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Negotiable Instruments Act, 1881

[Act No. 26 of Year 1881, dated 9-12-1881]

Contents

Sections

Particulars

Chapter I

Preliminary

1

Short title

2

Repeal of enactments

3

Interpretation clause

Chapter II

Notes, Bills And Cheques

4

"Promissory note

5

"Bill of exchange"

6

"Cheque"

7

"Drawer", "drawee"

8

Holder

9

"Holder in due course"

10

"Payment in due course"

11

"Inland instrument"

12

"Foreign instrument"

13

"Negotiable instrument"

14

Negotiation 

15

Endorsement

16

Endorsement "in blank" and "in full"-"endorsee"

17

Ambiguous instruments

18

Where amount is stated differently in figures and words

19

Instruments payable on demand

20

Inchoate stamped instruments

21

At sight, On presentment, After sight

22

"Maturity"

23

Calculating maturity of bill or note payable so many months after date or sight

24

Calculating maturity of bill or note payable so many days after date or sight

25

When day of maturity is a holiday

Chapter III 

Parties To Notes, Bills And Cheques

26

Capacity to make, etc., promissory notes, etc.

27

Agency

28

Liability of agent signing

29

Liability of legal representative signing

30

Liability of drawer

31

Liability of drawee of cheque

32

Liability of maker of note and acceptor of bill

33

Only drawee can be acceptor except in need or for honor

34

Acceptance by several drawees not partners

35

Liability of endorser

36

Liability of prior parties to holder in due course

37

Maker, drawer and acceptor principals

38

Prior party a principal in respect of each subsequent party

39

Suretyship

40

Discharge of endorser's liability

41

Acceptor bound, although endorsement forged

42

Acceptance of bill drawn in fictitious name

43

Negotiable instrument made, etc. without consideration

44

Partial absence or failure of money-consideration

45

Partial failure of consideration not consisting of money

45A

Holder's right to duplicate of lost bill

Chapter IV 

Negotiation

46

Delivery

47

Negotiation by delivery

48

Negotiation by endorsement

49

Conversion of endorsement in blank into endorsement in full

50

Effect of endorsement

51

Who may negotiate

52

Endorser who excludes his own liability or makes it conditional

53

Holder deriving title from holder in due course

54

Instrument endorsed in blank

55

Conversion of endorsement in blank into endorsement in full

56

Endorsement for part of sum due

57

Legal representative cannot by delivery only negotiate instrument endorsed by deceased

58

Instrument obtained by unlawful means or for unlawful consideration 

59

Instrument acquired after dishonor or when overdue

60

Instrument negotiable till payment or satisfaction

Chapter V 

Presentment

61

Presentment for acceptance

62

Presentment of promissory note for sight

63

Drawee's time for deliberation

64

Presentment for payment

65

Hours for presentment

66

Presentment for payment of instrument payable after date or sight

67

Presentment for payment of promissory note payable by installments

68

Presentment for payment of instrument payable at specified place and not elsewhere

69

Instrument payable at specified place

70

Presentment where no exclusive place specified

71

Presentment when maker, etc., has no known place of business or residence 

72

Presentment of cheque to charge drawer

73

Presentment of cheque to charge any other person

74

Presentment of instrument payable at demand

75

Presentment by or to agent, representative of deceased, or assignee of insolvent

76

When presentment unnecessary

77

Liability of banker for negligently dealing with bill presented for payment

Chapter VI 

Payment And Interest

78

To whom payment should be made

79

Interest when rate specified

80

Interest when no rate specified

81

Delivery of instrument on payment or indemnity in case of loss

Chapter VII 

Discharge From Liability On Notes, Bills And Cheques

82

Discharge from liability

83

Discharge by allowing drawee more than forty-eight hours to accept 

84

When cheque not duly presented and drawer damaged thereby 

85

Cheque payable to order

85A

Drafts drawn by one branch of a bank on another payable to order

86

Parties not consenting discharged by qualified or limited acceptance

87

Affect of material alteration

88

Acceptor or endorser bound notwithstanding previous alteration

89

Payment of instrument on which alteration is not apparent

90

Extinguishment of rights of action on bill in acceptor's hands

Chapter VIII 

Notice Of Dishonour

91

Dishonor by non-acceptance 

92

Dishonor by non-payment

93

By and to whom notice should be given

94

Mode in which notice may be given

95

Party receiving must transmit notice of dishonor

96

Agent for presentment

97

When party to whom notice given is dead

98

When, notice of dishonor is unnecessary 

Chapter IX 

Noting And Protest

99

Noting

100

Protest

101

Contents of protest

102

Notice of protest

103

Protest for non-payment after dishonor by non-acceptance

104

Protest of foreign bills

104A

When noting equivalent to protest

Chapter X

Reasonable Time

105

Reasonable time

106

Reasonable time of giving notice of dishonor

107

Reasonable time for transmitting such notice

Chapter XI 

Acceptance And Payment For Honour And Reference In Case Of Need

108

Acceptance for honor

109

How acceptance for honor must be made

110

Acceptance not specifying for whose honor it is made

111

Liability of acceptor for honor

112

When acceptor for honor may be charged

113

Payment for honor

114

Right of payer for honor

115

Drawee in case of need

116

Acceptance and payment without protest

Chapter XII 

Compensation

117

Rules as to compensation

Chapter XIII 

Special Rules Of Evidence

118

Presumptions as to negotiable instruments Until the contrary is proved, the following presumption shall be made

119

Presumption on proof of protest

120

Estoppel against denying original validity of instrument

121

Estoppel against denying capacity of payee to endorse

122

Estoppel against denying signature or capacity of prior party

Chapter XIV 

Crossed Cheques

123

Cheque crossed generally

124

Cheque crossed specially

125

Crossing after issue

126

Payment of cheque crossed generally

127

Payment of cheque crossed specially more than once

128

Payment in due course of crossed cheque

129

Payment of crossed cheque out of due course

130

Cheque bearing not negotiable

131

Non-liability of banker receiving payment of cheque

131A

Application of chapter to drafts

Chapter XV 

Bills In Sets

132

Set of bills

133

Holder of first acquired part entitled to all

Chapter XVI 

International Law

134

Law governing liability of maker, acceptor or endorser of foreign instrument 

135

Law of place of payment governs dishonor

136

Instrument made, etc. out of India, but in accordance with the law of India

137

Presumption as to foreign law

Chapter XVII

Penalties In Case Of Dishonour Of Certain Cheques For Insufficiency Of Funds In The Accounts

138

Dishonor of cheque for insufficiency, etc., of funds in the accounts 

 

Supreme Court 3762

139

Presumption in favor of holder

140

Defense which may not be allowed in any prosecution under section 138 

141

Offences by companies

142

Cognizance of offences

Schedule

Enactment [Repealed]

An Act to define the law relating to promissory notes, bills of exchange and cheques Whereas it is expedient to define and amend the law relating to promissory notes, bills of exchange and cheques;

It is hereby enacted as follows: -



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