The Negotiable Instruments Act – 1881

The Negotiable Instruments
Act – 1881

The Negotiable Instruments Act - 1881

This Act may be called the Negotiable Instruments Act,

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 –


Section. 4

Promissory note.

Section. 5

Bill of exchange.

Section. 6


Section. 7

Drawer, Drawee.

Section. 8


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


Section. 15


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

Section. 20

Inchoate stamped

Section. 21

At sight, On presentment,
After sight.

Section. 22


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

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


Section. 26

Capacity to make, etc., promissory
notes, etc.

Section. 27


Section. 28

Liability of agent

Section. 29

Liability of legal
representative signing.

Section. 30

Liability of drawer.

Section. 31

Liability of drawee of

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

Section. 38

Prior party a principal in
respect of each subsequent party.

Section. 39

Surety ship.

Section. 40

Discharge of endorsers

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


Section. 47

Negotiation by delivery.

Section. 48

Negotiation by

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

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

Section. 62

Presentment of promissory
note for sight.

Section. 63

Drawees time for

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

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

Section. 79

Interest when rate

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

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

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

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


Section. 99


Section. 100


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

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

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

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

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

Section. 131

Non-Liability of banker
receiving payment of cheque.

Section. 131A

Application of chapter to

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


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

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

Section. 144

Mode of service of

Section. 145

Evidence on affidavit.

Section. 146

Banks slip primafacie
evidence of certain facts.

Section. 147

Offences to be

Section. 148

Power of Appellate Court
to order payment pending appeal against conviction.



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