Bharat Bhashyam & Adiga The Negotiable Instruments Act Edition 2024

DescriptionBharat Bhashyam & Adiga The Negotiable Instruments Act Edition 2024Bharat Bhashyam & Adiga The Negotiable Instruments Act Edition 2024CHAPTER IPreliminary1 Short title, local extent, saving of usages relating to hundis, etc. Commencement2 Repeal of enactments (Repealed)3 Interpretation clause “Banker”CHAPTER IIOf notes, bills and cheques4 “Promissory note”5 “Bill of Exchange”6 “Cheque”7 “Drawer”, “Drawee”, “Drawee in case of need”, “Acceptor”, “Acceptor for honour”, “Payee”8 “Holder”9 “Holder in due course”10 “Payment in due course”11 Inland instrument12 Foreign instrument13 Negotiable instrument14 Negotiation15 Indorsement16 Indorsement “in blank” and “in full”, “indorsee”17 Ambiguous instruments18 Where amount is stated differently in figures and words19 Instruments payable on demand20 Inchoate stamped instruments21 “At Sight”, “On Presentment”, “After Sight”22 “Maturity” Days of grace23 Calculating maturity of bill or note payable so many months after date or sight24 Calculating maturity of bill or note payable so many days after date or sight25 When day of maturity is a holidayCHAPTER IIIParties to Notes, Bills and Cheques26 Capacity to make, etc., promissory notes, etc.27 Agency28 Liability of agent signing29 Liability of legal representative signing30 Liability of drawer31 Liability of drawee of cheque32 Liability of maker of note and acceptor of bill33 Only drawee can be acceptor except in need or for honour34 Acceptance by several drawees not partners35 Liability of indorser36 Liability of prior parties to holder in due course37 Maker, drawer and acceptor principals38 Prior party a principal in respect of each subsequent party39 Suretyship40 Discharge of indorser’s liability41 Acceptor bound although indorsement forged42 Acceptance of bill drawn in fictitious name43 Negotiable instrument made, etc., without consideration44 Partial absence or failure of money consideration45 Partial failure of consideration not consisting of money45A Holder’s right to duplicate of lost billCHAPTER IVOf Negotiation46 Delivery47 Negotiation by delivery48 Negotiation by indorsement49 Conversion of indorsement in blank into indorsement in full50 Effect of indorsement51 Who may negotiate52 Indorser who excludes his own liability or makes it conditional53 Holder deriving title from holder in due course54 Instrument indorsed in blank55 Conversion of indorsement in blank into indorsement in full56 Indorsement for part of sum due57 Legal representative cannot by delivery only negotiate instrument indorsed by deceased58 Instrument obtained by unlawful means or for unlawful consideration59 Instrument acquired after dishonour or when overdue, Accommodation note or bill60 Instrument negotiable till payment or satisfactionCHAPTER VOf Presentment61 Presentment for acceptance62 Presentment of promissory note for sight63 Drawee’s time for deliberation64 Presentment for payment65 Hours for presentment66 Presentment for payment of instrument payable after date or sight67 Presentment for payment of promissory note payable by instalments68 Presentment for payment of instrument payable at specified place and not elsewhere69 Instrument payable at specified place70 Presentment where no exclusive place specified71 Presentment when maker, etc., has no known place of business or residence72 Presentment of cheque to charge drawer73 Presentment of cheque to charge any other person74 Presentment of instrument payable on demand75 Presentment by or to agent, representative of deceased or assignee of insolvent75A Excuse for delay in presentment for acceptance or payment76 When presentment unnecessary77 Liability of banker for negligently dealing with bill presented for paymentCHAPTER VIOf Payment and Interest78 To whom payment should be made79 Interest when rate specified80 Interest when no rate specified81 Delivery of instrument on payment or indemnity in case of lossCHAPTER VIIOf discharge from liability on Notes,Bills and Cheques82 Discharge from liability — (a) by cancellation; (b) by release; (c) by payment83 Discharge by allowing drawee more than forty-eight hours to accept84 When cheque not duly presented and drawer damaged thereby85 Cheque payable to order85A Drafts drawn by one branch of a bank on another payable to order86 Parties not consenting discharged by qualified or limited acceptance87 Effect of material alteration, Alteration by indorsee88 Acceptor or indorser bound notwithstanding previous alteration89 Payment of instrument on which alteration is not apparent90 Extinguishment of rights of action on bill in acceptor’s handsCHAPTER VIIIOf Notice of Dishonour91 Dishonour by non-acceptance92 Dishonour by non-payment93 By and to whom notice should be given94 Mode in which notice may be given95 Party receiving must transmit notice of dishonour96 Agent for presentment97 When party to whom notice given is dead98 When notice of dishonour is unnecessaryCHAPTER IXOf Noting and Protest99 Noting100 Protest, Protest for better security101 Contents of protest102 Notice of protest103 Protest for non-payment after dishonour by non-acceptance104 Protest of foreign bills104A When noting equivalent to protestCHAPTER XOf reasonable time105 Reasonable time106 Reasonable time of giving notice of dishonour107 Reasonable time for transmitting such noticeCHAPTER XIOf acceptance and payment for honour andreference in case of need108 Acceptance for honour109 How acceptance for honour must be made110 Acceptance not specifying for whose honour it is made111 Liability of acceptor for honour112 When acceptor for honour may be charged113 Payment for honour114 Right of payer for honour115 Drawee in case of need116 Acceptance and payment without protestCHAPTER XIIOf compensation117 Rules as to compensationCHAPTER XIIISpecial rules of evidence118 Presumptions as to negotiable instruments — (a) of consideration; (b) as to date; (c) as to time of acceptance; (d) as to time of transfer; (e) as to order of indorsement; (f) as to stamps; (g) that holder is a holder in due course119 Presumption on proof of protest120 Estoppel against denying original validity of instrument121 Estoppel against denying capacity of payee to indorse122 Estoppel against denying signature or capacity of prior partyCHAPTER XIVOf crossed cheques123 Cheque crossed generally124 Cheque crossed specially125 Crossing after issue126 Payment of cheque crossed generally, Payment of cheque crossed specially127 Payment of cheque crossed specially more than once128 Payment in due course of crossed cheque129 Payment of crossed cheque out of due course130 Cheque bearing “not negotiable”131 Non-liability of banker receiving payment of cheque131A Application of chapter to draftsCHAPTER XVOf bills in sets132 Set of bills133 Holder of first acquired part entitled to allCHAPTER XVIOf international law134 Law governing liability of maker, acceptor or indorser of foreign instrument135 Law of place of payment governs dishonour136 Instrument made, etc, out of India but in accordance with the law of India137 Presumption as to foreign lawCHAPTER XVIIOf penalties in case of dishonour of certain cheques for insufficiency of funds in the accounts138 Dishonour of cheque for insufficiency, etc, of funds in the account1 Competence of the Parliament2 Statement of objects and reasons3 Object4 Salient features5 Non- compliance with the provision6 Scope7 Nature8 Applicability9 Applicability of provisions to cheques issued before 1-4-198910 Issue of cheque is not an offence11 Ingredients of the offence12 Dishonour of cheque issued for discharge of legally enforceable debt/liability13 Section 138 and Criminal Law14 Power of courts15 Interference by High Court in disputed questions of fact16 Bailable offence17 Trial of offence: Summary procedure18 Directions for Summary Trial19 Defence evidence20 Month’, meaning of21 Presentation of cheques any number of times during validity period22 Filing of a civil suit23 Arbitration proceedings24 Prosecution for cheating: Not barred25 Prosecution based on successive dishonour of cheque26 Filing of a complaint27 Condonation of delay in filing complaint28 Place of filing complaint29 Locus standi to file complaint30 Verification of complaint31 Cause of action32 Complaint not signed by complainant33 Permissibility for the substitution of complainant34 Deficit Court Fee35 Sole proprietorship concern36 Complaint by company37 Delegation of power of attorney38 Power of Attorney to witness transaction39 Complaint by Power of Attorney Holder40 Complaint, maintainability41 Reasons for return42 ‘Refer to drawer’, meaning of43 ‘Such person shall be deemed to have committed an offence’44 Payment of cheque stopped by drawer45 Propriety of order of issue process46 Bank account closed47 Exceeds arrangement: Dishonour on ground of48 Insufficient balance49 Cheque reported stolen50 Alteration in date and drawer’s signature differs51 Drawer’s signature incomplete52 Drawer’s signature denial53 Recourse to Proceedings54 Making endorsement ‘sans recourse’ on cheque55 Bank documents: Admissibility in evidence56 Exclusion of mens rea57 Cheque drawn by a person58 Cheque issued in illegal transaction59 Liability of director60 Liability of drawer of cheque61 Cheque issued by authorised signatory: Liability62 Vicarious liability63 Cheque issued by mandate holder: Liability64 Forfeiture of right of holder/payee65 Self drawn cheque66 Pay Order, dishonour of67 Post-dated cheques, dishonour of, effect68 An account maintained with a banker69 Joint bank account operated by ‘Either or Survivor’: Liability70 Banker71 Undated cheque72 Any debt or other liability: Legally enforceable liability73 Debt/Liability: Proof of74 Existence of debt or liability on the date of cheque75 Time-barred debt76 Discharge of liability in excess of liability incurred77 Legally enforceable liability78 Burden of proof79 Presumption80 Modification of discharge of liability81 Part payment82 Other liabilities83 Cheque received as guarantee or security84 Chit funds85 Uncertain future liabilities86 Proceedings against guarantor: Maintainable87 Blank cheque issued as security88 Misuse of blank cheque: Expert opinion89 Cheque issued as collateral security90 Liability need not be of drawer91 Discharge of debt of wife92 Discharge of Debt of Father93 Death of drawer of cheque94 Holder in due course95 Drawer alone can be prosecuted96 Cheque discounting facility with bank: Liability97 Offence98 Failure’ to make payment99 Cognizance of offence100 Quashing of Cognizance101 Without prejudice to any other provision of this Act102 Material alterations in cheque103 Typographical error104 Clubbing of complaints105 Punishment(a) Prior to 6-2-2003(b) On and from 6-2-2003106 Sentences to run concurrently: Powers of Court107 Sentence of imprisonment till rising of court108 Suspension of sentence109 Penalty provision created by legal fiction110 Provision, not for compensation111 Compensation112 Mode of recovery of fine and compensation113 Compensation, reduced114 Sentence of fine and compensation115 Inadequacy of sentence116 Payment of interest on award of compensation117 Default sentence118 Compounding of offence119 Acquittal120 Propriety of order of acquittal121 Conviction122 Release on probation123 Pendency of parallel proceedings124 Lok adalats125 Presentation of cheque126 Territorial jurisdiction127 Transfer of cases128 Compliance of procedure of trial on transfer of a Magistrate129 Provisos(1) Period for presentment: clause (a)(2) Notice of demand for payment: clause (b)130 Issuance of notice131 Handwritten notice132 Construction of Proviso133 Demand notice: Limitation period134 Notice to company sufficient135 Notice to director itself136 Form or format of notice137 Permissibility for the use of printed format138 Notice not signed by Advocate: Validity139 Contents of notice140 Notice sent under certificate of posting141 Notice: Service of142 Fresh notice143 Constructive service of notice144 Deemed service of notice145 Demand notice sent by registered post146 Demand notice: Burden of proof of service147 Copy of demand notice: Admissibility148 Omnibus Demand in Notice149 Period for payment150 Date of service of statutory notice151 Period for filing of complaint152 Computation of period of limitation of notice153 Computation of period of one month for filing of complaint154 Extension of limitation period155 Averment in complaint156 “Date of receipt” to be understood as “date of knowledge of receipt” of the notice157 Proof of service of demand notice158 Receipt of notice by wife of accused drawer159 Notice, interpretation of160 Validity of demand notice161 Exact date of issue of notice or date of service of the notice in the complaint162 Words ‘said amount of money’, meaning163 Notice of demand: Cheque Number164 Dishonour of cheque for higher amount165 Prior discharge166 Consolidated notice for more than one cheques: Validity167 Premature complaint168 Subsequent events: Consequence of part payment by drawer after issue of notice169 Deposit by accused of entire amount during trial170 Single complaint in respect of more than one dishonoured cheque171 Summoning of accused172 Examination of complainant173 Production of additional evidence174 Examination of witnesses175 Dismissal of complaint176 Dismissal of complaint for non-appearance of complainant/counsel177 Personal attendance of accused178 Death of payee179 Death of drawer180 Death of drawer-partner181 Death of complainant182 Discharge of accused183 Non-mention of necessary ingredients in pre-summoning statement184 No grant of injunction185 Private complaint by accused: Maintainability186 Drawer declared insolvent187 Delay in disposal of cases: Practice and procedure188 Additional evidence: Permissibility189 Quashing of complaint190 Quashing of proceedings191 Propriety of non-consideration of issue of limitation192 Writ jurisdiction of High Court193 Nature and extent of presumption: Standard of proof194 Rejection of application for sending cheque to FSL195 Money lending transaction196 Application for Opinion of handwriting export197 Preponderance of probabilities198 Power of successor Magistrate199 Revision, scope200 Remand of case201 Instruction, while working abroad202 Filing of case against directors203 Cheques whether supported by consideration139 Presumption in favour of holder1 Presumption against the drawer,2 Scope3 Termination of dealership due to dishonour of cheque4 Nature and extent of presumption5 Shall be presumed6 Propriety of presumption7 Unless the contrary is proved8 Rebuttal evidence: Quantum of9 Holder of a cheque as referred to in section 13810 Rebuttal plea11 Non-rebuttal of presumption12 Presumption available to payee and holder13 Discharge in whole or in part of any debt or other liability14 Presumption of existence of legally enforceable debt140 Defence which may not be allowed in any prosecution under section 1381 Scope2 Exclusion of mens rea3 It shall not be4 Reason to believe5 ‘Issuance’ of cheque6 Cheque may be dishonoured on presentation7 Closure of account prior to date of drawal of cheque141 Offences by companies1 Offences by companies2 Non-banking financial companies3 Scope4 “At the time the offence was committed”, scope of5 Complaint, maintainability6 Non-incorporation of particulars7 Reliance on affidavit8 Validity9 Expression ‘Company’: Meaning and scope10 Expression “other association of individuals”11 Status of a sole proprietorship concern12 Liabilities of a firm and its partners13 Joint family business14 Legal liabilities of a company15 Trustees of a trust16 Hindu Undivided Family (HUF)17 Section 141, sub-section (1)(a) Every person incharge(b) Vicarious liability(c) Quashing of prosecution(d) As well as the company18 Post-dated cheques19 Demand notice20 Section 141 — First proviso — Meaning of21 Nominated directors not liable for prosecution — Second proviso22 Section 141(2): With the consent or connivance of, or is attributable to, any neglect on the part of23 Section 141(2): Director — Manager or other officer — Meaning of24 Vacation of office: Quashing of prosecution25 Vicarious liability: Prosecution of Director: Sustainability26 Winding up proceedings pending27 Explanation (b)28 Company not prosecuted29 Proceeding against company and its Managing Director30 Companies under winding up31 Sick industrial companies32 Duty of Courts: Frivolous litigation33 Company changing name142 Cognizance of offences1 Scope2 Proviso differs prosecution3 Notwithstanding anything contained in Code of Criminal Procedure4 Filing of complaint: Legal requirements5 Cognizance of the offence: Section 142(1)(a)6 Complaint by payee or holder in due course7 Fresh complaint remedy8 Complaint by company9 Complaint by co-operative society10 Complaint by Government Company11 Sole proprietorship firm12 Partnership firm13 Complaint by unregistered firm14 Limitation for taking cognizance15 Cheques issued in favour of bank16 Complaint in writing: Section 142(1)(b)17 Issuing of fresh demand notice18 Complaint filed by power of attorney holder19 Ingredients of offence20 Complaint filed by advocate21 Complaint sent by post22 “Within one month of the date on which the cause of action arises”23 Quashing of prosecution24 Sufficient cause for not making a complaint within time25 Amendment prospective, not retrospective26 Premature complaint27 Jurisdiction of the court: Section 142(1)(c)28 Cause of action29 Defective notice30 Question of limitation(a) With effect from 6-2-2003(b) Prior to 6-2-200331 Prospective operation32 Successive presentation of cheque: Cause of action: Computation of33 Importance of date seal of court on copy of complaint to be served on accused34 Magistrate cannot refer the complaint to police for investigation35 Nature of enquiry before issue of process36 Recommended procedure for trial of section 138 complaint37 Non-applicability of section 29(2) of the Cr PC38 When punishment more severe than Magistrate empowered to give warranted39 Power of Court40 Power of attorney holder41 Territorial jurisdiction settled by the insertion of section 142(2)142A Validation for transfer of pending cases143 Power of Court to try cases summarily1 Trial of offence: Summary procedure2 Summary trial of cases3 Recording of reasons: Requirement of4 Summary trial provisions under the Code of Criminal Procedure5 Sentence of imprisonment or fine6 When the Magistrate may not hold a summary trial7 Day to day trial8 Trials to conclude within six months9 Directions to courts, for speedy disposal of dishonour of cheque cases144 Mode of service of summons145 Evidence on affidavit1 Evidence on affidavit2 Section 145 not to be dissected into pre-summoning and post-summoning stage of trial3 Section 145 is an enabling provision4 Scope and nature of provision: Overriding effect5 Right to fair trial6 Amendment retrospective or prospective7 Territorial jurisdiction146 Bank’s slip prima facie evidence of certain facts147 Offences to be compoundable1 Compounding of offence2 Right of accused to tender his evidence on affidavit3 Procedure to be followed: Applicability of section 320, Cr PC4 Permission from Court5 Deposit of ‘Amount due’ in Court6 Mere compromise and an action of compounding a crime: DistinctionAnnexure 1 Specimen NoticesSPECIMEN 1 Proforma of a notice in connection with payment of arrears of salarySPECIMEN 2 Proforma of a notice in connection with rendering servicesSPECIMEN 3 Proforma of a notice on behalf of a business firm for the amount outstanding on account of supply of goodsSPECIMEN 4 Proforma of a notice on behalf of the supplier of goodsSPECIMEN 5 Proforma of a notice on account of purchases made on creditSPECIMEN 6 Proforma of a notice on behalf of a BankSPECIMEN 7 Proforma of a notice on behalf of a companySPECIMEN 8 Proforma of a notice on behalf of a Pvt. Ltd. Company to a Limited Company on account of non-payment for the supply of goodsAnnexure 2 Specimen ComplaintsSPECIMEN 1 Proforma of a complaint for supply of goods on creditSPECIMEN 2 Proforma of a complaint on behalf of a sole proprietorship concernSPECIMEN 3 Proforma of a complaint on behalf of a Pvt. Ltd. Co. against a Limited CompanySPECIMEN 4 Proforma of a complaint by a leasing companySPECIMEN 5 Proforma of a complaint on behalf of a Ltd. Company against another Ltd. CompanySPECIMEN 6 Proforma of a complaint on behalf of a partnership concernSPECIMEN 7 Proforma of a complaint on behalf of a creditor against a debtorSPECIMEN 8 Proforma of a complaint on behalf of the sole proprietorship concernAnnexure 3 The Negotiable Instruments (Amendment) Act, 2018Annexure 4 The Negotiable Instruments (Amendment) Act, 2015Annexure 4A The Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002Annexure 5 Bankers’ Books Evidence Act, 1891 [As amended by the Negotiable Instruments (Amendment & Miscellaneous Provisions) Act, 2002]APPENDIX A Agreements controlling negotiable instrumentsAPPENDIX B Payment by bills, notes and chequesAPPENDIX C Suits on negotiable instrumentsAPPENDIX D Bills of Exchange Act, 1882APPENDIX E The Cheques Act, 1957APPENDIX F Uniform Commercial CodeSUBJECT INDEX