Report No. 11
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;
(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).
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