Negotiable Instruments Act 1881
Negotiable Instruments Act 1881 had been passed in 1882 and was modified in 1989 and 2002, as some more sections were added into the age old law. This act is applicable in entire India , including Jammu & Kashmir. J & K was brought in the ambit of the act in 1956.
The act has provisions of Negotiable Instruments such as Promissory Notes, Checks, Drafts , Bills of exchanges etc.
What is a Negotiable Instrument?
Negotiability means transfer of an instrument from a person / entity to another person / entity. The transfer should be without restriction and in good faith.
Before we move ahead , please note the following:
- The NI Act has 147 sections.
- Draft was not included and was made included in the Section 85(a).
- Currency Note is not a negotiable instrument as per section 21 of the Indian Currency Act .
- Section 4 deals with promissory notes
- Section 5 deals with Bill of Exchange
- Section 6 deals with Cheque
- Section 9 deals with holder and holder in Due course.
- Section 15 deals with Endorsements
- Various other sections such as 123-131 deal with crossing of cheques.
In the next few articles , we discuss the salient features of the NI Act 1881.