Preview

Negotiable Instruments

Powerful Essays
Open Document
Open Document
64211 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Negotiable Instruments
Subject: Principles of Insurance and Banking Course Code: FM-306 Lesson: 1 Author: Dr. S.S. Kundu Vetter: Dr. B.S. Bodla

NEGOTIABLE INSTRUMENTS ACT, 1881
STRUCTURE
1.0 1.1 1.2 1.3 1.4 1.5 Objectives Introduction Meaning of Negotiable Instruments Characteristics of a negotiable instrument Presumptions as to negotiable instrument Types of negotiable Instrument 1.5.1 Promissory notes 1.5.2 Bill of exchange 1.5.3 Cheques 1.5.4 Hundis 1.6 Parties to negotiable instruments 1.6.1 Parties to Bill of Exchange 1.6.2 Parties to a Promissory Note 1.6.3 Parties to a Cheque 1.7 1.8 Negotiation 1.7.1 Modes of negotiation Assignment 1.8.1 Negotiation and Assignment Distinguished 1.8.2 Importance of delivery in negotiation 1.9 Endorsement 1.10 Instruments without Consideration 1.11 Holder in Due Course

1.12 Dishonour of a Negotiable instrument 1.13 Noting and protesting 1.14 Summary 1.15 Keywords 1.16 Self Assessment Questions 1.17 References/Suggested readings

1.0 OBJECTIVES
After reading this lesson, you should be able to• • • • Understand meaning, essential characteristics and types of negotiable instruments; Describe the meaning and marketing of cheques, crossing of cheques and cancellation of crossing of a cheque; Explain capacity and liability parties to a negotiable instruments; and Understand various provisions of negotiable instrument Act, 1881 regarding negotiation, assignment, endorsement, acceptance, etc. of negotiable instruments.

1.1 INTRODUCTION
The Negotiable Instruments Act was enacted, in India, in 1881. Prior to its enactment, the provision of the English Negotiable Instrument Act were applicable in India, and the present Act is also based on the English Act with certain modifications. It extends to the whole of India except the State of Jammu and Kashmir. The Act operates subject to the provisions of Sections 31 and 32 of the Reserve Bank of India Act, 1934. Section 31 of the Reserve Bank of India Act provides that no person in India other than



References: 234 Bhole, L.M., Financial Institutions and Markets, 4th ed., Tata McGraw Hills, New Delhi, 2004. Bank Financial Management, Indian Institute of Banking and Finance, Taxman’s Publications, July 2004. Sinkey, J.F., Commercial Bank Financial Management, Prentice Hall, New Delhi, 2002. Joshi, V.C. and Joshi W., Managing Indian Banks, Response Books, New Delhi, 2002. Traded Progress of Banking in India, Govt. of India, 2005-06. Palfreman, D. and Ford, O.: Elements of Banking 1 and 2, Macdonald ad Evans Publications, Estover, 1985. 235

You May Also Find These Documents Helpful

  • Powerful Essays

    Bus311 Business Law I

    • 2524 Words
    • 11 Pages

    In this paper, I will reflect on the operation of contracts. Business law shows how contracts may be classified in several ways depending on the manner in which they are created, expressed, or performed. I have learned a lot from this course and I will use that to help write this paper. In the following paper I will discuss the oral or written contracts; I will discuss express or implied contracts, and will discuss formal or simple contracts. I will also discuss the impact of the contracts in a business and show the true propose of contracts. I will show what is needed in a contract to be legally enforceable. I will discuss how a contract must contain the following six elements: an offer and acceptances, a mutual agreement, a consideration, a competent parties, and legality of purpose, and proper form. All of this will be discussed in depth in the following paper.…

    • 2524 Words
    • 11 Pages
    Powerful Essays
  • Good Essays

    Contracts: definition; types; verbal, written, standard form; offers — distinguishing invitations to treat; counter-offers; communication of offers; acceptance; the battle of the forms; consideration and the Contracts (Rights of Third Parties) Act 1999; capacity as applied to business situations; application of Requirements…

    • 2641 Words
    • 11 Pages
    Good Essays
  • Good Essays

    Business Law

    • 911 Words
    • 3 Pages

    2. State whether the following provisions in a note impair or preclude negotiability, the instrument in each instance being otherwise in proper form. Answer each statement with either “Negotiable” or Nonnegotiable” and explain why.…

    • 911 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Ch 12

    • 2110 Words
    • 9 Pages

    6. Only the parties who signed the original contract can have rights with respect to that contract.…

    • 2110 Words
    • 9 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Negotiable Instrument

    • 271 Words
    • 1 Page

    CONCLUSION: The instruments is negotiable because it reference the content of the contract regarding rights to repayment and acceleration.…

    • 271 Words
    • 1 Page
    Satisfactory Essays
  • Satisfactory Essays

    Eddy Kay

    • 314 Words
    • 2 Pages

    4. In spite of all his precautions, the narrator does not commit the perfect crime. What trips him up?…

    • 314 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    The great depression was a very hard time for women in Australia. Without work and a steady income many people lost their houses and were forced to live in makeshift dwellings with poo heating and sanitation.…

    • 449 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    A negotiable instrument is a document contemplated by a contract, warranting (1) the payment of money, the promise of order for conveyance of which is unconditional; and, (2) which specifies or describes the payee, who is designated on and memorialized by the instrument and which is capable of change through transfer by valid negotiation of the instrument.…

    • 2744 Words
    • 11 Pages
    Powerful Essays
  • Best Essays

    There are some essential ingredients to be present in an agreement for it to constitute a contract. They include offer, acceptance, consideration, intention to create legal relations and reconciliation of buyers’ and sellers’ terms and conditions. Each element is equally important and essential in the formation of a contract but for the purposes of this assignment I will focus on “the intention to create legal relations” and endeavour to discuss the importance of this element citing case law to support my points.…

    • 2188 Words
    • 8 Pages
    Best Essays
  • Good Essays

    The Art of Negotiating

    • 1705 Words
    • 7 Pages

    The Art of Negotiating : The Art of Negotiating T. Sivasankaran Advesh Consultancy Services Chennai India…

    • 1705 Words
    • 7 Pages
    Good Essays
  • Good Essays

    The Negotiator

    • 3498 Words
    • 14 Pages

    The negotiator is someone who negotiates (confers with others in order to reach a settlement), a communicator (a person who communicates with others), a go-between, intercessor, intermediator, mediator (a negotiator who acts as a link between parties), a bargainer (negotiator of the terms of a transaction), a compromiser (a negotiator willing to compromise), a holdout (a negotiator who hopes to gain concessions by refusing to come to terms), a representative (a person who represents others) and a settler (a negotiator who settles disputes).…

    • 3498 Words
    • 14 Pages
    Good Essays
  • Satisfactory Essays

    CXC POB PAPER 2 JUNE 2010

    • 721 Words
    • 5 Pages

    2. (a) State the difference between a simple contract and a ‘mere agreement’. (4 marks)…

    • 721 Words
    • 5 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Ca Nannu Mia's Note

    • 18615 Words
    • 75 Pages

    The Contract and Agency Act------------1872. The Sales of Goods Act---------------------1930. The Partnership Act------------------------1932. The Negotiable Instrument Act-----------1881. The Bankruptcy Act------------------------1997. The Arbitration Act-------------------------2001.…

    • 18615 Words
    • 75 Pages
    Satisfactory Essays
  • Good Essays

    Extent, Commencements.-It extends to the whole of India 2*[except the State of Jammu and Kashmir]; and it shall come into force on the first day of September, 1872.…

    • 393 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    Project

    • 695 Words
    • 3 Pages

    I Ms. Daksha Nanabhau Pawale, student of Niranjana Majithia Degree College of Commerce, studying in T.Y.B.COM (banking and insurance) semester Vth hereby declare that I have completed Offshore banking project in the academic year 2011-2012.…

    • 695 Words
    • 3 Pages
    Satisfactory Essays