Report No. 11
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.