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Report No. 11

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.



Negotiable Instruments Act, 1881 Back




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