Professional Documents
Culture Documents
The term Negotiable Instrument consists of two parts viz; Negotiable and Instrument.
The Word negotiable means transferable by delivery and The word instrument mean written documents by which a right is created in favour of some person.
4. Title of holder in due course:- A holder in due course ( i.e. the person who become the possessor of negotiable instrument before maturity, for valuable consideration and in good faith) get the instrument free from all defects in the title of transferor 5. Presumption as to considerations:- Every negotiable instrument is presumed to have been made, drawn, accepted, endorsed , negotiated or transferred for consideration.
Promissory Note
Promissory Note
A promissory note is an instrument (not being a bank note or a currency note ) in writing containing an unconditional undertaking, signed by the maker to pay a certain sum of money only to or to the order of, a certain person or to the bearer of the instrument.
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Bill of Exchange
sec(5) It is an instrument in writing containing an unconditional order, signed by the maker directing a certain person to pay certain sum of money only to or to the order by of a certain person or the bearer of the instrument.
Definition of Cheque
A cheque is a bill of exchange which is
Drawn upon a specified banker And payable on demand
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Parties of cheque
Drawer: The person who draws the cheque called drawer. Banker: The bank on which the cheque is drawn called drawee Payee: The person in which favour the cheque is called payee. The payee may be third party or drawn himself.
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Crossing of Cheque
A cheque is said to be crossed when it bears across its face two parallel transverse lines which are usually drawn on the left hand top corner of the Cheque
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Types of crossing
General Crossing--// /&co/-left top corner Special Crossing--/canara bank/ /not negotiablycanara bank/ /account payee canara bank/ Account payee Crossing(Restrictive crossing)
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Loss of cheque Material alteration Different signature Notice of closure Irregular endorsement
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He must be entitled to receive/ recover the amount due on the instrument from partie s liable under instrument. Holder in due course: He must be a holder He must have become payee for consideration He must have obtained the instrument before its maturity He must have obtained the instrument in good faith.
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ENDORSEMENT
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Endorsement
Sec 15 of NI ACT,1881,defines the endorsement as follows: When the maker or holder of a negotiable instrument signs the same, otherwise than such maker for the purpose of negotiation, on the bank 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 endorse the same and is called the 24 endorsee
PARTIES
Endorsor: The person who endorses the instrument is called endorsor Endorsee: The person who favour of the instrument is called endorsor Kinds of Endorsement: General Endorsement/blank Endorsement: Just signing Special Endorsement/full Endorsement: pay to special person
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Cheques crossed generally Cheques crossed specially Protection to collecting banker A collecting banker is one who receives the payment of crossed cheque on behalf of his customer. if collecting banker has acted in good faith if collecting banker has acted without negligence
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