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NEGOTIABLE INSTRUMENTS

Presented by:-

Abrar Ahmad Ansari

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This presentation will make you familiar about

Definition of Negotiable Instrument

Characteristics of Negotiable Instrument

Types of Negotiable Instrument

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DEFINITION

In general meaning “Negotiable” means “transferable from one person to another in return for consideration”

“Instrument” means a written document by which a right is created in favor of some person.

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The term “Negotiable Instrument” as such is not defined in the Negotiable Instrument act. Sec 13, however, says that a negotiable instrument means a promissory note, bill of exchange or cheque payable either to order or to bearer” as it is, says that a negotiable instrument ‘means’ and not ‘means and includes’.

Therefore, any other instrument which satisfies the conditions of negotiability can be added to the list of negotiable instrument.

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According to Justice Willis “One property in which is acquired by anyone who takes it bona fide and for value notwithstanding any defect of title in the person from whom he took it”.

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Characteristics Of Negotiable Instrument

Freely transferable Title of holder free from all

defects Recovery

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Presumptions (Under Sec. 118 and 119)a) Considerationb) Datec) Time of the acceptanced) Time of transfere) Order of endorsementf) Stamps g) Holder presumed to be a holder in due course

h) Proof of protest

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Types of Negotiable Instrument

Negotiable by Statute, or

Negotiable by Custom or Usage

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Negotiable by Statute

The Negotiable Act mentions only three kinds of Negotiable Instrument (Under Section 13). These are I. Promissory NotesII. Bill of Exchange, andIII. Cheque

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Negotiable by Custom or Usage

There are certain other instruments which have acquired the characteristics of negotiability by the usage or custom of trade.