Or you can mention in the document that you would like to pay the amount after three months.You can make a document stating that you will pay the money to Monika or the bearer on demand.Lets understand this by simple example, Suppose you take a loan of Rs 10,000 from your friend Monika.Section 4 of the Negotiable Instruments Act, 1881 defines a promissory note.But a bill may be made payable on demand also. In a bill where a time period is mentioned, just like the above specimen, is called a Time Bill.Here the words in the bill would be Pay to us or order. The drawer can also draw a bill in his own name thereby he himself becomes the payee.The Payee – The person to whom the payment is to be made.The Drawee – The person to whom the order to pay is made.He is generally a debtor of the drawer.The Drawer – The person who makes the order for making payment.There are three parties involved in a bill of exchange.This document is called a Bill of Exchange, which can be transferred to some other person’s name by you.In this case, You can make a document directing Randhir to make payment up to Rs 5000 to Monika on demand or after expiry of a specified period.Now, You also have to give some money to Monika.Let us understand this by example, Suppose You have given a loan of Rs 5000 to Randhir, which Randhir has to return.Section 5 of the Negotiable Instruments Act, 1881 defines a bill of exchange.As per Section 6 of Negotiable Instruments Act 1881: A "cheque" is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.Key sections of this act are as follows:.There are 147 different sections in this act.However many other documents are also recognized as negotiable instruments on the basis of custom and usage, like hundis, treasury bills, share warrants, etc., provided they possess the features of negotiability.According to the Negotiable Instruments Act, 1881 there are just three types of negotiable instruments i.e., promissory note, bill of exchange and cheque.According to section 13 of the Negotiable Instruments Act, 1881, a negotiable instrument means “promissory note, bill of exchange, or cheque, payable either to order or to bearer”.Negotiable instruments are documents meant for making payments, the ownership of which can be transferred from one person to another many times before the final payment is made.Negotiability means transfer of an instrument from a person / entity to another person / entity.Note: Presentment duly made means that presentment complied with all agreed requirements (location, time, etc.).The correct answer is option 4, i.e. The person making presentment must exhibit the instrument, give reasonable identification, and surrender the instrument.
The holder presents a note to the maker of the note, while a holder of a draft presents the draft to the third-party payor (such as a drawee bank). The process for presenting a note for payment is slightly different than presenting a draft. Presentment is simply a demand made by a person entitled to enforce the instrument to an individual obligated to pay the instrument. A holder of the instrument may seek payment from a person obligated to pay the instrument through a process known as presentment. If there is no specified payment time, there is no limit on how long or how many times it can be negotiated to another party.
NEGOTIABLE INSTRUMENTS QUIZ UPDATE
Update Table of Contents How does a holder of commercial paper receive payment of the instrument? Discussion Question Practice Question Academic Research How does a holder of commercial paper receive payment of the instrument?Ī negotiable instrument may be traded for value up until the time of payment.
0 kommentar(er)
