The Negotiable Instruments Act – 1881

The Negotiable Instruments Act – 1881

This Act may be called the Negotiable Instruments Act, 1881.

An Act to define and amend the law relating to Promissory Notes, Bills of Exchange and Cheques.

The Negotiable Instruments Act, 1881, consists of a Total of 17 Chapters and 148 sections.

Chapter. 1. Preliminary. (Section. 1 – 3)

Section. 1	Short title.
Section. 2	(Repeal of enactment)
Section. 3	Interpretation clause.

Chapter. 2. Of Notes, Bills and Cheques. (Section. 4 – 25)

Section. 4	Promissory note.
Section. 5	Bill of exchange.
Section. 6	Cheque.
Section. 7	Drawer, Drawee.
Section. 8	Holder.
Section. 9	Holder in due course.
Section. 10	Payment in due Course.
Section. 11	Inland instrument.
Section. 12	Foreign instrument.
Section. 13	Negotiable instrument.
Section. 14	Negotiation.
Section. 15	Endorsement.
Section. 16	Endorsement in blank and in full-endorsee.
Section. 17	Ambiguous instruments.
Section. 18	Where amount is stated differently in figures and words.
Section. 19	Instruments payable on demand.
Section. 20	Inchoate stamped instruments.
Section. 21	At sight, On presentment, After sight.
Section. 22	Maturity.
Section. 23	Calculating maturity of bill or note payable so many months after date or sight.
Section. 24	Calculating maturity of bill or note payable so many days after date or sight.
Section. 25	When day of maturity is a holiday.

Chapter. 3. Parties to Notes, Bills ans Cheques. (Section. 26 – 45A)

Section. 26	Capacity to make, etc., promissory notes, etc.
Section. 27	Agency.
Section. 28	Liability of agent signing.
Section. 29	Liability of legal representative signing.
Section. 30	Liability of drawer.
Section. 31	Liability of drawee of cheque.
Section. 32	Liability of maker of note and acceptor of bill.
Section. 33	Only drawee can be acceptor except in need for honour.
Section. 34	Acceptance by several drawee not partners.
Section. 35	Liability of endorser.
Section. 36	Liability of prior parties to holder in due course.
Section. 37	Maker, drawer and acceptor principals.
Section. 38	Prior party a principal in respect of each subsequent party.
Section. 39	Surety ship.
Section. 40	Discharge of endorsers liability.
Section. 41	Acceptor bound, although endorsement forged.
Section. 42	Acceptance of bill draw in fictitious name.
Section. 43	Negotiable instrument made, etc., without consideration.
Section. 44	Partial absence or failure of money consideration.
Section. 45	Partial failure of consideration not consisting of money.
Section. 45A	Holders right to duplicate of lost bill.

Chapter. 4. Of Negotiation. (Section. 46 – 60)

Section. 46	Delivery.
Section. 47	Negotiation by delivery.
Section. 48	Negotiation by endorsements.
Section. 49	Conversion of endorsement in blank into endorsement in full.
Section. 50	Effect of Indorsement.
Section. 51	Who may negotiate.
Section. 52	Indorser who excludes his own liability or maker it conditional.
Section. 53	Holder deriving title from holder in due course.
Section. 54	Instrument indorsed in blank.
Section. 55	Conversion of indorsement in blank into indorsement in full.
Section. 56	Indorsement for part of sum due.
Section. 57	Legal representative cannot by delivery only negotiate instrument indorsed by deceased.
Section. 58	Instrument obtained by unlawful means or for unlawful consideration.
Section. 59	Instrument acquired after dishonor or when overdue.
Section. 60	Instrument negotiable till payment or satisfaction.

Chapter. 5. Of Presentment. (Section. 61 – 77)

Section. 61	Presentment for acceptance.
Section. 62	Presentment of promissory note for sight.
Section. 63	Drawees time for deliberation.
Section. 64	Presentment for payment.
Section. 65	Honours for presentment.
Section. 66	Presentment for payment of instrument payable after date or sight.
Section. 67	Presentment for payment of promissory note payable by instalments.
Section. 68	Presentment for payment of instrument payable at specified place and not elsewhere.
Section. 69	Instrument payable at specified place.
Section. 70	Presentment where no exclusive place specified.
Section. 71	Presentment when maker, etc. has no known place of business or residence.
Section. 72	Presentment of cheque to charge drawer.
Section. 73	Presentment of cheque to charge any other person.
Section. 74	Presentment of instrument payable on demand.
Section. 75	Presentment by or to agent, representative of deceased, or assignee of insolvent.
Section. 75A	Excuse for delay in presentment for acceptance or payment.
Section. 76	When presentment unnecessary.
Section. 77	Liability of banker for negligently dealing with bill presented for payment.

Chapter. 6. Of Payment and Interest.  (Section. 78 – 81)

Section. 78	To whom payment should be made.
Section. 79	Interest when rate specified.
Section. 80	Interest when no rate specified.
Section. 81	Delivery of instrument on payment or indemnity in case of loss.

Chapter. 7. Of Discharge from liability on Notes, Bills and Cheques.

(Section. 82 – 90)

Section. 82	Discharge from liability.
Section. 83	Discharge by allowing drawee more than forty-eight hours to accept.
Section. 84	When cheque not duly presented any drawer damaged thereby.
Section. 85	Cheque payable to order.
Section. 85A	Draft drawn by one branch of a bank on another payable to order.
Section. 86	Parties not consenting discharged by qualified or limited acceptance.
Section. 87	Affect of material alteration.
Section. 88	Acceptor or endorser bound notwithstanding previous alteration.
Section. 89	Payment of instrument on which alteration is not apparent.
Section. 90	Extinguishments or rights of action on bill in acceptors hands.

Chapter. 8. Of Notice of Dishonour. (Section. 91 – 98)

Section. 91	Dishonor by non-acceptance.
Section. 92	Dishonors by non-payment.
Section. 93	By and to whom Notice should be given.
Section. 94	Mode in which notice may be given.
Section. 95	Party receiving must transmit notice of dishonor.
Section. 96	Agent for presentment.
Section. 97	When party to whom notice given is dead.
Section. 98	When notice of dishonor is unnecessary.

Chapter. 9. No noting and Protest. (Section. 99 – 104A)

Section. 99	Noting.
Section. 100	Protest.
Section. 101	Contents of protest.
Section. 102	Notice of protest.
Section. 103	Protest of non-payment after dishonor by non-acceptance.
Section. 104	Protest of foreign bills.
Section. 104A	When noting equivalent to protest.

Chapter. 10. Of reasonable Time. (Section. 105 – 107)

Section. 105	Reasonable time.
Section. 106	Reasonable time of giving notice of dishonor.
Section. 107	Reasonable time for transmitting such notice.

Chapter. 11. Of Acceptance and Payment for Honour and Reference in case of need. (Section. 108 – 116)

Section. 108	Acceptance for honour.
Section. 109	How acceptance for honour must be made.
Section. 110	Acceptance not specifying for whose honor it is made.
Section. 111	Liability of acceptor for honor.
Section. 112	When acceptor for honor may be charged.
Section. 113	Payment for honor.
Section. 114	Right of payer for honor.
Section. 115	Drawee in case for honor.
Section. 116	Acceptance and payment without protest.

Chapter. 12. Of Compensation. (Section. 117)

Section. 117

Rules as to compensation.

Chapter. 13. Special Rules of Evidence. (Section. 118 – 122)

Section. 118	Presumptions as to negotiable instruments of consideration.
Section. 119	Presumption on proof of protest.
Section. 120	Estoppels against denying original validity of instrument.
Section. 121	Estoppels against denying capacity of payee to endorse.
Section. 122	Estoppels against denying signature or capacity of prior party.

Chapter. 14. Of Crossed Cheques. (Section. 123 – 131A)

Section. 123	Cheque crossed generally.
Section. 124	Cheque crossed specially.
Section. 125	Crossing after issue.
Section. 126	Payment of cheque crossed generally.
Section. 127	Payment of cheque crossed specially more than once.
Section. 128	Payment in due course of crossed cheque.
Section. 129	Payment of cheque crossed specially more than once.
Section. 130	Cheque bearing not negotiable.
Section. 131	Non-Liability of banker receiving payment of cheque.
Section. 131A	Application of chapter to drafts.

Chapter. 15. Of Bills in Sets. (Section. 132 – 133)

Section. 132	Set of bills.
Section. 133	Holder of first acquired part entitled to all.

Chapter. 16. Of International Law. (Section. 134 – 137)

Section. 134	Law governing liability of maker, acceptor or endorser of foreign instrument.
Section. 135	Law of place of payment governs dishonours.
Section. 136	Instrument made, etc. out of India, but in accordance with the law of India.
Section. 137	Presumption as to foreign law.

Chapter. 17. Of Penalties in Case of Dishonour of certain Cheques for insuffiency of Funds in the Accounts. (Section. 138 – 147)

Section. 138	Dishonor of cheque for insufficiency, etc., of funds in the accounts.
Section. 139	Presumption in favour f holder.
Section. 140	Defence which may not be allowed in any prosecution under section 138.
Section. 141	Offences by companies.
Section. 142	Cognizance of offences.
Section. 142A	Validation for transfer of pending cases.
Section. 143	Power of Court to try cases summarily.
Section. 143A	Power to direct interim compensation.
Section. 144	Mode of service of summons.
Section. 145	Evidence on affidavit.
Section. 146	Banks slip primafacie evidence of certain facts.
Section. 147	Offences to be compoundable.
Section. 148	Power of Appellate Court to order payment pending appeal against conviction.