# n.i. act sysnopsis - 1

NEGOTIABLE INSTRUMENTS ACT, 1881

Synopsis

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The N.I. Act, 1881 applies to the whole of India including State of Jammu and Kashmir


The N.I. Act, 1881 came into force on 1st March, 1882.


The undertaking contained in a promissory note, to pay a certain sum of money is Unconditional


A bill of exchange contains an unconditional order.


Cheque is a most popular kind of bill of exchange.


The term "a cheque in the electronic form" is defined in the N.I. Act, 1881 – under explanation 1

(a) of section 6,.


. The term Negotiable instrument' is defined in the N.I. Act, 1881, under section 13.


The term 'negotiation' in section 14 of the N.I. Act, 1881 refers to the transfer of a bill of exchange /

promissory note / cheque - to any person to constitute the person as the holder thereof.


If an instrument may be construed (interpreted) either as a promissory note or bill of exchange

then it is an ambiguous instrument.


If in an instrument the amount undertaken or ordered to be paid is stated differently in figures

and in words as the amount stated in words shall be the amount undertaken or ordered to be paid.


Under section 16 of the N.I. Act, 'endorsement in blank' of an instrument means, where the endorser

signs his name only on the instrument


'At sight' under section 21 of the N.I. Act, 1881, means on demand


A promissory note or bill of exchange which is not expressed to be payable on demand, at sight or on presentment is at maturity on the 3rd day after the

day, on which it is expressed to be payable.


If a minor draws, endorses, deliver or negotiates an instrument, such instrument binds all parties to the

instrument except the mino.r


. In a promissory note, the amount of money payable must be certain.


. An authority to draw bills of exchange does not itself import an authority to endorse


. The term 'legal representative' in section 29 of the N.I. Act, 1881 includes executors or

administrator. (K. Subbanna v. K. Subbarayudu, AIR 1926 Mad 390)


Drawer escape from his liability: A drawer can limit or exclude his liability by inserting in the bill "an

express stipulation" to that effect.


The legal representative cannot negotiate "instrument by delivery only". He must re-endorse

and deliver the instrument for negotiating it.


Public Holidays are excluded in determining reasonable time for the purpose of payment of a

negotiable instrument


The question of the reasonableness of the time for presenting a bill of exchange for payment is a

mixed question of law and fact


Under section 76(b) of the N.I. Act, 1881, the engagement to pay must have been entered into

prior to mtaturity.


A note under section 99 of the N.I. Act should also contain "charges of Notary" along with other

things .


The provisions of section 87 of the N.I. Act, 1881, are subject to the provisions of sections 20, 49, 8 6

and 125 of the Act.


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# n.i. act sysnopsis - 1

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