Evolution and Revolution of Negotiable Instruments as facilitator for Trade and Commerce and 10 years Taking forward MET’S BKC
Institute Of Management
MBA IST Year
1. Khushboo Lalwani
2. Yogesh Mali
3. Murtaza Raj
4. Snehal Nikam
5. Adhikar Patil
6. Atul Patil
7. Poonam Shinde
8. Ritu Singh
9. Salar Shaikh
3. Characteristics of Negotiable Instruments
4. Presumptions of Negotiable Instruments
5. Promissory Notes
5.1. Characteristics of a Promissory Note
5.2. Specimen of Promissory Note
6. Bill of Exchange
6.1. Definition of Bill of Exchange
6.2. Characteristics of Bill of Exchange
6.3. Specimen of A Bill Of Exchange
7.1. Definition of Cheque
7.2. Essential Elements of a cheque
7.3. Specimen of a Cheque
7.4. Types of Cheque
7.5. Dishonor of Cheques
7.6. Five Ingredients of the offence
8. Difference between Promissory Note and Bill of Exchange
9. Difference between Bill of Exchange and Cheque
11. Types of Hundis
12. JVC Case study.
Money is the most common medium of exchange in any advanced society. The reason for this is that money has the exchange value and is also freely transferable. In trade and commerce, the use of ready cash is desirable, because of its acceptability, but it may cause inconvenience and risk. In the modern age, business tran
sactions do not take place only through ready cash or currency notes. It is neither possible nor desirable to do all business transactions through ready cash as it is inconvenient and risky mode of dealings. The need for some safe and effective substitute for money leads to the development of the use of negotiable instruments and therefore, the use of negotiable instruments has become the order of the day in business transactions. Credit instruments used in business consist of :-
1. Negotiable Instrument :- The word negotiable means “ transferable from one person to another in return for consideration” and Instrument means “ a written document by which a right is created in favour of some person”. Thus, a negotiable instrument is a document which can be used to secure the payment of money. It is transferable by mere delivery or by endorsement and delivery. Delivery means to handover the documents. Endorsement means to sign the document for the purpose of negotiation. For example :- bill of exchange , promissory note, cheque.
2. Non Negotiable Instrument:- In the case of Non Negotiable Instruments, negotiability is restricted. The ownership of this instrument can be transferred only after fulfilling certain legal conditions. For example :- Share warrant, postal orders, letters of credit, bill of lading, etc. Meaning :-
The word negotiable means ‘transferable by delivery’, and the word instrument means ‘a written document by which a right is created in favour of some person’. Thus the term ‘Negotiable Instrument” means “a written document transferable by delivery”. Definition:-
According to section 13(1) of the negotiable instrument act, “ A negotiable instrument means a promissory note, bill of exchange, or cheque payable either to order or to bearer”. “ A negotiable instrument may be made payable to two or more payees jointly, or it may be made payable in the alternative to one of two, or one or some several payees”[ Section13(2) ].
The history of the present Act is a long one. The Act was originally drafted in 1866 by the 3rd India Law Commission and introduced in December, 1867 in the Council and it was referred to a Select Committee. Objections were raised by the mercantile community to the numerous deviations from the English Law which it contained. The Bill had to be redrafted in 1877. After the lapse of...
Bibliography: 1. Business Law Including Company Law (Author – S.S. Gulshan and G.K. Kapoor.
2. Legal Aspects of Business Law (Thakur Publishers)
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