Bills Of Bills Of ExchangeExchange

IntroductionIntroduction

Negotiable Negotiable Instrument Instrument

According To Section 13(1) Of The According To Section 13(1) Of The Negotiable Instrument Act, 1881,Negotiable Instrument Act, 1881,

“ “ A Negotiable A Negotiable Instrument Means A Promissory Instrument Means A Promissory Note, Bill Of Exchange Or Cheque Note, Bill Of Exchange Or Cheque Payable Either To Order Or To Payable Either To Order Or To Bearer”Bearer”

Types Of Negotiable Types Of Negotiable InstrumentInstrument

Recognized Recognized By StatuteBy Statute

1.1. Bills Of Bills Of ExchangeExchange

2.2. Promissory Promissory NotesNotes

3.3. ChequesCheques

Recognized By Recognized By Usage Or Usage Or CustomCustom

1.1. HundisHundis2.2. Share WarrantsShare Warrants3.3. Dividend WarrantsDividend Warrants4.4. Bearer Bearer

DebenturesDebentures

Bills Of Bills Of ExchangeExchange According to section 5 of Negotiable According to section 5 of Negotiable

Instrument Act,Instrument Act, ““A Bill Of Exchange is an A Bill Of Exchange is an

instrument in writing containing an instrument in writing containing an unconditional order, signed by the unconditional order, signed by the maker , directing a certain person maker , directing a certain person to pay a sum of money only to or to pay a sum of money only to or to the order of a certain person or to the order of a certain person or to the bearer of the instrument”to the bearer of the instrument”

Specimen Of A Bill Of Specimen Of A Bill Of ExchangeExchange

JAMMUJAMMU

2727thth Nov. 2006 Nov. 2006

StampStamp

Three months after due date, pay XYZ or order, theThree months after due date, pay XYZ or order, theSum of Rs 1000(one thousand only) for value received.Sum of Rs 1000(one thousand only) for value received.

To,To,M/S ABCM/S ABCGandhi NagarGandhi NagarJammuJammu

Parts Of A Bill Of Parts Of A Bill Of ExchangeExchange

DateDate TermTerm AmountAmount StampStamp PartiesParties

Special Special featuresfeatures

1.1. A Bill Of Exchange is an instrument in writingA Bill Of Exchange is an instrument in writing2.2. It must be signed by the makerIt must be signed by the maker3.3. It contains an unconditional orderIt contains an unconditional order4.4. The order must be to pay money and money The order must be to pay money and money

onlyonly5.5. The sum payable must be specificThe sum payable must be specific6.6. The amount must be paid within a stipulated The amount must be paid within a stipulated

timetime7.7. The name of the drawee must be clearly The name of the drawee must be clearly

mentionedmentioned8.8. It must be dated and stampedIt must be dated and stamped

Parties to a Bill Of Parties to a Bill Of ExchangeExchange

DrawerDrawer The person who draws or The person who draws or writes the Bill Of Exchange is writes the Bill Of Exchange is called the Drawer. The Drawer called the Drawer. The Drawer must be the seller or creditor must be the seller or creditor to whom the money is owingto whom the money is owing

DraweeDrawee

The Drawee is the person on The Drawee is the person on whom the bill is drawn. He whom the bill is drawn. He is the purchaser or debtor is the purchaser or debtor who is ordered by the who is ordered by the Drawer to pay the amountDrawer to pay the amount

PayeePayee The person who has the The person who has the right to receive the amount right to receive the amount of the bill is called the of the bill is called the Payee, the Payee may be a Payee, the Payee may be a third person or the Drawer third person or the Drawer himselfhimself

Advantages of Bill of Advantages of Bill of ExchangeExchange

1.1. A Bill of Exchange is used in A Bill of Exchange is used in settlement of debts settlement of debts

2.2. It fixes the date of paymentIt fixes the date of payment3.3. It is a written and signed It is a written and signed

acknowledgement of debtacknowledgement of debt4.4. A debtor enjoys full period of creditA debtor enjoys full period of credit5.5. A drawer can convert the bill into A drawer can convert the bill into

cash by getting it discounted with cash by getting it discounted with the bankthe bank

Kinds of Bills Of Kinds of Bills Of ExchangeExchange

Inland Inland BillBill

Foreign Foreign BillBill

Kinds of Bills Of Kinds of Bills Of ExchangeExchange

Trade Trade BillsBills

AccommodaAccommodation Billstion Bills

Kinds of Bills Of Kinds of Bills Of ExchangeExchange

Demand Demand BillBill

Time BillTime Bill

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