NI Act, 1881 (THE NEGOTIABLE INSTRUMENTS ACT, 1881)

Negotiable Instruments Act, 1881 (most commonly known and called NI Act 1881) is an act deals with the law governing the usage of negotiable instruments. Negotiable refers to transferable and "instrument" refers to a document that gives legal effect to that instruments by the virtue of the law.

There are three main types of negotiable instruments, they are:

1. Promissory Notes: A "promissory note" is an instrument in writing (not being a bank-note or a currency-note) containing an unconditional undertaking, signed by the maker, to pay on demand or at a fixed or determinable future time a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument. (CHAPTER II - OF NOTES, BILLS AND CHEQUES)

2. Bills of Exchange: A "bill of exchange" is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay on demand or at fixed or determinable future time a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument. (CHAPTER II - OF NOTES, BILLS AND CHEQUES) and

3. Cheques: A "cheque" is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. (CHAPTER II - OF NOTES, BILLS AND CHEQUES)

Main parties involv: Drawer (the maker of a bill of exchange/cheque who makes the instrument), Drawee (the person/debtor thereby directed to pay), and Payee (to whom the payment is to be made).

There are total Seventeen (XVII) Chapters in The Negotiable Instruments Act, 1881, (ACT NO. XXVI OF 1881); these are as follow:
* CHAPTER I - PRELIMINARY
* CHAPTER II - OF NOTES, BILLS AND CHEQUES
* CHAPTER III - PARTIES TO NOTES, BILLS AND CHEQUES
* CHAPTER IV - OF NEGOTIATION
* CHAPTER V - OF PRESENTMENT
* CHAPTER VI - OF PAYMENT AND INTEREST
* CHAPTER VII - OF DISCHARGE FROM LIABILITY ON NOTES, BILLS AND CHEQUES
* CHAPTER VIII - OF NOTICE OF DISHONOUR
* CHAPTER IX - OF NOTING AND PROTEST
* CHAPTER X - OF REASONABLE TIME
* CHAPTER XI - OF ACCEPTANCE AND PAYMENT FOR HONOUR AND REFERENCE IN CASE OF NEED
* CHAPTER XII - OF COMPENSATION
* CHAPTER XIII - SPECIAL RULES OF EVIDENCE
* CHAPTER XIV - SPECIAL PROVISIONS RELATING TO CHEQUES
* CHAPTER XV - SPECIAL PROVISIONS RELATING TO BILLS OF EXCHANGE
* CHAPTER XVI - OF INTERNATIONAL LAW
* CHAPTER XVII - ON PENALTIES IN CASE OF DISHONOUR OF CERTAIN CHEQUES FOR INSUFFICIENCY OF FUNDS IN THE ACCOUNT

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Published Date: 13/05/2023

Updated Date: 01/12/2023