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NEGOTIABLE INSTRUMENTS
ACT, 1881
Maker:
Maker is the person who promises to pay the amount statedin the
note.
Payee:
Payee is the person to whom the amount of the note ispayable.
Holder:
He is either the payee or the person to whom the note may
have been endorsed.
SPECIMEN OF PROMISSORY NOTE 9
Rs. 10,000
Lucknow April
10, 2013
Three months after date, I promise to pay Shri Ramesh (Payee) or to his order the sum of Rupees Ten
Thousand, for value received.
Stamp
To, Sd/-
Shri Ramesh, Ram
B-20, Green Park,
Mumbai.
(Maker)
BILLOF EXCHANGE 10
Drawer:
The maker of a bill of exchange is calledthe drawer.
Drawee:
The person directed to pay the money by the drawer is called the
drawee.
Payee:
The person named in the instrument, to whom or to whose order the
money are directed to be paid by the instruments are called the payee.
SPECIMEN OF BILLOF EXCHANGE 13
Rs. 10,000
Mumbai
April 10, 2013
Three months after date pay to Ram (Payee) order the sum of Ten Thousand Rupees, for value received.
To,
Sushil
B-20, Green Park,
Lucknow - 226020.
(Drawer) Stamp
In case of need with Accepted
Canara Bank, Delhi. Sushil Sd/- Ram
(Drawer)
CLASSIFICATION OF BILLOF 14
EXCHANGE
Inland and Foreign Bills [Section 11and12]
Inland Bill:
It is drawn in India on a person residing in India outside whether payable in or
India; or
It is drawn in India on a person residing outside India but payable in India.
Foreign Bill:
A bill drawn in India on a person residing outside India and made payable outside
India.
Drawn upon a person who is the resident of a foreign country.
CLASSIFICATION OF BILLOF 15
EXCHANGE (Cont.…)
Time and Demand Bills:
Time Bill: A bill payable after a fixed time is termed as a time bill. A bill payable
“after date” isa timebill.
Demand Bill: A bill payable at sight or on demand istermed as a demand bill.
Trade and Accommodation Bills:
Trade Bill: A bill drawn and accepted for a genuine trade transaction is termed as
“trade bill”.
Accommodation Bill: A bill drawn and accepted not for a genuine trade
transaction but only to provide financial help to some party is termed as an
“accommodation bill”.
CHEQUE 16
In writing
Express Order to Pay
Definite and Unconditional Order
Signed by the Drawer
Order to Pay CertainSum
Order to Pay Money Only
Certain Three Parties
Drawn upon a SpecifiedBanker
Payable on Demand
PARTIESTO ACHEQUE 18
Drawer:
Drawer is the person who draws the cheque.
Drawee:
Drawee is the drawer‟s banker on whom the cheque has been drawn.
Payee:
Payee is the person who is entitled to receive the payment of a
cheque.
SPECIMEN OF CHEQUE 19
Kapoorthala Bagh,
Mumbai – 400033
IFSCode:MAHB0000316
D D M M Y Y Y Y
Pay ……………………………………………………………………………………………………………......
……………………………………………………………………………………………………. Or Bearer
Rupees ……………………………………………………………………………………………………………
………………………………………………………………………………………… …Rs.
A/c No.
SHANKAR GAJARE
Signature
Please signabove
Bearer Cheque
Cross Cheque
The word „endorsement‟ in its literal sense means, writing on the back of
an instrument. But under the Negotiable Instruments Act it means, the writing of
one‟s name on the back of the instrument or any paper attached to it with the
intention of transferring the rights therein. Thus, endorsement is signing a
negotiable instrument for the purpose of negotiation. The person who effects an
endorsement is called an „endorser‟, and the person to whom negotiable
instrument istransferred by endorsement iscalled the „endorsee‟.
Kinds of Endorsement:
Blank or General Endorsement
Full or Special Endorsement
Partial Endorsement
Restrictive Endorsement
Conditional Endorsement