NEGOTIABLE INSTRUMENTS ACT, 1881andLaw of InsuranceMeaningNature and characteristicsKinds of negotiable instrumentsPromissory notesBills of exchangeChequesParties to negotiable instrumentsNegotiationPresentmentDischarge and dishonour of negotiable instrumentsLaw of insuranceGeneral principles of insuranceLife fire and marine insurance
Meaning of Negotiable instrumentA "negotiable instrument" meanspromissory note, orbill of exchange orchequepayable either to order or to bearerNEGOTIABLE =TRANSFERABLEINSTRUMENT= WRITTEN DOCUMENT
Definitions to remember•"Holder in due course"means any person who for considerationbecame the possessor of a promissory note, bill of exchange orcheque if payable to bearer, or the payee or endorsee thereof, if[payable to order], before the amount mentioned in it becamepayable, and without having sufficient cause to believe that anydefect existed in the title of the person from whom he derived histitle.•"Payment in due course" means payment in accordance with theapparent tenor of the instrument in good faith and withoutnegligence to any person in possession thereof undercircumstances which do not afford a reasonable ground for believingthat he is not entitled to receive payment of the amount thereinmentioned.
Inland and Foreign Instrument•Inland instrument•A Instrument drawn or made in India andmade payable in, or drawn upon anyperson resident in India shall be deemedto be an inland instrument.•Foreign instrument•Any such instrument not so drawn, madeor made payable shall be deemed to beforeign instrument.
Inchoate stamped instruments•An instrument signed by the drawer/maker•Duly stamped•All the details not filled•Other party fills the details•Valid to the extent of stamp duty
Days of grace•Every promissory note or bill of exchangewhich is not expressed to be payable ondemand, at sight or on presentment is atmaturity on the third day after the day onwhich it is expressed to be payable.
Capacity of the parties•Persons capable of contracting are eligibleto deal with negotiable instruments•Aminormay draw, endorse, deliver andnegotiate such instruments so as to bindall parties except himself.
Nature and Characteristics•Documents in writing•Free transfer•Transfer free from defect•Right to sue•No notice of transfer•Unconditional order/promise•Drawn on a certain person•