Chapters of The Negotiable Instruments Act 1881 [PDF]

  1. Preliminary
    Defines key terms and sets the framework for the Act. It includes definitions of negotiable instruments and provides general principles for their usage.
  2. Of Notes, Bills, and Cheques
    Describes what constitutes a negotiable instrument, specifically promissory notes, bills of exchange, and cheques. It outlines their form, characteristics, and legal requirements.
  3. Parties to Notes, Bills, and Cheques
    Identifies the parties involved in a negotiable instrument, such as the maker, drawer, payee, drawee, and endorser. It also explains the rights and duties of each party.
  4. Of Negotiation
    Explains how a negotiable instrument can be transferred (negotiated) from one party to another. It includes rules on endorsement and delivery.
  5. Of Presentment
    Covers the process of presenting a negotiable instrument for payment or acceptance. It includes requirements for the time, place, and manner of presentment.
  6. Of Payment and Interest
    Deals with the payment of negotiable instruments and the conditions under which interest is payable on overdue amounts.
  7. Of Discharge from Liability on Notes, Bills, and Cheques
    Explains the various ways in which a person can be released from liability under a negotiable instrument, such as through payment or agreement.
  8. Of Notice of Dishonour
    Discusses the requirement for notifying parties when a negotiable instrument is dishonoured (e.g., when a cheque bounces or a bill isn’t accepted).
  9. Of Noting and Protest
    Describes the procedures of noting (recording) and protesting a dishonoured instrument. This is important for future legal actions related to dishonoured instruments.
  10. Of Reasonable Time
    Sets out the concept of “reasonable time” for the presentment, acceptance, and payment of negotiable instruments, offering guidelines for what constitutes a reasonable period.
  11. Of Acceptance and Payment for Honour and Reference in Case of Need
    Deals with special circumstances where a third party may step in to accept or pay a negotiable instrument to protect the interests of the holder.
  12. Of Compensation
    Explains the rights to compensation if there is a wrongful dishonour of a negotiable instrument or failure to fulfil a legal obligation.
  13. Special Rules of Evidence
    Lists exceptions to the normal rules of evidence in court cases related to negotiable instruments, focusing on the admissibility of certain documents and practices.
  14. Of Crossed Cheque
    Describes the process and implications of crossing a cheque, i.e., writing two parallel lines across a cheque to ensure it is deposited into a bank rather than cashed directly.
  15. Of Bills in Sets
    Discusses the issuance and handling of bills of exchange in sets, where multiple identical instruments are issued to facilitate trade and payment.
  16. Of International Law
    Addresses issues related to international trade, including the application of negotiable instrument law across borders and between different jurisdictions.
  17. Of Penalties in Case of Dishonour of Certain Cheques for Insufficiency of Funds in the Accounts
    Specifies penalties for dishonouring cheques due to insufficient funds in the account, including fines and potential legal consequences.

Read below Negotiable Instrument Act 1881 and download pdf file of Negotiable Instrument Act .

राष्‍ट्रीय अन्वेषण अभिकरण अधिनियम, 2008

Chapter No. Negotiable Instruments Act 1881Chapter Name Negotiable Instruments Act 1881
1PRELIMINARY
2OF NOTES, BILLS AND CHEQUES
3PARTIES TO NOTES, BILLS AND CHEQUES
4OF NEGOTIATION
5OF PRESENTMENT
6OF PAYMENT AND INTEREST
7OF DISCHARGE FROM LIABILITY ON NOTES, BILLS AND CHEQUES
8OF NOTICE OF DISHONOUR
9OF NOTING AND PROTEST
10OF REASONABLE TIME
11OF ACCEPTANCE AND PAYMENT FOR HONOUR AND REFERENCE IN CASE OF NEED
12OF COMPENSATION
13SPECIAL RULES OF EVIDENCE
14OF CROSSED CHEQUE
15OF BILLS IN SETS
16OF INTERNATIONAL LAW
17OF PENALTIES IN CASE OF DISHONOUR OF CERTAIN CHEQUES FOR INSUFFICIENCY OF FUNDS IN THE ACCOUNTS

1. What is a negotiable instrument?
A negotiable instrument is a written document that promises or orders payment of money, such as cheques, promissory notes, and bills of exchange.


2. What are the types of negotiable instruments?

  • Promissory Notes
  • Bills of Exchange
  • Cheques

3. Who are the parties involved?

  • Drawer: The person who creates the instrument.
  • Drawee: The person or entity to whom the instrument is addressed.
  • Payee: The person receiving the payment.
  • Endorser: The person transferring the instrument.
  • Endorsee: The person receiving it.

4. What is dishonour of a cheque?
It occurs when a cheque cannot be paid due to insufficient funds or other issues like incorrect signature.


5. What is a crossed cheque?
A cheque marked with two parallel lines, which must be deposited into a bank account and cannot be cashed directly.


6. What are penalties for dishonouring a cheque?
Under Section 138, the drawer may face fines or imprisonment for dishonouring a cheque due to insufficient funds.


7. What is “noting and protest”?
Noting is recording a dishonoured instrument, and protest is an official declaration of dishonour, often required for bills of exchange.


8. What does “discharge from liability” mean?
It refers to being freed from the obligation to pay on a negotiable instrument, typically through payment or mutual agreement.


9. What are bills in sets?
Bills of exchange issued in multiple identical parts. Only the first part is valid for payment.


10. What is the role of the court?
Courts resolve disputes related to dishonoured negotiable instruments and can take criminal or civil action depending on the case.