Chapter VI: Of Payment and Interest Section 78: To whom payment should be made This section defines who can legitimately receive payment to discharge the debt. 1. Payment to the Holder: Section 79: Interest when rate specified This section details how to calculate interest when the instrument specifies an interest rate. 1. Specified Interest Rate:
Chapter V: Of Presentment Section 61: Presentment for acceptance This section deals specifically with presenting a Bill of Exchange to the Drawee so they can formally agree to pay it. 1. Presentment Rule for After-Sight Bills: 2. Penalty for Default: 3. Drawee Cannot Be Found: 4. Presentation at a Specific Place: 5. Presentment via Post
Chapter IV: Of Negotiation Section 46: Delivery This section establishes that the transfer of an instrument is only complete upon physical or constructive transfer. 1. Completion by Delivery: 2. Delivery Between Direct Parties: 3. Conditional Delivery: 4. Negotiation Methods: Section 47: Negotiation by delivery This section specifically reinforces the transfer method for bearer instruments. 1.
Chapter III: Parties to Notes, Bills, and Cheques Section 26: Capacity to make, etc., promissory notes, etc. This section defines who is legally able to create or sign these instruments. 1. General Capacity: 2. Minor’s Capacity (Protection Clause): 3. Corporation’s Capacity (Empowerment Clause): Section 27: Agency This section governs the signing of instruments through authorized
Chapter II: Of Notes, Bills, and Cheques Section 4: “Promissory note” A Promissory Note is a written promise to pay a fixed amount of money to a specific person. 1. Instrument in Writing: 2. Unconditional Undertaking: 3. Certain Sum of Money Only: 4. Payable to a Certain Person or Bearer: Test Cases (Illustrations) for Promissory
This guide breaks down the complex legal language of the Negotiable Instruments Act, 1881, into simple, modern terms, with practical, real-world examples for every point. Chapter I: Preliminary Section 1: Short title, Local extent, Saving of usages, and Commencement This section lays out the basic scope and authority of the Act. 1. Short title: 2.
