# Bharat’s Negotiable Instruments Act by Bhashyam & Adiga
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| About THE NEGOTIABLE INSTRUMENTS ACT |
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| CHAPTER I
Preliminary
Section Page No.
1 Short title, local extent, saving of usages relating to hundis, etc. Commencement
2 Repeal of enactments (Repealed)
3 Interpretation clause "Banker"
CHAPTER II
Of notes, bills and cheques
4 "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 instrument
12 Foreign instrument
13 Negotiable instrument
14 Negotiation
15 Indorsement
16 Indorsement "in blank" and "in full", "indorsee"
17 Ambiguous instruments
18 Where amount is stated differently in figures and words
19 Instruments payable on demand
20 Inchoate stamped instruments
21 "At Sight", "On Presentment", "After Sight"
22 "Maturity" Days of grace
Section Pa
23 Calculating maturity of bill or note payable so many months after date or sight
24 Calculating maturity of bill or note payable so many days after date or sight
25 When day of maturity is a holiday
CHAPTER III
Parties to Notes, Bills and Cheques
26 Capacity to make, etc., promissory notes, etc.
27 Agency
28 Liability of agent signing
29 Liability of legal representative signing
30 Liability of drawer
31 Liability of drawee of cheque
32 Liability of maker of note and acceptor of bill
33 Only drawee can be acceptor except in need or for honour
34 Acceptance by several drawees not partners
35 Liability of indorser
36 Liability of prior parties to holder in due course
37 Maker, drawer and acceptor principals
38 Prior party a principal in respect of each subsequent party
39 Suretyship
40 Discharge of indorser's liability
41 Acceptor bound although indorsement forged
42 Acceptance of bill drawn in fictitious name
43 Negotiable instrument made, etc., without consideration
44 Partial absence or failure of money consideration
45 Partial failure of consideration not consisting of money
45A Holder's right to duplicate of lost bill
CHAPTER IV
Of Negotiation
46 Delivery
47 Negotiation by delivery
48 Negotiation by indorsement
49 Conversion of indorsement in blank into indorsement in full
50 Effect of indorsement
51 Who may negotiate
52 Indorser who excludes his own liability or makes it conditional
53 Holder deriving title from holder in due course
54 Instrument indorsed in blank
55 Conversion of indorsement in blank into indorsement in full
56 Indorsement for part of sum due
57 Legal representative cannot by delivery only negotiate instrument indorsed by deceased
58 Instrument obtained by unlawful means or for unlawful consideration
59 Instrument acquired after dishonour or when overdue, Accommodation note or bill
60 Instrument negotiable till payment or satisfaction
CHAPTER V
Of Presentment
61 Presentment for acceptance
62 Presentment of promissory note for sight
63 Drawee's time for deliberation
64 Presentment for payment
65 Hours for presentment
66 Presentment for payment of instrument payable after date or sight
67 Presentment for payment of promissory note payable by instalments
68 Presentment for payment of instrument payable at specified place and not elsewhere
69 Instrument payable at specified place
70 Presentment where no exclusive place specified
71 Presentment when maker, etc., has no known place of business or residence
72 Presentment of cheque to charge drawer
73 Presentment of cheque to charge any other person
74 Presentment of instrument payable on demand
75 Presentment by or to agent, representative of deceased or assignee of insolvent
75A Excuse for delay in presentment for acceptance or payment
76 When presentment unnecessary
77 Liability of banker for negligently dealing with bill presented for payment
CHAPTER VI
Of Payment and Interest
78 To whom payment should be made
79 Interest when rate specified
80 Interest when no rate specified
81 Delivery of instrument on payment or indemnity in case of loss
CHAPTER VII
Of discharge from liability on Notes, Bills and Chequ
82 Discharge from liability — (a) by cancellation; (b) by release; (c) by payment
83 Discharge by allowing drawee more than forty-eight hours to accept
84 When cheque not duly presented and drawer damaged thereby
85 Cheque payable to order
85A Drafts drawn by one branch of a bank on another payable to order
86 Parties not consenting discharged by qualified or limited acceptance
87 Effect of material alteration, Alteration by indorsee
88 Acceptor or indorser bound notwithstanding previous alteration
89 Payment of instrument on which alteration is not apparent
90 Extinguishment of rights of action on bill in acceptor's hands
CHAPTER VIII
Of Notice of Dishonour
91 Dishonour by non-acceptance
92 Dishonour by non-payment
93 By and to whom notice should be given
94 Mode in which notice may be given
95 Party receiving must transmit notice of dishonour
96 Agent for presentment
97 When party to whom notice given is dead
98 When notice of dishonour is unnecessary
CHAPTER IX
Of Noting and Protest
99 Noting
100 Protest, Protest for better security
101 Contents of protest
102 Notice of protest
103 Protest for non-payment after dishonour by non-acceptance
104 Protest of foreign bills
104A When noting equivalent to protest
CHAPTER X
Of reasonable time
105 Reasonable time
106 Reasonable time of giving notice of dishonour
107 Reasonable time for transmitting such notice
CHAPTER XI
Of acceptance and payment for honour and
reference in case of need
108 Acceptance for honour
109 How acceptance for honour must be made
110 Acceptance not specifying for whose honour it is made
111 Liability of acceptor for honour
112 When acceptor for honour may be charged
113 Payment for honour
114 Right of payer for honour
115 Drawee in case of need
116 Acceptance and payment without protest
CHAPTER XII
Of compensation
117 Rules as to compensation
CHAPTER XIII
Special rules of evidence
118 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 course
119 Presumption on proof of protest
120 Estoppel against denying original validity of instrument
121 Estoppel against denying capacity of payee to indorse
122 Estoppel against denying signature or capacity of prior party
CHAPTER XIV
Of crossed cheques
123 Cheque crossed generally
124 Cheque crossed specially
125 Crossing after issue
126 Payment of cheque crossed generally, Payment of cheque crossed specially
127 Payment of cheque crossed specially more than once
128 Payment in due course of crossed cheque
129 Payment of crossed cheque out of due course
130 Cheque bearing "not negotiable"
131 Non-liability of banker receiving payment of cheque
131A Application of chapter to drafts
CHAPTER XV
Of bills in sets
132 Set of bills
133 Holder of first acquired part entitled to all
CHAPTER XVI
Of international law
134 Law governing liability of maker, acceptor or indorser of foreign instrument
135 Law of place of payment governs dishonour
136 Instrument made, etc, out of India but in accordance with the law of India
137 Presumption as to foreign law
CHAPTER XVII
Of penalties in case of dishonour of certain cheques finsufficiency of funds in the accounts
138 Dishonour of cheque for insufficiency, etc., of funds in the account
1 Competence of the Parliament
2 Statement of objects and reasons
3 Object
4 Salient features
5 Bird's eye view
6 Non-compliance with the provision
7 Scope
8 Nature
9 Applicability
10 Applicability of provisions to cheques issued before 1-4-1989
11 Issue of cheque is not an offence
12 Ingredients of the offence
13 Dishonour of cheque issued for discharge of legally enforceable debt/ liability
14 Section 138 and Criminal Law
15 Power of courts
16 Interference by High Court in disputed questions of fact
17 Bailable offence
18 Trial of offence: Summary procedure
19 Directions for Summary Trial
20 Defence evidence
21 'Month', meaning of
22 Presentation of cheques any number of times during validity period
23 Filing of a civil suit
24 Arbitration proceedings
25 Prosecution for cheating: Not barred
26 Prosecution based on successive dishonour of cheque
27 Filing of a complaint
28 Condonation of delay in filing complaint
29 Place of filing complaint,
30 Locus standi to file complaint
31 Verification of complaint
32 Cause of action
33 Complaint not signed by complainant
34 Permissibility for the substitution of complainant
35 Deficit Court Fee
36 Sole proprietorship concern
37 Complaint by company
38 Delegation of power of attorney
39 Power of Attorney to witness transaction
40 Complaint by Power of Attorney Holder
41 Complaint, maintainability
42 Reasons for return
43 'Refer to drawer', meaning of
44 ‘Such person shall be deemed to have committed an offence’
45 Infirmity in return memo
46 Payment of cheque stopped by drawer
47 Propriety of order of issue process
48 Bank account closed
49 Exceeds arrangement: Dishonour on ground of
50 Insufficient balance
51 Cheque reported stolen
52 Alteration in date and drawer's signature differs
53 Drawer's signature incomplete
54 Drawer's signature denial
55 Non-MICR cheque
56 Recourse to proceedings
57 Making endorsement 'sans recourse' on cheque
58 Bank documents: Admissibility in evidence
59 Exclusion of mens rea
60 Cheque drawn by a person
61 Cheque issued in illegal transaction
62 Liability of director
63 Liability of drawer of cheque
64 Cheque issued by authorised signatory: Liability
65 Vicarious liability
66 Cheque issued by mandate holder: Liability
67 Forfeiture of right of holder/payee
68 Self drawn cheque
69 Pay Order, dishonour of
70 Post-dated cheques, dishonour of, effect
71 An account maintained with a banker
72 Examination of Banker
73 Joint bank account operated by 'Either or Survivor': Liability
74 Joint Liability, existence of
75 Banker
76 Undated cheque
77 Any debt or other liability: Legally enforceable liability
78 Dishonour of cheque issued in pursuance of the agreement to sell
79 Debt/Liability: Proof of
80 Existence of debt or liability on the date of cheque
81 Time-barred debt
82 Discharge of liability in excess of liability incurred
83 Legally enforceable liability
84 Burden of proof
85 Presumption
86 Modification of discharge of liability
87 Part payment
88 Other liabilities
89 Cheque received as guarantee or security
90 Chit funds
91 Uncertain future liabilities
92 Proceedings against guarantor: Maintainable
93 Blank cheque issued as security
94 Blank cheque
95 Misuse of blank cheque: Expert opinion
96 Cheque issued as collateral security
97 Liability need not be of drawer
98 Discharge of debt of wife
99 Discharge of debt of father
100 Death of drawer of cheque
101 Holder in due course
102 Drawer alone can be prosecuted
103 Cheque discounting facility with bank: Liability
104 Offence
105 'Failure' to make payment
106 Cognizance of offence
107 Quashing of cognizance
108 Without prejudice to any other provision of this Act
109 Material alterations in cheque
110 Typographical error
111 Clubbing of complaints
112 Punishment
(a) Prior to 6-2-2003
(b) On and from 6-2-2003
113 Sentences to run concurrently: Powers of Court
114 Sentence of imprisonment till rising of court
115 Sentence of imprisonment modified
116 Suspension of sentence
117 Penalty provision created by legal fiction
118 Provision, not for compensation
119 Compensation
120 Mode of recovery of fine and compensation
121 Compensation, reduced
122 Sentence of fine and compensation
123 Inadequacy of sentence
124 Payment of interest on award of compensation
125 Default sentence
126 Compounding of offence
127 Acquittal
128 Propriety of order of acquittal
129 Appeal against acquittal
130 Conviction
131 Release on probation
132 Pendency of parallel proceedings
133 Lok adalats
134 Presentation of cheque
135 Territorial jurisdiction
136 Transfer of cases
137 Compliance of procedure of trial on transfer of a Magistrate
138 Provisos
(1) Period for presentment: clause (a)
(2) Notice of demand for payment: clause (b)
139 Issuance of notice
140 Handwritten notice
141 Construction of Proviso
142 Demand notice: Limitation period
143 Notice to company sufficient
144 Notice to director itself
145 Form or format of notice
146 Permissibility for the use of printed format
147 Notice not signed by Advocate: Validity
148 Contents of notice
149 Notice sent under certificate of posting
150 Notice: Service of
151 Fresh notice
152 Constructive service of notice
153 Deemed service of notice
154 Demand notice sent by registered post
155 Demand notice: Burden of proof of service
156 Copy of demand notice: Admissibility
157 Omnibus demand in notice
158 Period for payment
159 Date of service of statutory notice
160 Period for filing of complaint
161 Computation of period of limitation of notice
162 Computation of period of one month for filing of complaint
163 Extension of limitation period
164 Averment in complaint
165 "Date of receipt" to be understood as "date of knowledge of receipt" of the notice
166 Proof of service of demand notice
167 Receipt of notice by wife of accused drawer
168 Notice, interpretation of
169 Validity of demand notice
170 Exact date of issue of notice or date of service of the notice in the complain
171 Words 'said amount of money', meaning
172 Notice of demand: Cheque Number
173 Dishonour of cheque for higher amount
174 Prior discharge
175 Consolidated notice for more than one cheques: Validity
176 Premature complaint
177 Subsequent events: Consequence of part payment by drawer after issue of notice
178 Deposit by accused of entire amount during trial
179 Single complaint in respect of more than one dishonoured cheque
180 Summoning of accused
181 Examination of complainant
182 Production of additional evidence
183 Examination of witnesses
184 Dismissal of complaint
185 Dismissal of complaint for non-appearance of complainant/counsel
186 Personal attendance of accused
187 Death of payee
188 Death of drawer
189 Death of drawer-partner
190 Death of complainant
191 Discharge of accused
192 Non-mention of necessary ingredients in pre-summoning statement
193 No grant of injunction
194 Private complaint by accused: Maintainability
195 Drawer declared insolvent
196 Delay in disposal of cases: Practice and procedure
197 Additional evidence: Permissibility
198 Quashing of complaint
199 Quashing of proceedings
200 Simultaneous proceedings under Insolvency and Negotiable Instruments A
201 Propriety of non-consideration of issue of limitation
202 Writ jurisdiction of High Court
203 Nature and extent of presumption: Standard of proof
204 Rejection of application for sending cheque to FSL
205 Money lending transaction
206 Finding of civil court, effect of
207 Application for opinion of handwriting export
208 Preponderance of probabilities
209 Power of successor Magistrate
210 Revision, scope
211 Remand of case
212 Instruction, while working abroad
213 Filing of case against directors
214 Cheques whether supported by consideration
215 Both criminal proceedings and civil remedies can be pursued
139 Presumption in favour of holder
1 Presumption against the drawer
2 Scope
3 Termination of dealership due to dishonour of cheque
4 Nature and extent of presumption
5 Shall be presumed
6 Propriety of presumption
7 Unless the contrary is proved
8 Rebuttal evidence: Quantum of
9 Holder of a cheque as referred to in section 138
10 Rebuttal plea
11 Non-rebuttal of presumption
12 Presumption available to payee and holder
13 Discharge in whole or in part of any debt or other liability
14 Presumption of existence of legally enforceable debt
15 Opinion of handwriting expert
140 Defence which may not be allowed in any prosecution u/s 138
1 Scope
2 Exclusion of mens rea
3 It shall not be
4 Reason to believe
5 'Issuance' of cheque
6 Cheque may be dishonoured on presentation
7 Closure of account prior to date of drawal of cheque
141 Offences by companies
1 Offences by companies
2 Non-banking financial companies
3 Scope
4 “At the time the offence was committed”, scope of
5 Complaint, maintainability
6 Non-incorporation of particulars
7 Reliance on affidavit
8 Validity,
9 Expression 'Company': Meaning and scope
10 Expression "other association of individuals"
11 Status of a sole proprietorship concern
12 Liabilities of a firm and its partners
13 Joint family business
14 Legal liabilities of a company
15 Summon upon a Company: Mode
16 Dishonour of cheque by a Society
17 Trustees of a trust
18 Hindu Undivided Family (HUF)
19 Section 141, sub-section (1)
(a) Every person incharge
(b) Vicarious liability
(c) Quashing of prosecution
(d) As well as the company
20 Post-dated cheques
21 Demand notice
22 Section 141 — First proviso — Meaning of
23 Nominated directors not liable for prosecution — Second proviso
24 Section 141(2): With the consent or connivance of, or is attributable to, any neglect on the part of
25 Section 141(2): Director — Manager or other officer — Meaning of
26 Vacation of office: Quashing of prosecution
27 Vicarious liability: Prosecution of Director: Sustainability
28 Winding up proceedings pending
29 Explanation (b)
30 Company not prosecuted
31 Proceeding against company and its Managing Director
32 Companies under winding up
33 Companies under insolvency proceedings
34 Sick industrial companies
35 Duty of Courts: Frivolous litigation
36 Company changing name
37 Unregistered Partnership firm
38 Commission of offence
142 Cognizance of offences
1 Scope
2 Proviso defers prosecution
3 Notwithstanding anything contained in Code of Criminal Procedure
4 Filing of complaint: Legal requirements
5 Cognizance of the offence: Section 142(1)(a)
6 Complaint by payee or holder in due course
7 Fresh complaint remedy
8 Complaint by company
9 Complaint by co-operative society
10 Complaint by Government Company
11 Sole proprietorship firm
12 Partnership firm
13 Complaint by unregistered firm
14 Limitation for taking cognizance
15 Cheques issued in favour of bank
16 Complaint in writing: Section 142(1)(b)
17 Issuing of fresh demand notice
18 Complaint filed by power of attorney holder
19 Ingredients of offence
20 Complaint filed by advocate
21 Complaint sent by post
22 "Within one month of the date on which the cause of action arises"
23 Quashing of prosecution
24 Sufficient cause for not making a complaint within time
25 Amendment prospective, not retrospective
26 Premature complaint
27 Jurisdiction of the court: Section 142(1)(c)
28 Cause of action 1090
29 Defective notice 1091
30 Question of limitation 1092
(a) With effect from 6-2-2003 1092
(b) Prior to 6-2-2003 1092
31 Prospective Operation 1092
32 Successive presentation of cheque: Cause of action: Computation of 1094
33 Importance of date seal of court on copy of complaint to be served on accused 1095
34 Magistrate cannot refer the complaint to police for investigation 1096
35 Nature of enquiry before issue of process 1096
36 Recommended procedure for trial of section 138 complaint 1096
37 Non-applicability of section 29(2) of the Cr PC 1097
38 When punishment more severe than Magistrate empowered to give warranted 1097
39 Power of Court 1097
40 Power of attorney holder 1097
41 Territorial jurisdiction settled by the insertion of section 142(2) 1098
42 Mode of delivery 1099
142A Validation for transfer of pending cases 1099
1 Transfer of pending cases 1100
2 Refiling of complaint 1101
143 Power of Court to try cases summarily 1101
1 Trial of offence: Summary procedure 1102
2 Summary trial of cases 1103
3 Dismissal of complaint on non-appearance 1104
4 Recording of reasons: Requirement of 1105
5 Summary trial provisions under the Code of Criminal Procedure 1105
6 Sentence of imprisonment or fine 1107
7 When the Magistrate may not hold a summary trial 1108
8 Day to day trial 1108
9 Trials to conclude within six months 1108
10 Directions to courts, for speedy disposal of dishonour of cheque cases 1109
143A Power to direct interim compensation 1110
1 Object 1111
2 Section 143A is prospective in operation 1111
3 Power to direct interim compensation 1111
4 Amount of interim compensation 1113
5 Payment of interim compensation 1113
6 Refund of interim compensation with interest in case of acquittal 1113
7 Recovery of interim compensation 1113
8 Provision, whether directory or mandatory 1114
9 Interim compensation to be reduced from fine imposed 1114
10 Recording reasons — Necessary 1114
144 Mode of service of summons 1115
1 Service of summons by speed post/courier 1115
2 Refusal to take delivery of summons, effect of 1115
145 Evidence on affidavit 1117
1 Evidence on affidavit 1117
2 Section 145 not to be dissected into pre-summoning and post-summoning stage of trial 1118
3 Section 145 is an enabling provision 1119
4 Scope and nature of provision: Overriding effect 1121
5 Right to fair trial 1122
6 Amendment retrospective or prospective 1123
7 Territorial jurisdiction 1124
146 Bank's slip prima facie evidence of certain facts 1125
147 Offences to be compoundable 1125
1 Compounding of offence 1125
2 Right of accused to tender his evidence on affidavit 1126
3 Procedure to be followed: Applicability of section 320, Cr PC 1127
4 Reference of parties to mediation 1130
5 Permission from Court 1133
6 Deposit of 'Amount due' in Court 1133
7 Mere compromise and an action of compounding a crime: Distinction 1134
8 Payment of Compensation 1134
148 Power of Appellate Court to order payment pending appeal against conviction 1135
1 Object 1136
2 Power of Appellate Court to order payment pending appeal against conviction 1136 |
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