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

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

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

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

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

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

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

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

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

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

Section. 78To whom payment should be made.
Section. 79Interest when rate specified.
Section. 80Interest when no rate specified.
Section. 81Delivery 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. 82Discharge from liability.
Section. 83Discharge by allowing drawee more than forty-eight hours to accept.
Section. 84When cheque not duly presented any drawer damaged thereby.
Section. 85Cheque payable to order.
Section. 85ADraft drawn by one branch of a bank on another payable to order.
Section. 86Parties not consenting discharged by qualified or limited acceptance.
Section. 87Affect of material alteration.
Section. 88Acceptor or endorser bound notwithstanding previous alteration.
Section. 89Payment of instrument on which alteration is not apparent.
Section. 90Extinguishments or rights of action on bill in acceptors hands.

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

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

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

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

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

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

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

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

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

Section. 117Rules as to compensation.

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

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

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

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

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

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

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

Section. 134Law governing liability of maker, acceptor or endorser of foreign instrument.
Section. 135Law of place of payment governs dishonours.
Section. 136Instrument made, etc. out of India, but in accordance with the law of India.
Section. 137Presumption 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. 138Dishonor of cheque for insufficiency, etc., of funds in the accounts.
Section. 139Presumption in favour f holder.
Section. 140Defence which may not be allowed in any prosecution under section 138.
Section. 141Offences by companies.
Section. 142Cognizance of offences.
Section. 142AValidation for transfer of pending cases.
Section. 143Power of Court to try cases summarily.
Section. 143APower to direct interim compensation.
Section. 144Mode of service of summons.
Section. 145Evidence on affidavit.
Section. 146Banks slip primafacie evidence of certain facts.
Section. 147Offences to be compoundable.
Section. 148Power of Appellate Court to order payment pending appeal against conviction.

Leave a Reply

Your email address will not be published. Required fields are marked *

You cannot copy content of this page