Negotiable Instruments Act
NI provides holder two rights:-
1. To receive amount specified in such document from person who is liable
2. To transfer aforesaid right to any other person
Applicability :-
1. Location: Whole India except state of J&K
2. Instrument based: Section 13 gives definition of NI B/E, Pro Note and Cheque
- For DD it is applicable
- Not App on share certificate
- Not App on share warrant
- Not App on Document of title
- Not App on Currency note
- Not App on Bonds/Commercial papers/ T Bills/ FDs
- App on Hundi (traditional instruments) Local rules are applicable, if not then NI Act is applicable
Two amendments have been made since 1881 o Cheque Truncation : Section 143 Cheque made electronic o Cheque Dishonour: Section 138 (2 yrs imprisonment)
The history of the present Act is a long one. The Act was originally drafted in 1866 by the 3rd India Law Commission and introduced in December, 1867 in the Council and it was referred to a Select Committee. Objections were raised by the mercantile community to the numerous deviations from the English Law which it contained. The Bill had to be redrafted in 1877. After the lapse of a sufficient period for criticism by the Local Governments, the High Courts and the chambers of commerce, the Bill was revised by a Select Committee. In spite of this Bill could not reach the final stage. In 1880 by the Order of the Secretary of State, the Bill had to be referred to a new Law Commission. On the recommendation of the new Law Commission the Bill was re-drafted and again it was sent to a Select Committee which adopted most of the additions recommended by the new Law Commission. The draft thus prepared for the fourth time was introduced in the Council and was passed into law in 1881 being the Negotiable Instruments Act, 1881 (Act No.26 of 1881)[1]
The most important class of Credit Instruments that evolved in India were termed Hundi. Their use was most widespread in the twelfth century, and has continued
1. To receive amount specified in such document from person who is liable
2. To transfer aforesaid right to any other person
Applicability :-
1. Location: Whole India except state of J&K
2. Instrument based: Section 13 gives definition of NI B/E, Pro Note and Cheque
- For DD it is applicable
- Not App on share certificate
- Not App on share warrant
- Not App on Document of title
- Not App on Currency note
- Not App on Bonds/Commercial papers/ T Bills/ FDs
- App on Hundi (traditional instruments) Local rules are applicable, if not then NI Act is applicable
Two amendments have been made since 1881 o Cheque Truncation : Section 143 Cheque made electronic o Cheque Dishonour: Section 138 (2 yrs imprisonment)
The history of the present Act is a long one. The Act was originally drafted in 1866 by the 3rd India Law Commission and introduced in December, 1867 in the Council and it was referred to a Select Committee. Objections were raised by the mercantile community to the numerous deviations from the English Law which it contained. The Bill had to be redrafted in 1877. After the lapse of a sufficient period for criticism by the Local Governments, the High Courts and the chambers of commerce, the Bill was revised by a Select Committee. In spite of this Bill could not reach the final stage. In 1880 by the Order of the Secretary of State, the Bill had to be referred to a new Law Commission. On the recommendation of the new Law Commission the Bill was re-drafted and again it was sent to a Select Committee which adopted most of the additions recommended by the new Law Commission. The draft thus prepared for the fourth time was introduced in the Council and was passed into law in 1881 being the Negotiable Instruments Act, 1881 (Act No.26 of 1881)[1]
The most important class of Credit Instruments that evolved in India were termed Hundi. Their use was most widespread in the twelfth century, and has continued