by
such default.
[Section 31]
58. Liability of a maker of a promissory
note.—.....The maker of a note, by making it,engages that he will pay
it at maturity according to its apparent tenor and in default of such
payment....the maker is bound to compensate any party to the note....for any
loss or damage sustained by him and caused by such default.1
1. See section 88(1), BEA.
[Section 32, part, modified"
59. Liability of indorser of
any instrument.— .....The indorser of an instrument, by indorsing it
engages that on due presentment it shall be accepted and paid according to its
tenor, and that if it be dishonoured, he will compensate the holder or
subsequent indorser who is compelled to pay it.1
1. See section 55(2), BEA.
(Section 35, para. 1, part, modified]
60. Extent of
liability of parties.—(1) The maker of a note, the drawer of a
cheque, the drawer of a bill until acceptance and the acceptor,
are....respectively liable thereon as principal debtors.......
(Section 37, part]
(2)... The other parties to the
instrument are liable thereon as sureties for the maker, drawer or acceptor,
as the case may be.
[Section 37, part]
(3) As between the parties so liable as
sureties, each prior party is....also liable thereon as a principal debtor in
respect of each subsequent party.
(Section 38, part]
61. Provision for contract to the
contrary. —The provisions of sub-section (3) of section 56, section 58,
section 59 or sub-section (1) or sub-section (3) of section 60 do not apply
where there is a contract to the contrary.
(Section 32, part; section 35, para. 1, part; section 37, part;
section 38, part]
62. Liability of surety.—When the holder of an
accepted bill enters into any contract with the acceptor, which, under section
134 or 135 of the Indian Contract Act, 1872, would discharge the other parties,
the holder may expressly reserve his right to charge the other parties, and in
such case they are not discharged.
(Section 391
63. Duration of liability. — The
acceptor, and every prior party to an instrument, are liable thereon to a
holder in due course until the instrument is duly satisfied.
(Section 361
64. Liability of accommodation party and
position of accommodated party. —(1) An accommodation party is liable on
an instrument to a holder in due course, notwithstanding that when such holder
took the instrument he knew such party to be an accommodation
party.1
1. See section 28(2), BEA.
(New)
(2) An accommodation party to an instrument, if he
has paid the amount thereof, is entitled to recover such amount from the party
accommodated.
(New)
(3) No party for whose accommodation an instrument has
been made, drawn, accepted or indorsed can, if he has paid the amount thereof,
recover thereon such amount from any person who became a party to such
instrument for his accommodation.
(Section 43, Exception 11
65. Liability of a party inducing
another to make etc., an instrument.—No party to an instrument who
has induced any other party to make, draw, accept, indorse or transfer the same
to him for a consideration which he has failed to pay or perform in full shall
recover thereon an amount exceeding the value of the consideration (if any)
which he has actually paid or performed.
(Section 43, Exception III]
66. Liability of person signing
as agent.—(1) An agent who signs an instrument......is personally liable
thereon unless he adds to his signature words indicating that he is acting for
and on behalf of a named principal; but the mere addition by a person to his
signature of words describing him as an agent, or as filling a representative
character, does not exempt him from personal liability.1
1. See section 26(1), BEA, and section 20 NIL (USA).
[Section 28, earlier part, modified]
(2) An agent is not
personally liable to a person who induces him to sign upon the belief that
the principal alone would be held liable.
[Section 28, latter part]
67. Liability of legal
representative. —A legal representative of a deceased person who signs an
instrument is liable personally thereon unless he expressly limits his liability
to the extent of the assets received by him as such.
68. Transferor by delivery and transferee. —(1) Where the
holder of an instrument payable to bearer negotiates it by delivery without
indorsing it, he is called a "transferor by delivery".
(2) A transferor by delivery is not liable on the instrument.
(3) A transferor by delivery who negotiates an instrument thereby
warrants to his immediate transferee, being a holder for consideration, that the
instrument is what it purports to be, that he has a right to transfer it, and
that at the time of transfer he is not aware of any fact which renders it
valueless.1
1. See section 58, BEA.
(New)
69. Presentment. —(1) Subject to the
provisions of section 75, an instrument must, in order to make the parties
thereto liable to the holder, be presented for payment in accordance with this
Act.
[Section 64, para. I, part]
Exception.—. . .Presentment for
payment is not necessary in order to charge the maker of a note payable on
demand and not payable at a specified place, or the acceptor of a bill.
(Section 64, Exc., modified)
(2) The provisions of this
section are without prejudice to the provisions relating to presentment for
acceptance in the case of a bill.
(New)
70. Notice of dishonour for non-payment when
obligatory.—(1) When an instrument is dishonoured by non-payment ,
notice must be given, in the manner provided by this Act, that the instrument
has been so dishonoured....
[Section 93, para I, part]
(2) Such notice, however, need
not be given to the maker of the dishonoured note....the acceptor of the
dishonoured bill or the drawee of the dishonoured cheque......
[Section 93, para. 2]
71. Necessity for noting and
protest. —Foreign bills must be protested for dishonour in the manner
provided in Chapter IX of this Part when such protest is required by the law
of the place where they are drawn
[Section 104]
Chapter VI
Presentment For Payment
72. Definition. —In this
Chapter, "presentment" means presentment for payment.
(New)
73. Rules governing presentment for payment.
—(1) An instrument required to be presented for payment must be presented in
the manner hereinafter provided.
(New)
(2) Presentment must be made by the holder or by some
person authorised to receive payment on his behalf
[Section 64, para. 1, part]
(3) Presentment must be made,
in the case of a note, to the maker, in the case of a bill to the acceptor and
in the case of a cheque to the drawee, or to the representative of the maker,
acceptor or drawee.
Explanation.—Where there are several persons, not being partners,
liable on the instrument, as makers, acceptors or drawees, as the case may be,
and no place of payment is specified, presentment must be made to them
all.1
[Section 64, para. 1, part]]
(4) Presentment must be made
at the proper time, as provided below:—
(i) a note or bill not payable on demand must be
presented....at maturity;
[Section 66]
(ii) subject to the provisions of this Act, an
instrument payable on demand must be presented....within a reasonable time
after it is received by the holder;
[Section 74]
(iii) a note payable by instalments must be presented, ... on
the third day after the date fixed for payment of each instalment
[Section 67, earlier part]
(iv) subject to the provisions of section 155, a cheque must,
in order to charge the drawer, be presented ... before the relationship
between the drawer and his banker has been altered to the prejudice of the
drawer;
[Section 72]
(v) a cheque must, in order to charge any person except the
drawer, be presented within a reasonable time after delivery thereof by such
person.
[Section 73]
(5) Presentment....must be made during the usual
hours of business, and, if at a banker's, within banking hours.
[Section 65]
(6) Presentment must be made at the proper
place as provided below:—
(i) where a place of payment is specified in the
instrument, it must be presented at that place;
[Sections 68-69, modified]
(ii) where no place of payment is specified, but the
address of the maker, acceptor or drawee is given in the instrument, it must be
presented at such address;
(New)
(iii) where no place of payment is specified and no address
given, the instrument must be presented at the place of business (if known) or
the ordinary residence (if known), of the maker, acceptor or drawee;
[Section 70]
(iv) in any other case, the presentment may be made to the
maker, acceptor or drawee in person wherever he can be
found.2
1. See section 78 NIL and section 45(6),
BEA.
2. See section 45(4), BEA.
(Section 71, part]
Explanation.—In this sub-section,
"specified place" means a place described with particulars sufficient to enable
the person presenting the instrument to identify the place where the person
sought to be charged with liability can be found.
(New)
(7) Delay in presentment....is excused if the delay is
caused by circumstances beyond the control of the holder and not imputable to
his default, misconduct or negligence. When the cause of delay ceases to
operate, presentment must be made within a reasonable time.
[Section 75A, part]
74. What constitutes valid presentment
and the mode of presentment. —(1) To constitute a valid presentment, it
is not necessary to present the original instrument to the person liable to pay,
but it shall be sufficient if a copy thereof, certified to be true by the
holder, is delivered to such person, either personally or by registered post or
by other effective means.
[Section 64, para. 2, modified]
(2) If, after such
delivery, the person liable to pay so demands, the original instrument shall be
made available to him for inspection during the hours of business of the holder,
and if the holder fails to do so within a reasonable time, the presentment shall
be deemed to be invalid.
(New)
75. When presentment unnecessary.—No
presentment...is necessary, and the instrument shall be deemed to be dishonoured
at the due date for presentment, in any of the following cases:—
[Section 76]
(i) if the maker, acceptor or drawee intentionally
prevents the presentment of the instrument; or
[Clause (a), para. 1]
(b) if, the instrument being payable at his place of business,
he closes such place of business on a business day during the usual business
hours; or
[Clause (a), para. 2]
(c) if, the instrument being payable at some other specified
place, neither he nor any person authorised to pay it attends at such place
on a business day during the usual business hours; or
(Clause (a), para. 3]
(d) if, the instrument not being payable at any specified
place, he cannot after due search be found; or
[Clause (a), para. 41
(e) as against any part sought to be charged therewith, if he
has engaged in writing to pay without presentment; or
[Clause (b)]
(f) as against any party if, after maturity, with knowledge
that the instrument has not been presented, he makes a part payment on account
of the amount due on the instrument, or promises to pay the amount due thereon
in whole or in part, or otherwise waives his right to take advantage of any
default in presentment; or
[Clause (c)]
(g) as against the drawer, if the drawer could not suffer
damage from the want of such presentment; or
[Clause (d)]
(h) where the drawee is a fictitious person;1
or
(New)
(i) as regards an indorser, where the instrument was made,
drawn or accepted for the accommodation of that indorser and he has no reason to
expect that the instrument would be paid if presented;2 or
(New)
(j) where, after the exercise of reasonable diligence,
presentment as required by this Act cannot be effected;3 or
(New)
(k) where a bill has been dishonoured for
non-acceptance.
Explanation.—The fact that the holder has reason to
believe that the instrument will, on presentment, be dishonoured does not
dispense with the necessity for presentment.4
(New)
1. See section 46(2)(b), BEA.
2. See section 46(2)(d), BEA.
3. See section 46(2)(a), para. 2, BEA.
4. See section 46(2), para. 2, BEA.
Chapter VII
Payment, Discharge And Interest
76. Discharge by
payment. —(1).....An instrument is discharged by payment to the holder by
or on behalf of the maker of a note, the drawer of a cheque, the drawer of a
bill until acceptance or the acceptor.
[Section 78, modified]
(2) In the case of an instrument
payable to bearer or......indorsed in blank, payment in due course by the maker,
drawer, acceptor or indorser discharges all the parties thereto.
[Section 82, modified]
(3) In the case of an instrument
made, drawn, accepted or indorsed for accommodation, payment in due course by
the party accommodated discharges the instrument.1
1. See section 59(3), BEA.
(New)
(4) Payment to the holder by any other parry
discharges the liability of the party making the payment.
(New)
(5) Where an instrument has been materially
altered but does not appear to have been so altered,....payment thereof by a
person....liable to pay, and paying the same according to the apparent tenor
thereof at the time of payment and otherwise in due course, shall discharge such
person....from all liability thereon; and such payment shall not be questioned
by reason of the instrument having been altered.....
[Section 89, part]
77. Instrument to be delivered on
payment.—Any person liable to pay, and called upon by the holder....to pay,
the amount due on an instrument is before payment entitled to have it
shown, and is on payment entitled to have it delivered up to him, or, if the
instrument is lost or cannot be produced, to be indemnified against any further
claim thereon against him.
[Section 8]
78. Other modes of discharge.—(1) The
maker, drawer, acceptor or indorser respectively of an instrument
is discharged from liability thereon—
(a) to a holder thereof who cancels such acceptor's or
indorser's signature with intent to discharge him and to all parties claiming
under such holder;
[Section 82(a)]
(b) to a holder thereof who otherwise discharges such maker,
drawer, acceptor or indorser, and to all parties deriving title under such
holder after notice of such discharge;
[Section 82(b)]
(c) when the person liable thereon as principal debtor
becomes the holder thereof at or after its maturity in his own right.
[Section 90, modified]
(2) When the holder of an accepted
bill enters into any contract zvith the acceptor of the nature referred to in
section 62, the other parties are discharged, unless the holder has expressly
reserved his right to charge them.
(New)
(3) When the holder of an instrument, without the
consent of the indorser, destroys or impairs the indorser's remedy against a
prior party, the indorser is discharged from liability to the holder to the same
extent as if the instrument had been paid at maturity. [Section 40]
79. Discharge for non-presentment. —(1) The drawer of a bill or
cheque, and the indorser of a bill or note, are discharged where there is a
default by the holder in presentment of the instrument for payment in accordance
with this Act.
[Section 64, para. 1, part]
(2) The maker of a note payable
on demand and at a specified place is discharged in default of presentment as
aforesaid.
[Section 64, para. 1, part, read with Exc.]
80. Discharge
of parties not consenting to qualified or limited acceptance.—If the holder
of a bill acquiesces in a qualified acceptance as defined in section
12....., all previous parties whose consent is not obtained to such
acceptance are discharged as against the holder, unless on notice give by the
holder they assent to such acceptance.
[Section 86, main para., part]
81. Discharge by material
alteration.—(1) Where an instrument or the acceptance of a bill is
materially altered without the assent of all the parties liable on it, the
instrument or bill is discharged, except as against the party who has himself
made, authorised or assented to the alteration and subsequent indorsers:
Provided that this section shall not apply where the alteration was
made by a stranger without the consent of or any negligence or fraud on the part
of the holder, or where the alteration was made in order to carry out the
common intention of the original parties.
[Section 87, para. 1, modified]
(2)... .Any such alteration,
if made by an indorsee, discharges his indorser from all liability to him in
respect of the consideration for the indorsement.
[Section 87, para. 2]
(3) The provisions of this section are
subject to those of sections 20, 36, 80, 123 and 145.
[Section 87, para. 3]
(4) An acceptor or indorser of an
instrument is'bound by his acceptance or indorsement notwithstanding any
previous alteration of the instrument.
[Section 88]
82. Interest when rate specified and not
specified. —Subject to the provisions of any law for the time being in
force relating to the relief of debtors, and without prejudice to the provisions
of section 34 of the Code of Civil Procedure, 1908?
(a) when interest at a specified rate is expressly made
payable on a note or bill and no date is fixed from which interest is to be
paid, interest shall be calculated at the rate specified, on the amount of
the principal money due thereon, from the date of the note, or, in the case
of a bill, from the date on which the amount becomes payable, until tender
or realisation of such amount, or until the date of the institution of a
suit to recover such amount......;"
[Section 79, modified]
(b) when a note or bill is silent as regards interest or
does not specify the rate of interest, interest on the amount of the principal
money due thereon shall, notwithstanding any collateral agreement relating
to interest between any parties to the instrument, be allowed and calculated at
the rate of six per centum per annum from the date of the note, or, in the
case of a bill, from the date on which the amount becomes payable, until
tender or realisation of the amount due thereon, or until.... the date of the
institution of a suit to recover such amount.......
[Section 80, para. 1, modified]
Chapter VIII
Notice Of Dishonour
83. Dishonour. —Dishonour
takes place either by non-acceptance as provided in Part II or by non-payment as
provided in this Chapter.
(New)
84. Dishonour by non-payment. —An
instrument is said to be dishonoured by non-payment—
(a) when the maker (in the case of a note), the
acceptor (in the case of a bill) or the drawee (in the case of a
cheque) makes default in payment upon being duly required to pay the same;
or
(b) when the instrument is deemed to be dishonoured under
section 15.
[Section 92]
85. Notice of dishonour by whom and to whom to
be given. —When an instrument is dishonoured by non-acceptance or
non-payment, the holder or some party thereto who remains liable thereon, or
a person authorised in this behalf by such holder or party, must give notice of
dishonour—
[Section 93, para. 1, part]
(2) to all.....parties whom the
holder seeks to make jointly and severally or severally liable thereon,
and to some one of several parties whom he seeks to make jointly liable thereon;
or
[Section 94, para. 1, part]
(3) to the representative
of the person to whom the notice is required to be given under clause
(a).
[Section 94, para. 1, part]
86. Mode in which notice of
dishonour should be given. —Notice of dishonour, in order to be valid and
effectual, must conform to the following rules:—
(a) it must be in writing and may be sent by post;
(b) it may be in any form, but it must inform the party to
whom it is given, either in express terms or by reasonable intendment, that the
instrument has been dishonoured and in what way, and that he will be held liable
thereon.
[Section 94, para. 1, part]]
87. Time and place of
notice. —(1) A notice of dishonour must be given within a reasonable
time after dishonour, at the place of business, or, (in case the party has no
place of business), at the residence, of the party for whom it is intended.
[Section 94, para. 1, part]]
(2) When the instrument is
deposited with an agent for presentment, the agent is entitled to the same time
to give notice to his principal as if he were the holder giving notice of
dishonour, and the principal is entitled to a further like period to give notice
of dishonour.
[Section 96]
88. Notice miscarried in post. —If a
notice of dishonour is duly directed and sent by post and miscarried, such
miscarriage does not render the notice invalid.
[Section 94, para 2]
89. Party receiving must transmit
notice of dishonour. —Any party receiving notice of dishonour must, in order
to render any prior party liable to himself, give notice of dishonour to such
party within a reasonable time, unless such party otherwise receives due notice
as provided in this Chapter.
[Section 95]
90. When party to whom notice given is
dead. —When the party to whom notice of dishonour is despatched is dead, but
the party despatching the notice is ignorant of his death, the notice is
sufficient.
[Section 97]
91. When notice of dishonour is
unnecessary.—No notice of dishonour is necessary—
(a) when it is dispensed with by the party entitled
thereto;
(b) in order to charge the drawer, when he has countermanded
payment;
(c) when the party charged could not suffer damage for want of
notice;
(d) when the party entitled to notice cannot after due search
be found; or the party bound to give notice is, for any other reason, unable,
without any fault of his own, to give it;
(e) to charge the drawer, when the acceptor is also a
drawer;
(f) when the party entitled to notice, knowing the facts,
promises unconditionally to pay the amount due on the instrument.
[Section 98]
Chapter IX
Noting And Protest
92. Noting. —(1) When a note or
bill has been dishonoured by non-acceptance or nonpayment, the holder may
cause such dishonour to be noted by a notary upon the instrument, or upon a
paper attached thereto, or partly upon each.
(2) Such note must be made within a reasonable time after dishonour, and
must specify, the date of dishonour, the reason, if any, assigned for such
dishonour, or, if the instrument has not been expressly dishonoured, the reason
why the holder treats it as dishonoured, and the notary's charges.
[Section 99]
93. Protest.—(1) When a note or
bill has been dishonoured by non-acceptance or nonpayment, the holder may,
within a reasonable time, cause such dishonour to be noted and certified by a
notary. Such certificate is called a protest.
[Section 100, para. 1]
(2) When the acceptor of a bill
has become insolvent or his credit has been publicly impeached, before the
maturity of the bill, the holder may, within a reasonable time, cause
a notary to demand better security of the acceptor, and on its being
refused may, within a reasonable time, cause such facts to be noted and
certified as aforesaid. Such certificate is called a protest for better
security.
[Section 100, para. 2]
94. Contents of protest. —A
protest under section 93 must contain—
(a) either the instrument itself, or a literal transcript of
the instrument and of everything written or printed thereupon;
(b) the name of the person for whom and against whom the
instrument has been protested;
(c) a statement that payment or acceptance, or better
security, as the case may be, has been demanded of such person by the notary;
the terms of his answer, if any, or a statement that he gave no answer or that
he could not be found;
(d) when the note or bill has been dishonoured, the place and
time of dishonour, and, when better security has been refused, the place and
time of refusal;
(e) the subscription of the notary making the protest;
(f) in the event of an acceptance for honour or of a payment
for honour, the name of the person by whom, or the person for whom, and the
manner in which, such acceptance or payment was offered and
effected.
Explanation.—A notary may make the demand mentioned in
clause (c) of this section either in person or by his clerk, or, where
authorised by agreement or usage, by registered letter.
[Section 1011
95. Notice of protest. —When a note or
bill is required by law to be protested, notice of such protest must be
given instead of notice of dishonour, in the same manner and subject to the same
conditions; but the notice may be given by the notary who makes the
protest.
[Section 102]
96. Protest for non-payment after dishonour
by non-acceptance.—All bills drawn payable at some other place than the
place mentioned as the residence of the drawee, and which are dishonoured by
non-acceptance may, without further presentment to the drawee, be protested for
non-payment in the place specified for payment, unless paid before or at
maturity.
[Section 103]
97. When noting equivalent to protest.
—For the purposes of this Act, where a bill or note is required to be protested
within a specified time or before some further proceeding is taken, it is
sufficient that the bill has been noted for protest before the expiration of the
specified time or the taking of the proceeding; and the formal protest may be
extended at any time thereafter as of the date of the noting.
[Section 104A]
Chapter X
Reasonable Time
98. Reasonable time. —In determining
what is a reasonable time for the purposes of this Act.......regard shall
be had to the nature of the instrument and the usual course of dealing with
respect to similar instruments; and, in calculating such time, public holidays
shall be excluded.
(Section 1051
99. Reasonable time for giving notice of
dishonour. —(1) A notice of dishonour, when sent by post, shall be deemed
to be given within a reasonable time if it is posted on the day next after the
day of dishonour.
(Section 106, para. 1, modified]
(2) If the holder and the
party to whom a notice of dishonour is given carry on business or live in the
same place, the notice, when sent otherwise than by post, shall be deemed to be
given within a reasonable time if it is despatched in time so as to reach
its destination on the day next after the day of dishonour.
(Section 106, para. 2, modified]
100. Reasonable time for
transmitting such notice. —A party receiving notice of dishonour, who seeks
to enforce his right against a prior party, transmits the notice within a
reasonable time if he transmits it within the same time after its receipt as he
would have had to give notice if he had been the holder.
(Section 1071
Chapter XI
Compensation
101. Rule as to compensation. —(1) The
compensation payable in case of dishonour of an instrument by any party
liable to the holder, drawer or any indorser shall be determined by the
following rules:—
(a) the holder is entitled to recover from any party liable
on the instrument the amount due upon the instrument (principal and
interest), together with expenses properly incurred in presenting, noting
and protesting it;
[Section 117(a)]
(b) the drawer, who has been compelled to pay the amount
due on a bill is entitled to recover from the acceptor the amount so paid
(principal and interest), with interest at six per centum per annum from the
date of payment until tender or realisation thereof;1
1. Section 57(1), BEA.
(New)
(c) an indorser who, being liable, has paid the amount due on
the same is entitled to recover from the acceptor or from the maker or drawer
or from any prior indorser the amount so paid (principal and
interest), with interest at six per centum per annum from the date of
payment until tender or realisation thereof, together with all expenses caused
by the dishonour and payment;
[Section 117(c)]
(d) the sum mentioned in clause (a), (b) or (c) shall, in
so far as it represents the amount due on the instrument (principal and
interest), be paid to the holder, drawer or indorser, as the case may be, in the
following manner:—
(i) where such sum is due to him in Indian currency, the
payment shall be made in that currency;
(ii) where such sum is due to him in the currency of any
foreign country, the payment shall be made in Indian currency at the current
rate of exchange between India and that country as on the date on which such sum
became payable to him;
(Section 117(b) and (d), modified]
(e) the expenses referred to in clause (a) or (c) shall be
paid to the holder or indorser as the case may be, in Indian currency, or, where
the expenses were incurred in the currency of any foreign country, then, in
Indian currency at the current rate of exchange between India and that country
as on the date on which they were incurred by the holder or indorser, as the
case 'may be.
(New)
(2) The party entitled to compensation may draw a bill
upon the party liable to compensate him, payable at sight or on demand, for the
amount due to him, together with all expenses properly incurred by him. Such
bill must be accompanied by the instrument dishonoured and the protest thereof,
if any.
(Section 117(e), earlier half]]
(3) If a bill drawn under
sub-section (2) is dishonoured, the party dishonouring the same is liable to
make compensation thereof in the same manner as in the case of the original
bill.
[Section 117(e), latter half]]
Chapter XII
Special Rules Of Evidence
102. Presumptions as to
negotiable instruments.—Until the contrary is proved, the following
presumptions shall be made:—
(a) that every instrument was made or drawn for
consideration, and that every instrument, when it has been accepted,
indorsed, negotiated or transferred, was accepted, indorsed, negotiated or
transferred for consideration;
(b) that every instrument, acceptance or indorsement
bearing a date was made or drawn on such date;
(c) that every accepted bill was accepted within a
reasonable time after its date and before its maturity;
(d) that every transfer of an instrument was made
before its maturity;
(e) that the indorsements appearing upon an instrument
were made in the order in which they appear thereuopn;
(f) that a lost instrument was duly stamped;
(g) that the holder of an instrument is a holder in due
course:
Provided that, where the instrument has been obtained from the
lawful owner, or from any person in lawful custody thereof, by means of an
offence or fraud, or has been obtained from the maker, drawer or acceptor
thereof by means of an offence or fraud, or for unlawful consideration, the
burden of proving that the holder is a holder in due course lies upon him.
[Section 1181
103. Presumption on proof of protest. —In
a suit upon an instrument which has been dishonoured, the court shall, on proof
of the protest, presume the fact of dishonour, unless and until such fact is
disapproved.
[Section 1191
104. Estoppel against acceptor. —No
acceptor of a bill shall, in a suit thereon by a holder in due course, be
permitted to deny the existence of the drawer, his capacity and authority to
draw the bill, and the genuineness of his signature.1
1. See section 54(2)(a), BEA.
[New)
105. Estoppel against denying original validity of
instrument. —No maker.....or drawer, and no acceptor of a bill for the
honour of the drawer, shall, in a suit on the instrument by a holder in
due course, be permitted to deny the validity of the instrument as originally
made or drawn.
[Section 120]
106. Estoppel against denying capacity of
payee to indorse. —No maker of a note and no acceptor of a bill
payable to order shall, in a suit thereon by a holder in due course, be
permitted to deny the payee's capacity, at the date of the note. or bill, to
indorse the same.
[Section 1211
107. Estoppel against denying signature or
capacity of prior party. —No indorser of an instrument shall, in a
suit thereon by a subsequent holder, be permitted—
(a) to deny the signature or capacity to contract of any prior
party to the instrument;
(b) to deny that the instrument was at the time of his
indorsement a valid and subsisting instrument and that he had then a good title
thereto.1
1. See section 55(2)(c), BEA.
[Section 122]
Chapter XIII
Conflict Of Laws
108. Law governing liability of maker,
acceptor or indorser of a foreign instrument. —Where an instrument made
or drawn in one country is negotiated, accepted or payable in another, the
rights, duties and liabilities of the parties shall, in the absence of a
contract to the contrary, be determined as follows3—
(a) all questions relating to the capacity of the parties
and the validity of the instrument or of its acceptance or negotiation, shall be
governed by the law of the place where the contract constituted by the
instrument, acceptance, or negotiation, as the case may be, was
made:1
1. Section 72(1), BEA.
[Section 134, part, modified]
Provided that-
(i) if an instrument is made, drawn, accepted or indorsed
outside India but in accordance with the law of India, the circumstance that any
agreement evidenced by such instrument is invalid according to the law of the
country wherein it was entered into does not invalidate any subsequent
acceptance made thereon within India;
[Section 136]
(ii) a foreign instrument shall not be invalid or
inadmissible in evidence by reason only of its not being stamped according to
the law of the place where it was made;1
1. See
section 72(1), proviso (a), BEA.
(New)
(b) the law of the place where such instrument is payable
shall govern—
[Section 134, part, modified]
(i) the liability of all parties to the instrument;
(New)
(ii) the duties of the holder with respect to presentment
for acceptance or payment;
(New)
(iii) the date of maturity;
(New)
(iv).....what constitutes dishonour by non-acceptance or by
non-payment;
[Section 135, part]
(v) the necessity for and sufficiency of a protest or notice
of dishonour; [Section 135. part]
(vi) all questions relating to payment and satisfaction,
including the currency in which and the rate of exchange at which the instrument
is to be paid.
(New)
109. Presumption as to foreign law. —The law of
any foreign country......regarding negotiable instruments shall be presumed to
be the same as that of India unless and until the contrary is proved.
[Section 137]
Part II
Bills Of Exchange
110. "Presentment.". —In this
Part, unless the context otherwise requires, "presentment" means presentment for
acceptance.
(New)
111. Several drawees. —A bill may be addressed
to two or more drawees, whether they are partners or not; but an order addressed
to two drawees in the alternative, or, subject to the provisions relating to
drawee in case of need, to two or more drawees in succession, is not a
bill.1
1. See section 6(2), BEA.
(New)
112. In whose favour a bill may be drawn. —A bill
may be drawn payable to or to the order of, the drawer; or it may be drawn
payable to, or to the order of the drawee.1
1. See section 5(1), BEA.
(New)
113. Only drawee can be acceptor except in case of
need or for honour. —No person except the drawee of a bill, or all or some
of several drawees, or a person named therein as a drawee in case of need, or an
acceptor for honour, can bind himself by an acceptance.
[Section 33]
114. Time for deliberation by drawee. —(1)
The holder of a bill must, if so required by the drawee to whom it is presented
for acceptance, allow the drawee forty-eight hours (exclusive of public
holidays) to consider whether he will accept it.
[Section 63]
(2) If such holder allows such drawee more time
than specified in sub-section (1)....all previous parties not consenting
to such allowance are thereby discharged from liability to such holder.
[Section 83]
115. Acceptance by several drawees not
partners.—Where there are several drawees of a bill who are not partners,
each of them can accept it for himself, but none of them can accept it for
another without his authority.
(Section 34]
116. Acceptance of bill drawn in fictitious
name. —An acceptor of a bill drawn in a fictitious name and payable to the
drawer's order is not, by reason that such name is fictitious, relieved from
liability to any holder in due course claiming under an indorsement by the same
hand as the drawer's signature, and purporting to be made by the drawer.
[Section 42]
117. When presentment for acceptance is
necessary. —A bill, in order to fix the acceptor with liability, must be
presented for acceptance before it is presented for payment.
(New)
118. Acceptance of overdue bill. —The
acceptance of an overdue bill is not void; but such acceptance does not preserve
or revive the liability of a drawer or indorser who would be discharged by
reason of non-presentment of the bill for acceptance before maturity.
(New)
119. Time for presentment for acceptance of a bill
payable after sight. —(1) Subject to the provisions of this Act, when a
bill payable after sight is negotiated, the holder must either present it for
acceptance or negotiate it within a reasonable time.
(2) If he does not do so, the drawer and all indorsers prior to that
holder are discharged1
1. See section 40, BEA.
[Section 61, para 1, part, modified]
120. Rules as to
presentment for acceptance and excuses for non-presentment. —(1) A bill
is duly presented for acceptance when it is presented in accordance with the
following rules1—
(a) the presentment must be made by or on behalf of the
holder to the drawee or to his representative, in business hours on a business
day before the bill is overdue;
[Section 61, para 1, part, modified and section 75 part]
(b) (i) where a place of presentment for acceptance is
specified in the bill, it must be presented at that place;
[Section 61, para 3, part]
(ii) where no such place of presentment is specified, but
the address of the drawee is given in the bill, it must be presented at such
address;
(New)
(iii) when no such place of presentment is specified and no
address given, the bill must be presented at the place of business (if known) or
ordinary residence (if known), of the drawee;
(New)
(iv) in any other case, the presentment may be
made to the drawee in person wherever he can be found;
[Section 71, part]
(c) where a bill is addressed to two or
more drawees who are not partners, presentment must be made to them all unless
one has authority to accept for all, in which case presentment may be made to
him only.2
(New)
(2) Delay in presentment.....is excused if the delay is
caused by circumstances beyond the control of the holder and not imputable to
his default, misconduct or negligence. When the cause of delay ceases to
operate, presentment must be made within a reasonable time.
[Section 75A, part]
(3) Presentment in accordance with
these rules is excused, and a bill may be treated as dishonoured by
non-acceptance-
(a) where the drawee is dead or is insolvent or is a
fictitious person or a person not having capacity to contract by
bill;3
(New)
(b) where, at the due date for presentment, the drawee
cannot, after reasonable search, be found at the place at which the bill is to
be presented under sub-clause (i) or (ii) of clause (b) of sub-section
(1);
[Section 61, para. 3, modified]
(c) where the holder of a bill drawn payable elsewhere than
at the place of business or residence of the drawee, has no time with the
exercise of reasonable diligence to present the bill for acceptance before
presenting it for payment on the day it falls due;4
(New)
(d) where, after the exercise of reasonable diligence, such
presentment cannot be effected;5 (New)
(e) where although the presentment has been irregular,
acceptance has been refused on some other ground.6
(New)
(4) The fact that the holder has reason to believe
that the bill, on presentment, will be dishonoured, does not excuse
presentment.7
(New)
1. See section 41(1), BEA.
2. See section 41(1)(b), BEA.
3. See section 41(2)(a), BEA.
4. See section 39(4), BEA.
5. See section 41(2)(b), BEA.
6. See Section 41(2)(c), BEA.
7. See section 41(3), BEA.
121. Presentment by post. —Where authorised by agreement or
usage,....presentment through the post office by means of a registered letter is
sufficient.
[Section 6, para. 41
122. Dishonour by non-acceptance and
its consequences. —(1) A bill is.....dishonoured by non-acceptance?
(a) when the drawee, or one of several drawees not being
partners, makes default in acceptance upon being duly required to accept the
bill;
[Section 91, para. 1, part.]
(b) where presentment......is excused and the bill is not
accepted;
[Section 91, para. 1, part.]
(c) where the drawee is incompetent to contract, or the
acceptance is qualified.
[Section 91, para. 2)
(2) Subject to the provisions of this
Act, when a bill is dishonoured by non-acceptance, an immediate right of
recourse against the drawer and indorsers accrues to the holder, and no
presentment for payment is necessary.1
1. See section 43(2), BEA.
(New)
123. Qualified acceptance. —The holder of a
bill may refuse to take a qualified acceptance, and if he does not obtain an
unqualified acceptance, may treat the bill as dishonoured by
nonacceptance.1
1. See section 44(1), BEA.
(New)
Explanation. —An acceptance is qualified—
(a) where it is conditional, declaring the payment to be
dependent on the happening of an event therein stated;
(b) where it undertakes the payment of part only of the sum
ordered to be paid;
(c) where, no place of payment being specified on the order,
it undertakes the payment at a specified place and not otherwise or elsewhere,
or where, the place of payment being specified in the order, it undertakes the
payment at some other place and not otherwise or elsewhere;
(d) where it undertakes the payment at a time other than that
at which under the bill it would be legally due;
(e)......where the drawees are not partners and the acceptance
is not signed by all of them.
[Section 86, main para, part] [Section 86, Expl.]
124.
Non-presentment for payment in cases of qualified acceptance when does not
discharge the acceptor. —When by the terms of a qualified acceptance
presentment for payment is required, the acceptor, in the absence of express
stipulation to that effect, is not discharged by the omission to present the
bill for payment on the day that it matures.1
1. See section 52(2), BEA.
(New)
125. Notice of dishonour for non-acceptance. —(1)
When a bill is dishonoured by non-acceptance the holder thereof, or some party
thereto who remains liable thereon, must give notice of dishonour to the
drawer and each indorser, and any drawer or indorser to whom such notice is not
given is discharged:1
Provided that where a bill is dishonoured by non-acceptance and notice
of dishonour is not given, the rights of a holder in due course subsequent to
the omission shall not be prejudiced by that omission.2
[Section 93, para 1, part, modified]
(2) Where a bill is
dishonoured by non-acceptance and due notice of dishonour is given, it shall not
be necessary to give notice of a subsequent dishonour by non-payment, unless the
bill shall, in the meantime, have been accepted.2
1. See section 48, BEA.
2. See section 48, BEA.
(New)
126. Liability of banker for negligently dealing with
bill presented for payment. —When a bill accepted payable at a specified
bank has been duly presented there for payment and dishonoured, if the banker so
negligently or improperly keeps, deals with or delivers back such bill as to
cause loss to the holder, he must compensate the holder for such loss.
[Section 77]
127. Mode of giving notice of dishonour.
—Subject to the foregoing provisions, the rules governing the mode of giving
notice of dishonour for non-payment shall, mutatis mutandis, apply in respect of
the mode of giving notice of dishonour for non-acceptance.
128. Drawee in case of need. —Where a drawee in case of need is
named in a bill, or in any indorsement thereon, the bill is not dishonoured
until it has been dishonoured by such drawee.
[Section 115]
129. Acceptance and payment without
protest. —A drawee in case of need may accept and pay the bill without
previous protest.
[Section 116]
130. Acceptance for honour. —When a
bill has been noted or protested for nonacceptance or for better
security, any person, not being a party already liable thereon may, with the
consent of the holder, by writing on the bill, accept the same for the honour of
any party thereto.
(Section 1081
131. How acceptance for honour must be
made. —A person desiring to accept for honour must, by writing on the bill
under his hand, declare that he accepts under protest the protested bill for the
honour of the drawer or of a particular indorser whom he names, or generally for
honour.
(Section 1091
132. Acceptance not specifying for whose
honour it is made. —Where the acceptance does not express for whose honour
it is made, it shall be deemed to be made for the honour of the drawer.
(Section 1101
133. "Liability of acceptor for
honour".—An acceptor for honour binds himself, to all parties subsequent to
the party for whose honour he accepts, to pay the amount of the bill if the
drawee does not; and such party and all prior parties are liable in their
respective capacities to compensate the acceptor for honour for all the loss or
damage sustained by him in consequence of such acceptance:
Provided that—
(a) an acceptor for honour is not liable to the holder of the
bill unless it is presented, or, (in case the address given by such acceptor on
the bill is a place other than the place where the bill is made payable),
forwarded for presentment, not later than the day next after the day of its
maturity;
(Section 111, para. 21
(b) an acceptor for honour cannot be charged unless the bill
has at its maturity been presented to the drawee for payment, and has been
dishonoured by him, and noted or protested for such dishonour.
(Section 1121
134. Payment for honour. —When a
bill has been noted or protested for non-payment, any person may pay the
same for the honour of any party liable to pay the same, provided that the
person so paying (or his agent in that behalf) has previously declared before a
notary the party for whose honour he pays and that such declaration has
been recorded by such notary.
(Section 1131
135. Two or more persons offering to pay for
honour. —Where two or more persons offer to pay a bill for the honour of
different parties, the person whose payment will discharge most parties to the
bill shall have the preference.1
1. See section 68(2), BEA.
(New)
136. Rights and duties of payer for honour.
-(1) Any person paying for honour, on paying to the holder the amount of the
bill and the notarial expenses incidental to its dishonour, is entitled to
receive both the bill itself and the protest. If the holder does not on demand
deliver them up, he shall be liable to the payer for honour in
damages.1
(New)
(2) Such person... is also entitled to all the
rights....and is subject to all the duties2 of the holder at
the time of such payment, in relation to the party for whose honour he pays
and all parties liable to that party, and may recover from all such
parties all sums so paid by him with interest thereon and with all expenses
properly incurred in making such payment.
1. See section 68(6), BEA.
2. See section 68(5), BEA.
[Section 114]
137. Calculation of maturity in case of a
bill accepted for honour. —Where a bill payable after sight is accepted
for honour, its maturity is calculated from the date of the noting for
non-acceptance, and not from the date of acceptance for honour.1
1. See section 65(5), BEA.
(New)
138. Set of Bills. —Bills may be drawn in
parts, each part being numbered and containing a provision that it shall
continue payable only so long as the others remain unpaid. All the parts
together make a set; but the whole set constitutes only one bill, and is
extinguished when one of the parts, if a separate bill, would be extinguished.
Exception.—When a person accepts or indorses different parts of
the bill in favour of different persons, he and the subsequent indorsers of each
part are liable on such part as if it were a separate bill.
[Section 132]
139. Holder of first acquired part entitled
to all. —As between holders in due course of different parts of the same
set, he who first acquired title to his part is entitled to the other parts and
the money represented by the bill.
[Section 133]
Part III
Promissory Notes
140. Presentment of promissory note for
sight. —A promissory note, payable at a certain period after sight, must be
presented to the maker thereof or his representative (if he can after
reasonable search be found) for sight by a person entitled to demand
payment, within a reasonable time after it is made and in business hours on a
business day. In default of such presentment, no party thereto is liable thereon
to the person making such default.
[Section 62]
Part IV
Cheques
141. Cheque payable to order or bearer. —(1)
Where a cheque payable to order purports to be indorsed by or on behalf of the
payee, the drawee is discharged by payment in due course.
(Section 85(1)]
(2) Where a cheque is originally expressed to
be payable to bearer, the drawee is discharged by payment in due course to the
bearer thereof, notwithstanding any indorsement whether in full or in blank
appearing thereon, and notwithstanding that any such indorsement purports to
restrict or exclude further negotiation.
(Section 85(2)1
142. Revocation of banker's authority.
—The duty and authority of a banker to pay a cheque drawn on him by his
customer are determined by—
(1) countermand of payment;
(2) notice of the customer's death;
(3) notice of adjudication of the customer as an
insolvent.1
1. See section 75, BEA.
(New)
143. General and special crossing defined. —(1)
Where a cheque bears across its face an addition of—
(a) the words "and company" or any abbreviation thereof,
between two parallel transvere lines, either with or without the words "not
negotiable", or
(b) ......two parallel transverse lines simply, either with or
without the words "not negotiable",
that addition constitutes a crossing, and
the cheque is crossed generally.1
1. See section 76(1), BEA.
[Section 123]
(2) Where a cheque bears across its face an
addition of the name of a banker, either with or without the words "not
negotiable", that addition constitutes a crossing, and the cheque is crossed
specially and to that banker.1
1. See section 76(2), BEA.
[Section 124]
144. Cheque crossed "account payee".
—(1) Where a cheque crossed generally bears across its face an addition of
the words "account payee" between the tzvo. parallel transverse lines
constituting the general crossing, the cheque, besides being crossed generally,
is said to be crossed "account payee".
(2) When a cheque is crossed "account payee"—
(a) it shall cease to be negotiable; and
(b) it shall be the duty of the banker collecting payment
of the cheque to credit the proceeds thereof only to the account of the payee
named in the cheque.
(New)
145. Crossing by drawer or after issue. -(1) A
cheque may be crossed generally or specially by the drawer.1
(New)
(2) Where a cheque is uncrossed, the holder may cross it
generally or specially.
[Section 125, para. 1]
(3) Where a cheque is crossed
generally, the holder may cross it specially.
(Section 125, para. 2]
(4) Where a cheque is crossed generally
or specially, the holder may add the words "not negotiable".
[Section 125, para. 3]
(5) Where a cheque is crossed
specially, the banker to whom it is crossed may again cross it specially to
another banker, his agent, for collection.
[Section 125, para. 4]
(6) Where an uncrossed cheque, or a
cheque crossed generally, is sent to a banker for collection, he may cross it
specially to himself.2
1. See section 77(1), BEA.
2. See section 77(6), BEA.
146. Crossing a material part of a cheque. —A crossing
authorised by this Act is a material part of the cheque; it shall not be lawful
for any person to obliterate, or, except as authorised by this Act, to add to or
alter, the crossing.1
1. See section 78, BEA.
(New)
147. Payment of a cheque crossed generally or
specially. —(1) Where a cheque is crossed generally, the banker on whom it
is drawn shall not pay it otherwise than to a banker.
(2) Where a cheque is crossed specially, the banker on whom it is drawn
shall not pay it otherwise than to the banker to whom it is crossed, or his
agent, being a banker, for collection.
[Section 126]
148. Duties of banker as to crossed
cheques. —Where a cheque is crossed specially to more than one banker,
except when crossed to an agent for collection, being a banker,1 the
banker on whom it is drawn shall refuse payment thereof.
1. See section 79(1), BEA.
[Section 127]
149. Liability of a banker paying crossed
cheques otherwise than to a banker. —Where the banker on whom a cheque is
drawn which is crossed generally, pays the same otherwise than to a banker,
or pays a cheque crossed specially otherwise than to the banker to whom it is so
crossed, or his agent for collection, being a banker, he is liable to the true
owner of the cheque than a for any loss he may sustain owing to the cheque
having been so paid:
[Section 129, modified]
Provided that where a cheque is
presented for payment which does not at the time of presentment appear to be
crossed, or to have had a crossing which has been obliterated, added to or
altered otherwise than as authorised by this Act, the banker paying the cheque
in good faith and without negligence shall not be responsible or incur any
liability, nor shall the payment be questioned, by reason of the cheque having
been crossed, or of the crossing having been obliterated or having been added to
or altered otherwise than as authorised by this Act, and of payment having been
made otherwise than to a banker or to the banker to whom the cheque is or was
crossed or to his agent for collection, being a banker, as the case may
be.1
1. Cf. section 79(2), proviso, BEA.
[Section 89, part]
150. Protection to banker and drawer
where cheque is crossed. —Where the banker, on whom a crossed cheque is
drawn, in good faith and without negligence pays it, if crossed generally; to a
banker, and if crossed specially, to the banker to whom it is crossed, or his
agent for collection, being a banker,1 the banker paying the
cheque, and, if the cheque has come to the hands of the payee, the drawer
thereof, shall respectively be entitled to the same rights and be placed in the
same position in all respects as if payment of the cheque had been made to the
true owner thereof.
1. See section 80, BEA.
[Section 128, modified]
151. Cheque bearing words "not
negotiable". —Where a person takes a cheque crossed generally or
specially, bearing in either case the words "not negotiable", he shall not have,
and shall not be capable of giving, a better title to the cheque than that which
the person from whom he took it had.
[Section 130]
152. Protection to collecting banker.
—Subject to the provisions of this Act relating to cheques crossed "account
payee", where a banker in good faith and without negligence receives payment
for a customer of a cheque crossed generally or specially to himself, and the
customer has no title or a defective title thereto,1 the banker
shall not.......incur any liability to the true owner of the cheque by reason
only of having received such payment.
1. See section 82, BEA.
Explanation.—A banker receives payment of a crossed cheque for a
customer within the meaning of this section notwithstanding that he credits his
customer's account with the amount of the cheque before receiving payment
thereof.
[Section 131]
153. Protection to banker crediting cheque
crossed "account payee". —Where a cheque is delivered for collection to a
banker which does not at the time of such delivery appear to be crossed "account
payee" or to have had a crossing "account payee" which has been obliterated or
altered, the banker, in good faith and without negligence collecting payment of
the cheque and crediting the proceeds thereof to a customer, shall not incur any
liability by reason of the cheque having been crossed "account payee", or of
such crossing having been obliterated or altered, and of the proceeds of the
cheque having been credited to a person who is not the payee thereof
(New)
154. Cheque not operating as assignment of funds.
—A cheque, of itself, does not operate as an assignment of any part of the
funds to the credit of the drawer with the banker.1
1. Cf. section 53(1), read with para. 2 of section 73,
BEA.
(New)
155. When cheque not duly presented and drawee
damaged thereby. —(1) Where a cheque is not presented for payment within a
reasonable time of its issue, and the drawer or person on whose account it is
drawn had the right, at the time when presentment ought to have been made, as
between himself and the banker, to have the cheque paid and suffers actual
damage through the delay, he is discharged to the extent of such damage, that is
to say, to the extent to which such drawer or person is a creditor of the banker
to a larger amount than he would have been if such cheque had been paid.
[Section 84(1)]
(2) The holder of a cheque as to which such
drawer or person is so discharged shall be a creditor, in lieu of such drawer or
person, of such banker to the extent of such discharge and entitled to recover
the amount from him.
[Section 84(3)1
156. Drafts. —Where any draft, that is,
an order to pay money, drawn by one office of a bank upon another office of the
same bank for a sum of money payable to order on demand, purports to be indorsed
by or on behalf of the payee, the bank is discharged by payment in due course.
[Section 85A]
157. Application of this chapter to
drafts. —The provisions of this chapter shall apply to any draft, as defined
in section 156, as if the draft were a cheque.
[Section 131A1
Part V
Miscellaneous
158. Repeal. —The Negotiable
Instruments Act, 1881, is hereby repealed.
Appendix II
Table A Showing the provisions in the existing Act and the
corresponding provisions, if any, in Appendix I.
Existing provision
|
Corresponding provision, if any, in Appendix
I
|
1
|
2
|
Section 1
|
Sections 1 and 2
|
Section 2 (Repealed)
|
|
Section 3
|
Section 4(5)
|
Section 4
|
Sectidn 4(29)
|
Section 5, para. 1
|
Section 4(7)(ii)
|
Section 5, para. 2
|
Section 13(b)
|
Section 5, para. 3
|
Section 13(a)
|
Section 5, para. 4
|
Section 13(d)
|
Section 6
|
Section 4(8)
|
Section 7, para. 1
|
Section 4(10)
|
Section 7, para. 2
|
Section 4(11)
|
Section 7, para. 3
|
Section 4(1)
|
Section 7, para. 4
|
Section 4(2)
|
Section 7, para. 5
|
Section 4(27)
|
Section 8
|
Section 4(12)
|
Section 9
|
Section 4(13)
|
Section 10
|
Section 4(28)
|
Section 11
|
Section 4(15)
|
Section 12
|
Section 4(23)
|
Section 13(1), main para.
|
|
Expin. (i)
|
Section 4(18)
|
Expin. (ii)
|
Section 4(17)
|
Expin. (iii)
|
Section 18
|
Section 13(2)
|
Section 25
|
Section 14
|
Section 4(24)
|
Section 15
|
Section 4(14), part
|
Section 16(1), part
|
Section 34
|
Section 16(1), part
|
Section 4(14), part
|
Section 16(2)
|
Section 35
|
Section 17
|
Section 24
|
Section 18
|
Section 23
|
Section 19, part
|
Section 14(b)
|
Section 19, part
|
Section 14(c)
|
Section 20
|
Section 20
|
Section 21, earlier half
|
Sections 16 & 4(4), part
|
Section 21, latter half
|
Sections 14 & 4(4), part
|
Section 22, para. 1
|
Section 4(22)
|
Section 22, para. 2
|
Section 29(1)
|
Section 23
|
Section 29(2)
|
Section 24
|
Section 29(3)
|
Section 25
|
Section 29(4)
|
Section 26, para. 1
|
Section 5
|
Section 26, para. 2
|
Section 6
|
Section 26, para. 3
|
Section 7
|
Section 27
|
Section 8
|
Section 28, earlier part
|
Section 66(1)
|
Section 28, latter part
|
Section 66(2)
|
Section 29
|
Section 67
|
Section 30, part
|
Section 56(1)
|
Section 30, part
|
Section 57(1)
|
Section 31
|
Section 57(2)
|
Section 32, part
|
Section 56(3)
|
Section 32, part
|
Section 58
|
Section 32, part
|
Section 61, part
|
Section 33
|
Section 113
|
Section 34
|
Section 115
|
Section 35, para. 1, part
|
Section 59
|
Section 35, para. 1, part
|
Section 61, part
|
Section 35, para. 2
|
Section 14(d)
|
Section 36
|
Section 63
|
Section 37, part
|
Section 60(1) & (2)
|
Section 37, part
|
Section 61, part
|
Section 38, part
|
Section 60(3)
|
Section 38, part
|
Section 61, part
|
Section 39
|
Section 62
|
Section 40
|
Section 78(3)
|
Section 41
|
Section 56(4)
|
Section 42
|
Section 116
|
Section 43, para. 1, earlier half
|
Section 10(a)
|
Section 43, para. 1 latter half
|
Section 10(b)
|
Section 43, Exc. I
|
Section 64(3)
|
Section 43, Exc. II
|
Section 65
|
Section 44, para. 1
|
Section 11
|
Section 44, Expin.
|
Section 22
|
Section 45
|
Section 12
|
Section 45A
|
Section 53
|
Section 46, para. 1
|
Section 21(1)
|
Section 46, para. 2
|
Section 21(2)
|
Section 46, para, 3
|
Section 21(3)
|
Section 46, para. 4
|
Section 30(a), part
|
Section 46, para. 5
|
Section 30(b), part
|
Section 47, main part
|
Section 30(a), part
|
Section 47, Exc.
|
Section 42
|
Section 48
|
Section 30(b), part
|
Section 49
|
Section 36
|
Section 50, earlier half
|
Section 45
|
Section 50, latter half
|
Section 39
|
Section 51
|
Section 31
|
Section 52, para. 1 part
|
Section 40
|
Section 52, para. 1
|
Section 41(1)
|
Section 52, para. 2
|
Section 41(2)
|
Section 53
|
Section 51(1)
|
Section 54
|
Section 37
|
Section 55
|
Section 38
|
Section 56
|
Section 32
|
Section 57
|
Section 43
|
Section 58
|
Section 28
|
Section 59, main para.
|
Section 49
|
Section 59, proviso
|
Section 50
|
Section 60
|
Section 46
|
Section 61, para. 1, part
|
Section 119
|
Section 61, para. 1, part
|
Section 120(1)(a), part
|
Section 61, para. 2
|
Omitted [see section 120(3)(d)]
|
Section 61, para. 3, part
|
Section 120(1)(b)(i)
|
Section 61, para. 3 part
|
Section 120(3)(b)
|
Section 61, para. 4
|
Section 121
|
Section 62
|
Section 140
|
Section 63
|
Section 114(1)
|
Section 64, para. 1 part
|
Section 79(2)
|
Section 64, para. 1 part
|
Section 69(1), main para
|
Section 64, para. 1, part
|
Section 79(1)
|
Section 64, para. 1
|
Section 73(2)
|
Section 64, para. 1 part
|
Section 73(3), part
|
Section 64, para. 2
|
Section 74(1)
|
Section 64, Exception
|
Section 69(1), Exception
|
Section 65
|
Section 73(5)
|
Section 66
|
Section 73(4)(i)
|
Section 67, earlier part
|
Section 73(4)(iii)
|
Section 67, latter part
|
Omitted
|
Section 68
|
Section 73(6)(i), part
|
Section 69
|
Section 73(6)(i), part
|
Section 70
|
Section 73(6)(iii)
|
Section 71, part.
|
Section 73(6)(iv), main para.
|
Section 71, part
|
Section 120(1)(b)(iv)
|
Section 72
|
Section 73(4)(iv)
|
Section 73
|
Section 73(4)(v)
|
Section 74
|
Section 73(4)(ii)
|
Section 75, part
|
Section 73(3), part
|
Section 75, part
|
Section 120(1)(a), part
|
Section 75, part
|
Section 120(1)(a), part
|
Section 75A, part
|
Section 73(7)
|
Section 75A, part
|
Section 120(2)
|
Section 76(a), para. 1
|
Section 75(a)
|
Section 76(a), para. 2
|
Section 75(b)
|
Section 76(a), para. 3
|
Section 75(c)
|
Section 76(a), para. 4
|
Section 75(d)
|
Section 76(b)
|
Section 75(e)
|
Section 76(c)
|
Section 75(f)
|
Section 76(d)
|
Section 75(g)
|
Section 77
|
Section 126
|
Section 78
|
Section 76(1)
|
Section 79
|
Section 82(a)
|
Section 80, para. 1
|
Section 82(b)
|
Section 80, Expin
|
Omitted
|
Section 81
|
Section 77
|
Section 82(a)
|
Section 78(1)(a)
|
Section 82(b)
|
Section 78(1)(b)
|
Section 82(c)
|
Section 76(2)
|
Section 83
|
Section 114(2)
|
Section 84(1)
|
Section 155(1)
|
Section 84(2)
|
Omitted
|
Section 84(3)
|
Section 155(2)
|
Section 85(1)
|
Section 141(1)
|
Section 85(2)
|
Section 141(2)
|
Section 85A
|
Section 156
|
Section 86, main para., part
|
Section 80
|
Section 86, main para., part
|
Section 123, Expl. (e)
|
Section 86, Expin.
|
Section 123, Expl. (e) to (d)
|
Section 87, para. 1
|
Section 81(1)
|
Section 87, para. 2
|
Section 81(2)
|
Section 87, para. 3
|
Section 81(3)
|
Section 88
|
Section 81(4)
|
Section 89, part
|
Section 76(5)
|
Section 89, part
|
Section 149, proviso
|
Section 90
|
Section 78(1)(c)
|
Section 91, para. 1, part
|
Section 122(1)(a)
|
Section 91, para. 1, part
|
Section 122(1)(b)
|
Section, 91, para. 2
|
Section 122(1)(c)
|
Section 92
|
Section 84
|
Section 93, para. 1, part
|
Section 70(1), 125(1)
|
Section 93, para. 1, part
|
Section 85, opening lines
|
Section 93, para. 1, part
|
Section 125(1)
|
Section 93, para 1, part
|
Section 85(a)
|
Section 93, para. 2
|
Section 70(2)
|
Section 94, para. 1, part
|
Section 85(b)
|
Section 94, para. 1, part
|
Section 86
|
Section 94, para. 1, part
|
Section 87(1)
|
Section 94, para 2.
|
Section 88
|
Section 95
|
Section 89
|
Section 96
|
Section 87(2)
|
Section 97
|
Section 90
|
Section 98
|
Section 91
|
Section 99
|
Section 92
|
Section 100, para. 1
|
Section 93(1)
|
Section 100, para. 2
|
Section 93(2)
|
Section 101
|
Section 94
|
Section 102
|
Section 95
|
Section 103
|
Section 96
|
Section 104
|
Section 71
|
Section 104A
|
Section 97
|
Section 105
|
Section 98
|
Section 106, para. 1
|
Section 99(1)
|
Section 106, para. 2
|
Section 99(2)
|
Section 107
|
Section 100
|
Section 108
|
Section 130
|
Section 109
|
Section 131
|
Section 110
|
Section 132
|
Section 111, para. 1
|
Section 133, main para.
|
Section 111, para. 2
|
Section 133, proviso (a)
|
Section 112
|
Section 133, proviso (b)
|
Section 113
|
Section 134
|
Section 114
|
Section 136(2)
|
Section 115
|
Section 128
|
Section 116
|
Section 129
|
Section 117(a)
|
Section 101(1)(a)
|
Section 117(b)
|
Section 101(1)(d), part
|
Section 117(c)
|
Section 101(1)(c)
|
Section 117(d)
|
Section 101(1)(d), part
|
Section 117(e), earlier half
|
Section 101(2)
|
Section 117(e), latter half
|
Section 101(3)
|
Section 118
|
Section 102
|
Section 119
|
Section 103
|
Section 120
|
Section 105
|
Section 121
|
Section 106
|
Section 122
|
Section 107
|
Section 123
|
Section 143(1)
|
Section 124
|
Section 143(2)
|
Section 125, para. 1
|
Section 145(2)
|
Section 125, para. 2
|
Section 145(3)
|
Section 125, para. 3
|
Section 145(4)
|
Section 125, para. 4
|
Section 145(5)
|
Section 126
|
Section 147
|
Section 127
|
Section 148
|
Section 128
|
Section 150
|
Section 129
|
Section 149, main para.
|
Section 130
|
Section 151
|
Section 131
|
Section 152
|
Section 131A
|
Section 157
|
Section 132
|
Section 138
|
Section 133
|
Section 139
|
Section 134, part
|
Section 108(a), main para.
|
Section 134, part
|
Section 108(b)(i)
|
Section 135, part
|
Section 108(b)(iv)
|
Section 135, part
|
Section 108(b)(v)
|
Section 136
|
Section 108(a) proviso (i)
|
Section 137
|
Section 109
|
Section 138 (repealed)
|
...
|
Section 139 (repealed)
|
....
|
Appendix II
Table B Showing the provisions in Appendix I to the proposals
and the corresponding provisions, if any, in the existing Act, the Bills of
Exchange Act, 1882, and Uniform Negotiable Instruments Law.
Appendix I
|
Existing Act
|
B.E. Act
|
NIL
|
1
|
2
|
3
|
4
|
| Section 1 | .. | .. | |
| Section 2 | Section 1, para 2, part | .. | .. |
| Section 3 | New | ... | ... |
| Section 4(1) | Section 7, para. 3 | Section 17(1) | Section 132 |
| Section 4(2) | Section 7, para. 4 | Section 65(1) | Section 161 |
| Section 4(3) | New | Section 28(1) | Section 29 |
| Section 4(4) | Section 21 | Section 10(1)(a) | Section 7(1) |
| Section 4(5) | Section 3 | Section 2 | Section 191, part |
| Section 4(6) | New | Section 2 | Section 191, part |
| Section 4(7)(i) | New | Section 2 | Section 191, part |
| Section 4(7)(ii) | Section 5, para. 1 | Section 3(1) | Section 126 |
| Section 4(8) | Section 6 | Section 73 | Section 185 |
| Section 4(9) | New | Section 2 | Section 191, part |
| Section 4(10) | Section 7, para. 1 | ... | |
| Section 4(11) | Section 7, para. 2 | Section 15 | Section 131 |
| Section 4(12) | Section 8 | Section 2 | Section 191, part |
| Section 4(13) | Section 9 | Section 29 | Section 52 |
| Section 4(14) | Section 15 and Section 16(1), part | Section 32(1) | Section 31 |
| Section 4(15) | Section 11 & 12 | Section 4(1) | Section 129 |
| Section 4(16) | New | ... | ... |
| Section 4(17) | Section 13(1), Expin. (ii) | Section 8(3) | Section 9 |
| Section 4(18) | Section 13(1), Expin. (i) | Section 8(4) | Section 8 |
| Section 4(19) | New | Section 2 | Section 191 |
| Section 4(20) | New | ||
| Section 4(21) | New | Section 64(2) | Section 125 |
| Section 4(22) | Section 22, para. 1 | ||
| Section 4(23) | Section 13(1) main para. | ||
| Section 4(24) | Section 14 | Section 31(1) | Section 30 |
| Section 4(25) | New | ||
| Section 4(26) | New | ||
| Section 4(27) | Section 7, para. 5 | ... | |
| Section 4(28) | Section 10 | Section 59(1), para. 2 | Section 88 |
| Section 4(29) | Section 4 | Section 83(1) | Section 194 |
| Section 4(30) | New | ... | ... |
| Section 5 | Section 26, para. 1 | Section 22(1), para. | ... |
| Section 6 | Section 26, para. 2 | Section 22(2) | Section 22, part |
| Section 7 | Section 26, para. 3 | Section 22(1), proviso | Section 22, part |
| Section 8 | Section 27 | ... | Section 19. |
| Section 9 | New | Section 23(2) | ... |
| Section 10(1) | Section 43, para. 1 earlier half | ... | Section 28. |
| Section 10(2) | Section 43, para. 1 latter half | .. | .. |
| Section 11 | Section 44, para. 1 | .. | .. |
| Section 12 | Section 45 | ... | ... |
| Section 13(a) | Section 5, para. 3 | Section 9(1) | Section 2 |
| Section 13(b) | Section 5, para. 2 | .. | ... |
| Section 13(c) | New | Section 3(3) | Section 3 |
| Section 13(d) | Section 5, para. 4 | Section 7(1) | Section 8 |
| Section 13(e) | New | Section 7(3) | Section 9(3) |
| Section 14(a) | Section 21, earlier half | Section 10(1)(a) | Section 7(1) |
| Section 14(b) | Section 19, part | Section 10(1)(b) | Section 7(2) |
| Section 14(c) | Section 19, part | .. | ... |
| Section 14(d) | Section 35, para. 2 | Section 10(2) | Section 7, last para |
| Section 15 | New | Section 36(3) | .... |
| Section 16 | Section 21, latter half | Section 10(1)(a) | Section 7(1) |
| Section 17 | New | Section 11 | Section 4 |
| Section 18 | Section 13(1) expin. | Section 8(5) | |
| Section 19 | New | Section 13(2) | Section 12 |
| Section 20 | Section 20 | Section 20 | Section 14 |
| Section 21(1) | Section 46 para. 1 | Section 21(1) | Section 16, part |
| Section 21(2) | Section 46, para. 2 | Section 21(2)(a) | Section 16, part |
| Section 21(3) | Section 46, para. 3 | Section 21(2)(b) | Section 16, part |
| Section 22 | Section 44, Expin. | ||
| Section 23 | Section 18 | Section 9(2) | Section 17(1) |
| Section 24 | Section 17 | Section 5(2) | Section 17(5) and |
| Section 130 | |||
| Section 25 | Section 13(2) | Section 7(2) | Section 8(4) and 8(5) |
| Section 26 | New | Section 23(1) | Section 18, latter half |
| Section 27 | New | Section 24 | Section 23 |
| Section 28 | Section 58 | Section 29(2), Section 38(2), and | Section 55 and Section 57 |
| Section 38(3) | |||
| Section 29(1) Section 29(2) | Section 22, para. 2 Section 23 | Section 14(1), part, Section 14(4) | Section 85, earlier part |
| Section 29(3) | Section 24 | Section 14(2) and 14(3) | Section 86 |
| Section 29(4) | Section 25 | Section 14(1)(a)&(b) | Section 85, later part |
| Section 30(a) | Section 46, para. 4 and Section 47 main part | Section 31(2) | Section 30, part |
| Section 30(b) | Section 46, para. 5 and | Section 31(3), part | Section 30, part |
| Section 48 | |||
| Section 31 | Section 51 | Section 31(3), part | |
| and Section 32(3) | Section 30, part and Section 41 | ||
| Section 32 | Section 56 | Section 32(2) | Section 32 |
| Section 33 | New | Section 32(6) | Sec.33 |
| Section 34 | See. 16(1), part | Section 34(1), part and 34(2) | Section 34 |
| Section 35 | Section 16(2) | ||
| Section 36 | Section 49 | Section 34(4) | Section 35 |
| Section 37 | Section 54 | Section 34(1), latter half | Section 9(5) |
| Section 38 | Section 55 | ... | Section 40, latter half |
| Section 39 | Section 50, latter half | Section 35 | Section 36 & Section 37 |
| Section 40 | Section 52, para. 1, part | Section 33 | Section 39, earlier half |
| Section 41(1) | Section 52, para 1, part | Section 16(1) | Section 38 |
| Section 41(2) | Section 52, para. 2 | ... | |
| Section 42 | Section 47, exception | ||
| Section 43 | Section 57 | ... | |
| Section 44 | New | Section 37, part | Section 50, part |
| Section 45 | Section 50, earlier, half | ||
| Section 46 | Section 60 | Section 36(1)(a) and (b) Section 47 | |
| Section 47 | New | Section 38, part | Section 51, part |
| Section 48 | New | Section 37, part | Section 50, part |
| Section 49 | Section 59, main para. | Section 36(2) and 36(5) Section 52(2) | |
| Section 50 | Section 59, proviso | ... | |
| Section 51(1) | Section 53 | Section 29(3) | Section 57, latter half |
| Section 51(2) | New | Section 38(3) | |
| Section 52 | New | Section 38(2) | Section 57, earlier half |
| Section 53 | Section 45A | Section 69 | |
| Section 54 | New | ||
| Section 55 | New | Section 56 | Section 63 |
| Section 56(1) | Section 30, part | Section 55(1) | Section 61 |
| New | Section 53(1) | ||
| Section 32, part | Section 55(2) | Section 62 | |
| Section 41 | ... | ... | |
| Section 57(1) | Section 30, part | Section 73, para. 2 | Section 61 read |
| and Section 55(1) | with Section 185 | ||
| Section 57(2) | Section 31 | Section 74 | |
| Section 58 | Section 32, part | Section 88(1) | Section 60 |
| Section 59 | Section 35, para. 1, part | Section 55(2) | Section 66, last para |
| Section 60(1)&(2) | Section 37, part | ... | |
| -3 | Section 38, part | ||
| Section 61 | Section 32, part | ||
| Section 35, para. 1, part Section 37, part Section 38, part | |||
| Section 62 | Section 39 | ||
| Section 63 | Section 36 | ... | |
| Section 64(1) | New | Section 28(9) | Section 29 |
| Section 64(2) | New | ... | |
| Section 64(3) | Section 43, Exc. I | Section 121(2) | |
| Section 65 | Section 43, Exc. II | ... | Section 28 |
| Section 66(1) | Section 28, earlier part | Section 26(1) | Section 69, 20, part |
| -2 | Section 28, latter part | ... | ... |
| Section 67 | Section 29 | Section 26(1), part | Section 20, part |
| Section 68 | New | Section 58 | Section 65, part |
| Section 69(1) | Section 64, para. 1 part | Section 45, 1st line | Section 70, part |
| main para. | |||
| Section 69(1) Exc. Section 69(2) | Section 64, Exc. New | Section 87 | Section 70, part |
| Section 70(1) | Section 93, para, 1 part | Section 48, part | Section 89, part |
| -2 | Section 93, para. 2 | Section 48, part | Section 89, part |
| Section 71 | Section 104 | Section 51(2) | Section 152 |
| Section 72 | New | ||
| Section 73(1) | New | ||
| -2 | Section 64, para. I, part | Section 45(3) part | Section 72(1) |
| -3 | Section 64, para, 1, part and Section 75 | Section 45(3), part and Section 45(6) | Section 72(4), and Section 78 |
| Section 73(4)(i) | Section 66 | Section 45(1) | Section 71, earlier half |
| (4)(ii) | Section 74 | Section 45(2) | Section 71, latter half, part. |
| Section 73(4)(iii) | Section 67, earlier part | ||
| (4)(iv) | Section 72 | Section 74(1) | Section 186 |
| (4)(v) | Section 73 | Section 45(2) read with Section 73 | Section 71, latter half, part |
| Section 65 | Section 45(3), part | Section 72(2) | |
| (6)(i) | Section 68 & Section 69 | Section 45(4)(a) | Section 73(1) |
| (6)(ii) | Nezv | Section 45(4)(b) | Section 73(2) |
| (6)(iii) | Section 70 | Section 45(4)(c) | Section 73(3) |
| (6)(iv) | Section 71, part | Section 45(4)(d) | Section 73(4) |
| Expin. | New | ||
| Section 75A, part | Section 46(1) | Section 81 | |
| Section 74(1) | Section 64, para. 2 | Section 45(8) and | Section 74, part |
| Section 52(4), part | |||
| -2 | New | ||
| Section 75 | |||
| Cl. (a) | Section 76(a), para. 1 | ||
| (b) | Section 76(a), para. 2 | .. | |
| (c) | Section 76(a), para. 3 | Section 46(5) | |
| (d) | Section 76(a), para. 4 | ||
| (e) | Section 76(b) | Section 46(2)(c), part | Section 82(3), part |
| (f) | Section 76(c) | Section 46(2)(c), part | Section 82(3), part |
| (g) | Section 76(d) | ||
| (h) | New | Section 46(2)(b) | Section 82(2) |
| (i) | New | Section 46(2)(d) | Section 80 |
| (j) | New | Section 46(2)(a), para. 1 | Section 82(1) |
| (k) | New | ||
| Explanation | New | Section 46(2)(a), para 2. | |
| Section 76(1) | Section 78 | Section 59(1), part | Section 119(1), part |
| -2 | Section 82(c) | Section 59(1), part | Section 119(1), part |
| -3 | New | Section 59(3) | Section 119(2) |
| -4 | New | Section 59(2) | Section 121 |
| -5 | Section 89, part | Section 64(1), proviso. | |
| Section 77 | Section 81 | Section 52(4), part | Section 74. part |
| Section 78(1)(a) | Section 82(a) | Section 64 | Section 119(3) |
| (1)(b) | Section 82(b) | Section 62 | Section 122 |
| (1)(c) | Section 90 | Section 61 | Section 119(5) |
| -2 | New | ... | Section 120(5) and (6) |
| -3 | Section 40 | ... | ... |
| Section 79(1) | Section 64, para. 1part. | Section 45 & Section 87(2) | Section 70, part |
| -2 | Section 64, para. 1, part, read with Exc. | Section 87(1) | Section 70, part |
| Section 80 | Section 86, main para. part. | Section 44(2) | Section 142, part |
| Section 81(1) | Section 87, para. 1 | Section 64(1),main para., part. | Section 124, part |
| -2 | Section 87, para. 2 | ... | ... |
| -3 | Section 87, para. 3 | ... | ... |
| -4 | Section 88 | Section 64(1),main para., part. | ... |
| Section 82(a) | Section 79 | Section 9(3) | Section 17(2) |
| (b) | Section 80, para. 1 | ... | |
| Section 83 | New | ... | |
| Section 84 | Section 92 | Section 47(1) | Section 83 |
| Section 85, opening line | Section 93, para. 1, part. | Section 48, para 1, part | Section 89, part |
| Cl. (a) | Section 93, para. 1, part | Section 48, para. 1. part | Section 89, part |
| Cl. (b) | Section 94, para. 1, part. | Section 49(8),(9) and (10). | Section 97, part Section 98 and |
| Section 101. | |||
| Section 86 | Section 94, para. 1, part | Section 49(5) | Section 96 |
| Section 87(1) | Section 94, para. 1, part | Section 49(12) | Section 102 |
| -2 | Section 96 | Section 49(13) | Section 94, part |
| Section 88 | Section 94 para. 2 | Section 49(15) | Section 105 |
| Section 89 | Section 95 | ... | .... |
| Section 90 | Section 97 | ... | ... |
| Section 98 | Section 50(2) | Section 109, Section 112 | |
| Section 91 | .... | Section 114 & Section 115 | |
| Section 92 | Section 99 | Section 51(1) and Section 54(4) | .. |
| Section 93(1) | Section 100, para. 1 | Section 51(2) | Section 152 & Section 154 |
| -2 | Section 100, para. 2 | Section 51(5) | Section 159 |
| Section 94 | Section 101 | Section 51(7) | Section 153 |
| Section 95 | Section 102 | ... | ... |
| Section 96 | Section 103 | Section 51(6)(b) | Section 156, part |
| Section 97 | Section 104A | Section 93 | Section 155, latter half. |
| Section 98 | Section 105 | Section 45(2) latter half, Section 74(2) and Section 86(2). | Section 193 |
| Sec.. 99(1) | Section 106, para. 1 | Section 49(12)(b) | Section 104 and Section 103(3) |
| -2 | Section 106, para. 2 | Section 49(12)(a) | Sect=103(1) and (2). |
| Section 100 | Section 107 | Sec.49(14) | Section 107 |
| Section 101(1)(a) | Section 117(a) | Section 57(1) Part | ... |
| Section 101(1)(b) | New | Section 57(1) Part | ... |
| Section 1(c) | Section 117(c) | Section 57(1) Part | ... |
| Section 1(e) | New | ... | ... |
| Section (2) | Section 57(e) earlier Half | .... | ... |
| Section (3) | Section 117(e), latter half | ... | ... |
| Section 102 | Section 118 | Section 13(1), 30(1), 30(2), 32(5) and 36(4) | Section 11, Section 24 and 45 |
| Section 103 | Section 119 | ... | ... |
| Section 104 | New | Section 54(2) | Section 62(1) |
| Section 105 | Section 120 | Section 54(2)(a) | ... |
| Section 106 | Section 121 | Section 54(2)(c), Section 55(1)(b) and 88(2) | |
| Section 107 | Section 122 | Section 55(2)(b) | Section 66, read with Section 65 |
| Section 108 | |||
| Cl. (a), main para. | Section 134, part | Section 72(1) | |
| Cl. (a), prov. (i) | Section 136 | ... | ... |
| Cl. (a), prov. (ii) | New | Section 72(i), prov. (a) | ... |
| Cl. (b)(i) | Section 134, part | ... | ... |
| Cl. (b)(ii) | New | Section 72(3), part. | ... |
| Cl. (b)(iii) | New | Section 72(5) | ... |
| Cl. (b)(iv) | Section 135 part | ... | ... |
| Cl. (b)(v) | Section 135 part | Section 72(5) | ... |
| Cl. (b)(vi) | New | Section 72(4) | ... |
| Section 109 | Section 137 | ... | ... |
| Section 110 | New | .... | ... |
| Section 111 | New | Section 6(2) | Section 128 |
| Section 112 | New | Section 5(1) | Section 8(2) and 8(3) |
| Section 113 | Section 33 | ... | ... |
| Section 114(1) | Section 63 | Section 42, earlier, half | Section 136 |
| Section 114(2) | Section 83 | Section 42, latter half | ... |
| Section 115 | Section 34 | ... | ... |
| Section 116 | Section 42 | ... | ... |
| Section 117 | New | ... | ... |
| Section 118 | New | ... | ... |
| Section 119 | Section 61, para. 1, part | Section 40 | Section 143(1) and 144 |
| Section 120(b)(a) | Section 61, para. 1,part & Section 75, part | Section 41(1)(a)(c) and (d) | Section 145, opening lines & (2) &(3) |
| Section 120(b)(i) | Section 61, para. 3, part | .. | ... |
| Section 120(1)(b)(ii) | New | ... | ... |
| Section 120(1)(b)(iii) | New | ... | ... |
| Section 120(1)(b)(iv) | Section 71 part | ... | ... |
| Section 120(1)(c) | New | Section 41(i)(b) | Section 145(1) |
| Section 120(2) | Section 75A part | ... | |
| Section 120(3)(a) | New | Section 41(2)(a) | Section 148(1), part |
| Section 120(3)(b) | Section 61, para. 3, part | Section 148(1), part | |
| Section 120(3)(c) | New | Section 39(4) | |
| Section 120(3)(d) | New | Section 41(2)(b) | Section 148(2) |
| Section 120(3)(e) | New | Section 41(2)(c) | Section 148(3) |
| Section 120(4) | New | Section 41(3) | |
| Section 121 | Section 61, para. 4 | Section 41(1)(e) | |
| Section 122(1)(a) | Section 91, para. 1, part | Section 43(1)(a) | Section 149(1) |
| Section 122(1)(b) | Section 91, para. 1, part | Section 43(1)(b) | Section 149(2) |
| Section 122(1)(c) | Section 91, para. 2 | ... | |
| Section 122(2) | New | Section 43(2) | Section 151 |
| Section 123, main para. | New | Section 44(1) | Section 142, earlier part |
| Expin. Cl.(a) to (d) | Section 86, Expl. | Section 141(1) to(4) | |
| Explri. CI.(e) | Section 86, main para. part | Section 141(5) | |
| Section 124 | New | Section 52(2) | ... |
| Section 125(1) | Section 93, para 1, part | Section 48, part | Section 89, part |
| Section 125(2) | New | Section 48, part | Section 89, part |
| Section 126 | Section 77 | ... | |
| Section 127 | New | ... | |
| Section 128 | Section 115 | Section 131, last sentence. | |
| Section 129 | Section 116 | Section 67(1) | |
| Section 130 | Section 108 | Section 65(1) | Section 161 |
| Section 131 | Section 109 | Section 65(3) | Section 162 |
| Section 132 | Section 110 | Section 65(4) | Section 163 |
| Section 133 main para. | Section 111, para. 1 | Section 66 | Section 164 |
| prov. (a) | Section 111, para. 2 | Section 67(2) | Section 165, part and |
| 168 | |||
| prov. (b) | Section 112 | Section 67(1) | Section 167 |
| Section 134 | Section 113 | Section 68(1)(3) and (4) | Section 171 to 173 |
| Section 135 | New | Section 68(2) | Section 174 |
| Section 136(1) | New | Section 68(6) | Section 177 |
| Section 136(2) | Section 114 | Section 68(5) | Section 175, latter half |
| Section 137 | New | Section 65(5) | Section 166 |
| Section 138 | Section 132 | Section 71(1) | Section 178 |
| 71(2) | Section 180 | ||
| 71(4) | Section 181 | ||
| 71(6) | Section 183 | ||
| Section 139 | Section 133 | Section 71(3) | Section 179 |
| Section 140 | Section 62 | Section 40(1) read with Section 89 | ... |
| Section 141(1) | Section 85(1) | Section 60 read with Section 73, para. 2 | ... |
| -2 | Section 85(2) | ... | ... |
| Section 142 | New | Section 75 | ... |
| Section 143(1) | Section 123 | Section 176(1) | ... |
| -2 | Section 124 | Section 76(2) | ... |
| Section 144 | New | ... | ... |
| Section 145(1) | New | Section 77(1) | ... |
| -2 | Section 125, para. 1 | Section 77(2) | ... |
| -3 | Section 125, para. 2 | Section 77(3) | ... |
| -4 | Section 125, para. 3 | Section 77(4) | |
| -5 | Section 125, para. 4 | Section 77(5) | ... |
| -6 | New | Section 77(6) | ... |
| Section 146 | New | Section 78 | ... |
| Section 147 | Section 126 | ... | ... |
| Section 148 | Section 127 | Section 79(1) | ... |
| Section 149 main para | Section 129 | Section 79(2), main para | ... |
| Proviso | Section 89, part | Section 79(2), proviso | |
| Section 150 | Section 128 | Section 80 | ... |
| Section 151 | Section 130 | Section 81 | ... |
| Section 152 | Section 131 | Section 82 | ... |
| Section 153 | New | ... | ... |
| Section 154 | New | Section 53(1) read with section 73, para. 2 | ... |
| Section 155(1) | Section 84(1) | Section 74(1) | ... |
| -2 | Section 84(3) | Section 74(3) | ... |
| Section 156 | Section 85A | ... | ... |
| Section 157 | Section 131A |
...
|
... |
| Section 158 | New | ... |
Appendix III
|
Section in Appendix I
|
Contents
|
Corresponding Section in existing
Act
|
|
Part I
|
||
|
GENERAL
|
||
|
Chapter
I
|
||
|
PRELIMINARY
|
||
|
Section 1
|
Short title, extent and
commencement
|
|
|
Section 2
|
Saving Section I. para2, part.
|
|
|
Section 3
|
Operation of the Act on negotiable
instruments
|
New
|
|
Section 4
|
Definitions—
|
|
|
(1) Acceptor
|
Section 7, para. 3.
|
|
|
(2) Acceptor for honour
|
Section 7, para. 4.
|
|
|
(3) Accommodation party
|
New
|
|
|
(4) "At sight" "on
presentment", "after sight"
|
Section 21
|
|
|
(5) Banker
|
Section 3, amplified
|
|
|
(6) Bearer
|
New
|
|
|
(7) (i) Bill
|
New
|
|
|
(ii) Bill of exchange
|
Section 5, para. 1.
|
|
|
(8) Cheque
|
Section 6.
|
|
|
(9) Delivery
|
New
|
|
|
(10) "Drawer" and
"drawee"
|
Section 7, para. 1.
|
|
|
(11) "Drawee in case of
need".
|
Section 7, para. 2.
|
|
|
(12) "Holder"
|
Section 8.
|
|
|
(13) "Holder in due
course"
|
Section 9.
|
|
|
(14) "Indorsement"
"indorser" and "indorsee"
|
Section 15, Section 16 (1), part.
|
|
|
(15) "Inland instrument"
and "Foreign instrument"
|
Secs. 11 and 12.
|
|
|
(16) "Instrument"
|
New
|
|
|
(17) "Instrument payable to
bearer"
|
Section 13(1), Expin. (ii)
|
|
|
(18) Instrument payable to order
|
Section 13(i), Expin. (i)
|
|
|
(19) "Issue"
|
New
|
|
|
(20) "Maker"
|
New
|
|
|
(21) "Material
alteration"
|
New
|
|
|
(22) "Maturity"
|
Section 22, para. 1
|
|
|
(23) "Negotiable
instrument"
|
Section 13(1) main para.
|
|
|
(24) "Negotiation"
|
Section 14
|
|
|
(25) "Notary"
|
New
|
|
|
(26) "Note"
|
New
|
|
|
(27) "Payee"
|
Section 7, para. 5.
|
|
|
(28) "Payment in due
course"
|
Section 10
|
|
|
(29) "Promissory Note"
|
Section 4.
|
|
|
(30) "Representative"
|
New
|
|
|
Chapter
II
|
||
|
FORM
AND INTERPRETATION
|
||
|
Section 5
|
Applicability of the Contract Act
|
Section 26, para 1, modified.
|
|
Section 6
|
Incapacity of minor
|
Section 26, para, 2 modified
|
|
Section 7
|
Corporation's power
|
Section 26, para 3
|
|
Section 8
|
Agent's authority
|
Section 27
|
|
Section 9
|
Authority of partners
|
New
|
|
Section 10
|
Instrument made without
consideration
|
(1) Section 43, para, 1 earlier
half.
|
|
(2) Section 43, para. 1 latter
half.
|
||
|
Section 11
|
Partial absence or failure of
money consideration
|
|
|
Section 12
|
Partial failure of consideration
not consisting of money
|
|
|
Section 13
|
"Certain sum"
"unconditional" "certain person" and "fictitious
payee"
|
Section 44, para. 1. Section 45
|
|
(a) Section 5, para 3.
|
||
|
(b) Section 5, para 2.
|
||
|
(c) New
|
||
|
(d) Section 5, para 4,
|
||
|
(e) New
|
||
|
Section 14
|
Instruments payable on demand
|
(a) Section 21, earlier half
|
|
(b) Section 19, part
|
||
|
(c) Section 19, part
|
||
|
(d) Section 35, para. 2, modified
|
||
|
Section 15
|
When instrument payable on demand
overdue
|
New
|
|
Section 16
|
"After sight"
|
Section 21, latter half
|
|
Section 17
|
Instrument payable at a
determinable future time
|
New
|
|
Section 18
|
Effect of drawing or indorsing
instrument payable to order
|
Section 13(1), Expl. (iii)
|
|
Section 19
|
Effect of ante dating and post
dating
|
New
|
|
Section 20
|
Inchoate instrument
|
Section 20
|
|
Section 21
|
Negotiable instrument when
complete
|
(1) Section 46, para. 1
|
|
(2) Section 46, para. 2,
|
||
|
(3) Section 46, para. 3,
|
||
|
Section 22
|
Immediate parties
|
Section 44, Expin.
|
|
Section 23
|
Difference in figures and words
|
Section 18
|
|
Section 24
|
Ambiguous instruments
|
Section 17
|
|
Section 25
|
Payees may be joint
|
Section 13(2).
|
|
Section 26
|
Signature in trade or assumed name
|
New
|
|
Section 27
|
Forged or unauthorised signature
|
New
|
|
Section 28
|
Defective title
|
Section 58, modified
|
|
Section 29
|
Maturity how determined
|
(1) Section 22, para. 2.
|
|
(2) Section 23
|
||
|
(3) Section 24
|
||
|
(4) Section 25
|
||
|
Chapter
III
|
||
|
NEGOTIATION
|
||
|
Section 30
|
Mode of negotiation
|
(a) Section 46, para. 4 and
Section 47, main para.
|
|
(b) Section 46, para. 5 and
Section 48
|
||
|
Section 31
|
Persons entitled to negotiate
|
Section 51
|
|
Section 32
|
Requisites indorsement
|
Section 56
|
|
Section 33
|
Kinds of indorsements
|
New
|
|
Section 34
|
Indorsement in blank and in full
|
Section 16(i) part
|
|
Section 35
|
Provision for payee to apply to
indorsee
|
Section 16(2)
|
|
Section 36
|
Conversion of indorsement in blank
intoindorsement in full
|
Section 49
|
|
Section 37
|
Instruments indorsed in blank
|
Section 54
|
|
Section 38
|
Indorsement in blank followed by
indorsement in full
|
Section 55
|
|
Section 39
|
Restrictive indorsement
|
Section 50, latter half modified
|
|
Section 40
|
Conditional indorsement
|
Section 52, para. 1, part
|
|
Section 41
|
Qualified indorsement
|
(1) Section 52, para. 1, part
|
|
(2) Section 52, para. 2
|
||
|
Section 42
|
Conditional delivery
|
Section 47, Exception I
|
|
Section 43
|
Negotiation by legal
representatives
|
Section 57
|
|
Section 44
|
Negotiation back before maturity
|
New
|
|
Section 45
|
Effect of negotiation
|
Section 50, earlier half modified
|
|
Section 46
|
When negotiability ceases
|
Section 60
|
|
Chapter
IV
|
||
|
RIGHTS
OF HOLDER AND HOLDER IN DUE COURSE
|
||
|
Section 47
|
Right of holder
|
New
|
|
Section 48
|
Rights of holder of an instrument
negotiated back to him
|
New
|
|
Section 49
|
Instrument acquired after
dishonour or when overdue
|
Section 59, main para.
|
|
Section 50
|
Accommodation note or bill
|
Section 59, Proviso
|
|
Section 51
|
Holder claiming through holder in
due course
|
(1) Section 53, modified.
|
|
(2) New
|
||
|
Section 52
|
Rights of holder in due course
|
New
|
|
Section 53
|
Holder's right to duplicate of
lost instrument
|
Section 45A.
|
|
Chapter
V
|
||
|
LIABILITY
OF PARTIES
|
||
|
Section 54
|
Scope of chapter
|
New
|
|
Section 55
|
Stranger signing instrument
presumed be indorser to be indorser
|
New
|
|
Section 56
|
Liability of drawer or acceptor of
a bill of exchange
|
(1) Section 30, part,modified.
|
|
(2) New
|
||
|
(3) Section 32, part, modified
|
||
|
(4) Section 41
|
||
|
Section 57
|
Liability of drawer or drawee of
cheque
|
(1) Section 30, part
|
|
(2) Section 31
|
||
|
Section 58
|
Liability of a maker of a
promissory note
|
Section 32, part, modified
|
|
Section 59
|
Liability of indorser of any
instrument
|
Section 35, para. 1, part modified
|
|
Section 60
|
Extent of liability of parties
|
(1) Section 37, part
|
|
(2) Section 37, part
|
||
|
(3) Section 38, part
|
||
|
Section 61
|
Provision for contract to the
contrary
|
Section 32, part Section 45 para.
1 part, Section 37, part, Section 38 part.
|
|
Section 62
|
Liability of surety
|
Section 39
|
|
Section 63
|
Duration of liability
|
Section 36
|
|
Section 64
|
Liability of accommodation party
and position of accommodated party
|
(1) New
|
|
(2) New
|
||
|
(3) Section 43 Exception
|
||
|
Section 65
|
Liability of party inducing
another to make etc., an instrument
|
Section 43 Exception II
|
|
Section 66
|
Liability of person signing as
agent
|
(1) Section 28, earlier part
modified
|
|
Section 67
|
Liability of legal representative
|
|
|
Section 68
|
Transfer by delivery and
transferee
|
New
|
|
Section 69
|
Presentment
|
(1) Section 64, para. 1, part
Exception section 64 Exc. Modified
|
|
(2) New
|
||
|
Section 70
|
Notice of dishonour for
non-payment when obligatory
|
(1) Section 93, para. I, part
|
|
(2) Section 93, para. 2 Section
104
|
||
|
Section 71
|
Necessity for noting and protest
|
Section 104
|
|
Chapter
VI
|
||
|
Presentment
For Payments
|
||
|
Section 72
|
Definition
|
New
|
|
Section 73
|
Rules governing presentment for
payment
|
(1) New
|
|
(2) Section 64 para. 1, part
|
||
|
(3) Section 64, para. 1, part
& Section 75
|
||
|
(4)(i) Section 66
|
||
|
(ii) Section 74
|
||
|
(iii) Section 67, earlier part
|
||
|
(5) Section 65
|
||
|
(6)(i) Secs. 68-69. modified
|
||
|
(ii) New
|
||
|
(iii) Section 70
|
||
|
(iv) Section 71, part Explanation
New
|
||
|
(7) Section 75A part
|
||
|
Section 74
|
What constitutes valid presentment
and the mode of presentment
|
(1) Section 64 para. 2. modified
|
|
(2) New
|
||
|
Section 75
|
When presentment unnecessary
|
Section 76
|
|
(a) Cl. (a) para. 1,
|
||
|
(b) Cl. (a) para. 2
|
||
|
(c) Cl. (a) para. 3
|
||
|
(d) Cl. (a) para 4
|
||
|
(e) Cl. (b)
|
||
|
(f) Cl. (c)
|
||
|
(g) Cl. (d)
|
||
|
(h) New
|
||
|
(i) New
|
||
|
(j) New
|
||
|
(k) New
|
||
|
Explanation New
|
||
|
Chapter
VII
|
||
|
Payment,
Discharge And Interest
|
||
|
Section 76
|
Discharge by payment
|
(1) Section 78 modified
|
|
(2) Section 82(c) modified
|
||
|
(3) New
|
||
|
(4) New
|
||
|
(5) Section 89, part
|
||
|
Section 77
|
Instrument to be delivered on
payment
|
Section 81
|
|
Section 78
|
Other modes of discharge
|
(1) (a) Section 82(a)
|
|
(b) Section 82(b)
|
||
|
(c) Section 90, modified
|
||
|
(2) New
|
||
|
(3) Section 40.
|
||
|
Section 79
|
Discharge for non-presentment
|
(1) Section 64, para. 1, part
|
|
(2) Section 64, para. 1, part,
read with exceptions
|
||
|
Section 80
|
Discharge of parties not
consenting to qualified or limited acceptance
|
Section 86, main para. part
|
|
Section 81
|
Discharge by material alteration
|
(1) Section 87, para. 1, modified.
|
|
(2) Section 87, para. 2.
|
||
|
(3) Section 87, para. 3
|
||
|
(4) Section 88
|
||
|
Section 82
|
Interest when rate specified and
not specified
|
(a) Section 79, modified
|
|
(b) Section 80, para. 1, modified
|
||
|
Chapter
VIII
|
||
|
Notice
Of Dishonour
|
||
|
Section 83
|
Dishonour
|
New
|
|
Section 84
|
Dishonour by non-payment
|
Section 92
|
|
Section 85
|
Notice of dishonour by whom and to
whom to be given
|
Section 93, para. 1, part
|
|
(a) Section 93, para. 1, part
|
||
|
(b) Section 94, para. 1, part
|
||
|
Section 86
|
Mode in which notice of dishonour
should be given
|
Section 94, para. 1, part
|
|
Section 87
|
Time and place of notice Section
|
(1) Section 94, para. 1, part
|
|
(2) Section 96
|
||
|
Section 88
|
Notice miscarried in post
|
Section 94, para. 2
|
|
Section 89
|
Party receiving must transmit notice
of dishonour
|
Section 95
|
|
Section 90
|
When party to whom notice given is
dead Section
|
Section 97
|
|
Section 91
|
When notice of dishonour is
unnecessary
|
Section 98
|
|
Chapter
IX
|
||
|
Noting
And Protest
|
||
|
Section 92
|
Noting
|
Section 99
|
|
Section 93
|
Protest
|
(1) Section 100, para. 1
|
|
(2) Section 100, para. 2
|
||
|
Section 94
|
Contents of protest
|
Section 101
|
|
Section 95
|
Notice of protest
|
Section 102
|
|
Section 96
|
Protest for non-payment after
dishonour by non-acceptance
|
Section 103
|
|
Section 97
|
When noting equivalent to protest
|
Section 104A
|
|
Chapter X
|
||
|
Reasonable Time
|
||
|
Section 98
|
Reasonable time
|
Section 105
|
|
Section 99
|
Reasonable time for giving notice
of dishonour
|
(1) Section 106, para. 1 modified
|
|
(2) Section 106, para. 2 modified
|
||
|
Section 100
|
Reasonable time for transmitting
such notice
|
Section 107
|
|
Chapter XI
|
||
|
Compensation
|
||
|
Section 101
|
Rule as to compensation
|
(1) (a) Section 117(a)
|
|
(b) New
|
||
|
(c) Section 117(c)
|
||
|
(d) Section 117(b) and (d)
modified
|
||
|
(e) New
|
||
|
(2) Section 117(e), earlier half
|
||
|
(3) Section 117(e), latter half.
|
||
|
Chapter
XII
|
||
|
Special
Rules Of Evidence
|
||
|
Section 102
|
Presumptions as to negotiable
instruments
|
Section 118
|
|
Section 103
|
Presumption on proof of protest
|
Section 119
|
|
Section 104
|
Estoppel against acceptor
|
New
|
|
Section 105
|
Estoppel against denying original
validity of instrument
|
Section 120
|
|
Section 106
|
Estoppel against denying capacity
of payee to indorsee
|
Section 121
|
|
Section 107
|
Estoppel against denying signature
or capacity of prior party
|
Section 122
|
|
Chapter
XIII
|
||
|
Conflict
Of Laws
|
||
|
Section 108
|
Law governing liability of maker,
acceptor or indorser of a foreign instrument.
|
(a) Section 134, part, modified.
Proviso—(i) Section 136 (ii) New
|
|
(b) (i) Section 134 part, modified
|
||
|
(ii) New
|
||
|
(iii)New
|
||
|
(iv) Section 135, part
|
||
|
(v) Section 135, part
|
||
|
(vi) New
|
||
|
Section 109
|
Presumption as to foreign law
|
Section 137
|
|
Part II
|
||
|
Bills
Of Exchange
|
||
|
Section 110
|
Presentment
|
New
|
|
Section 111
|
Several drawees
|
New
|
|
Section 112
|
In whose favour a bill may be
drawn
|
New
|
|
Section 113
|
Only drawee can be acceptor except
in case of need or for honour
|
Section 33
|
|
Section 114
|
Time for deliberation by drawee
|
(1) Section 63(2) Section 83
|
|
Section 115
|
Acceptance by several drawees not
partners
|
Section 34
|
|
Section 116
|
Acceptance of bill drawn in
fictitious name
|
Section 42
|
|
Section 117
|
When presentment for acceptance is
necessary
|
New
|
|
Section 118
|
Acceptance of overdue bill
|
New
|
|
Section 119
|
Time for presentment for
acceptance of a bill payable after sight
|
Section 61, para. 1, part modified
|
|
Section 120
|
Rules as to presentment for
acceptance and excuses for non-presentment
|
(1) (a) Section 61, part 1, part,
modified and Sec. 75, part
|
|
(b)(i) Section 61, para. 3, part
|
||
|
(ii) New
|
||
|
(iii) New
|
||
|
(iv) Section 71, part
|
||
|
(c) New
|
||
|
(2) Section 75A, part
|
||
|
(3) (a) New
|
||
|
(b) Section 61, para. 3, part,
modified.
|
||
|
(c) New;
|
||
|
(d) New
|
||
|
(e) New
|
||
|
(4) New
|
||
|
Section 121
|
Presentment by post
|
Section 61, para. 4.
|
|
Section 122
|
Dishonour by non-acceptance and
its consequences
|
(1) (a) Section 91 para. 1; part
|
|
(b) Section 91 para. 1, part
|
||
|
(c) Section 91, para. 2 (2) New
|
||
|
Section 123
|
Qualified acceptance
|
New
|
|
Expin. (a) to (d)—Section 86,
Expl.
|
||
|
Expin.—(e) Section 86, main para.
part
|
||
|
Section 124
|
Non-presentment' for payment in
cases of qualified acceptance when does not discharge the acceptor
|
New
|
|
Section 125
|
Notice of dishonour for
non-acceptance
|
(1) Section 93, para, 1 part
modified
|
|
(2) New
|
||
|
Section 126
|
Liability of banker for
negligently dealing with bill presented for payment
|
Section 77
|
|
Section 127
|
Mode of giving notice of dishonour
|
New
|
|
Section 128
|
Drawee in case of need
|
Section 115
|
|
Section 129
|
Acceptance and payment without
protest
|
Section 116
|
|
Section 130
|
Acceptance for honour
|
Section 108
|
|
Section 131
|
How acceptance for honour must be
made
|
Section 109
|
|
Section 132
|
Acceptance not specifying for
whose honour it is made
|
Section 110
|
|
Section 133
|
Liability of acceptor for honour
|
Section 111, para. 1.
|
|
Proviso—(a) Section 111para. 2.
|
||
|
(b) Section 112.
|
||
|
Section 134
|
Payment for honour
|
Section 113
|
|
Section 135
|
Two or more persons offering to
pay for honour New
|
|
|
Section 136
|
Rights and duties of payer for
honour
|
(1) New
|
|
(2) Section 114
|
||
|
Section 137
|
Calculation of maturity in case of
a bill accepted for honour
|
New
|
|
Section 138
|
Set of bills
|
Section 132
|
|
Section 139
|
Holder of first acquired part
entitled to all
|
Section 133
|
|
Part III
|
||
|
Promissory
Notes
|
||
|
Section 140
|
Presentment of promissory note for
sight
|
Section 62
|
|
Part IV
|
||
|
Cheques
|
||
|
Section 141
|
Cheque payable to order or bearer
|
(1) Section 85 (1)
|
|
(2) Section 85 (2)
|
||
|
Section 142
|
Revocation of banker's authority
|
New (1) Section 123
|
|
Section 143
|
General and special crossing
defined
|
(2) Section 124
|
|
Section 144
|
Cheque crossed "account
payee"
|
New
|
|
Section 145
|
Crossing by drawer or after issue
|
(1) New
|
|
(2) Section 125, para. 1
|
||
|
(3) Section 125, para. 2
|
||
|
(4) Section 125, para. 3.
|
||
|
(5) Section 125, para. 4.
|
||
|
(6) New
|
||
|
Section 146
|
Crossing a material part of a
cheque
|
New
|
|
Section 147
|
Payment of a cheque crossed
generally or specially
|
Section 126
|
|
Section 148
|
Duties of banker as to crossed
cheques
|
Section 127
|
|
Section 149
|
Liability of a banker paying
crossed cheques otherwise than to a banker
|
Section 129, modified
|
|
Proviso—Section 89, part
|
||
|
Section 150
|
Protection to banker and drawer
where cheque is crossed
|
Section 128, modified
|
|
Section 151
|
Cheque bearing words "not
negotiable"
|
Section 130
|
|
Section 152
|
Protection to collecting banker
|
Section 131
|
|
Section 153
|
Protection to banker crediting
cheque crossed "account payee"
|
New
|
|
Section 154
|
Cheque not operating as assignment
of funds
|
New
|
|
Section 155
|
When cheque not duly presented and
drawer damaged thereby
|
(1) Section 84 (1)
|
|
(2) Section 84 (3)
|
||
|
Section 156
|
Drafts
|
Section 85A
|
|
Section 157
|
Application of this Chapter to
drafts
|
Section 131A
|
|
Part V
|
||
|
Miscellaneous
|
||
|
Section 158
|
Repeal
|
New
|
Appendix III
Suggestions Regarding Other Acts
Evidence Act.
Section 117—Omit?
(a) The words—
"No acceptor of a bill of exchange shall be permitted to deny
that the drawer had authority to draw such bill or to endorse it.
(b)
Explanation (1).
[Para. 164]
Appendix IV
Commercial Bodies & Associations Whose Suggestions Were
Particularly Invited
1. The Secretary Ahmedabad Maskati Cloth Market
Association, Maskati Cloth Market, Railwaypura, Post Box No. 2, Ahmedabad.
2. The Secretary, Ahmedabad Mill Owners Asson., Navrangpura, Post Box.
No. 7 Ahmedabad.
3. The Secretary, All-India Food Preservers' Association, 93, Apollo
Street, Bombay-1.
4. The Secretary, All-India Importers' Asson., Churchgate House, Veer
Nariman Road, Fort, Bombay.
5. The Secretary, All-India Sindwork Merchants Asson., 231, Hornby Road,
(4th floor) Bombay.
6. The Secretary, All-India Starch Manufacturers Association, 12, Rampart
Row, Bombay.
7. The Secretary, Andhra Chamber of Commerce, 272-273, Angappa Naick St.
G. T. Madras.
8. The Secretary, Association of Merchants & Mfrs. of Textiles Stores
& Machinery Sir Vithaldas Chambers (Top Floor), 16, Apollo Street, Fort,
Bombay.
9. The Secretary, Automotive Mfrs. Association of India, 'India
Exchange', Calcutta-1.
10. The Secretary, Bengal Glass Mfrs. Asson., P-11, Mission Row
Extension, Calcutta
11. The Secretary, Bengal National Chamber of Commerce & Industry,
P-11, Mission Row Extension, Calcutta.
12. The Secretary, Bengal Sugar Merchants' Association, 161/1, Harrison
Road, Calcutta.
13. The Secretary, Bharat Chamber of Commerce, State Bank Building,
(Burrabazar Branch), Calcutta-7.
14. The Secretary, Bihar Chamber of Commerce, Judges' Court Road, Post
Box No. 71, Patna-1.
15. The Secretary, Bihar Industries Asson., Fraser Road, Post Box No. 7,
Patna-1.
16. The Secretary, Bombay Bullion Association Ltd., Shaikh Memon Street,
Bombay.
17. The Secretary, Bombay, Oilseeds & Oils Exchange Ltd., Jenabai
Building, Musjid Bunder Road, Bombay.
18. The Secretary, Bombay Cotton Merchants and Muccadums Association,
S/72-73 Cotton Exchange Bldg., Sewree, Post Box No. 15, Bombay.
19. The Secretary, Bombay Piece-Goods Merchants Mahajan, Mulji Jetha
Market Halls Shaikh Memon Street, Bombay.
20. The Secretary, Bombay Shroffs Asson., Ltd., 233, Shroff Bazar,
Bombay.
21. The Secretary, Bombay Sugar Merchants Association Ltd., 104-114,
Frere Road, Bombay-9.
22. The Secretary, Bombay Yarn Merchants' Asson., & Exchange Ltd.,
111, Chawla Building, Tambakanata, Post Box No. 3, Bombay.
23. The Secretary, Calcutta Bin Tobacco Merchants Asson., 1, Rup Chand
Roy Street, Calcutta-7.
24. The Secretary, Calcutta Bullion Asson., 68, Cotton Street, Calcutta.
25. The Secretary, Calcutta Jute Exchange Ltd., 5/1, Royal Exchange
Place, Calcutta.
26. The Secretary, Calcutta Wheat & Seeds Asson., 149, Cotton Street,
Calcutta.
27. The Secretary, Calcutta Kirana (Spices) Merchants' Asson., 29,
Armenian Street Calcutta.
28. The Secretary, Cycle Manufacturers' Asson, of India, 'India
Exchange', Calcutta-1.
29. The Secretary, Delhi Chamber of Commerce, 'Dilbar Building',
Deshbandhu Gupta Road, Paharganj, New Delhi-1.
30. The Secretary, Delhi Factory Owners' Federation, Scindia House,
Curzon Road, Post Box No. 130, New Delhi-1.
31. The Secretary, Delhi Hindustani Mercantile Association, 641/1213,
Chandni Chowk, Delhi.
32. The Secretary, Eastern Chamber of Commerce, 15, Clive Row, Calcutta.
33. The Secretary, East India Cotton Association, Ltd., Cotton Exchange,
Marwari Bazar, Bombay.
34. The Secretary, East India Jute & Hessian Exchange, 43, Netaji
Subhas Road, Calcutta.
35. The Secretary, Eastern Zone Mining Asson., Chaibasa (Singhbhum),
Bihar, S.E. Rly.
36. The Secretary, Engineering Association of India, 'India Exchange',
Calcutta-1.
37. The Secretary, Employers' Association, 'India Exchange', Calcutta-1.
38. The Secretary, Fan Makers' Asson. of India, India Exchange (7th
Floor), Calcutta.
39. The Secretary, Federation of Gujarat Mills and Industries, Baroda.
40. The Secretary, Federation of Electricity Undertakings of India,
Killick Bldg., Home St., Bombay.
41. The Secretary, Federation of Woollen Mfrs. in India, J. K. Bldg.,
Dougall Road, Ballard Estate, Bombay.
42. The Secretary, Federation of Commerce and Industries (Hyderabad St.),
352, Sultan Bazar, Hyderabad-1.
43. The Secretary, Grain Oilseeds Merchants' Association, Masjid Bunder
Road, Bombay.
44. The Secretary, Gujarat Vepari Mahamandal, Gujarat Samachar Bldg.,
Khanpur, Ahmedabad.
45. The Secretary, Hindustan Chamber of Commerce, 168, Broadway,
Gujerathi Mandal Bldg., (1st Floor), Madras.
46. The Secretary, Hindustani Merchants and Commission Agents' Asson.,
342, Kalbadevi Road, Bombay.
47. The Secretary, Hyderabad (Dn.) Chamber of Commerce and Industries,
171, Chapel Road, Opp. Stanley Girls School, Near Hyderabad State Bank,
Hyderabad.
48. The Secretary, Indian Banks Association, Devkaran Nanjee Bldgs.,
Elphinstone Circle, Fort, Bombay.
49. The Secretary, Indian Chamber of Commerce, 'India Exchange'
Calcutta-1.
50. The Secretary, Indian Chamber of Commerce, 'Jagadalaya', Post Box No
200, Coimbatore.
51. The Secretary, Indian Chamber of Commerce, Mattancheri (Cochin).
52. The Secretary, Indian Chamber of Commerce, Tuticorin (South India).
53. The Secretary, Indian Chemical Mfrs. Asson., 'India Exchange' (7th
Floor, Calcutta-1.
54. The Secretary, Indian Chemical Merchants Association, India Exchange
(8th Floor, Calcutta-1.
55. The Secretary, Indo-Afghan Chamber of Commerce, 586, Gandhi Cloth
Market, Chandni Chowk, Delhi-6.
56. The Secretary, Indian Colliery Owners' Association, Post Box No. 70,
Dhanbad.
57. The Secretary, Indian Confectionery Mfrs', Association, 'India
Exchange' Calcutta-1.
58. The Secretary, Indian Insurance Companies Association, Co-operative
Insurance Bldg., Sir Pherozshah Mehta Road, Fort, Bombay.
59. The Secretary, Indian Insurance Companies Asson., India Exchange,
Calcutta-1.
60. The Secretary, Indian Merchants' Chamber, Backbay Reclamation,
Churchgate Street, Fort, Bombay.
61. The Secretary, Indian Mining Federation, 135, Canning Street,
Calcutta.
62. The Secretary, Indian National Steamship Owners' Association, Scindia
House, Ballard Estate, Bombay.
63. The Secretary, Indian Non-Ferrous Metals Mfrs' Association, 'India
Exchange' (8th Floor), Calcutta-1.
64. The Secretary, Indian Paint Manufacturers' Association, 'India
Exchange, (8th Floor), Calcutta-1.
65. The Secretary, Indian Paper Mills' Asson., 'India Exchange', (8th
Floor) Calcutta-1.
66. The Secretary, Indian Produce Asson., 402, Upper Chitpore Road,
Calcutta.
67. The Secretary, Indian Rope Manufacturers' Association, 'India
Exchange' (8th Floor), Calcutta-1.
68. The Secretary, Indian Stock Exchange Ltd., 'Laxmi Building' Sir
Phirozshah Mehta Road, Bombay.
69. The Secretary, Indian Soap & Toiletries Makers' Association,
P-11, Mission Road Extension, Calcutta-1.
70. The Secretary, Indian Tea Planters' Asson., Post Box No. 74,
Jalpaiguri.
71. The Secretary, Indian Sugar Mills' Asson., 'India Exchange"
Calcutta-1.
72. The Hony, General Secretary, Iron & Steel & Hardware,
Merchants' Chamber of India, 'Steel Chambers' 153, Naryan Dhuru Street,
Bombay-3.
73. The Secretary, Jaipur Chamber of Commerce, and Industry, Johri Bazar,
Jaipur City.
74. The Secretary, Jute Balers' Association, 5 Royal Exchange Place.
Calcutta.
75. The Secretary, Karnataka Chamber of Commerce, Post Box No. 16, Hubli.
76. The Secretary, Lantern Mfrs. Association, India Exchange (7th Floor)
Calcutta-1.
77. The Secretary, Madhya Pradesh Millowners' Association, 11, South
Tukoganj, Indore.
78. The Secretary, Madhyabharat Chamber of Commerce and Industry, Dharam
Mandir Road, Laskar (Gwalior).
79. The Secretary, Madhya Pradesh Mineral Industry Association, Above
Khemka Motors, Residency Road, Nagpur.
80. The Secretary, Madhura Ramnad Chamber of Commerce, 90-92, East
Avanimoola St., Madurai (South India).
81. The Secretary, Madras Piecegoods Merchants, Association, 103, Godown
Street, Madras-1.
82. The Secretary, Maharashtra Chamber of Commerce, 12, Rampart Row (3rd
Floor), Fort, Bombay.
83. The Secretary Mahratta Chamber of Commerce and Industries, Tilak
Road, Poona-2.
84. The Secretary, Merchants Chamber of U.P., 15/17 Civil Lines, Kanpur.
85. The Secretary, Merchants' Chamber of Commerce, 173, Harrison Road,
Calcutta-7.
86. The Secretary, Mysore Chamber of Commerce, Bangalore City.
87. The Secretary, Nag Vidarbha Chamber of Commerce, Temple Road, Civil
Station, Post Box No. 33, Nagpur-1.
88. The Secretary, Native Share & Stock Brokers' Association, Dalai
Street, Fort, Bombay.
89. The Secretary, Northern India Chamber of Commerce, Ambala Cantonment.
90. The Secretary, Oriental Chamber of Commerce, 6, Clive Row, Calcutta.
91. The Secretary, Orissa Chamber of Commerce, Tinkonia Bagicha,
Cuttack-1.
92. The Secretary, Pepper & Ginger Merchants' Association Ltd.,
285-87, Narsi Natha Street, Bombay-9.
93. The Secretary, Plywood Mfrs. Association of India, P-11 Mission Row
Extension Calcutta.
94. The Secretary, Punjab Federation of Industry and Commerce, Amritsar.
95. The Secretary, Rajasthan Chamber of Commerce and Industry, Johri
Bazar, Jaipur City.
96. The Secretary, Rajasthan Textile Mills Association, (Premises of
Jaipur Spg. and Wvg. Mills Ltd.), Jaipur.
97. The Secretary, Rayon Mfrs. Association, Ewart House, Bruce Street,
Fort, Bombay.
98. The Secretary, Saurashtra Millowners' Association, Dharangadhara
House, Surendranagar.
99. The Secretary, Silk & Art Silk Mills Asson., Resham Bhawan, Ltd.,
78, Veer Nariman Road, Fort, Bombay.
100. The Secretary, Silk Merchants' Association, 'Dhanukar Building',
Kalbadevi Road Bombay-2.
101. The Secretary, Saurashtra Ch. of Commerce, Mahatama Gandhi Road,
Lokhan Bazar, Bhavnagar.
102. The Secretary, Southern India Chamber of Commerce, 28/30, North
Beach Road, Madras-1.
103. The Secretary, Southern India Skin & Hide Merchants'
Assosiation, 16, Sydenham Road, Periamet, Madras.
104. The Secretary, Southern India Millowners' Association, Race Course,
Coimba tore.
105. The Secretary, Steel Re-rolling Mills Association of India, 20
Strand Road, Calcutta.
106. The Secretary, Surat Chamber of Commerce, 'Safe Deposit Chambers',
Bhagtalao, Surat.
107. The Secretary, Tamil Chamber of Commerce, 310/311, Linghi Chetty
St., (1st Floor) Madras-1.
108. The Secretary, Tea Association of India, India Exchange, (8th Floor)
Calcutta-1.
109. The Secretary, Textile Mfrs Association. 4, Queens' Road, Amritsar.
110. The Secretary, United Chamber of Trade Associations, Katra Rathi,
Nai Sarak Delhi.
111. The Secretary, United Planters Asson. of Southern India, Glenview
Post Box No. 11 Coonoor (Nilgris).
112. The Secretary, U.P. Chamber of Commerce, 15/197 Civil Lines, Kanpur.
113. The Secretary, Utkal Mining & Industrial Association, Gandhi
House, 16, Ganesh Ch. Avenue, Calcutta-13.
114. The Secretary, Vanaspati Mfrs., Association of India, Scindia House,
(5th Floor) Fort Street, Opp. G.P.O., Bombay.
115. The Secretary, Vidarbha Chamber of Commerce, Rajasthan Building,
Akola.
116. The Secretary, Western India Chamber of Commerce, 232-234, Kalbadevi
Road, Bombay.
117.The Secretary, Western India Minerals' Asson., Killick Building, Home
Street Bombay.
118.The Secretary, Western U P. Chamber of Commerce, Pooran Chand
Building, Bombay Bazar, Meerut Cantonment.
119.District Bar Association, Alipur.
120.Federation Indian Chambers of Commerce and Industry, 28, Ferozshah
Road, New Delhi.
Appendix V
Chambers Of Commerce And Associations Who Have Submitted
Memorandum
1. Bharat Chamber of Commerce, Calcutta.
2. Bengal National Chamber of Commerce, Calcutta.
3. Indian Chamber of Commerce, Calcutta.
4. Calcutta Stock Exchange.
5. Indian Merchants, Chambers, Backbay Reclamation, Bombay.
6. Madras Centre of Indian Bank Association, Madras.
7. Andhra Chamber of Commerce, Madras.
8. Madras Chamber of Commerce, Madras.
9. South Indian Chamber of Commerce, Madras.
10. European Chamber of Commerce, Madras.
11. Indian Banks Association. Bombay.
12. District Bar Association, Alipur.
Courtesy:- Legal Point Foundation
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