Negotiable Instruments Act. 1881

[Cites 196, Cited by 0]

Law Commission Report

Negotiable Instruments Act. 1881

LD. 92 XI
2200

 

LAW COMMISSION
OF INDIA

ELEVENTH REPORT

(NEGOTIABLE INSTRUMENTS ACT. 1881)

GOVERNMENT OF INDIA : MINISTRY OF LAW



 ,
LAW COMMISSION.

New Delhi,
September 26, 1958

§hri Ashok Kumar Sen,

' Minister of Law,

Government of India,
New Delhi.

' My dear Minister,

I have great pleasure in forwarding herewith the Eleventh
Report of the Law Commission on the Negotiable Instru-
ments Act.

2. At its first meeting held on the 17th September, 1955,
the Commission decided to take up the revision of the Nego-
stiable Instruments Act and entrusted the task to a Com-
mittee consisting of Shri D. Narasa Raju and Shri S. M. Sikri.

3'. It was subsequently decided that Shri P. Satyanarayana
iRao, the senior Member of the Section of the Commission
.dealing with Statute Law Revision should assist the Com--
mittee in drawing its Report. The consideration of the sub-
gect was initiated by Shri Rao who formuiated a scheme for
ithe revision of the Act. The principles underlying the
.-scheme were discussed at the meetings of the Statute Revi-
sion Section held on the 22nd September, 1956 and 21st
October, 195 6. At the meeting "held on the 22nd September,
1956, it was also decided to include Shri V. K._T. Chari in
the Committee on the Negotiable Instruments Act in View
of Shri Narasa Raju's ill health. A draft Report prepared
«on the basis of the scheme was circulated to all Members
and their views invited thereon. These views together with

the draft Report were discussed at the meetings of the Statute
Revision Section held on the 26th January, 1958 and the

29th March, 1958. Some of the suggestions made by Mem-
'bers at these meetings were accepted and it was left to the
Chairman to ﬁnally settle the Report in the light of the
discussion.



ii

4. The Commission wishes to acknowledge the services
rendered by its Joint Secretary, Shri D. Basu, in connection
with the preparation of the Report; ' ' '

Yours sincerely,'
M. C. SETALVAD-



Paragraphs
1 ----3
4
5-20

21--33
34~l 78

Appendix I
Appendix II

Appendix IH
Appendix IV

Appendix V

REPORT

on me
NEGOTIABLE INSTRUMENTS ACT
CONTENTS
History of the legislation . . . . . .
Materials on'which revision is made . . ' ._ . .

Suggestions of Chambers and iﬁankers' Associations consi-
dered, . . . . . . . . .

Scheme adopted for revision and major changes proposed
Examination of the provisions of the Act, indicating the changes
required . . . . . . . .
APPENDICES
Proposals as inserted in the body of the existing Act . .

Comparative Tables-

Table A---Showing the provisions in the existing Act and th
corresponding provisions in Appendix I . . .

Table B----Showing the provisions in Appendix I and the cor-
responding provisions in the existing Act, the Bills
of Exchange Act, and the Uniform Negotiable Ins-

truments Law . . .

Table C----Showing the contents of the sections in Appendix I
with the corresponding szctions in the existing Act .

Suggestions regarding other Acts . . . .

Commercial_bodies and associations who were addressed
for suggestions . . . . . . .

Commercial bodies and associations who gave their views
in writing . . . . . .

131-135

136-142

143-150
151

152 ---I55

156



REPORT ON THE NEGOTIABLE INSTRUMENTS'
ACT, 1881

l. "Mercantile usage is the raw material, mercantile law gftlifésff
is the manufactured article", said Sir McKenzie Chalmers' lation.
while speaking about the state of the English law before the
Bills of Exchange Act, 1882. This statement brings out
clearly the process of evolution of mercantile law which
includes the law of negotiable instruments. The mercantile
community found in such instruments an easy mode of pay-
ment of money by the endorsement and delivery or by mere
delivery of these instruments. With the expansion of trade
and commerce, negotiable instruments have assumed inter-

national importance.

2. An attempt at the codiﬁcation of mercantile usages

was made in France as early as 1818 and the French Com-
mercial Code was later adopted as a model by other countries

on the Continent. In England, the movement for codiﬁcation
was not started till 1880 when Sir McKenzie Chalmers
drafted a bill on the subject. This was enacted as the Bills

_ of Exchange Act, 1882. In India, an effort in the same

direction was made earlier, in 1867, when the (third) Indian
Law Commission prepared a bill. But, for various reasons
it was kept in cold storage for a number of years. In 1879

.Mr. Arthur Phillips, the then Law Secretary and a member

of the Calcutta Bar, redrafted the bill. Criticisms were
invited on it from banks, chambers of commerce and leading
merchants. This bill, after passing through Select Com-
mittees more than once, was again referred to a new Law
Commission in - 1879. The recommendations of the Com-
mission were considered by another Select Committee and
eventually the bill, in a modiﬁed form, became the Negotiable
Instruments Act, 1881. '

3. The principal source for codiﬁcation of this law both
in England and in India was the English common law of

I. Introduction to the First Ed. of Chalmers' Negotiable Instruments, Act. 1). 9.



I

Materials
for revision.

Suggestions
of m-
bers and
Bankers'.
Associations
considered.

2 _ ,_--._

contracts as modiﬁed by the law merchant. But, curiously,
there has been a considerable divergence, whether intended
or not, between the two Acts though the raw material for
both was the same. The arrangement of the sections in the
English Act is more logical and the principles enunciated
therein are more comprehensive than in the Indian Act.

4. The Indian Negotiable Instruments Act has been on
the Statute Book for over 75 years and except for" amend-
ments made now and then, the question of revising the Act
as a whole has never been raised before. In revising the
Act we have considered the provisions of the English Bills
of Exchange Act, the Uniform Negotiable Instruments Law'
of the U.S.A., the decisions under the English and Indian
Acts and the suggestions made by the Chambers of Com-
merce, Bankers' Associations and members of the public.

5. Immediately after the work was taken up by us a
press note was issued inviting suggestions for reform from
the public. Apart from this, important commercial bodies,
such as the Chambers of Commerce? as well as the State
Governments were addressed individually for their sugges-
tions. Some of these commercial bodies3 offered their views
in writing. Besides, Shri G. N. Das, Member (assisted by
Joint Secretary, Shri Basu) had discussions with the represen-
tatives of the Chambers at Calcutta, while Shri P. Satya-
narayana Rao and Shri V. K. Thiruvenkatachari,"Members,
had discussions with the representatives of similar Associa-
tions at Madras, on the basis of their memoranda received
earlier. Two Associations of Bombay sent their memoranda
subsequent to the Commission's visit to that place. The
Bombay Shroﬁs' Association sent a deputation to us and we
heard their representatives on certain questions. We desire to
express our thanks for the valuable suggestions made by these
Chambers of Commerce and Associations. The major sug-
gestions made by them will be considered presently; the rest
will be considered in their appropriate places when dealing
with the relevant provisions of the Act.

1.

Drafted by the National Conference of _Commissioners on Uniform State Law in 1896 and since reused from time to time.

2. Vzde Appendix IV.

3. Vida Appendix-V. 3

6. It has to be mentioned at the outset that the title "Negotiable Instruments Act" is somewhat misleading as it conveys the idea, at ﬁrst sight, that it is a comprehensive enactment relating to all negotiable instruments whether recognised as such by law or by usageor custom. A perusal of section 13 of the Act shows, however, that the Act is conﬁned only to three speciﬁc types of negotiable instru- ments, viz., promissory note, bill of exchange and cheque. The codiﬁed law in India relating to negotiable instruments 'thus deals, as in England, only with the aforesaid three instruments.

7. But an instrument for securing payment of money Suggestions may become negotiable not only by statute but also by :2? ':,';',',;';*' custom or usage of the mercantile community. The princi- ¥""3°"*""° pal advantages of a negotiable instrument under the Act are 613? that the property in the instrument and all rights under. it il'c1uded' pass, by operation of law, to a bona ﬁde transferee for value by mere delivery or by endorsement and delivery, without the necessity of the complicated procedure of executing a deed of assignment and that the rights of the transferee are, not in any manner affected by any defect in the title of the transferor. It has been urged before us that the foregoing and other statutory beneﬁts conferred by the Act should be extended to two other classes of instruments viz., (1) indige- nous instruments known as hundis and (2) instruments other than promissory notes, bills of exchange and cheques which are, for the time being, recognised by usage or custom as negotiable. Since this suggestion was made persistently by 'important commercial bodies, it has to be discussed at the outset in order to clear the ground.

8. Section I of the Act now saves usages in respect of Hmdis which allinstruments in an oriental language unless an intention is '° expressed in any such instrument that it would be governed ' 'by the provisions oﬁthe Act. The section ciearly indicates that an instrument, even if it be within the deﬁnition of a 'promissory note, bill of exchange or cheque will, if written in an oriental language, be governed by usage, if any, appli- cable to it and not by the provisions of the Act 4 Reference may made to the case of Jambu Chetty .&. another v. Palaniappa Chettiar, where the Madras High Court, proceeding on the assumption that the hundi in ques- tion in that case was either a bill or a note, observed--

y"If any local usage relating to bills and notes in an oriental language--the operation of which usage- is saved by section 1, though such usage may be at variance with the Act--be relied upon, such; usage should be alleged and established by the:

party relying upon it."

The Court thus took the view that if a contrary usage were established, an instrument in an oriental language, even. though it conformed to the requirements of a negotiable instrument as laid down in the Act, would be governed not? by the provisions of the Act, but by such usage; but that in. the absence of proof of any such usage, such instrument:

(though in an oriental language) would be governed by the provisions of the Act.

followed by the Hyderabad High Court'.

' In Champaklal v. Keshrichand', Mirza J. of the Bombay High Court observed--

"Supposing that this hundi were not a Shahjog hundi and were an ordinary hundi to which the Negotio able Instruments Act applied. . . ."

This observation also suggests the view that an 'ordinary" hundi which conforms to the requirements of a negotiable instrument under the Act would normally be governed by' its provisions. ' The two decisions in Pannalal v. Hargopal3 and Surajmaf V. Kashi Prasad', also illustrate the above proposition. Both.

related to a hundi of the nature of a bill of exchange which , required acceptance. In the former case" the Lahore High.

Court held- that a usage of oral acceptance in Delhi having :51"!"1"

Chaudulal v. Ramchander, A.I.R. 1955 N.U.C. 2363 (Hyd.).

(1925)

50 Born. 765 (781).

I.L.R. (1919) 1 Lab. 80.

A.I.R. 1933 Nag. 389 .

This view seems to have recently been. \ 5 been established by the evidence, such acceptance was valid in Delhi. In the Nagpur case', on the other hand, there was no allegation or proof of any usage in Bombay contrary to the provisions of section 7 and so it was held that acceptance must be in writing as required by section 7 of the Act.

9. We are, however, of the opinion that in cases of this Language kind, any usage contrary to the provisions of the Act should should not , _ 1 d not be allowed to be estabhshed. There 15 no reason to exclude the applicability of any of the provisions of the Act $;t'f,i,,°2h";°' deﬁnition of to an instrument (in whatever language it may be written) the Act which fulﬁls the requirements of one or other of the instru- ments dealt with under the Act. Thus, if a hundi, in spite of the name that is given to it in the document by the parties, comes within the deﬁnition of a promissory note, or a bill of exchange or a cheque, it should be governed by the provi- sions of the Act alone, notwithstanding any usage or custom applicable to it which may be at variance with such provisions. To this extent, we think, indigenous instruments should be brought within the scope of this Act. With this end in view ' we have proposed a new provision? in place of the existing saving clause in section 1. We would also like to point out that with the increasing emphasis on the use of Indian language a growing number of negotiable instruments will come to be made in these languages and it is necessary that these instruments should be brought within the ambit of the provisions of the Act. Many of the commercial bodies consulted by us have expressed agreement with our proposal.

10. As regards hundis which do not conform to the other hundis deﬁnition of any of the negotiable instruments dealt with in gfgﬂgfn b' the Act, a different problem arises. under the:

es)!' abo-

IS .

It is clear that no provision of the Act as it stands can possibly be applied to such hundis3 and that they must be governed exclusively by usage unless, of course, the provi- sions of the Act are imported by the agreement of the parties themselyes.

--~ 1. A.I.R. I933 Nag. 389.

2. S. 3 of App. 1.

3. Champaklal v. Keshrichaud, (1925) 50 Born. 765 (18!) ; Raja Komalsingh V- Rambhnrosa. A.I.R. 1943 Nag. 99 (Sh:hi03 hundi).

ll. It may be recalled that the framers of the Act, though they did not desire to abolish the local usages suddenly, cherished the desire that the introduction of the Act which imported the English law would facilitate the assimilation of the practice of the local merchants to that of the English merchants. When the Bill was before the Select Committee the Chief Justice of Bengal and the Bank of Bengal urged that the provisions of the Act should be made applicable to ' hundis also in order to bring about uniformity in the law and to avoid uncertainty. The Government of the Punjab, however, was for the total exclusion of hundis from the Bill.

A via media was adopted in the Act by providing that usages might be excluded by expressing in the instrument an inten- tion to be governed by the provisions of the Act. It was hoped that in course of time the mercantile community would realise the necessity of uniform rules' governing all instru-

_ ments and gradually choose to be governed by the provisions of the Act. In the words of the Select Committee of 1879 on the Negotiable Instruments Bill, "the eifect of the Bill will be to induce the native mercantile community gradually to discard them for the corresponding rules contained in the Bill. The desirable uniformity of mercantile usage will thus be brought about without any risk of causing hardship to Native bankers and merchants. How long this change will take, it is of course impossible to prophesy". But though over three quarters of a century have passed the practice of the local mercantile community has belied the expectations of the Select Committee. The option contained in the saving clause does not appear to have been availed of and our businessmen still continue to stick to the bewildering usages governing these' instruments.

12. In pursuance of a suggestion that the use of indi- genous instruments should be discontinued altogether after the lapse of a speciﬁed period, we sought the views of represen- tative commercial bodies once again on the speciﬁc question of omitting the saving clause as to local usage on the expiry of a speciﬁed period. If this suggestion had been accepted, it would have 'meant that after an appointed date only those instruments which conform to the requirements of the Negoti-

able Instruments Act,_----irrespective of the language in which they are written,--would get the protection of the law and that no other instrument or any usages relating thereto would have any legal sanction. ' The suggestion did not, however, ﬁnd favour with the commercial bodies except in those parts of the country where mercantile transactions are rarely carried on through the medium of hundis or similar indigenous instruments having special incidents. '

13. Having given our anxious consideration to the ques- tion, we are of the opinion that hundis and the shrolfs who ﬁnance commercial transactions through hundis do a very' useful service over the larger part of the country, particularly in the villages where the modern banking system has not so far been extended. Though it would have been a great advance towards securing uniformity of the law if all negoti- able instruments could be brought under the codiﬁed law, we _cannot afford to prevent the use of the hundis so long as we ' are not in a position to have an eﬂicient Bank in each village. As things are, we cannot prevent the operation of the indige- nous system without causing a serious dislocation of our trade and commerce. ~

14. The suggestion made by some of the Chambers, how- ever, was that hundis should be allowed to retain their peculiar incidents according to usage and that those usages should be codiﬁed by us. It is, however, not easy to deﬁne a hundi or to discover its essential attributes. It would appear from the text-books' and judicial decisions that no less than a dozen varieties of hundis are in vogue in this country. The usages differ so widely as between these species and from place to place that we can discover only a few characteristics or incidents which may be attributed to hundis in general; for instance----

(1) Hundis payable to a speciﬁed person or order are negotiable without endorsement by the payee2;

1. Cf. Bhashyam & Adiga, Negotiable Instruments Act, 10th Ed., pp. 18 ct seq.; Sing]; Law of Mercantile Usages in India, 1939, pp. 131-141.

2. Rqiroopram v. Buddo, (1863) l Ind. Jur. (O.S.) 93.

3 ' Wﬁf ( 2 ) a holder is entitled to sue on a hundi without ' an endorsement in his favour;

(13) a hundi accepted by the drawee could be nego- tiated without endorsement';

.2 (4) if a hundi is lost, the owner could claim a peth (duplicate) or parapeth (triplicate) from the drawer and present it to the drawee for pay- ment';

f (5) interest above 6 per centum per annum can be charged where usage is established'"';

(6) even though a hundi is silent as to payment of interest, the market rate of interest is payable, according to usage'.

15. Apart from a few common features such as the above, each kind of hundi has its own peculiar characteristics and incidents. Though it is not necessary for our purpose to analyse these features exhaustively we shall refer to the characteristics of some of those types of hundis which cannot possibly claim to be one of the three instruments governed by the Act--only to demonstrate the impracticability of any attempt to codify the usages relating to them.

Thus, a Shah Jog hundi, a most commonly-used form of hundi, has been held to be neither a bill of exchange nor a promissory note. It is not payable to a speciﬁed person or his order or to bearer. It is payable to a Shah, that is, a respectable person, a man of worth and substance known in the bazar though not speciﬁed in the instrument. The drawee, before making payment, has to satisfy himself that the person demanding payment is a 'Shah5'. It is not usually presented for acceptance on the due date and may be accepted orally.

.°- ¢=:»:~=:-

East India Bank v. Khojah Vullie, (1866) 1 Incl. Jur. (N. S. ) 247. Mulchand v. Suganchand, 1 Born. 23.

Kamal Singh v. Rambharosa, A.I.R. 1943 Nag. 99.

Har Narain v. Bihari Lal, A.I.R. 1932 Lab. 582.

Champaklal v. Keshrichand, (1926) 50 Born. 765 ;Ke_s-hrichand v. Asharan, A. I. R. 1916 Cal. 888 ; Murli Dhar v. Hukam Chand, A.; I. R. 1932 Lah. 312.

a A Nam Jog hundi is payable to the person whose name is speciﬁed in the body of the instrument. It is similar in form to a Shah Jog hundi except that in place of 'Shah' the name of a particular person as the payee is speciﬁed. It has been held' that all that the drawer of a nam jog- hundi guarantees is that the drawee will honour and pay the hundi when it is presented to him on maturity, and if the drawee fails to do so, then the drawer would repay the amount thereof provided the hundi is returned to him in an undis- charged state. Where, however, the drawee is not in a position to return the hundi in an undischarged state, it is the drawee who shall be liable in damages to the owner of the hundi for wrongful conversion, the measure of damages being the amount of the hundi'.

A Dhani Jog hundi, on the other hand, has been held" to be an instrument "payable to the person who purchases it, as distinguished from Shah Jog,--an ephithet . . . . . . . . importing that the person presenting it is worthy and may be trusted with the cash answering to payable to bearer (Molesworth)" and the word 'dhani' has been held not to be equivalent to "bearer" in the sense that word is used in the Negotiable Instruments Act. In the result, a mere bearer of a Dhani Jog hundi is not, as such, entitled to payment. It is, accordingly, not a negotiable instrument within the meaning of the Act'.

A Jokhmi hundi is payable only in the event of arrival of goods. It is both a contract of insurance and an instru- ment for payment of money. Sargent J ., in Jadowji Gopal v. Jetha Shamff' summarised the incidents of this species of hundi as follows---

".A. . . . .a jokhmi hundi is always drawn on or against goods shipped on the vessel mentioned in the hundi; and, lastly, that the price paid for a jokhmi hundi depends on the rate of exchange, the vessel in which the goods are shipped, the season, and the nature of the goods. A jokhmi hundi l. Lallubhai v. Ratanchand, A.I.R. 1940 Born. 82. I

2. _7etha Parkha & others v. Ramchandra Vithoba, (1892) 16 Born. 689, at 693:.

3. "1879: 4 Rom. 333 (340).

10 ' . would thus appear to have been designed with a double pur-

pose, viz., to put the drawer of the hundi in funds, and, at the same time, to effect an insurance upon the goods them- selves, by reversing the position. of the insurer and insured from that which obtains in ordinary policies, the insurer being the buyer of the hundi who pays the insurance money down, and is entitled to recover it with a premium (together making the amount of the hundi) in case the vessel arrives safely."

/ A Jowabi hundi is described by Macpherson on Contracts at p. 166 as follows:

"A person desirous of making a remittance writes to the payee and delivers the letter to a banker who either endorses it on to any of his correspon- dents near the payee's place of residence or negotiates its transfer. On its arrival, the letter is forwarded to the payee who attends andgives his receipt in the form ofvan answer to the letter, . which is forwarded by the same channel to the drawer of the order." ' A Zikrichit hundi is a letter of protection which is given to the holder of a hundi by the drawer or any other prior party to be used by him in case the hundi gets dishonoured. It is mostly in use amongst Marwari Shroﬂs.

16. The foregoing account of some of the hundis would sufﬁce to show that it is not possible to evolve uniform rules applicable to hundis of the various kinds for the purpose" of codiﬁcation. The Bharat Chamber of Commerce, Calcutta, furnished us with a copy of Rules which have had the approval of eleven trade associations. But i these Rules relate to one_ kind of hundis only, namely, Darshani hundis, and we have not been able to discover whether there are any agreed Rules governing the other kinds of hundis, or whether the Rules referred to by the Bharat Chamber are accepted throughout the country.

Codiﬁcation not being possible, 'we must leave such instru- ments in use as at present. We, therefore, propose to make it clear' that the Act will be conﬁned in its application to the

1. Vde s. 3 of App. I. 11 three kinds of instruments, vz'z., bills of exchange, promissory notes and cheques, but that it will apply to them irrespective of the language in which they are written. Instruments which do not answer the requirements of the Act in respect of any of these three kinds of instruments will remain outside the purview of the Act, so that no saving clause is required to save the usages relating to such instruments. l7. Another major suggestion made by some of the gg1eerth6t1'ypcs Chambers is that certain other types of instruments recognis- _of negotiable ed in the mercantile world should also be brought within the ;I11,%$¢I1n an ambit of the Act. These documents fall under two cate- in°1"d°d' gories :

(1) Documents under which money is payable, such as (i) debentures, (ii) bonds issued by com- panies, (iii) bearer bonds, (iv) bearer scrips,

(v) bearer debentures, (vi) treasury bills, (vii) postal orders, (viii) share certiﬁcates, (ix) insurance certiﬁcates, (x) deposit receipts, and

(xi) pay warrants.

(2) Documents relating to delivery of goods known as mercantile documents of title to goods, which are described in s. 137 of the Transfer of Pro-

perty Act.

The second class of documents referred to above are obviously outside the purview of the Act as they relate to delivery of goods and not payment of money.

As regards the other class of documents which are nego- tiable by usage or custom we feel that no speciﬁc purpose would be served by including them in the Act except to give statutory recognition to the usage or custom, if any, by which they are negotiable. They will not be subject to the other provisions of the Act, such as presentment for payment or acceptance, notice of dishonour, or the liability of parties. It is also not possible to make a complete and exhaustive list of such instruments without undertaking an elaborate inquiry. Some of them are governed by special laws such as the Com- panies Act and the Insurance Act. We, therefore, feel that 218 M ofLaw---2.

C ex-tiﬁ cation of cheques.

Cheques marked " Account payx. II 12 it is neither useful nor practicable to bring them within the I Act. _ |

18. Two suggestions relating to cheques deserve parti- cular mention. The ﬁrst is that certiﬁcation of cheques should be treated as equivalent to acceptance as in the case of bills. In the Bank of Baroda case' the Privy Council eitamined this question and held that certiﬁcation of cheques as practised in England and also by some banks in India did not amount to acceptance in the sense in which it was under- stood in the case of bills. Under the American Uniform Negotiable Instruments Law (ss. 187 to 189), on the other hand, certiﬁcation is treated as equivalent to acceptance, and the effect of certiﬁcation is to discharge the drawer and all indorsers from liability thereon (s. 188). The point for con- sideration, therefore, is whether we should follow the American law, or leave the law as settled by the Privy Council unaltered. Some of the bankers whom we inter- viewed were not in favour of adopting the American law. We have been told that certiﬁcation is not resorted to very frequently in India and that in cases where an assurance is needed that funds of the drawer are available with the Bank, the practice followed, as in Australia, is for the Bank to issue its own cheques. In the circumstances, we think no altera- tion of the law is required.

19. The second question is----to what extent we should accord legislative recognition to the practice of marking cheques "account payee". It has been found by experience that a cheque with general or special crossing does not afford sufﬁcient protection to the true owner. It was at one time supposed in England that the addition of words "not nego- tiable" in the crossing would enlarge the protection. But the Courts have belied this expectation by holding that a cheque crossed 'not negotiable' is still transferable'. In the meanwhile, businessmen were evolving for their own security a method of crossing cheques "account payee". The object I. Bfsmkof Baroda Ltd, V. The Punjab National Bank Lrd.,|A. I. R. 1944 P. C. 3 .

2. Fisher V. Roberts, (1890) H6 T. L. R. 354 (C.A.).

of such crossing is to make it obligatory on the collecting 'bank to credit the amount received from the paying bank to the payee's account with the former. But a decision of the Court of Appeal', again, introduced a complication. It was held that notwithstanding such crossing the cheques remained snegotiable as the words "account payee" did not prohibit atransfer under section 8 of the Bills of Exchange Act. But if a cheque crossed "account payee" still remains negotiable, it unnecessarily enhances the duty of inquiry on the part of ttheycollecting bank? without a corresponding gain in security to the parties, for, the law or practice relating to the "account payee" cheque has not yet been settled. The acceptance of the suggestion that the custom of crossing cheques "account payee" should be recognised will not result in any substantial radvantage unless such cheques are made not negotiable by the law. In that case, the payee only would be entitled to deliver the cheque for collection. Even if his signature is 'forged by somebody, the collecting bank will credit the amount in the payee's account and the forger would derive no beneﬁt. The risk of the banks would also be minimised, and none but a bank having an account in the name of the payee would then accept such a cheque for collection. We, have, therefore, provided3 that if a cheque is marked "account payee" it shall cease to be negotiable and that it shall be the

-duty of the banker collecting the amount under the cheque to credit it only in the account of the payee named in the cheque.

We have added a provision for the protection of a banker who bona ﬁde collects the payment of a cheque in which the crossing "account payee" has been obliterated or altered.

20. Having dealt with the main suggestions, we now pro-

-ceed to explain the broad features of the revision proposed 'shy us.

1 . National Bank V. Silke, (1891) 1 Q. B. 435.

2. Chalmers, Bills of Exchange, 12th Ed. p. 254 ; Byles, Bills of Excnange 21st 'Ed., pp. 43,47.

3. S. 144 of App. I. Scheme adopted for 14 21: The Act as it stands is not exhaustive. Where-

revision and ever the Act is silent, the principles of English law have been major changes proposed.

Conflict of laws.

followed by our courtsl. We have thought it advisable to adopt more of these principles as codiﬁed in the Bills of Exchange Act instead of leaving the Courts to inquire into' the uncertain rules of the law merchant and to apply them to particular cases or to determine whether the principle. embodied in any particular provision of the English Act is applicable to such cases. ' A comparative study of the English Bills of Exchange Act and the American Uniform Negotiable Instruments Law as well as the suggestions received from commercial bodiesvhave also induced us to propose other changes in our Act.

22. The existing scheme of arrangement of the Act is. confusing" and illogical. A scrutiny of the provisions of the Act will reveal that some of them are applicable to all the- three instruments--promissory notes, bills of exchange and. cheques, while some are peculiar to bills of exchange, some to promissory notes and some to cheques. This suggests that the sections which are of a general nature and applicable to all the three instruments should be grouped in one part, while the provisions peculiar to each of these instruments should be placed in separate parts. Following this natural division, we have arranged the sections of the Act in four.

parts: Part I containing general provisions; Part II relating to bills of exchange; Part III to promissory notes; and Part IV to cheques.

23. While we shall explain our detailed proposals in the A course of our examination of the existing provisions of the"

Act, we consider it proper to accord a special treatment to one major topic which has been largely modiﬁed and recast by us, namely, the provisions relating to Conﬂict of Laws.

24. The ﬁrst thing that strikes one on this subject is the- laek of uniformity in the principles embodied in the English and the Indian enactments and also as between such principles

1. Muthur Sahib v. Kadir Sahib, (1905) 28 Mad. 544 ; Veeragépza v. Vellayan, (191 9' 7 .

M.W.N. 780 ; Royal Bank of Scotland v. Rahim, (1924) 49 Born.

2. Benares Bank Lt., v. Hormusii, (l930) 52 All.

696 (697).

and those followed in other countries. This want of unifor- mity is regrettable, particularly in View of the fact that negotiable instruments have become the usual medium of the ever expanding international trade and commerce. An attempt to evolve uniform rules in this behalf was indeed made at the Geneva Convention of 1930. The nations who :were parties to that Convention agreed:--

(a) to adopt a uniform law for bills of exchange and promissory notes;

(b) to settle questions of private international law arising in connection with bills and notes; and

(c) to unify the rules concerning stamp duties'.

The Conventions agreed upon" were adopted by Austria, Belgium, Denmark, Dunkirk, Finland, France, Germany, ' Greece, Italy, Japan, Monaco, Netherlands, Norway, Portugal, Sweden and Switzerland. They were not, however, adopted by England (exceptyon one matter), the United States and the Commonwealth countries. 4 iAs"I1-rdia has not adopted them we are free to incorporate such rules as are widely acknowledged and are consonant with the general principles of Private International Law, justice and equity.

25. The primary reason for disturbing the existing pro- visions as contained in sections 134-137 of our Act is that they do not deal with all the questions which ordinarily arise in this branch of the law. The English Act is no better guide on this subject because it 'deals with the entire subject in one section (section 72) which is no more exhaustive than the provisions of our Act. Moreover, the English section has been severely criticised as "ambiguous" and "unintelligible".

26. The principal questions which require to be solved in connection with international dealings in negotiable instru- ments are----the capacity of parties, the formal and essential validity of the contract, the liability of the parties including.

1. Vide Cheshire, Private International Law, 4th Ed. p. 247.

2. League of Nations Doc. C. 346 (1), M. 142(1), 1930 (II).

3. Cheshire, Private International Law, 4th Ed.,7, 253. pp. 4 16 the formalities regulating presentment for acceptance, pre-- sentment for payment, notice of dishonour for non-accept- ance and non-payment, noting and protest. Our Act does- not provide for the ﬁrst two at all. We shall now examine the principles relevant to each of these questions.

27. For determining the capacity of the parties the choice is between lex domicilii (law of domicile) and lex loci con- tractus (law of the place where the contract took place).

In England, the current opinion is that so far as mer-V cantile contracts are concerned, there is a presumption that' the parties submitted to the law of the place of contract and that governs the matter unless the presumption is rebutted." This View has been accepted by the Madras High Court'.

As pointed out by Cheshire3, under modern conditions of trade, the domicile of the parties cannot be allowed to govern .

the question of capacity, for, in that case, a foreigner, con- tracting in another country, would be allowed' to escape liability on the ground, for instance, that according to the- law of his own country, which may not be known to the other party, a person does not attain majority even at the age of"

21. It can hardly be overlooked that the Geneva Conven- tion (on Conﬂict of Laws) which starts with the general rule--- based on lex domicilii has to make an exception on the basis of [ex loci contractus. Thus, while the ﬁrst' clause of Article 2 of the Convention says that the capacity of a person to bind himself should be determined by his national law, the second clause of that Article provides that "a person who lacks capacity according to law speciﬁed in the preceding rule shall nevertheless be bound if his signature had been given in any territory in which according to law in force there, he would have the requisite capacity." We ' would prefer to adopt the lex loci contractus instead of any-

such compromise formula which would introduce unneces-. sary complications.

1. 6th Ed., Sch6r£11itthoﬂ', Conﬂict of Laws, 3rd Ed., pp. p.

117-8; Dicey, Conﬂict of Laws.

2. T.N.S., Firm V. Md. Husain, A.I.R. 1933 Mad. 756.

3. Private Intemationa Law, 4th Ed., p. 213.

28. But though we elect in favour of the lex loci con- tractus, we would not prevent the parties from having their own choice in the matter of the law which would govern their contract, by an express stipulation in the instrument itself.

We have, accordingly, proposed the simple rule that in the absence of any contract to the contrary, the capacity of the parties to an instrument shall be determined by the law of the country where the contract constituted by the nego- tiable instrument was made.

29. But this rule, without more, would be incomplete, for, a negotiable instrument involves a composite contract. It consists not only of the original contract between the parties to the instrument but also of "supervening contracts"

(to adopt the expression used by the Bills of Exchange Act) made by the acceptor or indorser. Each of these contracts may be entered into at different places and the validity of each must naturally be determined according to the place where such contract was made'. We have made this clear in our proposal?

30. In formulating the foregoing rule, we have followed the provision in sub-section (1) of' section 72 of the English Act, but as that sub-section -shows, the rule should be made subject to two exceptions:

(a) The ﬁrst exception is in respect of the requirement of stamp. The rule recognised by English private inter-

national law in this behalf was that if under the law of the place where the contract is made an instrument is void for want of proper stamp, it should not be recognised as valid 'in any other country3. If, however, the want of requisite st/amp makes the instrument only inadmissible in evidence under the law of the place of contract its validity is not alfected as it is only a rule of evidence'. The Bills of Exchange Act has done away with this distinction and laid down that a bill issued outside the United Kingdom is not invalid by reason only that

- Cf. Palauiappa Chetty V. Peria Karuppanchetty, 17 Mad. 262._ S. l08(a) of App. I. Alves V. Hodgson, (1797) 7 T. R. 241. Bristo» V. Sequaville, (1850) 5 Ex. 275.

¢p-

it is not stamped in accordance with the law of the place of issue. Its admissibility or enforceability in the UK. will depend upon the requirements of English law in that behalf.

In India, the Act is silent and the old rule was applied in Venkatarami v. Seetharamal and Manattil Ali V.' Vazhapulli Varial'-'. Under our stamp law a document is not void but becomes inadmissible in evidence even in cases where the defect of stamp is not curable under section 35 of the Stamp Act. A foreign instrument, when brought into India, has to be stamped according to our law (vide section 19 of the Stamp Act). Hence, there is no justiﬁcation for invoking the technicality of a foreign law relating to stamp revenue to invalidate the instrument in India and the liberal rule intro- duced by the English Act should be adopted by us. It may be noticed that a similar' View was expressed by Whitley Stokes".

(b) The other exception recognised by the Proviso (b) to section 72(1) of the English Act, is already embodied in section 136 of our Act. It may be mentioned that para- graph 2 of Article 3 of the Geneva Convention is also to the same effect. Hence, we do not think it necessary to disturb the existing provision.

31. Regarding the liability of the parties, section 134 of our Act makes a distinction between the maker or drawer of a foreign instrument on the one hand, and the acceptor or indorser, on the other. The liability, in the case of the maker or drawer, is determined by the law of the place where the instrument is made but in the case of an acceptor or indorser it is determined by the law of the place where the instrument is made payable. But the liability of the maker of the note should, according to the true principles of international law, be governed by the law of the place where it is payable (lex loci solutionis). In the case of a drawer the place of draw- ing is, of course, usually the place of payment. The acceptor being the principal debtor, his liability is also determined by

1. I. L. R. (1930) 53 Mad. 968.

2. (1941) 1 M. L. J. 35 n.

3. Anglo-Indian Codes, Vol. 1 p. 664.

%the place of payment in accordance with the contract of acceptance. The liability of the indorsers should naturally follow the liability of the principal debtor.

We have, accordingly, suggested a clear provision that 'the liability of all parties to the instrument shall be governed by the law of the place where such instrument is payable.

32. It follows that the conditions governing liability, such as what constitutes dishonour and what notice of dishonour is suﬂicien-t, the due date', or the duties of the holder with respect to presentment for acceptance or payment must be governed by the law of the place where the money is payable. This principle is, in substance recognised by section 135 of our Act, though not fully developed. The corresponding provision in sub-section (3) of section 72 of the English Act is ambiguous and has been rightly criticised as verging "perilously on the unintelligible"?

We have' suggested simpler provisions.

3 33. All questions relating to payment and satisfaction including interest should, logically, be governed by the law »of the place where the instrument is payable'.

As section 72(4) of the Bills of Exchange Act provides, the rate of exchange at which payment is to be made, being an incident of payment, should also be governed by the place of payment, if the instrument is expressed in a foreign currency. Representations having been made before us that in the absence of a provision in our Act in this behalf con-

-siderable inconvenience is experienced, we have proposed a .clear provision regarding this matter.

34. Having dealt with the broader questions, we now

- proceed to examine the provisions of the Act seriatim, point- sions of the ing out the problems which hr.ve arisen and indicating, broadly, our proposals for their solution. '

1. Rouquette V. Overmann & Sohan (1874-75)l0 Q. B. 525 ; s. 72 (5) B. E. Act ; Art.

of the Geneva Convention.

2. Cheshire, Private International Law, 4th Ed. p. 253.

3. Foote, Private International Law, 5th Ed., pp. 460-1, quoted in Cheshire, 4th Ed.

pp. 253-4.

Section 1.

Sec. 3.

"India".

UINI-| u 9 20

35. The Act has already been extended to the State of Jammu and Kashmir by the Jammu and Kashmir (Exten- sion of Laws) Act, 1956 (62 of 1956), and the words "except the State of Jammu and Kashmir" in section 1 and the deﬁnition of "India" in section 3 have been omitted by that Act.

We have substituted the, Saving Clause in section 1 by two new sections: one of them1 refers to the provision in section 31 of the Reserve Bank of India Act, 1934, which has taken the place of section 21 of the Indian Paper Cur- rency Act, 1871. The other section2 seeks to replace the- existing provision regarding instruments in oriental langu--- ages.

In pursuance of our views as explained in paragraphs 9 and 16, ante, we have made it clear that----

(a) The scope of the Act is restricted to 'negotiable instruments' as deﬁned in the Act, that is, pro- missory notes, bills of exchange and cheques. It would follow that no provision in the Act "would extend to or affect any usage relating to- any instrument other than these three.

(b) If, however, an instrument conforms to the deﬁnition of a negotiable instrument, it shall be governed exclusively by the provisions of this. Act, whatever the language in which it is written. In other words, if an instrument is a 'negotiable instrument' within the meaning of' this Act, no usage relating to such instrument' shall be permitted to defeat or modify the provisions of the Act. 'In any case, language- will no longer be a test for determining whether the provisions of the Act are applicable to an instrument or not.

36. As pointed out above', the deﬁnition of "India" has already been omitted by the Legislature.

. s. 2 or'App. 1.

S. 3 of App. I. Para. 35., ante. \ 21

37. The deﬁnition of "banker" has been recently sub-- " Banker"

stituted by the Negotiable Instruments (Amendment) Act, 1955 (37 of 1955); but the 'deﬁnition still remains unsatis- factory inasmuch as it does not explain what constitutes the business. of banking so as to make a person engaged in such business- a "banker". We have removed this defect by adopting the deﬁnition of 'banking' given in s. 5(1) (b) of the Banking Companies Act, 1949 (10 of 1949), which follows the deﬁnition given in Hart on Banking' and has so far been accepted as comprehensive.

38. The deﬁnition of _':notary public" has been omitted ';Egﬁ;'.?_' by section 6 of the Notaries Act, 1952. That Act has taken away the power to appoint 'notaries public' under the Negotiable Instruments Act and has, instead, provided for the appointment of 'notaries', who shall exercise, inter aim, the functions of a notary under the Negotiable Instru- ments Act. But the omission of the deﬁnition from the Negotiable Instruments Act, is not happy inasmuch as the words "notary public" are still used in Chapter IX of the Negotiableilnstruments Act. Some explanation of that ex- pression, accordingly, seems necessary. We have, therefore,

(a) inserted a definition of 'notary', referring to the Notaries Act, 1952; and

(b) substituted the word 'notary' for the words 'notary public' wherever they occur in this Act.

39. Besides modifying the existing deﬁnitions, we have added a number of new deﬁnitions which, we believe, would ' be conduchre to a better understanding of the Act. Thus,------

(a) Section 59 of the Act refers to an "accommoda 'Accommo- tion note or bill" but the term "accommodation da"°"p""f party" is not deﬁned in the Act. This omission has been supplied by adding a deﬁnition in the light of section 28(1) of the Bills of Ex- change Act.

1. 4!) Ed.,Vol. I, pp. 1-2.

"Bearer".

IIBEHJ )' ' 'Note", "instru-

m : nt".

' 'Delivery,' ' 'Isms "

(b) \ (6;

Cd) (6) 22 We have added a deﬁnition of "bearer", for reasons which will be explained while dealing with _the deﬁnition of "holder".

For the sake of economy of words, we have, following the American law, added the deﬁni- tions of "bill", "note" and "instrument", deﬁn- ing them as bill of exchange, promissory note and negotiable instrument, respectively.

In order to avoid a repetition of the words "actual or constructive?' wherever the word "delivery" is used in the Act, we have introduc- ed a deﬁnition of "delivery", following the deﬁnition given in section 2 of the Bills of Ex- change Act. .

We have considered it necessary to include a deﬁnition of "issue", for, the word which is used in several provisions of the Act has a technical meaning. It is restricted to the ﬁrst delivery of an instrument to a holder after the instrument is drawn up and completed. If a promissory note, bill, or cheque is executed but kept without delivery, it does not become effective. It is in this sense that the word 'issue' is deﬁned in section 2 of the Bills of Exchange Act, 1882, and we have adopted that deﬁnition.

(f) The words "maker" and "drawer" are indiffer-

ently used in the Act. While the maker of a bill of exchange or cheque is deﬁned as a "drawer" in section 7, there is no separate de- ﬁnition of the word "maker" to denote the maker of a promissory note. On the contrary, in sections 5 and 7 and. the Explanation to section 44, the word 'maker"is used in a gene- ral sense, referring to instruments other than promissory notes as well. In section 51, on the other hand, both the terms 'maker' and 'drawer' are used in juxtaposition to each other, 23 This has naturally led to a confusion and two decisions'-2 of the Lahore High Court have taken contradictory views as to whether the . word 'drawer' includes the maker of a promis-

sory note. To remove this uncertainty, we have inserted a deﬁnition of "maker" so as to conﬁne it to the executant of a promissory note, leaving it to the word "drawer" to refer to the executant of a bill of exchange or cheque. Consequential changes have also been made in the Various provisions of the Act to make this clear.

(g) Though sections 87-89 deal with the effects of material alteration, there is no provision in the Act to explain what constitutes a 'material al-

teration'. In general, courts in India have fol- lowed the English common law and held that anything which has the effect of altering the legal relationship between the parties?' or the character of the instrument or the sum pay- able amounts to a material alteration. Since it is diﬂicult to exhaust all the circumstances which might possibly constitute a material al- teration we prefer to adopt the provision in section 64 (2) of the Bills of Exchange Act, which is illustrative and not exhaustive.

(h) By adding a deﬁnition of the word 'represen- tative" we have sought to effect an economy of words in several sections, e.g., 75, 94.

40. Besides adding the foregoing new deﬁnitions, we have transferred to the Deﬁnition Clause a number of other deﬁnitions which are, at present, interspersed amongst the substantive provisions of the Act, such as "Promissory Note'.',. "Bill of Exchange", "Cheque" and the like, with modi- ﬁcations which will be explained in their proper places.

1. Shiv Nath V. Bishambar, A. I. R. 1935 Lab. 153.

2. Sheikh Illuhammad V. Abdul, A. I. R. 1937 Lab. 259.

3. Subramaniu V. Porathana, A. I. R. 1942 Mad. 709.

' 'Material alteration.' "

"Representa-

tive. "

'Sec. 5.

»Para 1.

41. As would appear from the second paragraph of section 5 and section 21, a promissory note may be pay- able either 'on demand' or 'at a ﬁxed or determinable future time'. But though the law in India is not different,from that in England, this is not quite clear from the existing deﬁ- nition of "promissory note". We have, accordingly, added these words to the deﬁnition of "promissory note", and also added a separate provision', on the lines of section 11 of the English Act, to explain what is meant by "at a determin- able future time". '

42. The words "on demand or at a ﬁxed or determinable future time" have similarly been added to the deﬁnition of "bill of exchange" contained in the ﬁrst paragraph of sec- tion 5, for, the existing provision is silent as to the time of payment of a bill of exchange though a cheque is deﬁned as a bill of exchange "not expressed to be payable otherwise than on demand." The English and American provisions do not leave it to inference and we prefer to follow these precedents.

Some of the Chambers of Commerce suggested that sub- section (4) of section 3 of the Bills of Exchange Act should be adopted and a provision should be made that an instru- ment, which is not dated or in which the value or the place where it is drawn or payable are not mentioned, should be valid. We do not consider it useful to give effect to this suggestion, having regard to the conditions prevalent in India. The date is important in several respects and there is a presumption under section 118 in favour of execution on the date given in an instrument. Apart from this it can hardly be overlooked that, notwithstanding section 3(4) (a) of the Bills of Exchange Act, in practice' no undated cheque is paid by a banker in England and such practice has recent- ly been judicially noticed". It would not be advisable therefore, to incorporate an express provision to the effect that dating is not necessary to give validity to the instru- ment.

1. S. 17 of App. 1.

2. Byles on Bill: of Exchange, 21st Ed., p. 13.

3. Grz,'ﬁt}:J V. Dalton, (1940) 2 KB. 264.

' 25 On the other hand, there is no need to include similar statements relating to the payment of consideration or the place of execution or that for payment, for, the deﬁnitions in our Act relating to the several instruments do not require these matters to be stated in any of the instruments. On the contrary, so far as consideration is concerned there is, in section 118(a), a presumption in favour of its payment as regards every negotiable instrument.

43. Paragraphs 2 to 4 of section 5 deal with certain Pm8-3""- general conditions, such as 'certainty', which are applicable to all negotiable instruments. Hence, they should logically come under Chapter II, as proposed by us'.

We have elaborated the provision relating to an uncon- ditional order or promise to pay, by incorporating the pro- vision contained in section 3(3) of the Bills of Exchange Act, whichzis not inconsistent with the principle embodied in paragraph 2 of section 5 of our Act.

As regards paragraph 3 of the section dealing with certainty of the sum payable, we have elaborated it by adopting the provision in section 9(1) (c)' of the English Act relating to stipulation for payment by instalment with a default clause. We have also substituted the ambiguous words 'according to the course of exchange' by the words . 'current rate of exchange.' At the end of the clause relating to 'certain person', we have added the condition of 'reasonable certainty' which occurs in section 7(1) of the Bills of Exchange Act and has also been applied in India'.

We have also stated, in this context, what would be the eﬁect where the payee is fictitious or non-existent, by adopt- ing the provisions of section 7(3) of the English Act, which is founded on good reason'.

1. S. 13 ofApp. I.

2. Venkararami V. Maharaja, 53 Mad. 968.

3. Cf. Chalmers, Bills of Exchange, 12th Ed., p. 25.

Secs. 6-7 "Cheque"

"drawer"

"drawee"

facceptor"

I payee»-

Sec. 8.

"Holder ".

44. We have shifted the deﬁnitions of "cheque", "drawer". "drawee' and "drawee in case of need", "accep-

tor', "acceptor for honour", and "payee", to the Deﬁnition-

Clause proposed by us, without any change in principle. In the deﬁnition of "payee", we have added the word' 'undertaken' since that would be more appropriate when the-

instrument is a promissory note.

45. While similarly transferring the deﬁnition of "holder", we have made substantial changes, which .re- quire a fuller explanation.

It may, however, be observed at the outset that the changes introduced do not seek to alter the law but to obviate the conﬂict of judicial opinions and the criticism of commentators which the existing deﬁnition has given rise' to. ' The expression "persons entitled in his own name to the possession of the instrument and to receive and recover the amount" is ambiguous. If the expression be literally con- strued, a bearer would be excluded from the deﬁnition as his name does not appear on the instrument. But if all that is meant by the expression is that he should be entitled to possession in his own name and to' sue upon it though his name does not appear on it, a bearer may then be with- in the deﬁnitionl. As pointed out by a Full Bench of the Madras High Court'-' _the expression "in his own name" was introduced only for the purpose.of ruling out the plea that the holder of an instrument was a benamidar for some other person. That the beneﬁcial owner cannot claim to be a holder may now be taken as the prevailing view': We have adopted this view in order to put a stop to all contro- versy on the point, and have expressly excluded the bene- ficial owner from the deﬁnition of "holder".

46. The principal source of diﬂiculties is the use of the word "entitled". This word is of a very wide implication.

Ramanadan Chettiar v. Gundu Ayyar A. I. R. 1928 Mad. 1238 (1243).

2. Subba Narayamz V. Ramaswami, (1907) 30 Mad. 88 (F.B.). _ V

3. Harkishare v. Guru Mia, (1930) 58 Cal. 752 ; "Virappa v. Mdhadebappa, A, I. R, 1934 Bom. 356 ; Bacha Prasad V. janki, A. I. R. 1957 Pat. 380 (F.B.)., 27 " A person (may be entitledito an instrument either as a ' payee For indorsee, or, as a bearer if the instrument is one payable

-fto bearer. He may be entitled to" it also by other 'modes

-of 'transfer of the interest in the instrument, such as assign- {ment as" an actionable claim, in accordance with sections "''130 and 132 of the Transfer of Property Act or legal devo- lution. It' may not be in 'accordance 'with' the scheme of lithe Act to recognise persons other than a payee, indorsee or a bearer as holders, even though they may be entitled to 'the possession of the instrument and to recover the debt due under the 'instrument. A person" may become owner of the debt and sue for its recovery if there is an assignment of the debt or if there is legal devolution, but that does not make lhim a "holder" within the meaning of the Act. Of course, a single Judge of the Madras,High Court' anda Bench of the 'Calcutta High Court? have held that an assignee is a holder

-within the meaning of section 8, but the contrary view, which 'has been consistently maintained by the Allahabad High >Court3, appears to be preferable. In these cases", the Allahabad High Court has made it clear that a transferee 'by legal devolution is entitled to recover the amount due on the instrument' not because he is the 'holder' but because he, as the owner of the debt, is entitled to give a valid dis- «charge even apart from the provisions of section 78 of the/ ,Negotiable Instruments Act.

The right of negotiation is conferred' by the Act only 'upon a maker, drawer, payee or indorsee (vide s. 51)'and in the case of a bearer instrument, upon the bearer. In the case of an instrument payable to order, section 48 lays

-down that it is negotiable by a 'holder' by indorsement and

1. Seshachalqm Naidu V. Venkrztachalam Cltetty (1954) 2 M.I/..J. 47l.V

2. Surathchandra v. Narayan Chandra, (1934) 61 Cal. 425.

3, Parsotam'v. Bankey Lal, A. 1. R. 1935 All. 1041 ; yang Bahadur v. Chandra A. L R. 1939 All. 279 ; Ramkirhore v. Ramprasad A. I. R. 1952 All. 245 (R3). 218 M of Law--3 28 delivery .thereof. Tthe'."holder" inthis. context does not mean an assigneeor a person who has acquired rights. under the instrument by legal devolution. An assignee, not being an: indorsee,..cannot claim any rights under the Act against' -

prior. parties and his rights .are governed by the provisions of .the Transfer of Property Act which lay down that the 'transferee takes the rights under the assignment subject to .the equities to which thetransferor was subject at the time of the transfer. In this connection, it must be remembered:

that the Transfer of Property Act expressly saves the mode- of transfer by negotiation though it does not prevent the assignment of rights under a negotiable instrument qua an. actionable claim.

We, therefore, think that the position should be made clear, by omitting from the deﬁnition of 'holder' the words "entitled in his own name to the possession thereof" and expressly enumerating the persons who are entitled to be a holder, as in section 2 of the Bills of Exchange Act, viz.,.

"thepayee or indorsee of an instrument who is in possession: of the instrument or the bearer thereof".

47. The English Act, however, deﬁnes 'bearer' as mean-- ing "a person in possession of a bill or note which is payable:

to bearer". In the case of. instruments payable to order, it is clear that a person cannot be a holder unless he is the payee or the indorsee thereof and the indorsement is on.

the instrument itself; a person whose name does not appear on the instrument as indorsee cannot claim his rights there-~ under. But in the case of a bearer instrument, since nego-- tiation is only by delivery and no indorsement is required, possession alone is material. The English deﬁnition of' "bearer" does not require that possession should be a law- ful possession. The possession of a ﬁnder or a thief may, therefore, be a good possession to make him a bearer and, therefore, a holder. Under the existing provisions of our- Act, such persons are excluded because of the word "entitl- ed" in the deﬁnition of :"holder". Section 58 of: the Act makes it clear that such a person is notentitled to receive the amount: due thereon from the. maker, acceptor, or holder \ 29 or from any party prior to the holder. ll-Ie is, therefore,' not entitled to sue and recover the money but,' as"it veryoften happens, a third party dealing with such a person may presume-the latter's possession to be lawful, acquire rights under the 'instrument from him for consideration and thus become a "holder in due course". _The rights of a third party who thus becomes a holder are protected by section

48. But suppose a person makes a payment to a ﬁnder or a thief, believing him to be the lawful holder of the instrument. Such a payment -is also protected, because under section 82(c), if an instrument is payable to bearer or has been indorsed in blank, the maker, acceptor or indorser who makes a payment in due course of the amount due thereof gets, a complete discharge. These provisions, thus, amply protect under our law a third party dealing with a person in possession of a bearer instrument but do not give that person a right to recover the amount due under it in his own right by suing upon the instrument unless his pos--

session is lawful.

48. As stated above, the English law is different. But there is no justiﬁcation, in our opinion, to clothe any person in mere possession with a right to sue and enable him to recover the amount. We, therefore, propose to, adopt an altered deﬁnition of "bearer" as meaning a person who comes into possession of an instrument payable to bearer by negotiation, that is, by delivery from the lawful holder. Finders, thieves, and such other persons as are enumerated in section 4 58 will thus be excluded as they cannot be "holders" under our Act. The implications of the word "entitled" in the existing deﬁnition of "holder" will thus be fully covered by the changes proposed by us.

49. We have omitted the words "and to receive or re- cover the amount due thereon from the parties thereto" as the rights of a :'holder" have been speciﬁed in »a separate section proposed by us'.

1. Rees. 47 of App.I. Sec. 9. _ " Holder 111;.

due course".

30 '

50. The language of the secondparagraph of segtion 8 is also unsatisfactory. _ It has been criticised by Chahners' I ,"it isva strain upon language to deseribe the original . owner 0 a lost instrument as the holder of it.

Suppose a cheque payable to bearer is lost, and the person who ﬁnds it negotiates it,to some other person who takes it in good faith and A for value. The latter becomes the holder in due course of the instrument, There tarezthen two holders of the same cheque in this case', ac- cording to the Act."

'As' Bhashyam and Adigai' suggest, this absurdity may be avoided if we construe the word 'lost' as ''lost-- to "the world" and "not found again". We have made a verbal change to this effect and also made it clear that the holder before such loss or destruction "shall be deemed" to'conti- nue to be its holder." ' A '

51. In the deﬁnition of "holder in due course", we have substituted the word "become overdue" for the words "be- came payable", as the latter. cannot aptly be applied tb the case of instruments payable on demand. It is we1l-estabIish- ed that in the case of an instrument payable on demands, limitation 'for an action on the instrument starts, immediate- ly" after its execution. If that rule were to be applied to section 9, it would exclude the possibility of a person 'ever becoming a holder in duecourse in the case of instruments payable on demand, for they become due immediatelyhafter execution3. To overcome' this difficulty, we have considered it advisable to adopt the language of the English Act: and the American Uniform Negotiable Instruments Law," vz'z., "became overdue". Further, we have added a section [on the lines of s. 36(3) of the English Act] laying down the test to be applied in determining when an instrument' pay- able on demand becomes overdue'.

Negotiable Instruments in British India, 2nd Edn., p. 46. ' Negotiable Instruments Act, 10th l£x.ln., p. 72. I ' ' Ram_S¢z_rup v._ Hardeu, 50 All.

Dungarmull v. Sambhu, A. l. R. 1951 Cal. 55. S. 15, App. I. 309 (312) ;

52. 'For reasons to be explained hereinafter. we have added an Explanation to the deﬁnition of "holder in due course" to clarify what. is meant by the words "defect in title" in the deﬁnition.

53. It was suggested by the Indian Banks Association gee. 10. that the words "without negligence" should be omitted from ifayxtbegg the deﬁnition of "payment in due course". But we are un- course,"

able to accept this suggestion since we agree with the princi- ple enunciated in Sahu Lalta Prasqd V. Campbell' that there should exist an obligation to _act without negligence, while making payment of a negotiable instrument.

54. Since the existing deﬁnition of a "foreign instru-- §ffj;ul,(lf,lz' merit" in section 12 explains it with reference to the deﬁni- ::i'én,,"F°' tion of "inland instrument" in section 11, we have com- instruments-

bined the two sections for a better understanding of the two terms.

55. The alterations recommended in section 59913:

» "Negotiable '13 relating to "negotiable instrument", are mere- instrument"-

ly formal: sub-section (1) has been_ taken out to form a deﬁnition of "negotiable instrument", refer- ring to the three kinds of instruménts,--bills, notes and cheques. The ﬁrst two Explanations to sub-section (1) have; similarly, been taken out to make two separate deﬁni- tions of "Instruments payable to bearer" and "payable to order".-

The third Explanation to sub-section (1), and sub- section (2) have been included in two separate sections?

56. The deﬁnition of "negotiation" has been shifted» to :°:°Iffeg;fi'a_ the Deﬁnition Clause, with only verbal changes. tion"-

57. The deﬁnition of "indorsement" hassimilarly been §°§-ndgf; . 53;-

transferred to the Deﬁnition Clause, with verbal changes. ment The deﬁnition of "indorsee" is at present included in sec-

tion " 16(1) and refers exclusively to'the indorsee of an

1. (1905) 9 c. w; N. 841.

2. Secs. 18 and 25 of App. I. Sec. 16.

Sec. 17.

Sec.

'indorsement in full' (otherwise known as special indorse- ment). In fact, however, the word 'indorsee' is used to denote "not only the person to whom a bill is specially in- dorsed. but also the bearer of a bill indorsed in blank- that is, any person, who makes title to a bill through an indorsement". It is in this wider sense, that the word 'indorsee' is used even in several other sections of our Act, e.g., section 87. We have. accordingly, made the deﬁnition of indorsee a part of the deﬁnition of indorsement in gene- ral. '

58. That portion of sub-section (1) of section 16 which deals with indorsement "in blank" and "in full" has been shifted to the Chapter on Negotiation" because it describes different kinds of indorsement. The wording has also been changed in the light of section 34(1)-(2) of the English Act.

As stated before, the remaining portion of sub-section (1) has been tacked on to the deﬁnition of indorsement.

Sub-section (2) has been made an independent section' in the Chapter on Negotiation.

59. No change is proposed in section 17.

60. To section 18, we have added a Proviso, in the light of section 17(1) of the American Uniform Negotiable Instruments Law, to make it clear that-if the words are ambiguous and uncertain, reference may be had to ﬁgures to ﬁx the amount.

61. We have added two new sections relating to signa- tures.

One of them provides that a person may sign in a trade or assumed name and become liable on such instrument. In the absence of a speciﬁc A provision corresponding to section 23(1)_ of the Bills of Exchange Act, our Courts had to rely on general principles to come to a similar concltwion'.

2. Chalmers, 12th Ed., p. 9 : Halsbury, 3rd Ed., Vol. 3, p. 145. ' See s. 34 of App. 1.

3. See s. 35 of App. 1.

4 Zujya V ﬁlamrolvan, A. I. R. 1940 Born. 164.

We have thought it better to engraft a speciﬁc provision' :as in the English Act. ' The other section2 deals with the effects of a forged or «unauthorised signature. Though we have no provision corresponding to section 24 of the English Act, our Courts have held3 that forgery conveys no title. Several Chambers :have suggested that we should have a speciﬁc provision in this behalf instead of leaving it to case-law. We have, I accordingly, adopted the provisions of section 24 of the Bills .-of Exchange Act.

62. We have replaced section 19 and the ﬁrst 'part of section 21 by a comprehensive provision', in the light of

-section 10 of the Bills of Exchange Act, including the various circumstances in which an instrument is payable on demand.

63. We have also engrafted a new provision5 following section 36(3) of the English Act, to explain when an instru- :ment payable on demand shall be deemed to be overdue, ;for reasons already explained.

64. As stated before, we have added another new pro- vision" to explain what is meant by "payable at a determin- sable future time".

65. There is no provision in our Act relating to ante- dating and post-dating as in section 13(2) of the English Act. But notwithstanding. the absence of such a provision, the Privy Council, in the Bank of Baroda case", held that post-dated cheques are not invalid. The practice of ante- dating and post-dating cheques seems to be prevalent in this country, as in other countries, though there is no statutory :-:recognition of such practice in India. One of the Chambers of Commerce has suggested that we should make a provision See s. 26 of App. 1.

See s. 27 of App. I. See Venkateswarlu V. H ymavatamma, A. I. R. 1944 Mad. 471. See s. 14 of App. I. See s. 15 of App. I. See s. 17 of App. 1.

éwewww

47. Bank of Baroda Ltd,, v. Punialz '\'a1.ional Bank Ltd" A.I,R. l944lP.C. 53.' 34 treating such instruments as valid. We have thought it necessary-'to give statutory recognition to the practice by inserting a section' on the lines of section 13(2) of the Bills:

of Exchange Act. But even in England, ante-dating may' amount to forgery where the object is to defraud' a third party". We have, accordingly, improved upon the English- provision by adding that an ante-dated orpost-dated instru-

ment will not be valid where it is done for an illegal or fraudulent purpose. ' I Sec. 20. 66. Substantial changes had to be made in section 201., relating to inchoate instruments:

(ha) The section has been split up into several sub~ '\ sections for convenience of reference.

(b) In a recent Bombay case?' it was pointed out that the word 'holder' in this section was creat~ ing some difficulty inasmuch as, in this context, the word only means the person who receives.

the paper and not a "holder" as deﬁned in the.- Act. We have made this clear by lverbalz changes.

(c) Both in the Bills of Exchange Act (s. 20) and? the uniform Negotiable Instruments Law (s. 14) certain additional conditions are mentioned for- inferring an authority to complete such instru- ments. These should be inserted in our Act; in order to clarify the position. These are---

(i) That the delivery of the inchoate instrument ' must be made "in order that it may be con-

verted into a negotiable instrument". (In the-

absence of such words, a person to whom ana- inchoate instrument is delivered for some- other purpose, e.g., safe custody, may be in.

i."fSeé s. 19 of App. I.

2. Vida Chalmers, Bills of Exchange, 12th Ed., 1). 36.

3..'_ T aracband v. Sikri Bros., A. I. R. 1953 Born. 290.

a position to utilise the section to his:

advantage.)

(ii) That it must be ﬁlled up "within a reasonable' time and strictly in accordance with the authority given", but that in case of negotia-

tion to a holder in due course after comple-- tion of the instrument, no such objectiom should lie against the holder in due course._ We have inserted these conditions into the section'.

67. There is another material diﬂerence between the- provision in s. 20 of our Act and the corresponding provision- in s. 20 of the Bills of Exchange Act. The ﬁrst paragraplcrv of sub--sec. (.1) of sec. 20 of the English Act is conﬁned"

to the completion of an instrument where there was a blank. paper delivered by the signer so that it might be converted' into a bill. The delivery of such a paper under the c1'rcum--~ stances is treated as a prima facie authority to ﬁll it up as:

a complete bill for any amount the stamp will cover. The provision in section 20 of our Act substantially corresponds. to the said sub-section of the English section.

But the provision in the English Act has a second limb- under which, if a bill is wanting in any material particular, the person in possession of it has a prima facie authority to ﬁll up the omission. It has been suggested to us that this. part of the English provision should also be incorporated' into our Act, but we are unable to accept that suggestion for the following reasons. Our Act speaks of the paper' being either wholly blank or "having written thereon an incomplete negotiable instrument", that is, partly blank. The» deﬁnition of indorsement in section 15 of our Act refers to- signature on a stamped paper intended to be completed as. a negotiable instrument and the person so signing is treated as an indorser. Both these provisions under the Indian law deal with an incomplete instrument and not an instrument . which is otherwise complete except for a material particular. , I. See S. 20 of App. 1.

"sec. 21 "At sight"

retc.

_ In England, in a case where a bill payable to a drawer's order contained the signature of a person who intended to become answerable if the acceptor defaulted in payment and thereafter the drawer indorsed the instrument, the question arose whether the ﬁrst indorser would be liable to the second , or not. It was decided by the House of Lords' that it was an instance of a material particular not being ﬁlled in though the instrument was otherwise complete, and, therefore, under s. 20 of the English Act the drawer had authority to indorse and as the indorsement by the drawer in point of time was later to the earlier indorsement, it should prevail. This was followed in another case? A situation in this form may not directly arise in India under the existing law. The only question under the Act will be whether it was a wholly blank or partly blank instrument bearing stamp. If the person had signed intending to be an indorser, he will be an indorser; if he signed intending to make himself liable in any other capacity, he will be liable in that capacity.

Even under the English and the American law, the person who receives the paper and ﬁlls it in is not treated as a holder in due course. It is only a person who takes an instrument which is regular and complete on its face who can be a holder in due course'.

We do not, therefore, see any reason to alter the law on this point.

68. As stated before', the earlier part of section 21, relating to instruments on demand has been incorporated into a new section". The latter part of the section, relating to the expression "after sight" has been retained as it is.

69. Since we have introduced 'the words "on demand or at a ﬁxed or determinable future time" in the deﬁnitions of bill of exchange, and promissory note, these words require Macdonald 65' Co. v Nash 65' Co., (1924) A. C. 625. National Salesvcarpn. v. Bemardi, (1931) 2 K. B. 188. Chalmers. Bills of Exchange, 12th Ed., p. 48.

Vide para. 62, ante» 5- 14 of App. 1.

an explanation. We have, accordingly, added a section' on the lines of section 11 of the English Act.

70. We have split up the contents of section 22, and 5"' 22' "Maturity" .

removed its ﬁrst part to the Deﬁnition Clause, without any change.

As regards the secorfd part of the 'section, dealing with days of grace, we have amalgamated it with the provisions of sections 23. 24. and 25 into a new section2 to give a com- prehensive view of all the rules for determining when a bill or note not payable on demand falls due.

71. We have received conﬂjcting suggestions relating Days Of . . . ace.

to the provision tor days of grace. gr One view is that no days of grace should be allowed at all and the reason assigned is that if a person contracts to pay the amount due under an instrument on demand he could as well have ﬁxed a time limit to suit his convenience. This view has the support of Chalmers3. The Geneva Con- vention of 1930 has also abolished days of grace.

The Bharat Chamber of Commerce, Calcutta, and the Indian Merchants Chamber, Bombay are, however, against any alteration and are of the view that days of grace should be retained as merchants have become accustomed to this.

The Bengal National Chamber of Commerce has, on - the other hand, suggested that this provision should be made subject to variation by contract, if any, between the parties.

We are of the opinion that any alteration of the existing provision would lead to confusion in dealing between the merchants, and do not, accordingly, recommend any change relating to days of grace.

72. No change is considered necessary in sections 23-24.. S°°3- 23-24-

73. In section 25, we have substituted the words "suc- Sec. 25- ceeding business day" for "next preceding business day". Section 10 of the General Clauses Act (X of S. 17 of App. I. S. 29 of App. I.

3. Chalmers, Negotiable Instruments Act, Introduction to the First Ed., p. 18.

Sec.

26. 38 1897) provides that where _ a law require somethinr:

to be done in any olﬁce on or within a certain:

day on which the ofﬁce ' happens to be closed. the Act may be considered as duly done if it is done on the next day on which the oﬂice is open. Section 25 of the Nego- tiable Instruments Act which lays down a contrary rule for commercial transactions, causes inconvenience to the business. people and all the Chambers of Commerce _have urged the change we have proposed. It is to be noted that the Geneva. Convention has also adopted the "succeeding business day"

rule.

74. We are of the opinion that not much purpose is being served by the ﬁrst paragraph of section 26.

Where there is no codiﬁed law relating to contract it may be necessary in an Act relating to negotiable instruments. to enumerate the general principles of the law of contract whicheare applicable to negotiable instruments. The Bills- of Exchange Act, therefore, enacted provisions dealing with capacity and authority of parties, consideration and other"

matters which are governed by the law of contract. Similar' provisions were reproduced in our Negotiable Instruments Act, even though we had our law of contract codiﬁed prior' to that Act. In our opinion, it is necessary to include in our Act provisions relating to matters such as' what con--' stitutes good consideration or when consideration is illegal' or capacity of parties and so on. It is, however, necessary to include in this Act such of the provisions as modify the law under the Contract Act, as for example, s. 39. To make this provision clear we have proposed' that the provi-

' _sions of the Contract Act save in so far as they are not "inconsistent with the provisions of this Act should apply to all negotiable instruments. Such a provision, though unnecessaryz, is not uncommon in Indian legislation (vidc -. Transfer of Property Act, s. 4 and Sale of Goods Act. s. 3} I

1. S. 5 of App. I.

2. Cf. Subbbnarayana V. Ramaswami, 28 Mad. Z44.

'-composite contract.

"which the instrument is made and 'added to it are the 39 v _, 75. As_regar_ds' minors, the existing provision puts. forth .a proposition which is directly contradictory to the principle laid down'.in section 11 of the Contract Act. Wevthink the import of the second _paragraph of section 26 would be . better conveyed if. modiﬁed, as we have done1,»in the light of «sub-section (2) of section 22 of the Bills of Exchange Act.

76. The third paragraph of section 26 has been taken out to form a separate section", with verbal changes making it clear that:a corporation's power to draw, indorse or- accept an instrument is limited to the extent of its authority recog-

mised by the law for the time being in force relating to «corporations. Thus, section 47 of the Companies Act, 1956, prescribes the extent and limits of the power of companies :-registered under that Act. .

77. No change has been proposed in section 27 except 'that instead of the words "as. mentioned in section 2_6"

-explanatory words have been substituted to elucidate the "meaning of' the section that anybody who is capable of being bound 'byta transaction relating to a negotiable instrument

-may be so bound either by his own act or by the act of {his duly authorised agent. ' I

78. We have introduced a new provision relating to partners to make it clear that the] partner's authority extends

-to bind all the partners of the ﬁrm in the case of an instru- ment made" in the name of the ﬁrm. If it is not made or drawn inthe name of the ﬁrm, the other partners cannot . «be made liable'.

79. We have introduced a separate Chapter' on liability of parties and included all the provisions of the Act relating 'to liability in that Chapterﬁ A negotiable instrument is a There is the original contract under Sec.

27.

1. S." 6 of App." 1.

2. S. 7 of App. 1.

3. Rangaraju V. Devi Chaim', A. I. R. 1945 Mad. 439.

4. Ci. V of App. I. Sec.

28. 40 «supervcning contracts of the acceptor in the. case of" a bill and indorsers in the case of all instruments. The liability of the original parties is different from that of the subsidiary parties under supervening contracts. The liability' of the different parties arises if and when certain conditions are fulﬁlled by the holder. We have ﬁrst deﬁned the liability of each of the parties and then stated the conditions under which such liability arises.

The manner and method of carrying out the conditions such as presentment for acceptance in the case of bills, presentment for payment, notice of dishonour for non- acceptance and none-payment and the circumstances under' which such presentment either for non-acceptance or non-- presentment is excused have been relegated to separate chapters as they are more or less of a procedural character though quite essential to the accrual of the liability. This is made clear in an introductory provision'.

80. The position of a stranger signing an instrument and his liability are nowhere stated in the Act. A presump- tion is laid down in s. 63 of the American Uniform Negotiable Instrument Law that such a person_should be presumed to be an indorser unless a contrary intention is expressed. In our opinion, this presumption is founded on sound principle and is conducive to the certainty of the law. We have, accordingly, inserted a new section" embodying this pre- surnption.

81. Section 28 does not specify the manner in which an agent should indicate that he has signed as an agent so as to exclude his personal liability. Nor have any deﬁnite tests been laid down by our Courts so far. ' In section 26(1) of the English Act it is provided that where a person signs a bill as drawer, indorser or acceptor, and adds words to his signature, indicating that he has signed for or on behalf of a principal, or in a representative charac-- ter, he is not personally liable thereon; but the mere addition

1. S.

2. S. 5430!' App. 1.

54 of App. 1.

to. his signature of words describing himself as an agent, or as ﬁlling a representative character, does not exempt him from personal liability. It is to be gathered from the instrument whether the covenant to pay is, in essence, given by' the person executing the document on his own behalf or ' on behalf of some other. We have, accordingly, adopted the provision in section 26(1) of the'English Act, with some verbal modiﬁcations'.

82. No change is» proposed in section 29. 5°°- 29~

83. There is no section in the Act which deﬁnes the liability of the bearer who negotiates an instrument. In the case of an instrument payable to bearer, he can negotiate it byimere delivery. He is not an indorser, and therefore he does not become liable under the instrument by reason of the negotiation. As section 58 of the English Act says, he is only a transferor by delivery and is not liable on the instrument as his name does not appear on it. His only liability is that he warrants by his negotiation that he has the right to transfer the instrument and that at the time of the transfer he was not aware of any fact which renders it valueless, and no more. We think it is necessary to engraft a provision so deﬁning the li-ability of a bearer who negotiates an instrument payable to bearer and we have, accordingly, added a section2 on the lines of section 58 of the English Act.

84. We have taken sections 30----32 and 41 together se¢s,3o..32; .

and replaced them by three provisions3 dealing with the 41' liability of--( a) drawer and acceptor of a bill, (b) drawer and drawee of a cheque, and (c) maker of a note, respec- tively. -

We have redrafted sections 30 and 31 in the light of section 55( 1)( a) of the Bills of Exchange Act. Our Act

1. S 66 of ADP. I. ' .1. S. 68 of App. I.

3. S. 55: 57, and 58 of App I. . Sec.

smsn--M. 'Sec.

35.

36. 42 nowhere says that the drawee is not liable until acceptance though it is assumed in various sections. We have 'made this clear in a new sub-section.

In section 32 verbal changes have been made the light of section 54(1) of the English Act, relating to. the acceptor's liability. The provision in section 41 of our Act, which also relates to the acceptor's liability, has been placed in the same sectionl. .

85.' Since the provisions in sections 33-34 relate' only to a bill of exchange, they have been placed in Part II of App. /1, without any change. A

86. Sections 34 as well as 91 assume the possibility of _Joint drawees but there is no speciﬁc provision in our Act corresponding to section ,6(2) of the Bills of Exchange Act (or section 128 of the Uniform Negotiable InstrumentsiLaw) to indicate the proper mode of addressing a bill to two or more drawees. Since the principle embodied in the English provision is not inapplicable in India we have incorporated it in a new sectionz.

87. Similarly, we have no provision in our Act corres- ponding to section 5(1) bnhe English Act to provide that a bill may be drawn payable to the drawer or the drawee or to the order of either. Though the words 'certain person' in section 5 of our Act are wide enough to include the .

drawer or drawee, we have made this clear by inserting "a new provision3. '

88. We have redrafted section 35, relating to the liability of "the indorser' in the light of sec. 55(2) of the Bills of Exchange Act. '

89. We have inserted the words "the acceptor and" at the beginning of section 36, to make it clear that the acceptor S. S. . S. . ' S. hwwﬁ 56(4) of App. 1.

111 of App. 1.

112 of App. 1.

59 of App. 1.

,43 is liable even though his acceptance may take place subse-

, quently to the holder's getting possession of the instrument'.

90. We have combined sections 37 and 38 into one sees. 37-38. section2 since the provisions are complementary in their nature, dealing with parties who are liable on the instrument as principal debtors or sureties.

We have also inserted a new section3 to indicate which of the provisions relating to liability are subject to the pro- visions of "a contract to the contrary" instead of repeating those words in each of those sections. -

9l. No change is recommended in section 39. scc._39, The section gives the holder the power to expressly reserve his rights to charge other parties when he enters into such a contract with the acceptor as would have the i effect of discharging the surety under s. 134 or'_135 of the Contract Act. This variation from the law in s. 134 or 135 of the Contract Act is restricted only to the case of a contract between the holder and the acceptor of a bill of exchange. It was, however, suggested that this liberty to reserve the right to charge the other parties and prevent the discharge of the surety when there is an alteration of the contract between the" principal debtor and the principal creditor should be extended to other cases also, such as the holder and the maker of a promissory note. Curiously, in a decision of the Madras High Court' it was held that section 39, though it is conﬁned to bills of exchange, has not abrogated the common law principle, namely, that when a contract between the principal creditor and the principal debtor which discharges the latter reserves the right 0*' the creditor against the surety, the surety is not discharged by the variation of the contract between the principal debtor and the creditor. This view makes the section otiose. Neither 218 M of Law--2 Secs. 40-41.

See. 42 Qecs. 43-45.

-14 s. 134 nor s. 135 of the Contract Act recognises such a right of reservation. \ In fact, if the law has been correctly laid down in the _ Madras decision, there is really no need to extend the pro- visions of section 39 to other cases. If, on the other hand, the law in India be diﬁerent from the English common law, we see no reason to extend the privilege to other cases as it would result in great hardship to the surety if the entire 4 burden were to be thrown upon him either by discharging the principal debtor or by giving up rights against him in any other manner. The right of contribution which accrues under section 140 of the Contract Act to the surety after he discharges the debt is no consolation to him if he should be treated as the principal debtor. Under section 134, the surety is automatically discharged whether there is a reserva- tion or not. We think, therefore, that there is no justice or equity in favour of the extension of the scope of section 39 to other cases.

92. No alteration other than a rearrangement has been proposed in sections 40-41. Section 40 has been transferred to the Chapter relating to Dischargel and section 41 to the Chapter on Liability?

93. The provisions of section 42 have been trans1'er"cd to the Chapter on Bills of Exchange, without any change'.

94. As has been already indicated, sections 43-45 have been included in the Chapter relating to Form and Interpre- tation' except the two Exceptions to section 43 which have been included in the Chapter on Liability of Parties", with verbal changes.

Exception I to section 43 refers to an accommodation party but it requires to be supplemented as it does not contain

1. .

2. 3- 4-

5.' S S S S S 78 (3), App. 1.

56 (4), ibid.

116 , ibid.

.3 10-12, ibid.

. 64(3), ibid.

Sec. 49.

Sec. 502 46 The last two paragraphs of section 46 and sections 47 and 48 deal with the modes of negotiation for different kinds of instruments, with some repetition." We have combined them into a single section'. The Exception to section 47 has been made a separate sectionz.

An introductory section?' has also been proposed, specify-' ing the different kinds of indorsements.

98. Some drafting changes have been made in section 49, following section 34(4) of the English Act'.

99. Section 50 has been recast in order to simplify it. It consists of two parts. The latter part refers to a restrictive indorsement but does not explain what constitutes a restric- tive indorsement. There is no provision in our Act corresponding to section 35 of the Bills of Exchange Act or section' 36 of the Uniform Negotiable Instruments Law. We have remedied this lacuna by adopting a new provision"

which combines the principles embodied in the English and' American provisions, just cited.

The earlier part of section 50 gives the effects of or the rights following from indorsement. In the new section' which represents that part, we have made_ it clear that the effect, which is generally stated, is subject to the provisions relating to restrictive, conditional and qualiﬁed indorsements.

100. Since we have deﬁned 'holder' as including payee I and indorsee, we have avoided repetition of these words in- section 51 by using the word 'holder' in their place'.

101. The contents of section 52 have been split into two sections as they deal with two separate matters, viz., con- ditional3 and qualiﬁed' indorsements.

2°.°°>'O\S"."'.-*'!"."' 4'4' As regards a conditional indorsement, we have no pro- vision in our Act corresponding to section 33 of the Bills of Exchange Act and section 39 of the Negotiable Instru- ments Law which make the conditional indorsement operative only as between indorser and indorsee and give the payer (acceptor or maker) the liberty to pay the indorsee regard- less of the condition. There is no such liberty to the payer in India. As has been pointed out by Bhashyam and Adiga', the Indian law is stillvbased upon the old common law rule2 which has been discarded both in England and the U.S.A. The old rule operates harshly upon the acceptor of a conditional indorsement who is not in a position to discover whether the condition has been fulﬁlled and yet cannot dare dishonour the instrument.

There is no reason why we should not adopt the modern principle as embodied in the English and American law. We have, accordingly, adopted that principle in two new sub- sections.

102. Following section 38 of the English Act, we have introduced two new sections3, which together state the rights of 'holder' and 'holder in due course' which have now to 'be gathered from different provisions of the Act.

103. There is no provision in our Act, corresponding to section 37 of the Bills of Exchange Act, giving the effects of 'negotiation back before maturity'. Under the English provision, if there is negotiation back of the instrument before maturity to the maker, drawer or to a prior indorsee or to the acceptor, such persons are entitled to further negotiate the instrument. But it would be inequitable to allow a right to enforce payment under the instrument against any of the parties who were liable before the instru- ment was indorsed back. This is avoided by the latter part of the English section. We have incorporated the two parts

1. Negotiable Instruments Act, 1956, 10th E1, p. 303. _' '

2. Robertson v. Kenxington 5- ML, (1811) 4 Taunt, 30 ; Byles on Bills of Exchange , 21st Ed., p. 169.

3. Ss. 47 and 52, App. 1.

Sec. 53.

Secs. 54'-55.

Sec. 56.

of the English provision in two sections, one explaining what is negotiatijon back1 and the other, the rights of a person who acqltes an instrument through the process of negotiation back2.

104. Section 53 has been redrafted3 in the light of section 29(3) of the Bills of Exchange Act, to make the meaning more clear. The English provision expressly states that a person who is a party to any fraud or illegality affecting an instrument cannot be a holder in due course.

We have added a new sub-section, on the lines of sub- section (3) of section 38 of the English Act, to explain the rights of a holder whose title is defective. What is a defective title is explained in another provision'. '

105. No alteration has been proposed in sections 54-55.

106. We have recast section 56 to make it clear that the existing provision is only an exception to the general

- rule that a transfer by endorsement must be of the entire Sec. 57.

Sec. 58.

9 .°":":5?'N*-

rights in the instrument. In redrafting5 the section, we have followed sub-section (2) of section 32 of the English Act..

107. No change is proposed in section 57.

108. There is no deﬁnition of "defective title" though the expression is used in the deﬁnition of "holder in due course". We have already provided" that a forged instru- ment conveys no title. If the title is acquired by means of an offence or fraud or for an unlawful consideration the title is only defective and the person holding such title may convey a better title to a holder in due course. This is provided in section 58. We have retained that section,.

subject to verbal changes'.

S. 44, App. 1.

S. 48, ibizl S. 51, ibid S. 28, ibid.

S. 32, ibid.

Para. 61, ante.

S. 23, App. 1.

-. 49

109. The two paragraphs of section 59 deal with two S°°- 9- diﬁerent matters. They have, accordingly, been placed under two separate sections.

What is meant by the words 'rights of his transferor' in the ﬁrst part is that the holder who acquires an instrument after dishonour or after maturity, acquires the instrument 'subject to the equities to which his transferor was subject at the time of acquisition by such holder'. We have added these words, by way of abundant caution, to make the mean- ing clear'.

The second part, which is at present in the nature of a Proviso is, in fact, a substantive provision as to the rights of a person who becomes the holder of an accommodation instrument, after maturity. No change is proposed in this provision?

110. No change is proposed in section 60, except to sec. 60. - ' include a reference to a restrictive indorsement which is also one of the modes of termination of negotiability, as would appear from another provision, namely, section 50.

111. We have replaced section 61 by a comprehensive sec. 61. provision3 and have incorporated therein other rules relating to presentment for acceptance which are now dispersed over several sections. A Since presentment for acceptance is a special incident of bills of exchange, we have included all the provisions relating to presentment for acceptance in Part II which deals with such instruments in particular.

112. Section 61 of the Act makes it obligatory upon the holder to present a bill for acceptance only in the case of a bill payable after sight. In that case presentment for acceptance is absolutely necessary to ﬁx,the date for pay- ment. In the case of other bills there is no express provision 50 .

in the Act requiring presentment for acceptance before presenting them for payment: But this omission has been held to be a drafting defect in several decisions starting with Veerappa v. Vellayan', where it has been held that present- ment for acceptance must precede presentment for payment in the case of every bill, in order to ﬁx the drawee with_ liability. In the Madras Case', this view was supported by pointing out that sections 91 to 93 of the Act were applicable to bills payable on demand as well.

Recently, the Supreme Court had an occasion to examine the question in Jagjivan v. Ranchhoddas". Reference was made in that decision to sections 61 and 64 of the Act and it was observed that in the case of a bill payable after sight there are two distinct stages, ﬁrstly, when it is presented for acceptance and _later, when it is presented for payment; section v 61 deals with the former while section 64 deals with the latter. The observation of the Bombay High Court in Ram Ravji v. Pralhaddas3 that "presentment for acceptance must always and in every case precede presentment for payment" was noticed and the comment made by the learned Judges of the Supreme Court was that in the case of a bill payable on demand both stages synchronise and there is only one pre- sentment which is both for acceptance and payment. Had the learned Judges stopped there the matter would not have created any difﬁculty.' But they proceeded to observe:

"But whether the bill is payable after sight or at sight or on demand, acceptance by the drawee is necessary before he can be ﬁxed with liability on it. It is acceptance that establishes privity on the instrument between the payee and the drawee and we agree with the learned Judges of the High Court that unless there is such accept- ance, no action on the bill is maintainable by the payee against the drawee".

1. (1919) M. w. N. no.'

2. A. x. R. i954 s. c. 554.

3. (ms) 20_Bom. 133041).

In view of the above observation of the Supreme Court and the defective provisions of the Act, we are of the opinion that the law should not be left in a dubious state and effect must be given to the decision of the Supreme Court, making ' it obligatory in the case of every bill to present it for accept-

ance before it is presented for payment. . The drawee can be made liable only if he accepts. If the bill is dishonoured by non--a(_:cepta'nce no question of anyipresentment for payment arises.- We have, accordingly, inserted a provision' that a bill must be presented for acceptance before it is presented for payment.

113. That part of section 61 which deals with the duty of presentment for acceptance of a bill payable after sight has been taken out to form a separate provision' in' the light of section 40(1)-(2) of the English Act to make it 'clear ihatif the holder does not either present itfor acceptance or negotiate it within a reasonable time, the drawer and all i ' indorsers prior to that holder shall be dischargedn

114. As regards the persons by whom and to whom pre- sentment for acceptance is to be made, we have substituted a clearer provision3, combining the relevant provisions in 'sections .61 and 75. ,5 ' L ' '

115. As to the place of pnesentmentlfor acceptance, the -

provision in para. 3 of section 61 is not adequate. Elaborate provisions relating to place ofpresentment for payment are contained in sections 69, 70_ and 71. We have adopted Jsimilar rules for presentment for acceptance'.

(116. We have also thought it necessary to engraft a pro-

.' vision' on the lines of section 41 (1) (by), reiating to present-

" merit to joint drawees. ' '

117. We have also adopted a detailed subsection" includ-I ing all the cases where presentment excusexlr It would 52 appear from section 91 that where presentment is excused, a.- bill is deemed to be dishonoured by non-acceptance. As to the cases where such constructive dishonour takes place, we have two instances contained in paragraphs 2 and 3 of section 61, but there is no provision enumerating the cases where pre- sentment is excused. [The provisions in sub-section (2) of section 41 of the English Act being elaborate on this point, we have adopted them, with the addition of the case speciﬁed in section 39(4) of that Act. The rule relating to delay being excused has been taken from section 75A which com-

bines the rules in respect of both presentment for acceptance.

as well as for payment. There being an enumeration of cases where presentment,for acceptance is excused, it has become necessary also to incorporate the provision in section 41 (3) as to when presentment is not excused.

118. No change has been proposed in the fourth para- graph of section 61.

119. There is no speciﬁc provision in the Act stating the effects of the acceptance of a bill after it has become overdue, although from some of the provisions of the Act itiwould appear that such an acceptance is not void. ' Section 18(2) of the Bills of Exchange Act as well as section 138 of the Uniform Negotiable Instruments Law speciﬁcally state that "A bill may be accepted* "' * * * *wherL it is overdue or after it has been dishonoured by a previous.

. refusaltto accept or by non-payment".

Clause (2) of section 39 of the Bills of Exchange Act speaks of the presentment for acceptance of a bill payable- elsewhere than at the residence or place of the business of the drawee and clause (4) of the same section provides' as follows:--

"Where the holder of a bill, drawn payable elsewhere than at the place of business or the residence of the drawee has not time with the exercise of reasonable diligence to present the bill for accept- ance before presenting it for payment on the day 1 See section 147 of the Negotiable Instruments Law.

that it falls due, the delay caused by presenting the bill for acceptance before presenting it for payment is ekcused, anddoes not discharge the drawers and indorsers."

This shows that the drawer and indorsers would be dis- charged in any other case. This view ﬁnds support from Chalmers' who observes---"A bill should clearly be presented:

for acceptance before maturity. It may be accepted when overdue. . . . . ..Such acceptance preserves or revives the liability of the drawer and indorsers only in the case provided by section 39 (4) tie. domiciled bill arriving late." The same "view is taken by Halsbury: "the drawee may, however, accept' when the bill is overdue, if he is wﬂling to do so"." "The? want of presentment, however, will result in the holder losing his right of recourse against the drawer and indorsers. . , . . . , except in the case of bill drawn payable elsewhere n than at the place of. business or residence of the drawee where the holder has not time to present for acceptance before he has to present the bill for payments."

There being no provision in our Act which is inconsis- - tent with the propositions discussed above, we have thought fit to remove all doubts by adding a new section'. providing that the acceptance of an overdue bill is not void but such acceptance does not preserve or revive the liability of a . drawer or indorser who would be discharged by reason of non-presentment of the bill before maturity.

120. We have transferred the contents of section 62 to sec.:62-> the new Part on Promissory Notes, with verbal changes'.

121. We have combined the provisions of section 63 S°°'5=°3"

with those "of section 83, since the latter section states the L consequences" of allowing more time than as prescribed in section 63.

1. Bills of Exchange, 12th 1221., p. 132. ~ .

2. I-Ialsbury, Laws of England, 3rd Ed., N01.

3. Halsbury, ibid.,' p. 194, f.n. (0.

4. s, us, App. 1.

5. s. 140, mu.

"Sec. 64 .

122. While presentment for acceptance relates only to bills, presentment for payment is a condition common to all instruments. We have, therefore, separated the provisions relating to the two kinds of instruments.

The provisions of section 64 have been modiﬁed. to explain more clearly where presentment for payment is or is not necessaryl. The Exception has been redrafted in order to obviate the conﬂict of judicial opinion which has arisen as to its scope?

Further, we have grouped together, with suitable verbal changes, the rules relating, to presentment for payment in one section' with different clauses relating to the persons by whom and to whom presentment is to be made, and the time, hour and place of presentment, following the plan we have adopted 'with respect to presentment for acceptance.

The latter part of the ﬁrst paragraph of section 64 states , a rule of discharge for non-presentrnent. We have, accord- ingly, shifted it to the Chapter on Discharge, with verbal changes to make it comprehensive".

123. We have added a new provision5 laying down clearly what constitutes presentment for payment. Several Chambers have urged that since usage varies regarding the mode of 'presentment, there should be a deﬁnite provision in the Act. Diﬂiculty is often experienced in having to send the original instrument for presentment. It is risky to send the original as it may be lost or it "may not be returned. We have, there- fore, suggested that the sending of a copy would be sufﬁcient but that the inspection of the original may be demanded; and if, on demand, the holder fails to produce it for inspection within a reasonable time the presentment shall be deemed to be invalid.

1. S. 69, App. 1. - '

2. Cf. Oudh Commercial Bank v. Gur Di;i559 I. C. 604: Ramkrisnayya v. Kasim, 13 . Mad. 172; Manik V. Parlraslz, 45 C. W. N

3. S. 73, App. L

4. S. 79, ibid.

'5. S. 74, ib"'l.

Under paragraph 2 of section 64, personal presentment is obligatory unless presentment through post is authorised by agreement or usage. As pointed out by some of the Chambers of Commerce, the existing provision is somewhat restrictive in view of the changed conditions of commercial intercourse. There is no apparent reason why the use of postal communication should depend on agreement or usage. We have left it to the option of the party, who is to make the presentment, to adopt any effective means convenient to him.

124. Apart from the rearrangement referred to above, 5°CS- 65-67. ' no other change is proposed in respect of sections 65, 66 and 67, except the omission from section 67 of the words "and non-payment . . . . . . . . maturity", which have created some confusion and are considered by us to be unnecessary.

125. We have combined1 sections 68 and 69, because there is no substantial distinction between the circumstances' contemplated by the two sections and these separate provisions complicate the matter. It is not clear from what source the provision in section 68 has been drawn. If an instrument is payable at a speciﬁed place, it follows that it is not payable 'elsewhere'. '

126. We have introduced a new provision2 on the lines Sec. 70.

of section 45(4) (b) of the Bills of Exchange Act to deal with the case where no place of payment is speciﬁed but the address of the maker, acceptor or drawee is given in the instrument. Section 70 of our Act has been modiﬁed by us to deal with the case where even such address is not given in the instrument3. '

127. Verbal alterations have been proposed in section 71 566- 7!- to indicate that it is the residuary provision' relating to the place of presentment. I

128. We have added an Explanation' to clarify what is meant by the words "speciﬁed place" in the foregoing group . s. 73(6)(i), App. 1.

. s. 73(6) (ii), ibid.

. s. 73(6) (iii), ibid.

. s. 73(6)(iv), ibid.

. Expl. to s. 73, ibid.

Us-h-WN~ .~Secs. 72-74.

See. 75.

' Sec. 75A.

~ Sec. 76.

of provisions as there are conﬂicting decisions regarding the interpretation of these wordsl. The question arose parti- cularly where the name of a town was mentioned without giving any address within the town. In conformity with the result of these decisions, we have provided that "speciﬁed place" means a place described with suﬂicient particularity in the instrument to enable the person presenting an instrument to identify the place where the person sought to be charged with liability is to be found. It is not suﬂicient merely to say, for example, "city of Calcutta" but a speciﬁed place in that city should be mentioned.

129. No change, other than verbal, has been proposed in sections 72 to 74. '

130. Section 75 governs both presentment for accept- ance and presentment for 'payment. As already stated, we have split up the provision and assigned the portions relating to presentment for acceptance to the Chapter on Bills of Exchange. The portion relating to presentment for pay- ment has been included in the Chapter on Presentment for Payment and supplemented by an Explanation on the' lines of section 45 (6) of the English Act, to cover the case of present- ment to more than one person liable on an instrument.

131. No alteration has been made in section 75A, except that it had to be repeated in connection with present- .

ment for acceptance and for payment.

_ 132. In section 76, apart from some verbal changes, we have added some new clauses?

(:1) Where the drawee is a ﬁctitious person, it is obvious that nobody can be held liable for non- presentment. The new clause (h) imports this rule from section 46(2) (b) of the English Act.

(b) There is no provision in our Act corresponding to section 46(2) of the English Act providing ,

-Cal. 5

1. 5Shaik Md. v. Abdul, A. I. R. 1937 Lab. 259; Dungarmull v. Shambu, A. I. R. 1951 '. S. 75, App. 1.

when presentment is not necessary to charge an indorser. This is now provided in the new clause (i).

(c) The principle which we ﬁnd in paragraph 2 of section 61 of our Act with respect to present- ment for acceptance should also apply as regards presentment for payment. We have, therefore, incorporated the new clause (j), following sec- tion 46(2) (a) of the English Act.

(d) No less important is the provision in the new clause (k), namely, that no question of present- ment for payment should arise where a bill has been dishonoured for non-acceptance. This would follow from the principle embodied in section 43 (2) of the English Act, which we have adopted', that when a bill is dishonoured by non-acceptance, an immediate right of recourse against the drawer and indorser accrues to the holder, and no presentment for payment is, accordingly, necessary.

An Explanation has been added at the end of the section to embody the rule in section 48(2) of the English Act lay- ing down that the holder's belief that the instrument would be dishonoured even if presented does not absolve him from the duty to present.

133. No change has been made in section 77. ' sec. 77.

134. There is a distinction between discharge of an instru- ment by payment and discharging of a particular party liable under an instrument. This distinction is not clearly brought out by the provisions of our Act, though some indication of it may be had from section 60. We have re-arranged the several provisions relating to discharge to make this distinc- tion ciear. ' L 135. We have grouped together all the provisions relat- ing to discharge by payment in one section2,----including

1. S. 122(2), App. 1.

2. S. 76, App. 1.

Secs. 79-80 58' existing sections 78, 82(c)'mand 89, with modiﬁcations. The case of payment of an acdommodation instrument has also been included in a new sub-section.

136. As regards interest payable on instruments, no diﬂi- culty is experienced when the instrument provides for pay- ment of interest and speciﬁes the rate. The contract between the parties is, however, subject to any law for the time being in force for the relief of debtors which authorises the courts to scale down the interest and give relief. to the debtors. Section 34 of the Code of Civil Procedure, on the other hand, gives a discretion to the court regarding interest from the institution of the suit till the date of decree and thereafter till payment. When, however, the contract is silent as regards interest or it refers to interest but does not mention the rate, the question arises whether any rate of interest should be allowed d'r not. The existing section 80, which deals with this question, is somewhat unintelligible. The difﬁculty is created by the words---- notwithstanding any agreement relating to the contract between any parties to the instrument" which must necessarily refer to an independent agreement, as the section starts by saying that the provision would apply only when no rate of interest is speciﬁed in the instrument.

is intended to apply only where the parties contemplated payment of interest under the instrument but did not provide for the rate of interest or also where the contract is silent on both matters. To avoid all these difficulties we have com-

bined' sections 79 and 80 with verbal changes and have pro- vided for the two liabilities in one section'. The provision has also been made subject to the law for the time being in A force relating to the relief of debtors and to section 34 of the Code of Civil Procedure.

The Explanation to section 80 has been omitted because on principle there is no basis for making any distinction between the two cases mentioned under sections 79 and 80. If the indorser's liability is as a surety,' it must be co-extensive with that of the principal debtor so that there is nothing to

1. :2 ApP- 1. _ It is also not clear from the section whether it -

distinguish between the two cases speciﬁed in sections 79 and

80. We ,have, accordingly, considered it ﬁt to omit the Explanation.

137. Except for verbal changes, no alteration has been Sec. 81- recommended in section 81.

138. As indicated earlier, the provisions of clauses (a) 5°°- 3' and (b) of section 82 have been included in a new section' relating to the discharge of the liability of particular parties. In that section we have also included some other provisions relating to the discharge of particular parties, such as that contained in section 40 and the principle underlying section 90 which has been extended by us to all instruments,--the principle being one of general application, providing for a merger in the case of a union of the rights of the creditor and of the debtor. 1 Another rule' engrafted by us in this section is a corollary rrom the provision in section 39 of the Act relating to a surety. It states that when the holder of an accepted bill enters into a contract with the acceptor of the nature referred to in section 134 or 135 of the Contract Act, the other parties liable on the bill would be discharged, unless the holder expressly reserves his right to charge them.

139. Since section 83 relates solely to bills of exchange, sec. 83- it has been transferred' to the Chapter relating to bills, and combined with section 631 to which it is complementary."

140. Similarly, section 84, which relates exclusively to Sec. 84- cheques, has been transferred to the chapter dealing with such instrurnents3, excepting sub-section (2) which has been omitted as being unnecessary in view of the comprehensive"

provision proposed' by us' relatirigto reasonable time.

141. Sections 8S--85A have been transferred to theSecs--85-85A-

Chapter on cheques, without any alteration.

1. S. 78, App. 1. ibid

2. S. 78 (2),

3. S. 155 ofApp. I.

4. S. 98, ibid 2:3 M of Law--7 60 56°--35 142. In section 86, we have expressly made provision for the right of the holder to refuse to take a qualiﬁed accept- ance', by adopting sub-section (1) of section 44 of the Bills of Exchange Act.

The ﬁrst paragraph of section 86. stating the consequences of acquiescence in a qualiﬁed acceptance, practically provides a rule relating to discharge. We have, accordingly, shifted this paragraph to the Chapter on Discharge?

No change has been proposed in the Explanation to section 86.

In connection with a qualiﬁed acceptance, we have adopted a new provision3, following section 52(2) of the English Act, to make it clear that non-payment for pay- ment in cases of qualiﬁed acceptance does not, in the absence of an express stipulation to that effect, discharge the acceptor 3"' 87' 143. We have redrafted section 87 in the light of section 64(1) of the Bills of Exchange Act, which is more compre- hensive.

The proviso, which has been added, is based on the deci- sion in Gourochandra v. Krushnacharana', which applied the principle laid down by the Privy Council in Hongkong and Shanghai Banking Corporation V. Lo Lee Shz'5, which was a case of a material alteration resulting from an accident, to the case of a material alteration "made by a meddlesome or maliciously minded stranger without the consent of the holder of the instrument and without any fraud or negligence on his part". The second part of the Proviso retains the existing provision that an alteration made to carry out the common intention of parties should not affect the liability.

3"' 88' 144 Section 88 has been amalgamated with section 87., S S S. 124 of App. 1.

. A. I. R. 1941 mad. 383 at p. 385

5. (1928) A. C. 181.

145. No change is necessary in the provision in section 3°°- 39- 89 in so far as it is applicable to instruments other than cheques'.

The part relating to cheques has been taken out and added as a Proviso? to existing section 129, after modifying it in the light of the Proviso to section 79(2) of the English Act.

146. Section 90, as it stands, is conﬁned to bills of 5°°-9°-

;exchange. As already stated, there is no reason why the principle of merger by unity of debtor and creditor embodied therein should not apply to other instruments. We have. accordingly, made it a general provision3.

147. Since section 91 relates only to bills of exchange 5°°- 91- we have transferred it to Part II of Appendix I. For the . purpose of simpliﬁcation, we have split» the section into several sub-sections. We have also added a new provision' on the lines of section 43 (2) of tlg English Act as our Courts have already followed the principle contained therein'.

148. Since dishonour may take place either by non- acceptance or by non-payment, we have inserted an intro- ductory section" to that effect.

149. In section 92, the cases of constructive dishonour Sec. 92. already included in section 75 have been referred to in order to give a comprehensive view of the law'.

150. Section 93 deals with dishonour by non-acceptance 5005- 93:94- as well as by non-payment. Hence, the provision had to be repeated with necessary modiﬁcations in two Chapters, according to our scheme".

1. S. 76(5) of App. 1.

2. Prov. to S. 149, ibid.

3. S. 78(1) (c), App. I.

4. S. 122(2) , ibid.

19 C5é]Riz£7é Ravji v. Prahlad, (1895) 20 Born. 133; Miller v. National Bank of India, (1891)

6. S. 83, of App. 1.

7. S. 84, ibid.

8. Ss. 70, 125, App. I. Sec. 95.

Sec. 96.

Sec. 97.

Sec. 98.

Secs. 99- 104A.

Sec. 105.

As regards notice of dishonour for non-acceptance, we have adopted the provisions of section 48 of the Bills of Exchange Act, to explain clearly the effects of failure to give such notice That part of section 94 which deals with parties to whom notice is [0 be given, has been amalgamated with section 93., with some verbal changes to make the meaning clear'.

The remaining part of section 94 has been placed under three sections2, dealing respectively with--(a) the mode of giving notice; (b) the time and place of giving notice; and

(c) the effect of miscarriage in post. As to the mode of giving notice we have omitted oral notice in order to impart more certainty to this important act.

151. No change has been proposed in section 95.

152. Since section 96 also gives a rule relating to the time for giving notice, it has been combined3 with the relevant part of section 94. .

153. No change is considered necessary in section 97.

154. Clause (f) of section 98, which deals with non- negotiable instruments, has been omitted, as such instruments are outside the scope of the Act.

155. There is no substantial change in the Chapter on Noting and Protest, and the existing law is reproduced subject to a few verbal alterations. Section 104 of the Act has been transposed to the Chapter on Liability', as a protest is obligatory in the case of a foreign bill when it is so required by the law of the place where it is drawn.

156. Since the enumeration of the purposes in section 105 may not be exhaustive, we have extended the principle5 to all the purposes of the Act and thus avoided the need for a separate provision like that in section .84( 2).

85, ibid.

1. S

2. S5. 86-88, ibid

3. S 87(2), ibid.

45. S 71 o_ App. I. 63

157. We have abolished the present distinction in section 5°°- 1°'- l06 based on the places of business and substituted two 'simpler ru1es'--one relating to service of notice by post and the other relating to service otherwise than by post, say, by messenger. The latter mode will, of course, be permissible only when the two parties reside or carry on business at the same place. The provisions proposed by us will obviate all r the controversy arising out of the expression 'next post'.

158. No change is proposed in section 107. S°C- 107-

159. No alteration has been considered necessary in 5:33-1°3- sections 108--113, except that they have been transferred ' to the Part on Bills of Exchange and that sections 111 and 112 have been combined into one sectionz.

A new provision3 has been added, following section 65(5) of the English Act to make it clear that when a bill payable after sight is accepted for honour, its maturity shall be calculated from the date of the noting for non-acceptance, and not from the date of its acceptance for honour.

160. To section 114 we have added a new sub-section' Sec.114. on the lines of section 68(6) of the English Act to explain the rights of the payer for honour which are not fully pro- vided for in the existing section. On the other hand, we have made it clear that the payer for honour, according to the doctrine of subrogation. succeeds not only to the rights but also to the duties of the holder. We have also inserted a new provision5 corresponding to section 68(2) of the English Act to resolve the question of precedence where more than one person oifers to pay a bill for the honour of different parties.

161. No change has been proposed insections 115-116. 50516115-

162. Some improvements have been made in section 117, S°¢- "7 in the light of the corresponding English provision. As is evident from section 57(1) of the English Act, in case of dishonour, the holder, indorser and drawer are all entitled to 99 ibid.of App. I.

1. s.

2. s. 133 ofApp. 1.

3. s. 137, ibid.

4. s. 135(1), ibid

5.. s. 135, ibid.

5"':

recover not only the amount due on the instrument but also the interest due thereon; but interest is not mentionedjn the existing clause (a) of our section 117 which relates to the holder. The word 'indorsee' in the ﬁrst paragraph of the section is a misprint for 'indorser'. We have removed these"

defects and also made it clear from which parties the holder, drawer or indorser shall be entitled to recover. Correspond- ing changes have been made in clause (c). We have added a new clause' to provide for the case of the drawer who has been compelled to pay the amount due on the instrument which is not mentioned in the section at all.

Clause (e) has been split up into two sub-sections for the purpose of a better understanding of the provision.

163. There is a difference in the provisions of clauses

(b) and (d) of section 117 of the Act. Under clause (b), the rate of exchange in the case of a holder who pays the amount is to be determined at the current rate of exchange between the place where the person charged resides and the place at which the instrument was payable. Under clause-

((1), if the person charged and the indorser are at diﬁerent places, the rate of exchange between the two places deter- mines the quantum of liability. The place where the instru- ment is payable has no relevance under clause (d). On- principle there should be no difference between the rights of a holder and of an indorser in this respect.

In our opinion, the problem arises not because of the residence of the parties being at ditferent places but because of the fact that the currency in which the amount payable is.

expressed is other than that of the country where the amount. is payable. We can simplify the problem by conﬁning our- selves to cases where the amount is payable in India.

Now, the amounts payable are of two kinds--( a) the amount due upon the instrument; and (b) the expenses

-incurred on presenting, noting, protesting and the like.

1. 8. 101(1) (17) ofApp. I. 65

(a) As regards the sum due on the instrument, no diffi- culty arises where the instrument speciﬁes it in Indian currency. Where it is expressed in a foreign currency, the payment in India must obviously be made in Indian currency and here the question of rate of exchange comes in. We have provided' that in such a case the sum is to be paid in Indian currency at the current rate of exchange obtaining between India and the foreign country concerned on the date on which such sum became payable;

(b) The same principle should be followed as regards sums paid on account of protesting and the like in a foreign country except that the rate of exchange to be applied in this case should be that which was prevalent on the date on which such expenses were incurred by the holder or indorser, as the case may be. We have provided accordingly".

164. No change has been proposed in sections 118----120.S°°""3--12°° We have however inserted a new provision3 relating 'to the estoppel of the acceptor of 'a bill in the light of section 54(2) (a) of the English Act. At present, the primary rule as to the acceptor's estoppel.is contained in the Evidence Act instead of in the Negotiable Instruments Act. Section 117 of the Evidence Act, 1872 provides-

"No acceptor of a bill of exchange shall be permitted to deny that the drawer had authority to draw such a bill or to endorse it . . . . . . . . . . . . . .

Explanation (l).----The acceptor of a bill of exchange may deny that the bill was really drawn by the person by whom it purports to have been drawn . . . . . . . . . . . . "

When the Negotiable Instruments Act was enacted subse- quently, it was presumably considered unnecessary to repeat the principle in that Act. But since the above rule of evidence is a special rule relating to negotiable instruments and Chapter XIH of the Negotiable Instruments Act contains

1. S. l0I(d) (i) (ii) of App. I.

2. S. 101(e), ibid.

3. S. 104, ibid.

Secs.

I22.

121- 66 various rules of evidence relating to such instruments, pur- porting to be exhaustive, it would seem proper to transfer the above rule from the Evidence Act to the Negotiable Instruments Act.

The substance of the said provision in the Evidence Act is'that the acceptor of a bill is prevented from denying the drawer's authority to draw the bill or to indorse it but he may deny that the bill was really drawn by the person by whom it purports to have been drawn. In other words, he may show that the drawer was a ﬁctitious person or that the signature was not genuine. Section 54(2) of the English Act provides that the acceptor is precluded from denying to a holder in due course the existence of the drawer, the genuineness of the signature after acceptance would introduce to draw the bill. Thus, while under the English law the acceptor is prevented also from denying the genuineness of the signature of the drawer, under the Indian law it is other- wise. We are of the view however that at the time of accept- ance, the drawer should satisfy himself whether the drawer's signature is genuine or not. To permit him to deny the genuineness of his signature and his capacity and authority uncertainty into the law and innocent parties would be made to suffer. The English principle being just and equitable, should be preferred to the provision in section 117 of the Evidence Act.

We have, accordingly, adopted a provision' on the lines of the English Act and recommended that the provision in the Evidence Act should be deleted in so far as it relates to the acceptor.

165. No change has been proposed in sections 121-122, except that a clause has been added to section 122, on the lines of section 55(2) (c) 01' the English Act, to prevent the indorser from denying the validity of the instrument and his title to it at the time of the indorsement. '

166. As stated earlier, all provisions exclusively relating to cheques have been put in a separate Part, and in that LS. 104 of ADD. 1.

Part we have included the following new provisions, in order to make it comprehensive:

(i) When a banker's authority may be revoked is not stated in the Act. We have adopted the provi-

sion in section 75 of the English Act and ampli- ﬁed by adding notice of insolvency as a third 7 ground'.

(ii) We have introduced a new provisionz relating to cheques marked "account payee", for the reasons already explained''', and as a sequel to this new provision, it has become necessary to add another provision' to protect a banker who, bona ﬁde fails to carry out the "account payee"

direction because of the obliteration or altera- tion of such crossing on the cheque.

(iii) That crossing is also a material 'part of the cheque is not stated in the Act and is not included in the deﬁnition of material alteration.

We have inserted an express provision', follow- ing section 78 of the English Act.

(iv) We have made it clear" that a cheque does not amount to an assignment of part ofthe funds of the drawer in the bank to the payee, following section 53(1) of the Bills of Exchange Act (as applied to cheques by the second' paragraph of section 73 of that Act).

167. Only a verbal change has been proposed in sections 5." 123... '123--1 27. But to section 125, we have added, a new 127- .clause7, incorporating the rule conta'med in section 77(6) of the Bills of Exchange Act, to enable a collecting banker to specially cross a cheque to himself.

1. S. 142 of App. 1.

2. S. 144, ibid.

3. Para. 19, ante. -

4. S. 153 of App. 1.

5. S. 146, ' §. S. 154. ibid.

7. S. 145(6), fbil.

Sec.

Ses.

Sec.

128.

129.

130.

131. 53

168. In section 128, we have inserted the condition of' good faith and absence of negligence, following the provi--- sions of section 80 of the English Act. '

169. Section 129 of our Act corresponds to section 79(2) of the English Act, but omits to specify the exceptions which are contained in the Proviso thereto. The exceptions are founded on a sound principle, namely, that there should be no liability where the crossing is not apparent or obliterated. or altered in an unauthorised manner and the banker pays- in good faith. We have, accordingly, adopted the Proviso.

170. No alteration is proposed in section 130.

171. In view of the recognition of "account payee"

cheques, an exception relating thereto had to be made in section 1311.

172. Our attention has been drawn tolthe recent legis- lation in England relating to cheques (Cheques Act, 1957- 5 and 6 Eliz. 2, c. 36).

The main purpose of the Act seems to be to extend the legal protection to paying and collecting banks, acting in good faith, in respect of uncrossed cheques, banker's drafts. and like instruments which, prior to this Act, was conﬁned to crossedcheques, and practically to exonerate the paying.

banks from the duty of insisting on the endorsement of the' payee (except where the cheque is negotiated), provided that payment is made bona ﬁde and in the ordinary course of business.

The implications of these provisions have not yet been clearly appreciated even by the Banks in England as appears from an article in The Law Times, Vol. 22:1, at p. 207. The Banks in England have issued instructions to their branches to move cautiously in.this behalf and they have not taken:

full advantage of the provisions of the Act.

1. S. 152 of App. 1.

The instructions issued by the Banks contain the follow» ing directions:

Cases in which endorsement will not be required are:----

(a) where the cheques are paid into the account of the payee;

(b) where they are paid in for the credit of a joint or partnership account.

Endorsement will still be necessary in the following cases:

(i) cheques cashed or exchanged over the counter;

(ii) negotiated cheques, that is, those tendered for' the credit of an account other than that of the ostensible payee;

(iii) cheques payable to joint payees, if tendered for' the credit of an account to which all are not.

parties; and

(iv) bills of exchange (other than cheques) and' promissory notes.

Having regard to the conditions in India, it may be dangerous to enact legislation on the lines of the Cheques Act, 1957. As the learned writer in the Law Times points' out, "nothing is said in the new Act about the users of cheques". It looks solely to the convenience and protection-

of the bankers and we are not sure what repercussions it may have upon the interests of the customers, in a country' like India. Further, there appears to have been no demand. ' that we in India should have a legislation on those lines.

We think it advisable that we should wait until the impli- cations of the Cheques Act, 1957 are fully known, and until there is suﬂicient demand by the banks and the members of the public in India for such a legislation;

173. No change has been considered necessary in section 50¢-1315» 131A.

Secs. (32--

I33.

'Secs.134--

.136.

:Sec. 137.

Sec. 138- A39.

174. No change is proposed in sections 132-133, except that they have been included in the Part dealing with Bills of Exchange.

175. The provisions relating to conﬂict of laws and foreign instruments in sections 134----136 have been replaced by a new section' framed in the light of the principles arrived at in paragraphs 27--33, ante.

176. In section 137, the words "or the State of Jammu and Kashmir" have already been omitted by the Jammu and Kashmir (Extension of Laws) Act (62 of 1956).

177. Sections 138-139V have been omitted by the Notaries Act (LIII of 1952).

178. In order to give a concrete shape to our proposals, we have, in Appendix I, put them into the form of draft sections of the Act. The Appendix is not, however, to be treated as a draft Bill.

As in our previous Reports, we have omitted all illustra- tions from the text. ' Appendix II contains two comparative Tables: Table A shows the sections in the existing Act with the corresponding sections in Appendix I; while Table B shows the sections in Appendix I with the corresponding sections of our Act as , well as of the Bills of Exchange Act and the Negotiable Instruments Law, respectively.

Appendix III contains the suggestions made by us regard- ing other Acts.

'-1. :. nos, rm.

Appendix IV gives a list of commercial bodies and associa-» tions who were addressed individually for their suggestions and Appendix V speciﬁes such of them as gave their views in writing-

M. C. SETALVAD, (Chairman).

M. C. CHAGLA, K. N. WANCHOO, P. SATYANARAYANA RAO, N. C. SEN GUPTA,* V. K. T. CHARI,* D. NARASA RA.IU,* S. M. SIKRI,* G. S. PATHAK,* G. N. JOSI-II, N. A. PALKHIVALA.

K. SRINIVASAN, DURGA DAS BASU, Joint Secretaries.

NEW DELHI,' The 26th September, 1958.

'Being unable to come to Delhi to sign the Répon, these Memb.-rs have authorised?

hairman to sign the Repoft on their behalf.

APPENDIX I Proposals as inserted in the body of the existing Act. (This is, however, not to be treated as a Draft Bill).

[Corresponding sections of the existing Act are noted in the "margin, and additions to the provisions of the existing Act are

-shown in the text in italics, wherever possible.] THE NEGOTIABLE INSTRUMENTS ACT, 19 PART I--GENERAL CHAPTER I PRELIMINARY A Sec.1. Short (1) This Act may be called the Negotiable Instruments Act, 'title, extent, and com- 19 mencement. ., (2) It extends to the whole of India.

(3) It shall come into force on the 1st day of / 19 'Sec.2.Saving. . . . . . . .Nothing herein contained affects the provisions of pa,a_'2,lf,a,t_ section 31 of the Reserve Bank of India Act, 1934 . . . . . . .

s¢c_ 3, Ope-- . . .Every negotiable instrument 'shall be governed by the provi-

-ration of the . . . .

Act on szons of tl'IlS Act, and no usage or custom at variance with any Vﬁfsgtﬁtlllgtélfts. such provision shall apply thereto.

[New] ;sec_ 4_ Deﬁ_ In this Act, unless the context otherwise requires--

nitions.

"Acceptor". (1) "acceptor" means the drawee of a bill who has signed gs. 7, para. _ _ _ J. l'llS assent upon it, or, if there are more parts thereof than one, upon one of such parts, and delivered the same, or given notice of such signing to the holder or to some person on his behalf . . . . . . .. ;

7?

(2) (3) (4) (5) (6) (7) 73

"acceptor for honour" means a person who, f;'r/\C§gggZlrr"

when a bill has been noted or protested for non- [s. 7, para acceptance or for better security, accepts it supra ' protest for honour of' the drawer or of any one of the indorsers . . . . . . . . . . . .;

an "accommodation party" means a person who «Acc0mo_ has signed an instrument as a maker, drawer, 9a,',i_''" 93'' acceptor or indorser without receiving the value [New] thereof and for the purpose of lending his name to some other person';

. . . . . . . .the expressions "at sight" and "on "At "on present-

presentment" mean on demand; and the expres- rnent" "after sion "after sight" means, in the case of a note, after presentment for sight, and, in the case of a bill, after acceptance or noting for non-accept ance or' protest for non-acceptance;

sight' ' "banker" means a person carrying on the bust'- "I?a':k"§I;;_ ness of accepting, for the purpose of lending or pliﬁedi investment, of deposits of money from the public, repayable on demand or otherwise and with- drawable by cheque, draft, order or otherwise, and includes any post oﬂice savings bank;

"bearer" means a person who by negotiation comes into possession of an instrument payable to bearerz;

"Before"

[New]

(i) "bill" means a bill of exchange; 'Bin,'

(ii) a "bill of exchange" is an instrument in writ- f Ex_ ing containing an unconditional order, change"

signed by the drawer, directing a certain 1]_ person to pay on demand or at a ﬁxed or determinable future time3 a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument; ,

1. See sec. 28(1), B. E. A.

2. See sec. 2, B. E. A.

3. See sec. 3(1), B. E. A. [S. 5, para.

'Cheque".

S. 6].

Delivery".

[ New] "Drawer"

need.

"drawec".

[S. 7, para.

1 ].

"Drawee in case of need".

[S. 7, para.

2].

"Holder".

[S. 8.] {New} " Holder in due course".

[S. 9.] 74 i (8) a "cheque" is a bill drawn on a speciﬁed banker and not expressed to be payable otherwise than on demand;

(9) "delivery" means transfer of possession, actual' or constructive, from one person to another';

(10) a person making a bill or cheque is called the "drawer" and the person thereby directed to pay is called the "drawee";

(_l l ) when in the bill or in any indorsement thereon the name of any person is given, in addition to- the drawee, to be resorted to in case of need, such person is called a "drawee in case of need";

(12) "holder" means the payee or indorsee of an instrument who is in possession of the instru-

ment or the bearer thereof, but does not include' a beneﬁcial owner claiming through a benami-« darz;

Explanation.----When an instrument is lost and not' found again, or is destroyed, its holder at the time of such loss or destruction shall be deemed to continue to be its holder, notwithstanding such loss or destruction;

(13) "holder in due course" means any person who, for consideration, becomes the possessor of an instrument if payable to bearer, or the payee or indorsee thereof if payable to order, before the amount mentioned in it became overdue?' and without having sulﬁcient cause to believe that any defect existed in the title of the person from whom he derived his title;

Explan'ation.----For the purposes of this clause, a defect is said to exist in the title of a person to an instrument when he is not entitled to receive the amount due thereon, by virtue of the prov!- sions of section 28;

1. Sec sec

2. 3 See sec.

. See sec. 29(l)(a) NM ,B.E. ,B. E. A. A. .

B. E. A.; sec. 52, N. I. L. 75 (144) when the maker or drawer or holder of an'£;$','.'~°*'-':.h'_ instrument signs the same, otherwise than as gprsera' apd such maker or drawer, for the purpose of nego- ' tiation, on the back or face thereof or on a slip of paper annexed thereto, or so signs for the same purpose a stamped «paper intended to be completed as a negotiable instrument, he is said to indorse the same and is called the "indorser"; and the person in whose favour the indorsementg-nl1"(1)» is made is called the "indorsee". . . . . . . . . . . .;

(15) an instrument drawn or made in India, and "Inland 1-n_ ' ' strumcnt"

made payable in, or drawn upon any person andworeign resident in, India, is an inland instrument, and instrument".

s. &.

every instrument not so drawn, made or made 12,] payable is a foreign instrument; (16) "instrument" means a negotiable instrument; "Insign- men [New.] (17) "instrument payable to bearer" means an "Instrument payable to instrument which is expressed to be so payable beam», or on which the only or last indorsement is an S,;p}3(ﬁ)]'-1)' indorsement in blank;

(18) "instrument payable to order" means an instru- "Instrument ment which is expressed to be so payable or to which is expressed to be payable to a particular §:_s,;pl_'im("' person, and does not contain words prohibiting transfer or indicating an intention that it shall not be transferable;

(19) "issue" means the ﬁrst delivery of an instru- ment complete in form to a person who takes it as a holder';

at H -

(20) maker means the executant of a promissory ..Ma,,_er.. note: [New] (21) "material alteration", in relation to an instru- ;'15t'Te*;;':1i'(i)"2,, ment, includes any alteration of the date, the [New], sum payable. the time of payment or the place of payment, and, where an instrument has

1.See sec. 2, B. E. A. 218 M of Law--8 ' 'Maturity".

[S. 22, para.

1.] f'Negotiable mstrumen " .

[S._ 13 (1) main para.] "Negotia-

tion". [S. "Notary".

[New] "N ote" .

[New] "P ayee".

[S. 7, para.

"Payment in due course"

[S. 10] "Promissory Note".

[S. 4] 76 been accepted generally, the addition of a place of payment without the acceptor's assent';

(22) . . . ."maturity" of a note or bill is the date at which it falls due;

(23) . ."negotiable instrument" means a promissory note, bill of exchange or cheque. . . .;

(24) when an instrument is transferred in the manner provided by this Act to any personso as to constitute that person the holder thereof, the instrument is said to be negotiated;

(25) "notary" means a person appointed as such under the Notaries Act, 1952";

(26) "note" means a promissory note;

(27) "payee" means the person named in the instru- ment, to whom or to whose order the money is by the instrument undertaken or directed to be paid . . . . . .;

(28) "payment in due course" means payment in accordance with the apparent tenor of the instru- ment in good faith and without negligence to any person in possession thereof'under circum- stances which do not atford a reasonable ground for believing that he is not entitled to receive payment of the amount therein mentioned;

(29) 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 time3 a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument:

1. See sec. 64(2), B. E. A. '

2. The deﬁnition of 'notary' in the existing Act was deleted by the Notaries Act, 1952

3. See sec. 83(1) B. E. A.; S. 184 N. I. L. (U. S. A.) '27 (30) "representative" means--- 'E'§f§e'8'_'°"' _ New

(i) in the case of a person who is dead, his legal 1 representative;

(ii) in the case of a person who has been adjudi- cated an insolvent, the ofﬁcial assignee or oﬁicial receiver in whom his property has vested;

(iii) in the case of a company in liquidation, the liquidator thereof;

and includes a duly authorised agent.

CHAPTER II FORM AND INTERPRETATION.

The provisions of the Indian Contract Act, 1872, shall, Sec. 5._ Ap- ' g _ s , , plgicagﬂlty of save in so far as they are inconsistent with the provisions of t e ontract ' . . --

Act. [s. 25 this Act, apply toall negotiable instruments.

para. 1, mo- _ diﬁed] Sec. _6. In- Where an instrument is made, drawn or negotiated by' ,°,';';'::,°,'ty [go minor, the making, drawing or negotiation entitles the-

Zgdngrz-} 2, holder to receive payment of the instrument and to enforce m I E . * , .

it against any other party thereto except the minor'.

sea 7_ C0,. No corporation has power to make, draw, indorse or lI)3gl:;i'un's accept an instrument except in the manner and to the ex-- gsj 25»Paf3- tent authorised by the law for the time being in force relat-« mg to corporations.

Sec. 8. Ag- (1) Every person capable of binding himself or of being;

3&5 a"th°" bound. . . .by the making, drawing, acceptance or negotia-v 15- 271 tfon of an instrument may so bind himself or be bound by a duly authorised agent acting in the name of such:

person.

(2) A general authority of an agent to transact busi-e ' ness 'and to receive and discharge debts does not confer upon him the power of accepting or indorsing instruments so as to bind his principal.

(3) An authority to draw instruments does not of itself"

import an authority to indorse.

Sec._9. A}x- A partner acting in the ﬁrm name may, to the extent :',,",$y,m° authorised by the law for the time being in force relating mm] io partnership, bind the ﬁrm by the making, drawing, ac--

ceptance or negotiation of an instrument.

1. Sec sec. 22(2), 13. E. A. 78 79 (1) An instrument made, drawn, accepted indorsed or s3te°m-mig-t 111-

transfcrred without consideration, or for a consideration made with- , , . . ot con-

which fails, creates no obligation of payment between the sﬁegtion, parties to the transaction . . . . . . . . . . gfflffg half} ' - [S. 43 para. 1 (2) . . . . . . If any such party has transferred the in latter half].

strument with or without indorsement to a holder for C0l'1Sl- deration, such holder, and every subsequent holder deriving title from him,'may recover the amount due on such instru-

ment from the transferor for consideration or any party to Jim instrument at the time of the transfer.

When the consideration for which a person signed an ia1l1.ab_ instrument consisted of money, and was originally absent sence or fail- in part or has subsequently failed in part, the sum which g:,;c3£si§:,','.:

a holder standing in innnediate relation to the person so' £23 1151- 44» signing is entitled to receive from him is proportionately reduced.

Where a part of the consideration for which a person sea 12_ par.

signed an U1SIl'llITl€rl!, though not consisting of money, IS f,','j,',,',?$,",;ii:,',, ascertainable in money without collateral enquiry, and l.';l°g' o°t9"£;'_' there has been a failure of that part, the sum which a holder nevi standing in immediate relation to the person so signing is[ ' entitled to receive from him is proportionately reduced.

In an instrument-- . s¢c,13_«ce,. ' F?" '"".".'

(a) the sum payable may be "certain". . . .although n;'l1}?°"'}fg§_'_ it includes future interest or is payable at an tam person"

indicated rate of exchange, or is payable at ""dO§°'"i°"s ' the current rate of exchange, and although it is [s.y5,.' para. to be paid in stated instalments with a provision 3 that upon default in payment of an instalment or interest, the whole shall become due;

(1)) an undertaking or order to pay may be "uncon-

ditional" . . . . . . although the time for pay- 5- 5, para ment of the amount or any instalment thereof ' is expressed to be on the lapse of a certain ' period after the occurrence of a speciﬁed event which, according to the ordinary expectation of mankind. is certain to happen, although the time of its happening may be uncertain;

[NW] (c) an order to pay out of a particular fund is not unconditional; but an unqualiﬁed order to pay, coupled with----

(i) an indication of a particular fund out 'of which the drawee is to reimburse himself or a particular account to be debited with the' amount, or

(ii) a statement of the transaction which gives rise to the instrument, is unconditional';

[s. 5 para, 4] (d) a person may be a 'certain person",. .a1though= he is misnamed or designated by description only, provided the person intended can reason-- ably be ascertained from{ the instrument";

[New] (e) where the payee is a fictitious or non-existing' person, the instrument may be treated as pay-- able to bearer';

An instrument is payable on demand----

Stec. 14.t In- (a) where it is expressed to be payable on demand..

s .

,,a,'"§i','f§ in or at sight, or on presentment'; or demand.

{ise-I ztlélflear' (b) where no time for payment is speciﬁed therein:

[S. 19, or part] _ S 19 (c) where the instrument IS a cheque; or rt . . . .

$1.315, 'para ((1) where the instrument is issued, accepted or m--

2' m°d'ﬁ°d] dorsed after it is overdue, as regards the per~- son so issuing, accepting or indorsing'.

S°°' 15' An instrument a able on demand shall be deemed to-

When m- P 3' ;taF;I£'l=§t°n be overdue when it appears on the face of it to have 'beer:

demand in circulation for an unreasonable length of time'.

overdue.

[New]

1. See sec. 3(3), B. E. A.

2. Sec sec. 7(1), B. E. A.

3. See sec. 7(3), B. E. A.

4. See sec. l0(I)(a), B. E. A.

5. See sec. 10(2), B. E. A.

6. See sec. 36(3), B. E. A. 81 The expression "after sight" means--- f'e°r°'$g;';:{§f' _ , [S. 21, Iat-

(a) in a note, after presentment for sight, and ter half]

(b) in a bill, after acceptance or noting for non- acceptance or protest for non-acceptance. An instrument is payable at a determinable future time SSt'l'_°u'mgE 1"' where it is expressed to be payabie----- V ggiiggnfbfe future time.

[New]

(a) at a ﬁxed period after date or sight; or

(b) on, or at a ﬁxed period after, the occurrence of a speciﬁed event which is certain to happen though the time of happening may be uncer-

tainl.

Where an instrument, either originally or by indorse- §:cct-o1f3dml3"f_- ment, .is expressed to be payable to the order of a speciﬁed ing _or _in person, and not to him or his order, it is nevertheless pay- ?,'f,',i,';',§, P125:

able to him or his order at his option. §g'_'[§'_'13'E;5 Expl. (iii)] An instrument is not invalid for the reason only that it Sec. 19. Ef- is ante-dated or post-dated, provided the ante--dating or post-- §':%,,';' :3?' dating was not done for an illegal or fraudulent purpose'. Eﬁzgfatmg' (1) Where one person signs and delivers to another a See. 20. I_n-

paper stamped in accordance with the law relating to stamp §l','.',';',',i,.,, In. duty chargeable on instruments and either wholly blank or S'2°]' having written thereon an incomplete instrument, in order that it may be converted or completed into an instruments he thereby gives prima facie authority to the person who receives the paper to make or complete, as the case may be. upon it an instrument, for the amount if any speciﬁed there- in, or, where no amount is speciﬁed, for any amount, not exceeding in either case the amount covered by the stamp.

(2) The person so signing shall, subject to the provi- sions of sub-section (3), be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course, for the amount speciﬁed in the instrument or

1. Sec sec. 11, B. E. A.

2. See sec. 13(2), B. E. A. and sec. 12, N. I. L. 82 ﬁlled up therein:

Provided that no person other than a holder in due course shall receive from the person so signing the paper? anything in excess of the amount intended by him to be paid thereunder. ' (3) In order that any such instrument when completed may be enforceable against any person who became a party thereto prior to its completion, it must be ﬁlled up within a reasonable time and strictly in accordance with the authority given;

Provided that if any such instrument after completion is negotiated to a holder in due course, it shall be valid and eﬂectual for all purposes in his hands, and he may enforce it as if it had been ﬁled up within a reasonable time and strictly in accordance with the authority givenl.

sec: 21? No. (1) The making, acceptance "or indorsement of an in- §{'r:'1:E'el§t i"' strument is completed by delivery . . . . . . . .

when com-

plete. (2) As between parties standing in immediate relation, R?' 46' pm' delivery to be eﬂectual must be made by the party making, 9]' 46' "am accepting or indorsing the instrument or by a person autho-

rised by him in that behalf.

gs. 46, para. ( 3) As between such parties and any holder of the ' instrument other than a holder in due course, it may be shown that the instrument was delivered conditionally or for a special purpose only, and not for the purpose of transferring absolutely the property therein. Sec. 22. Im- For the purposes of this Act----

mediate P""°s~ (a) the drawer of a bill stands in immediate relation [S. 44 Ex-

Pln-} to the acceptor;

(b) the maker of a note, or the drawer of a bill or cheque stands in immediate relation to the payee, and the indorser to his indorsee;

1. See Sec. 20B. E. A. , 83 ' If the amount undertaken or ordered to be paid is stated 5°¢- 23 Di?' ferenec In differently in ﬁgures and in words, the amount stated in ﬁguaes and words shall be the amount undertaken or ordered to be '[§°_r,§j;

paid:

Provided that if the words are ambiguous or uncer- tain, reference may be had to the ﬁgures to fix the amount'.

Where an instrument may be construed either as a note SEC. 24. A_m- or bill, the holder may at his election treat it as either, and :'fm§§;5,m' the instrument shall be thenceforward treated accordingly. 5' 17] An instrument may be made payable to two or more See. 25. Pa- payees jointly, or it may be made payable in the alternative ,y§ie,',st_may be to one of two, or one or some of several, payees. [S' 13 (2)1 Where a person signs an instrument in a trade or as- 5°°- 25- 558' nature In sumed name, he is liable thereon to the same extent as if he trade or assu- . . . . 2' med name.

had signed it in his own name, . [New] Subject' to the provisions of this Act, where a signature Sec' 27' F°"

ged or un- on an instrument is forged or, placed thereon without the a'."h°'i5°d Signature.

'authority of the person whose signature it purports to be, it [New].

is wholly inoperative, and no right to retain the instrument or to give a discharge therefor or to enforce payment there- of against any party thereto can be acquired through or under such signature, unless the party against whom it is sought to retain or enforce payment of. the instrument is pre- cluded from setting up the forgery or want of authority:

Provided that nothing in this section shall affect the ratiﬁcation of an unauthorised signature not amounting to a forgery'.

When an instrument has been lost or has been obtained Sec.' 28. pc- from any maker, drawer, acceptor or holder thereof by fa?' means of an offence or fraud, or for an unlawful considera- '"ﬁ°'" ' tion, neither the person who ﬁnds or so obtains the instru- ment nor any possessor or indorsee who claims through I. See sec. 17(1), N. I. L. (U. S. A.).

2. See sec. 23(1), B. E. A.

3. See sec. 24. R E A. Sec. 29. Ma-

turity, how determind.

IS_. 22, para.

2] (S. 24] is. 25;

such person is entitled to receive the amount due thereon from such maker, drawer, acceptor or holder, unless such possessor or indorsee is, or some person through whom he claims was, a holder thereof in due course.

The maturity of a note or' bill not payable on demand is determined as follows:--

(1) (2) (3)

'9-.« i Every such note or bill is at maturity on the third day after the day on which it is expressed to be payable.

In calculating the date at which a note or bill, made payable a stated number of months after date or after sight or after a certain event, is at maturity, the period stated shall be held to terminate on the day of the month which cor- responds with the day on' which the instru- ment is dated, or presented for acceptance or sight, or noted for non-acceptance, or protest-I ed for non-acceptance, or the event happens, or, where the instrument is a bill made payable a stated number of months after sight and has been accepted for honour. with the day on which it was so accepted. If the month in which the period would terminate has no cor- responding day, the period shall be held to ter- minate on the last day of such month.

'In calculating the date at which a note or bill made payable a certain number of days after date or after sight or after a certain event is at maturity, the day of the date, or of present- ment for acceptance or sight, or of protest for non--acceptance,'or on which the event happens, shall be excluded.

(4) When the day on which a note or bill is at maturity is a public holiday, the instrument shall be deemed to be due on the next succeed-

ing business day. ' Explanation: The expression "public holiday"

Sundays and any other day declared by the Central Gov- ernment, by notiﬁcation in the Official Gazette, to be a public holiday.

includes 50' CHAPTER III NEGOTIATION Sec. 30f An instrument is negotiable--

Mode 0 £'§_g'f§':"é§','£;_ (a) by.. delivery thereof, if payable to bearer:

4 an . 47, ' main part] ' _ _ .

IS_ 46'pam (b) . . .. by indorsement and delivery thereof, If 53nd 3-48] payable to order.

§§f1'S31'cf:t°i§f_ Every sole maker. drawer or holder, or all of several led to neg0- ioint makers, drawers . . or holders, of an instrument may, t' t . '. . . . . .

[l§a_ C5 1] if the negotiability of such instrument has not been restricted or excluded as mentioned in section 39, indorse and nego-

tiate the same.

Explanation: Nothing in this section enables a maker or drawer to indorse or negotiate an instrument unless he is in lawful possession or is holder thereof . . . . . . Sec. 32. (1) Negotiation_ by indorsement must be of the entire Requisites of . -

;nd°,semem_ Instrument'.

Is' 56] ( 2) An indorsement .. which purports to transfer to the indorsee only a part of the amount payable, or which purports to transfer the instrument to two or more indorsees severally, is not valid as a negotiation of the instrument'; but where such amount has been paid in part, a note to that effect may be indorsed on the instrument. which may then be indorsed for the balance.

ieiidfo-f in An indorsement may be either in blank or in full. and dorsci-nents. may be restrictive or conditional or qualiﬁed. ' . [New sec, 34. In- (1) An indorsement in blank speciﬁes no zndorsee. dorsement ' in blank and in full.

{S. 16 (1), part]

1. See sec. 32(2), B. E. A. U"! (2) An indorsement in full speciﬁes the person to whom or to whose order the instrument is to be payable'.

35 Pro-

The provisions of this Act relating to a payee shall apply ';:;,';'e""to £2; with the necessary modiﬁcations to an indorsee. V 533;? in-

[S. 16(2)] When an instrument has been indorsed in blank, any Sec._36. Con- holder. . . .may, without signing his own name. . . .convert the indorsement in blank into an indorsement in full by i'ﬁdbg':§f,:,'e'_ﬁ° writing above the indorser's signature a direction to pay the i[1§'f§g]- amount to or to the order of himself or some other person;

and the holder does not thereby incur the responsibility of an indorser". ' Subject to the provisions hereinafter contained as to Sec. 37. In-

. . . . t crossed cheques, an instrument indorsed in blank is pay- stmmens indorsed able to the bearer thereof, even though originally payable blank-

[s. 54] to order.

If an instrument, after having been indorsed in blank, is sec, 33, 19. indorsed in full, the amount of it cannot be claimed from the indorser in full, except by the person to whom it has :gm':¥n'"d°i'l; been indorsed in full, or by one who derives title through [fgllgsl such person. ' (1) An indorsement is restrictive which either-- sea 39_ Res- _ _ _ trictive in-

(a) restricts or excludes the further negotiation of dorsement the instrument; or

(b) constitutes the indorsee the agent of the indorser mfg: It':

. . . . . . . . . . . . . . diﬁedl Provided that the mere absence of words implying power to negotiate does not make the indorsement restrictive.

(2) A restrictive indorsement confers upon the indorsee the righ.t--

(a) to receive payment of the instrument;

(b) to sue any party thereto that his indorser could have sued, but gives him no power to transfer his rights as indorsee unless it expressly autho-

rises him to do so.

1. See sec. 34(1), (2), B. E. A. '. See sec. 34(4), B. E. A. Wile-L T' ' T 88

- (3) Where a restrictive indorsement authorises further transfer, all subsequent indorsees take the instrument with .

the same rights and subject to the same liabilities as-the first indorsee under the restrictive indorsement'.

§_et<;-4f;-lC9n- (1) The indorser of an instrument may, by express 1 0]) ln- . . . . . .

dotlsement. words in the indorsement, make 'hlS' hability or the '[5' 52' pa" right of the indorsee to receive the amount due thereon de-

1. pm] pend upon the happening of a speciﬁed event, although such event may never happen.

(2) Such a condition is valid only as between the in- dorser and the indorsee.

(3) Where an instrument purports to be indorsed con- ditionally, the condition may be disregarded by the payer, and payment to the indorsee is valid whether the condition has been fulﬁlled or not'.

'ESE:-d4'-Q33' (1) The indorser of an instrument may, by express Words in the indorsement, exclude his own liability thereon. [part] ' 52, para. (2) Where an indorser so excludes his liability and afterwards becomes the holder of the instrument, all inter- mediate indorsers are liable to him.

Sec. _4;. An instrument delivered on condition that it is not to Conditional . . . - .

.dg1ive1-y_ take effect except in a certain event IS not negotiable (except Igpceﬂgon] in the hands (if a holder for consideration without notice of the condition) unless such event happens.

sec. 43. The legal representative of a deceased person cannot Negotiation bylegal_ negotiate, by delivery only, an instrument payable to order and indorsed by the deceased but not delivered.

366- _ _44. Where an instrument is negotiated back before maturity Negotiation back before to the maker or drawer or a prior indorser or to the acceptor, {?~?e3.,Tty such party may, subject to the provisions of this Act, reissue and further negotiable the instrument".

1. See secs. 36 and 37, N. I. L. (U. S. A.) and S. 35, B. _E. A.

2. See sec. 33, B. E. A. and sec. 39, N. I. L. (U. S. A.).

3. See sec. 37, B.E.A., part.

\I 89 v Subject to the provisions contained in this Chapter relat- 3&3 jng to restrictive, conditional and qualiﬁed indorsements, negotiation .the person in whose favour an instrument is negotiated £§',nf,°',,,1f acquires the property therein with the right of. further "'°diﬁ°d] .negotiation . . . . . . . . . . . . . . . .

An instrument may be negotiated (except by the maker, §vech.en46r.m_ 'drawer, drawee or acceptor after maturity) until payment gotiabilit}; or satisfaction thereof by the maker, drawer, drawee or gffgj acceptor at or after maturity, but not after such payment or satisfaction, or after it has been restrictively indorsed'.

t. set; sec. 36(1)(a), B.E._A.

Sec. 47.

Rights of

- holder.

[New] See. 48.

Rights of holder of an instrument negotiated back to him.

[New] See. 49.

Instrument acquired _ after d15- honour or when over-

[s. '59, main para.] Sec. 50.

Accom-

modation note or bill.

[S. 59, Proviso] Sec. 51.

Holder claimmg through _ holder In due course.

[S. _53, modiﬁed] [New] CHAPTER IV RIGHTS OF HOLDER AND HOLDER IN DUE COURSE A holder may sue on the instrument in his own name, receive payment in due course thereunder and further"

negotiate it in the manner provided by this Act.

A person acquiring an instrument in the circumstances' mentioned in section 44 is not entitled to enforce payment of such instrument against any intervening party to whom' he was previously liable'.

A holder who has acquired an instrument after dis-v honour, whether by non-acceptance or non-payment, with notice thereof, or after maturity, has only, as against the other parties, the rights thereon of his transferor, and is"

subject to the equities to which the transferor was subject at the time of acquisition by such holder.

. . . . . Any person who, in good faith and for considera- tion, becomes the holder, after maturity, of a note or bill' made, drawn or accepted without consideration, for the purpose of enabling some party thereto to raise money thereon, may recover the amount of the note or bill from any' prior party.

(1) A holder who derives_ his title through a. holder in due course, and who is not himself a party to any fraud or illegality aﬁecting the instrument, has all the rights thereon of that holder in due course as regards the acceptor and all parties to the instrument prior to that holder'.

(2) Where the title of the holder is defective--

(a) if he negotiates the instrument to a holder in due course, that holder obtains a good and' complete title to the instrument; and

1. See sec. 37, B.E.A., part.

*. See sec. 29(3), B.E.A. 91

(b) if he obtains payment of the instrument, the person who pays him in due course gets a valid discharge for the instrument'.

A holder in due course holds the instrument free from 590- £3 0 any defect of title of prior parties, and free from defences holder in available to prior parties among themselves, and may enforce €1E::w']:°um payment of the instrument for the full amount thereof against all parties liable thereon?

(1) Where an instrument has been lost before it is See. 5,3. overdue, the person who was the holder thereof may apply §;',l'3°'§, 'to the maker or drawer to give him another instrument of f:)':'t'H°a"i'nsf'f the same tenor, giving security to the maker or drawer, if required, to indemnify him against all persons whatever in case the instrument alleged to have been lost shall be found again.

(2) If the maker or drawer on request as aforesaid refuses to give such duplicate instrument, he may be com- pelled to do so. '

1. See sec. 321(3), B.E.A. 2'. See sec. 38(2), B.E.A. . 218 M of Law--5 CHAPTER V LIABILITY OF PARTIES 54- of The liability of the original parties to an instrument, and FfI\:I5§6r- of persons who become parties thereto under supervening contracts, such as acceptors, indorsers and acceptors for honour, shall, subject to the other provisions of this Act, be as deﬁned in this Chapter. ' gfgngg; A person placing his signature upon an instrument other-

:igningtin5- wise than as maker. drawer or acceptor, is presumed to be ILHTJCI1 _ ' _ presumed an mdorser, unless he clearly indicates by appropriate words to be indor-

Sen his intention to be bound in some other capacityl.

[New] S<,=c-._56- (1) The drawer of a bill, by drawing it, engages that Liability of » drawer or on due presentment it shall be accepted and paid according acceptor of a big of to its tenor, and that if it be dishonoured he will compensate' f§'_°h§'ag°' the holder or any indorser who is compelled to pay it".

gag, modi- .

6 .

[New] (2) The drawee of a bill is not liable thereon until acceptance in the manner provided by this Act. 4 [Sec, 32_, (3) The acceptor before maturity of a bill, by ggcriimodl' accepting it, engages that he will pay it according to the tenor of his acceptance . . . . . . and in default of such pay- ment . . . . . . such . . . . acceptor is bound to compensate any party to the bill for any loss or damage sustained by him and caused by such defaults. ' [S' 4"' ( 4) The acceptor of a bill already indorsed is not relieved from liability by reason that such indorsement is forged, if he knew or had reason to believe the indorsement to be forged when he accepted the bill.

5?" .5.7- (1) The drawer of a . . . cheque, by drawing it, engages Liability of _ drawer or that in case of dishonour by the drawee . . . . . .he will com-

drawec of ' cheque. pensate the holder .... .. .

($.39. part] A _

1. See sec. 63, N.I.L. (U.S.A.) and sec. 56, REA.

2. See sec. 55 (1), B.E.A. l »

3. See sec. 54(1), B.E.A.

4. See sec. 73. para. 2. read withgsec. 55 (1). B.E.A. 92 93 (2) The drawee of a cheque having suﬂicient funds of[5- 31]- nhe drawer in his hands properly applicable to the payment of such cheque shall pay the cheque when duly required so to do, and, in default of such payment, shall compensate ithe drawer for any loss or damage caused by such default.

. . . . The maker of a note, by making it,' engages that §e%._l_t58. f . . ' . . . I 1a 11 o t-he will pay it at maturity according to its apparent tenor . . . . a makeilofa .and in default of such payment . . . . the maker . . . .. is §f,'t'§']'sS°ry bound to -compensate any party to the note .. .. for any g§(')d3i%'ed1']"_"'* 'loss or damage sustained by him and caused by such default'.

~ -' - ~ - - Sec. 59.

. .. The mdorser of an instrument, by indorsmg zt, Liability of "(engages that on due presentment it shall be accepted andindorser Of paid according to its tenor, and that if it be dishonoured, he ?3.1}iI1ent].nS-

-will compensate the holder or subsequent indorser who is £,Sa}a_ 351', compelled to pay it2. 1 §?;:'d]_ '"°' (1) The maker of a note, the drawer of a cheque, the %:°{em60' of drawer of a bill until acceptance and the acceptor, are . . . . . . ggﬁzigify °f respectively liable thereon as principal debtors . . . . . . . . [S- 37. Partl- [S. 37, part].

(2) The other parties to the instrument are liable thereon as sureties for the maker, drawer or acceptor, as the case may be. ' (3) As between the parties so liable as sureties, each [5-33:P'"'3-

-prior party is . . . . also liable thereon as a principal debtor in respect of each subsequent party.

The provisions of sub-section (3) of section 56, section gfgvision 58, section 59 or sub-section (1) or sub-section (3) of {get tgthrilé section 60 do not apply where there is a contract to the f§>ntr3zEry- t . par,

-contrary. s, 35, para, 1 part, S. 37, part, S. 38.'

- part].

When the holder of an accepted bill enters into any Sec. 62. . . . Liability of «contract with the acceptor, which, under section 134 or 135 surcty_ of the Indian Contract Act, 1872, would discharge the other [S' 39]' parties, the holder may expressly reserve his right to charge {the other parties, and in such case they are not discharged.

1. See sec. 88(1), B.E.A.

2. See sec. 55 (2), B.E.A. 94 13361;-a?l3(;n of The acceptor, and every prior party to an instrument, are"

liability. liable thereon to a holder in due course until the instrument' [S. 36]. . .

1S duly satisﬁed.

S .6 , . . . .

Lfgbilfgy of (1) An accommodation party is liable on an instrument"

accom-

modation to a holder in due course, notwithstanding that when such' P3fFY_ and holder took the instrument he knew such party to be an:

position of accommo-- accommodation party'.

dated party.

[New] . ' . . .

(2) An accommodation party to an instrument, if he' [New] has paid the amount thereof, is entitled to recover such amount from the party accommodated.

[ES)ic'l31,], (3) No party for whose accommodation an instrument has been made, drawn, accepted or indorsed can, if he has' paid the amount thereof, recover thereon such amount from:

any person who became a party to such instrument for his' accommodation.

Sec. 65 No party to an instrument who has induced any other Liability of .

gpargy party to make, draw, accept, indorse or transfer the same ;';$t'§'e';gt0 to him for a consideration which he has failed to pay or ;I!3k:§::- perform in full shall recover thereon an amount exceeding \'11 . -

mem. E the value of the consideration (if any) which he has actually £'§,',;lZ,, ¥i1]_ paid or performed.

Sec' 66 '(1) An agent who signs . . . . . .an instrument . . . . . . ..

Liabi"'Y °f is personally liable thereon unless he adds to his signature' ' person sign- _ _ _ _ _ illlsg assagent words indicating that he is acting for and on behalf of a' .2 ear- . . . . .

lier pa'rt, named principal; but the mere addition by a person to his modiﬁedl signature of words describing him as an agent, or as ﬁlling a representative character, does not exempt him from personal' liability?

'E53-H213: lam'-' (2) An agent is not personally liable to a person who' induces him to sign upon the belief that the principal alone- would be held liable. ' Sea 67_ A legal representative of a deceased person who signs' E-e':'a';i1r'e'{' °f an instrument is liable personally thereon unless he expressly"

Presentative. limits his liability to the extent of the assets received by him-

as such.

--1.'See sec. 28(2), B.E.A.

2. Sec scc. 26(1), B.E.A., and sec. 20 N.I.L. (U.S.A.).

'(1) Where the holder of an instrument payable to SW63- _ ' _ _ Transfer or Fbearer negotiates it by delivery without indorsmg it, he IS by delivery " _ " and trans-

«called a transferor by delivery . feree. [New] (2) A transferor by delivery is not liable on the instru-

»ment.

(3) A transferor by delivery who negotiates an instru- ,-ment thereby warrants to his immediate transferee, being a holder for consideration, that the instrument is what it 'purports 'to "be, that he has a right to transfer it, and that at :the time of transfer he is not aware of any fact which renders tit valueless'. I (1) Subject to the provisions of section 75, an instru- 3°C- 69- _ . _ Presentment.

'ment must, in order to make the parties thereto liable to [S. 64 para. :the holder, be presented for payment in accordance with this 1' Pam' {A ct. * Exception.----. . .Presentment for payment is not neces- [S.64, , Exc.,. mo-

;sary in order to charge the maker of a note payable on diﬁed]. (demand and not payable at a speciﬁed place, or the acceptor «of a bill.

( 2) The provisions of this section are without prejudice [New] to the provisions relating to presentment for acceptance in ..the case of a bill.

(1) When an instrument is dishonoured by . . . . . . . . . . . IS'Iec._7o. f 'non-payment . . . . . . . . . . . ., notice must be given, in the d1:1t11§§o(:,1- manner provided by this Act, that the instrument has been ,so dishonoured . . . . when °b"' %§t0!'y.

-93, para. 1, (2) Such notice, however, need not be given to the [psaerctl'93,.

maker of the dishonoured note_ the acceptor of the pm 2]'

-dishonoured bill or the drawee of the dishonoured cheque. .

Foreign bills must be protested for dishonour in the Sec. 71_. emanner provided in Chapter IX of this Part when such pro-

'(test is required by the law of the place where they are _drawn f'§'_dI'(','ﬁt_°""

I. See sec. 58, B.E.A. i Definit ion 72 See.

[New] Sec. 73 Rules governing present-

ment for payment.

[New]-

[S. 64, para. 1, part.] [S. 64, para. 1, Part & S. 75.] [S. 66].

[S. 74].

[S.. 67, earlier part] .

CHAPTER VI PRESENTMENT FOR PAYMENT In this Chapter, "presentment" means presentment for- " payment.

(1) An instrument required to be presented for payment-

must be presented in the manner hereinafter provided.

(2) Presentment must be made by the holder or by- some person authorised to receive payment on his behalf.

(3) Presentment must be made, in the case of a note, to* the maker, in the case of a bill to the acceptor and in the case of a cheque to the drawee, or to the representative of; the maker, acceptor or drawee.

Explanation.----Where there are several persons, not' being partners, liable on the instrument, as makers, acceptors. or drawees, as the case may be, and no place of payment isr speciﬁed, presentment must be made to them all'.

(4) Presentment must be made at the proper time, as-

provided below:----

(i) a note or bill not payable on demand must be presented . . . . at maturity;

(ii) subject to the provisions of this Act, an instru- ment payable on demand must be presented. . . . . within a reasonable time after it is received by the holder;

(iii) a note payable by instahnents must be presented, on the third day after the date ﬁxed for' payment of each instalment . . . . .;

1. See sec. 78 N. I. L. and sec. 45(6), B.E.A. 96 97

(iv), subject to the provisions of section 155, a cheque (S. 72]. must, in order to charge the drawer, be present- ed before the relationship between the drawer and his banker has been altered to the prejudice of the drawer; '

(v) a cheque must, in order to charge any person [s_ 73], except the drawer, be presented within a reason- able time after delivery thereof by such person.

~(5) Presentment must be made during the usua1'[S. 65]. hours of business, and, if at a banker's, within banking hours.

(6) Presentment must be made at the proper place as provided below:---- '

(i) where a place of payment is speciﬁed in the instru-- [Ss. _68-59. ment, it must be presented at that place; m°d'ﬁ°d]'

(ii) where no place of payment is specified, but the [New] address of the maker, acceptor or drawee is given in the instrument, it must be presented at such address;

(iii) where no place of payment is speciﬁed and no [S- 70]- address given, the instrument must be present- ' ed at the place of business (if known) or the ordinary residence (if known), of the maker, acceptor or drawee; ' '

(iv) in any other case, the presentment may be made [S.71,"part]. to the maker, acceptor or drawee in person wherever he can be found'.

Explanation.----In this sub-section, "speciﬁed place" [New] / means a place described with particulars suﬁicient to enable the person presenting the instrument to identify the place where the person sought to be charged with liability can be found.

1. See sec. 45(4), B.E.A. 98 i>sa}:],75A' (7) Delay in presentment . . . . is excused if the delay is» caused by circumstances beyond the control of the holder and not irnputable to his default, misconduct or negligence. When the cause of delay ceases to operate, presentment must be made within a reasonable time.

3%-at7"c-onS_ (1) To constitute a valid presentment, it is notnecessary titutestvalitd to present the original instrument to the person liable to ICSCD men . _ , .

gndd thef pay, but it shall be suﬁiclent if a copy thereof, certiﬁed to ',§',';s§,,,m';n,. be true by the holder, is delivered to such person, either g'ra§4; personally or by registered post or by other eﬁective means. modiﬁed]. -

[New] (2) If, after such delivery, the person liable to pay so demands, the original instrument shall. be made available to him for inspection during the hours of business of the holder, and if the holder fails to do so within a reasonable time, the presentment shall be deemed to be invalid.

'SNeﬁ.en75. No presentment . .. is necessary, and the instrument scntment shall be deemed to be dishonoured at the due date for ?s"_"7e5"]s_s'" presentment, in any of the following cases:--

[Cl-(4)1. (a) if the maker, acceptor or drawee intentionally 3"" 1' prevents the presentment of the instrument; or [Cl. (:22), (b) if, the instrument being payable at his place of para' 1' business, he closes such place of business on a business day during the usual business hours; or '[c1_ (4), (c) if, the instrument being payable at some other para' 3]' speciﬁed place, neither he nor any person authorised to pay it attends at such place on a business day during the usual business hours; or I [CL (G), A (d) if, the instrument not ' being payable at any para- 41- ' ' speciﬁed place, he cannot after due search be

- found; or {C1 (b) I (e) as against any part sought to be charged there-

with, if he has engaged in writing to pay without presentment; or ,« 99 . . . - Cl.

(f) as against any party 'If, after maturity, Wlthf (CH.

knowledge that the instrument has not been presented, he makes a part payment on account of the amount due on the instrument, or pro-

mises to pay the amount due thereon in whole or in part, or otherwise waives his right to take advantage of any default in presentment; or

(g) as against the drawer, if the drawer could not [Cl. (d) 1.

suﬁer damage from the want of such present- ment; or

- - 1. '

(h) where the drawee is a ﬁctttous person , or [New]

(i) as regards an indorser, where the instrument [New] was made, drawn or accepted for the accommo- dation of that indorser and he has no reason to expect that the instrument would be paid if presented'; or

(j) where, after the exercise of reasonable diligence, mew] presentment as required by this Act cannot be eﬁecteds; or

(k) where a bill has been dishonoured for non- [New] acceptance.

Explanation.--The fact that the holder has reason to {yaw} believe that the instrument will, on presentment, be dis-

honoured does not dispense with the necessity for present- ment'.

1. Soc Sec. 46(2) (b), B.E.A.

2. See sec. 46(2) (d), B.E.A.

3. See sec. 46 (2) (a), para. 2, B.E.A.

4. See sec. 46(2) ((1), para. 2, B.E.A. Sec. 76.

Discharge by payment.

S 78 mbdiﬁed].

[S. $2 (c) modiﬁed].

[New] [New] [S. 89, part).

Sec. 77.

Instrument to be deli-

vered on payment.

[S. 81].

CHAPTER VII PAYMENT, DISCHARGED AND INTEREST (1) . . . .An instrument is discharged by payment to the' holder by or on behalf of the maker of a note, the drawer' of a cheque, the drawer of a bill until acceptance or the- acceptor. V ( 2) In the case of an instrument payable to bearer or. . indorsed in blank, payment in due course by the maker', drawer, acceptor or indorser discharges all the parties thereto.

(3) In the case of an instrument made, drawn, accepted or indorsed for accommodation, payment in due course by.-' the party accommodated discharges the instrument'.

(4) Payment to the holder by any other party discharges':

the liability of the party making the payment.

(5) Where an instrument has been materially altered but does not appear to have beenso altered, . . . . . . . . . . . .

payment thereof by a person. . . .liable to pay, and paying. the same according to the apparent tenor thereof at the time of payment and otherwise in due course, shall discharge such person. . . .from all liability thereon; and such payment shall not be questioned by reason of the instrument having been altered . . . . . . . . . . . . . .

Any person liable to pay, and called upon by the holder. . . .to pay, the amount due on an instrument is before payment entitled to have it shown, and is on payment entitled to have it delivered up to him, or, if the instrument is lost or cannot be produced, to be indemniﬁed against any further claim thereon against him.

1. See sec. 59(3), B.E.A. 100 '101 (1) The maker, drawer, acceptor or indorser respec- f)°3,-er73- tively of an instrument is discharged from liability thereon-- modes of"

' discharge.

(a) to a holder thereof who cancels such acceptor's [s. 82(a)].

or indorser's signature with intent to discharge ' him and to all parties claiming under such holder;

(b) to a holder thereof who otherwise discharges [S-3201)]--« such maker, drawer, acceptor or indorser, and to all parties deriving title under such holder after notice of such discharge;

its maturity in his own right. ' (2) When the holder of an accepted bill enters into any [New], contract with the acceptor of the nature referred to in section 62, the other parties are discharged, unless the holder has expressly reserved his right to charge them.

(3) When the holder of an instrument. without the con- Is. 40]__ sent of the indorser, destroys or impairs the indorser's remedy against a prior party, the indorser is discharged from liability to the holder to the same extent as if the instrument had been paid at maturity.

(1) The drawer of a bill or cheque, and the indorser of sec, 79' . . - D. h a bill or note, are discharged where there IS a default by the fol," aggfh holder in presentment of the instrument for payment in F§°5g2";':l'_';--

. , .

accordance with this Act. :1. part]-

(2) The maker of a note payable on demand and at a [5-64, Para-

], part, read.

speciﬁed place is discharged in default of presentment as with Exc.]. aforesaid. ' If the holder of a bill acquiesces in a qualiﬁed acceptance ]S)"§-char:2- as deﬁned in section 12 . . . . . . . . . . . ., all previous parties tpeggles whose consent is not obtained to such acceptance are dis-- senting to qualiﬁed of charged as against the holder, unless on notice given by the limited ac-

holder they assent to such acceptance. §§f"§'6':?'-ain para, part].

'Sec. 81.

Discharge by material alteration, [S. 87 para.

1. modi-

.ﬁed.] [S. 87, para.

2}.

[S. 87 para.

3]. '

-{s. 88}.

102

(1) Where an instrument or the acceptance of a bill is materially altered without the assent of all the parties 'liable on it, the instrument or bill is discharged, except as against the party who has himself made, authorised or assented to the alteration and subsequent indorsers:

Provided that this section shall not apply where the alte- ration was made by a stranger without the consent of or any negligence or fraud on the part of the holder, or where the alteration was made in order to carry out the common inten- tion of the original partiesl.

(2) . . . .Any such alteration, if made by an indorsee, discharges his indorser from all liability to him in respect of the consideration for the indorsement.

(3) The provisions of this section are subject to those of sections 20, 36, 80, '123' and 145.

(4) An acceptor or indorser of an instrument is bound ' by his acceptance or indorsement notwithstanding any pre-

Sec. 82.

'Interest when rate speciﬁed and not specified.

[S. 79, mo-

zdiﬁed].

vious alteration of the instrument. t Subject to the provisions of any law for the time being in force relating to the relief of debtors, and without pre- iudice to the provisions of section 34 of the Code of Civil Procedure, 1908-- V

(a) when interest at a speciﬁed" rate is expressly made payable on a note or bill and no date is ﬁxed from which interest is to be paid, interest shall be calculated at the rate speciﬁed, on the amount of the principal money due thereon, from the _date of the note, or, in the case of a bill, from the date on which the amount becomes payable, until tender or realisation of' such amount, or until the date of the institution of a suit to recover such amount . . . . . . ;' o 103

(b) when anote or bill is silent as regards interest £3 80: gffax or does not specify the rate of interest, interest diﬁcd]. on the amount of the principal money due there- on shall, notwithstanding any collateral agree- ment relating to interest between any parties to the instrument, be allowed and calculated at the rate of six per centum per annum from the date of the note, or, in the case of a bill, from the date on which the amount becomes payable, until tender or realization of the amount due thereon, or' until. . . . the date of the institution of a suit to recover such amount . . . . . .

CHAPTER VIII _ NOTICE or DISHONOUR sec. 88. Dishonour takes place either by non-acceptance as pro- ﬁ»§sel,],.,°]n°ur' vided in Part II or by non-payment as provided in this Chapter. ' ' Sec. 84. An instrument is said to be dishonoured by non- '§)',S"n"o"[f'_"' payme'nt-- \ , payment. _ [S. 92;. _ (a) when the maker (in the case of a note), the A acceptor (in the case of a bill) or the drawee.

(in the case of a cheque) makes default in pay-

ment upon being duly required to pay the same;

0)'

(b) when the instrument is deemed to be dish0nour- ed under section 75.

gect-, 85- f When an instrument is dishonoured by noii--acceptance or 0106 O

-dishonour by non--payment, the holder or some party thereto who remains ¥f,h°v'v'f,'0:?d liable thereon, or a person authorised in this behalf by such

-to be given. ' ' ' _ [S_ 93' para. holder or party, must give notice of dishonour 1, part].

(1§-p9a3r;]1.'3Fa- (a) to all. . . . parties whom the holder seeks to . make jointly and severally or- severally liable thereon, and to some one of several parties whom he seeks to make jointly liable thereon; or IS' 94' 1''"3- (b) to the representative of the person to whom 1, part]. _ _ _ _ the notice 1S required to be given under clause

(a). . _ 1SVi°)ae8?l-1 Notice of dishonour, in order to be valid and effectual, which notice must conform to the following rules:---- of disho- . " ""

-nour should be given.

[S. 94, para. ' _ _ -

'I. partl- (a) it must be in writing and may be sent by post;

104 105

(b) it may be in any form, but it must inform the party to whom it is given, either in express terms or by reasonable intendment, that the instru-

'ment has been dishonoured and in what way, and that he will be held liable thereon.

(1) A notice of dishonour must be given within a reason- Sec. 87. 'able time after dishonour, at the place of business, or, (in 51:; :1? case the party has no place of business), at the residence, of E'§"§§- para the party for whom it is intended. ' 1, part]-

'(2) When the instrument is deposited with an agent for [S3 95]- presentment, the agent is entitled to the same time to give notice to his principal as if he were the holder giving notice of dishonour, and the principal is entitled to a further like period to give notice of dishonour.

If a notice of dishonour is duly directed and sent by post Xsqec, 88. and miscarried, such miscarriage does not render the notice méééamed

- - In post.

invalid. [S' 94' para 2].

Any party receiving notice of dishonour must, in order Sec. 89, to render any prior party liable to himself, give notice of i1;agm;,,,r,:feiV' 'dishonour to such party within a reasonable time. unless :'0"t'i';"" of such party otherwise receives due notice as provided in this dishonour. Chapter 5' 951' When the party to whom notice of dishonour is des- Sec 90- When party patched is dead, but the party despatching the _notice is to whom ignorant of his death, the notice is sufficient. 'g'?,te',°,e is dead.

[21, 97}.

No notice of dishonour is necessary-- 91. ' en ' notice of dishonour is unneces-

sary.

(a) when it is 'dispensed with by the party entitled IS' 93]-

thereto;

(b) in order to charge the drawer, when he has countermanded payment;

106

(d) when the party entitled to notice cannot after due search be found; or the party bound to give ' notice is, for any other reason, unable, without_ any fault of his own, to give it.

(e) to charge the drawer, when the acceptor is also a drawer;

(f) when the party entitled to notice, knowing the facts, promises unconditionally to pay the amount due on the instrument.

CHAPTER IX No'r1NG AND PROTEST '(1) When a note or bill has been dishonoured by non- ﬁegéingz :acceptance or non--payment, the holder may- cause such dis- [s. 991' ,.honour to be noted by a notary upon the instrument, or upon a paper attached thereto, or partly upon each.

(2) Such note must be made within a reasonable time ;..after dishonour, and must specify, the date of dishonour, the reason, if any, assigned for such dishonour, or, if the :instrument has not been expressly dishonoured, the reason why the holder treats it as dishonoured, and the notary's charges.

(1) When a note or bill has been dishonoured by non- Sec. 93. ;acceptance or non-payment, the holder may, within a reason- Eef_"t°1S(t,'(,, .-able time. cause such dishonour to be noted and certiﬁed bv Pa" ll ;a rzarary. Such certiﬁcate is called a protest.

(2) When the acceptor of a bill has become insolvent. [S 100, or his credit has been publicly impeached, before the matu~ t>ara- 2] prity of the bill, the holder may, within a reasonable time, 'cause a notary to demand better security of the acceptor, and on its being refused may, within a reasonable time, cause such facts to be noted and certified as aforesaid. Such «certiﬁcate is called a protest for better security.

A protest under section 93 must conta1n---- Sm 94_ Contents protest.

(a) either the instrument itself, or a literal transcript [S' 1°"

of the instrument and of everything written or printed thereupon;

(b) the name of the person for whom and against I whom the instrument has been protested;

107

'2l8 M of Law-G Sec.- 95.

Notice of protest.

s. 102] Sec. 96.

Protest for non-pay-

ment after dishonour by non-

acceptance.

[S. 103].

Sec. 97.

When noting equi-

' valent to protest.

[S. 104A 1 103

(c) a statement that payment or acceptance, or better security, as the case may be, has been demanded- of such person by the notary; the terms of his answer, if any, or a statement that he gave no» answer or that he could not be found;

(d) when the note or bill has been dishonoured, the place and time of dishonour, and, when better' security has been refused, the place and time oﬁ refusal;

(e) the subscription 'of the notary making the pro-~ test; »

(f) in the event of - an acceptance for honour or of ' a payment for honour, the name of the persorr by whom, of the person for whom, and the manner in which, such acceptance or payment was olfered and effected. V Explanation.-----A notary may make the demand men- tioned in clause (c) of this section either in person or by his clerk, or, where authorised by agreement or usage, by? registered letter.

When a note or bill is required by law to be protested; notice of such protest must be given instead of notice of dishonour, in the same manner and subject to the same con' ditions; but the notice may be given by the notary who makes- the protest.

All bills drawn payable at some other place than the place mentioned as the residence of the drawee, and which are dishonoured by non--acceptance may, without further"

presentment to thedrawee, be protested for non~payment'in the place speciﬁed for payment," unless paid before or at' maturity.

For the purposes of this Act, where a bill or note is:

required to be protested within a specified time or before' some further proceeding is taken, it is sufficient that the bi}? has been noted for protest before the expiration of the"

speciﬁed time or the taking of proceeding; and the formal' protest may be extended at any time thereafter as of the:

date of the noting.

CHAPTER X REASONABLE TIME In determining what is a reasonable time for the pur- 5% 93_ poses of this Act . . . . . . . . . .regard shall be had to the nature t1i'm°':°"3"'° of the instrument and the usual course of dealing with [S- 105] respect to similar instruments; and, in calculating such time, public holidays shall be excluded.

(1) A notice of dishonour, when sent by post, shall be Sec. 99.

deemed to be given within a reasonable time if it is posted ﬁgesollgrb 1:

on'the day next after the day of dishonour. ﬁgég of dishonour.

[s. 106, para. 1.

modiﬁed] (2) If the holder and the party to whom a notice of dis- ls. M326, honour is given carry on business or live in the same place, §,a¢;;{ﬁ¢d_3 the notice, when sent otherwise than by post, shall be deemed to be given with in a reasonable time if it is despatched in time so as to reach its destination on the day next after the day of dishonour.

A party receiving notice of dishonour, who seeks to sec_1oo_ enforce his right against a prior party, transmits the notice ,'§;,:'*°'}g';'° within a reasonable time if he transmits it within the same §fl"c';]SmIj:"t'£e8 time after its receipt as he would have had to give notice [S- 107] if he had been the holder.

109

Sec: 101.

Rule as to compen sa-

tion.

(S.1 17(a)] [New] [S.117(c).] S. n7(b) and (d), modiﬁed.) ..._.._. ___----

CHAPTER x1 ' , COMPENSATION (1) The compensation payable in case of dishonour of an instrument by any party liable to the holder, drawer or any i zdorser shall be determined by the following ru1es:--

(a)

(b)

(c)

(d) the holder is entitled to recover from any party liable on the instrument the amount due upon the instrument (principal and interest), together with expenses properly incurred in presenting, noting and protesting it; ' the drawer. who has been compelled to pay the amount due on a bill is entitled to recover from the acceptor the amount so paid (principal and.

interest), with interest at six per centum per annum from the date of payment until tender or realization thereof';

an indorser who, being liable, has paid the amount due on the same is entitled to recover from the acceptor or from the maker or drawer or from any prior indorser the amount so paid (principal and interest), with interest at_ six per centum per annum from the date of payment until tender or realization thereof, together with all expenses caused by the dishonour and pay- ment;

the sum mentioned in clause (a), (b) or (c) shall, in so far as it represents the amount due on the instrument (principal and interest), be paid to the holder, drawer or indorser, as the case may be, in the following manner:---

{ i) where such sum is due to him in Indian cur-

rency, the payment shall be made in that currency;

' '. Sec. 57 (I), B.E.A .

110 111

(ii) where such sum is due to him in the currency of any foreign country, the payment shall be made in Indian currency at the current rate of exchange between India and that country as on the date on which such sum became payable to him;

(e) the expenses referred to in clause (a) or (c) .[New] shall be paid to the holder or indorser, as the case may be, in Indian currency, or, where the expenses were incurred in the currency of any foreign country, then, in Indian currency at the current rate of exchange between India and that country as on the date on which they were incurred by the holder or indorser, as the case 'may be.

(2) The party entitled to compensation may draw a bill upon the party_liable to compensate him, payable at sight or L §;l}e1r7 (6):

on demand, for the amount due to him, together with all half.) expenses properly incurred by him. Such bill must be accompanied by the instrument dishonoured and the protest thereof, if any.

(3) If a bill drawn under sub--section (2) is dishonoured, the party dishonouring the same is liable to make compen- [S.117(e), sation thereof in the same manner as in the case of the latter ham original bill.

CHAPTER XII SPECIAL RULES or EVIDENCE §$§;.},',',2,,'_ Until the contrary is proved, the following presumptions ffggnjtffbﬁg shall be made:----

instruments. V {S-118] (a) that every instrument was made or drawn for consideration, and that every instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;

(b) that every instrument, acceptance or indorse- ment bearing a date was made or drawn on such date;

(d) that every transfer of an instrument was made before its maturity;

(e) that the indorsements appearing upon an instru- ment were made in the order in which they appear thereuopn;

(f) that a lost instrument was duly stamped;

(g) that the holder of an instrument is a holder in due course:

Provided that, where the instrument has been obtain- ed from the lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker, drawer or acceptor thereof by means of an.

offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.

112 113

In a suit upon an instrument which has been dishonoured, 5°°- 103- res t' n vthe court shall, on proof of the protest, presume the {act of l<)):1op;1l's::1o'l'lgf «dishonour, unless and until such fact is disapproved. [s_119j No acceptor of a bill shall, in a suit thereon by a holder sec. 104.

. . . E I .122 due course, be permitted to deny the existence of the a;?,','§t'° .drawer, his capacity and authority to draw the bill, and the E"b°f;°v1v']'°'- genuineness of his signature'.

No maker . . . . . .or drawer, . . . . . .and no acceptor of 105i , t . . t '3 bill for the honour of the drawer, shall, in a suit on the aga'-f.,";:° instrument by a holder in dueycourse, be permitted to deny the validity of the instrument" as originally made or drawn. Validity of lﬂStl'U-

merit.

is. 120] No maker of a note and no acceptor of a bill payable to lsiifégggi

-order shall, in a suit thereon by a holder in due course, be against . , . d ' permitted to deny the payee s capacity, at the date of the note c§,','ié'3§ or bill, to indorse the same. ' of pay"

to indorse.

[S. 121] No indorser of an instrument shall, in a suit thereon by 107i S ODDC .a subsequent holder, be permitted---- against denying

(a) to deny the signature or capacity to contract of gfgggggfty any prior party to the instrument; . of prior ' party.

(b) to deny that the instrument was at the time of[S'122]' his indorsement a valid and subsisting instrument and that he had then a good title thereto".

_......__.;¢ 1 'See. sec. 54 (2)(a), B.E.A. " See sec. 55 (2)(c), B.E.A. CHAPTER XIII CONFLICT OF LAWS sec. 108. W/zere an instrument made or drawn in one country is:

La -- . . . .

mg"ﬂ§§i'1'ie;;n negotiated, accepted or payable in another, the rights, duties-

gicgféir' and liabilities of the parties shall, in the absence of a contract 0rind°fS°r to the contrary, be determined as follows1--

of a foreign instrument.

[s_ 134, (a) all questions relating to the capacity of the parties"

ffo'é}ﬁed] and the validity of the instrument or of its * acceptance or negotiation, shall be governed by the law of the place where the contract consti- tuted by the instrument, acceptance, or negotia-~ tion, as the case may be, was made':

Provided that--

[s_ 136] g (i) if an instrument is made, drawn, accepted or"

indorsed outside India but in accordance with the law of India, the circumstance that any agreement evidenced by such instrument is. invalid according to the law of the country wherein it was entered into does not invalidate any subsequent acceptance made thereon within India;

{New} (ii) a foreign instrument shall not be invalid or inadmissible in evidence by reason only of its not being stamped according to the law of the place where it was made2;

(b) the law of the place where such instrument is payable shall govern--

[S-134. (i) the liability of all parties to the instrument;

Ilitaorttiiﬁedj 1 Sec. 72 (I), B.E.A. * See sec. 72 (1), proviso (a), B.E.A. 115

(ii) the duties of the holder with respect to pre-'. I "

sentment for acceptance or payment;

(iii) the date of maturity; [New.]'

(iv) . . . . . .what constitutes dishonour by non- [s. 135, part]:

acceptance or by non-payment;

(v) the necessity for and suﬂiciency of a protest or [S- 135, P311}.

notice of dishonour;

(vi) all questions relating to payment and satz's- [New] faction, including the currency in which and the rate of exchange at which the instrument is to' be paid.

The law of any foreign country . . . . . .regarding nego- §,':§'Sulg£:;'_g tiably instruments shall be presumed to be the same as that "O" a5'° _ _ _ foreign of Indra unless and UDU1 the contrary 1s proved. law.

{S. 1.37], PART II BILLS OF EXCHANGE In this Part, unless the context otherwise requires, "pre-

Sec. 110.

;;]§{f,§°"" sentment" means presentment for acceptance.

[New] 'gee. 111. A bill may be addressed to two or more drawees, whether d:;'§Vr:e1s_ they are partners or not; but an order addressed to two [New] drawees in the alternative, or, subject to the provisions relat- ing to drawee in case of need, to two or more drawees in succession, is not a bill'.

S:c,l12. A bill may be drawn payable to or to the order of, the gvzfffsﬁ drawer; or it may be drawn payable to, or to the order of, the 5"" may 1" drawee?

A rawn, [New] sec, 113_ No person except the drawee of a bill, or all or some of g',','Y,,;""""° several drawees, or a person named therein as a drawee in case of need, or an acceptor for honour, can bind himself by case of t _ need or for an accep ance honour.

[s. 33] _ .

Sec. 114. (1) The holder of a bill must, if so required by the T' . . .

dgﬁgfgfm arawee to whom it IS presented for acceptance, allow the F; 'g§'}W°°- drawee forty--eight hours (exclusive of public holidays) to consider whether he will accept it.

IS. 83] (2) If such holder allows such drawee more time than speciﬁed in sub--section (1) . . . . . .all previous parties not consenting to such allowance are thereby discharged from liability to such holder.

Efgéplt;-:1~ce Where there are several drawees of a bill who are not

-by several artners, each of them can acce t it for himself, but none of drawees p ' p not them can accept it for another without his authority.

partners.

.,[s. 34} ' See sec. 6 (2), B.E.A. ' See sec. 5 (1), B.E.A. 116 «or «--

117

An acceptor of a bill drawn in a ﬁctitious name and pay- gfﬁcc able to the drawer's order is not, by reason that such name is at bill in . . . . . d ﬁctitious, relieved from liability to any holder in due course ﬁéﬁﬁﬂus claiming under an indorsement by the same hand as the drawer's signature, and purporting to be made by the drawer.

. . 9 . . . .

A bill, in order to ﬁx the acceptor with liability, must be $3412'. :17.

presented for acceptance before it is presented for payment. presentment _ for accep-

tance is necessary.

[New]' The acceptance of an overdue bill is not void; but such Sec. 118- , , _ . Acceptance acceptance does not preserve or revive the liability of a of overdue drawer or indorser who would be discharged by reason of ["I.';l;'w] non-presentment of the bill for acceptance before maturity.

(1) Subject to the provisions of this Act, when a bill gfgelggé payable after sight is negotiated, the holder must either pre- fpresentmedt . . . . . t-

sent it for acceptance or negotiate it within a reasonable a(r'1:;:%ct?:bl

- b'llpaya e time' ail'ter sight.

, [S. 61 para. 1, part,_ modiﬁed] (2) If he does not do so, the drawer and all indorsers prior' to that holder are discharged'.

(1) A bill is duly presented for acceptance when it is $531-6:2;-to presented in accordance with the following ruIes'-- presentment . for accept-

ance and excuses for non-present-

ment.

A (a) the presentment must be made by or on beIzalf£)Sa°rg1'l of the holder to the drawee or to his repre- part, ' , , _ _ modiﬁed sentative, in business hours on a business day and S. 75 before the bill is overdue; part}

(b) (i) where a place of presentment for acceptance [S.61, para. is speciﬁed in the bill, it must be presented at 3'part] that place;

1 See sec. 40, B.E.A. ' See sec. 41 (I), B.E.A. {New} [Ne ;v] '9. 7], Delft] {New} [S. 75A, part] [New] ls. 61, para. 3, part.

modiﬁde] [New] 118

(ii) where no such place of presentment is speciﬁed, /A but the address of the drawee is given in the bill, it must be presented at such address;

(iii) when no such place of presentment is specified"

and no address given, the bill must be preseftted at the place of business (if known) or ordinary residence (if known), of the Cirawee;

(iv) in any other case, the presentment may be made to the drawee in person wherever he can be found;

(C) where a bill is addressed to two or more drawees' who are not partners, presentment must be made to them all unless one has authority to accept for ~ all, in which case presentment may be made to him only'.

(2) Delay in presentment . . . . . .is excused if the delay is caused by.circumstances beyond the control of the holder and not imputable to his default, misconduct or negligence.

When the cause of delay ceases to operate, presentment must be made within a reasonable time. ' (3) Presentment in accordance with these rules is excused, and a bill may be treated as dishonoured by non- acceptance----

(a) where the drawee is dead or is insolvent or is a fictitious person or a person not having capacity to contract by bill";

(b) where, at the due date for presentment, the drawee cannot, after reasonable search, be found at the place at which the bill is to be pre- sented under sub-clause (i) or (ii) of clause (b) of sub-section (1);

(c) where the holder of a bill drawn payable else- where than at'the place of business or residence of the drawee, has no time with the exercise of 1 See sec. 41(1)(b),§.E.A. 2 See sec. 41 (2)(a), B.E.A. 119 reasonable diligence to present the bill for acceptance before presenting it for payment on the day it falls due';

(d) where, after the exercise of reasonable diligence, [New] such presentment cannot be effected";

(e_) where although the presentment has been irre- [New] t gular, acceptance has been refused on some other ground3.

(4) The fact that the holder has reason to believe that ;the bill, on presentment, will be dishonoureal, does not excuse presentment".

Where authorised by agreement or usage, . . . . . .present-

ment through the post office by means of a registered letter is met? by , OS .,' suﬁiclent. F5, 51, para. 4] (1) A bill is. . . . dishonoured by non-acceptance---- %el.°s-hiff)-Ur by non-

acceptance and its consequ-

(a) when the drawee, or one of several drawees not [°s"°;' being partners, makes default in acceptance para. 1, upon being duly required to accept the bill; 93"}

(b) where presentment . . . . . .is excused and the bill is not accepted; ' [S-91:' para. 1, (C) where the drawee is incompetent to contract, or "am! . . .9 , the acceptance is quallﬁed. pam 21 (2) Subject to the provisions of this Act, when a bill is [New] .a'ishonoured by non-acceptance, an immediate right of recourse against the drawer and indorsers accrues to the holder, and no presentment for payment is necessary5.

The holder of a bill may refuse to take a qualiﬁed accept-

ance, and if he does not obtain an unqualiﬁed acceptance, (sic-l.'§3'-1 ual e .may treat the bill as dishonoured by non-acceptance". acceptance.

[New] 1 See sec. 35 (4), B.E.A, 2 See sec. 41 (2)(b), B.E.A _ 3 See sec. 4] (2) (c), B.E.A. ' See sec. 41 (3), B.E.A 5 See sec43 (2), B.E.A. ' See sec. 44 (I), B.E.A [S.86.

Expl.] 120 Explanation.----An acceptance is qualiﬁed---

(a) where it is conditional, declaring the payment to

(b)

part].

Sec. 124.

Non-prese-

ntment for payment in cases of qualiﬁed acceptance when does not dis-

charge the acceptor.

[N ew] Sec. 125.

Notice of dishonour for non-

acceptance.

[S. 93 para 1, part, modiﬁed}.

(e) for payment omission to matures'.

not given is Prov be dependent on the happening of an event therein stated;

where it undertakes the payment of part only' of the sum ordered to be paid;

where, no place of payment being speciﬁed on the order, it undertakes the payment at a speci-

ﬁed place and not otherwise or elsewhere, or' where, the place of payment being speciﬁed in the order, it undertakes the payment other place and not otherwise or elsewhere;

where it undertakes" the payment at a time other than that at which under the bill it would be legally due;

. . . . . .where the drawees are not partners and ' the acceptance is not signed by all of them.

When by the terms of a qualiﬁed acceptance presentment;

is required, the acceptor, in the absence of express stipulation to that eﬁect, is not discharged by the present the bill for payment on the day that its ( 1) When a bill is dishonoured by non-acceptance. . . . . the holder thereof, or some party thereto who remains liable- thereon, must give notice of dishonour to the drawer and each indorser, and any drawer or indorser to whom such notice is.-

d ischargedz :

ided that where a bill is dishonoured by non- acceptance and notice of dishonour is not given, the rights of a holder in due course subsequent"

to the omission shall not be prejudiced by that' omission'.

1 See sec. 52 (2), B.E.A. ' See sec. 48, B.E.A. at some-

12} (2) Where a bill is dishonoured by non-acceptance and {NW} due notice of dishonour is given, it shall not be necessary to give notice of a subsequent dishonour by non-payment, unless the bill shall, in the meantime, have been accepted'.

When a bill accepted payable at a speciﬁed bank has s9¢_'1_25_ been duly presented there for payment and dishonoured, if I3'faE:,';',{er the banker so negligently or improperly keeps, deals with or g';f]3;3"' delivers back such bill as to cause loss to the holder, he must dqglirggll WI 1 compensate the holder for such loss. presented for payme nt is. 771 Subject to the foregoing provisions, the rules governing sec.d127f. Mo co the mode of giving notice of dishonour for non-payment giving . . . . t' f shall, mutatis mutandis, apply In respect of the mode of gtv-- 3§'s,'l';"n(';ur' ing notice of dishonour for non-acceptance. [New] Where a drawee in case of need is named in a bill, or se¢,12s_ in any indorsement thereon, the bill is not dishonoured until }3f§;;';°o, it has been dishonoured by such drawee. E'S°°"1~15] A drawee in case of need may accept and pay the bill iec.1gtgn e . . V we c without previous protest. . and payment without DTOICSL [s. 116] When a bill has been noted or protested for non-accept- sec_ 130, ance or for better security, any person, not being a party al- (':',°1°,f£:§,','r°_° ready liable thereon may, with the consent of the holder, by [S- 103]- writing on the bill, accept the same for the honour of any party thereto.

A person desiring to accept for honour must, by writing rsiegylgclc-C' on the bill under his hand, declare that he accepts under pro- ﬁtance for test the protested bill for the honour of the drawer or of a ,,,'{,'f.,'§",§,, particular indorser whom he names, or generally for honour.

Where the acceptance does not express for whose honour ii:-611,23'-we it is made, it shall be deemed to be made for the honour not speci- fying for of the drawer. whose honest it *1'?---'--. l 7 7 ' 'ml' is ma 9 1 See sec. 48, B.E.A. Is. no} l 22 'IS}:i)i1"3t;-of An acceptor for honour binds himself, to all parties sub» acceptor sequent to the party for whose honour he accepts, to pay }'f'1':°"r' the amount of the bill if the drawee does not; and such party Para" ll and all prior parties are liable in their respective capacities to compensate the acceptor for honour for all the loss or damage sustained by him in consequence of such acceptance:

Provided that----

'[S. 111, i (a) an acceptor for honour is not liable to the holder pm' 2] of the bill unless it is presented, or, (in case the address given by such acceptor on the bill is a place other than the place where the bill is made payable), forwarded for presentment, not later than the day next after the day of its maturity;

IS. 112] (b) an acceptor for honour cannot be charged un- less the bill has at its maturity been presented to the drawee for payment, and has been dis- honoured by him, and noted or protested for such dishonour. ' 'Sec. 134. When a bill has been noted or protested for non-payment, Payment for honour. any person may pay the same for the honour of any party 15113] liable to pay the same, provided that the person so paying (or his agent in that behalf) has previously declared before a notary the party for whose honour he pays and that such declaration has been recorded by such notary.

5% 135. Where two or more persons offer to pay a bill for the Two or - - ' more persons honour of different parties, the person whose payment Wlll oﬁeripg to discharge most parties to the bill shall have the preference'. pay or honour.

'[New] 590-135 . (1) Any person paying for honour, on paying to the Rights and ' duties of holder the amount of the bill and the notarial expenses 'in-

§3¥,'2,',,£'_" . cidental to its dishonour, is entitled to receive both the bill {New} itself and the protest. If the holder does not on demand deliver them up, he shall be liable to the payer for 'honour in damages".

1 See sec. 687(2), 3.25..

- See see. as (6), B.E.A. 123 (2) Such person. .. is also entitled to all the rights. . . . 151"»-1

-and is subject to all the duties' of the holder at the time of such payment, in relation to the party for whose honour he pays and all parties liable to that party', and may recover from all such parties all sums so paid by him with interest thereon and with all expenses properly incurred in making such payment. V Where a bill payable after sight is accepted for honour, Sec. 137.

its maturity is calculated from the date of the noting for §'ff"'f,,",',?.',",'§,';

non-acceptance, and not from the date of acceptance for iﬁlfaasggétgd fOI' h0H0ur.

[New] Bills may be drawn in parts, each part being numbered Sec. 138. :and containing a provision that it shall continue payable only 3:15:

rso long as the others remain unpaid. All the parts together IS' 132] make a set; but the whole set constitutes only one bill, and is extinguished when one of the parts, if a separate bill, 'would be extinguished.

Execption: When a person accepts or indorses diiferent parts of the bill in favour of different persons, he and the subsequent indorsers of each part are liable on such part as if it were a separate bill. ' As between holders in due course of different parts of See.

'the same set, he who ﬁrst acquired title to his part is entitled ﬁ1-gt.

:to the other parts and the money represented by the bill. ;§"}t'"f:ﬁﬂed t ll.

[§.ai33] 1 See sec. 68 (5), B.E.A. ' See sec. 65 (5), B.E.A. 218 M 01 Law--9 PART III PROMISSORY ' NOTES se¢,14o_ ' A romisso note, a able at a certain eriod after si ht,.

P TY P Y P 8 P'°S°m' must be resented to the maker thereof or his representative» ment _of .p 'I]"';'t';1'f1§f_°'Y (if he can after reasonable search be found) for sight by as sight. person entitled to demand payment, within a reasonable time [ 8.62] . . . . ' .

after 1t 15 made and 1n busmess hours on a busrness day. In default of such presentment, no party thereto is liable thereon» to the person making such default.

PART IV CHEQUES (1) Where a cheque payable to order purports to be indorsed by or on behalf of the payee, the drawee is dis- pacyi/abletol charged by payment in due course. 3232;?"

[S.85(l}I (2) Where a cheque is originally expressed to be pay- [3-359"

able to bearer, the drawee is discharged by payment in due course to the bearer thereof, notwithstanding any indorse- 7 ment whether in full or in blank appea/ring thereon, and not- withstanding that any such indorsement purports to restrict or exclude further negotiation.

The duty and authority 0}' a banker to pay a cheque liiﬁoiifiqn drawn on him by his customer are determined by-- Of ba°!<°P'S authority; ,, [New] (1) countermand of payment;

(2) notice of the customer's death;

(3) notice of adjudication of the customer as an in- solvent'. ' ' (1) Where a cheque bears across its face an addition of~--- gm 14?- enera and special crossing deﬁned.

(a) the words "and company" or any abbreviation [S- 123] thereof, between two parallel transvers lines, either with or without the words "not negotia- ble", or

(b) .. two parallel transverse lines simply, either with or without the words "not negotiable", that addition constitutes a crossing, and the cheque is cros- sed generally?

1. Sec sec. 75, B.E.A. '

2. See sec. 76 (1), B.E.A. ' \ ;._ IO 01 [S. 124] Sec. 144.

Cheque crossed "account payee".

[ New] Sec. 145.

Crossing by drawer or after issue.

[New] [S. 125, para-

11 126

(2) Where a cheque bears across its face an addition of the name of a banker, either with or without the words "not negotiable", that addition constitutes a crossing, and the cheque is crossed specially and . . to that bankerl.

(1) Where a cheque crossed generally bears across its face an addition of the words "account payee" between the two parallel transverse lines constituting the general crossing, the cheque, besides being crossed generally, is said to be crossed "account payee".

(2) When a cheque is crossed "account payee"--

(a) it shall cease to be negotiable; and

(b) it shall be the duty of the banker collecting pay- ment of the cheque to credit the proceeds there- of only to the account of the payee named in the cheque.

(1) A cheque may be crossed generally or specially by the drawer?

(2) Where a cheque is uncrossed, the holder may cross it generally or specially.

'lg-rgzgjl (3) Where a chejue is crossed generally, the holder may ' cross it specially.

[S- 125, (4) Where a cheque is crossed generally or specially, the para. 3} '-' , "

holder may add the words not negotiable .

E:-$23,] (5) Where a cheque is crossed specially, the banker to whom it is crossed may again cross it specially to another banker, his agent, for collection.

[New] (6) Where an uncrossed cheque, or a cheque crossed generally, is sent to a banker for collection, he may cross it specially to himself. ' Scerco-siglrfé A crossing authorised by this Act is a material part of a nrntatefrial the cheque; it shall not be lawful for any person to obliterate, Eﬁeqﬁg' or, except as authorised by this Act, to add to or alter, the [New] crossing'.

1. See sec. 76 (2), B.E.A. ""

2. 5.»; sec. 77(1), B.E.A.

3. S:: sec. 77 (6). B.E.A.

4. See sec. 78, B.E.A. 127 (1) Where a cheque is crossed generally, the banker on §,:°§n1l:[7l£:Of whom it is drawn shall not pay it otherwise than to a banker. achggie CFOS generally or specia-

(2) Where a cheque is crossed specially, the banker on E15526] whom it is drawn shall not pay it otherwise than to the banker to whom it is crossed, or his agent, being a banker, ' for collection. -

Where a cheque is crossed specially to more than one sec_14s, banker, except when crossed to an agent for collection, being afiiiggl a banker', the banker on whom it is drawn shall refuse pay- \ _ ment thereof. , [S- 127] Where the banker on whom a cheque is drawn which is sgc,'1519, crossed generally, pays the same otherwise than to a banker, ';}a,§_",','g,k,, or pays a cheque crossed specially' otherwise than to the gfgslgfd -1 banker to whom it is so crossed, or his agent for collection, <=heque§ being a banker, he is liable to the true owner of the cheque for any loss he may sustain owing to the cheque having been }'sa_nf§;;

so paid: "'°d'ﬁ°d] Provided that where a cheque is presented for payment [s. 89, part] which does not at the time of presentment appear to be cros- ' sed, or to have had a crossing which has been obliterated, added to or altered otherwise than as authorised by this Act, the banker paying the cheque in good faith and without' negligence shall not be responsible or incur any liability, nor shall the' payment be questioned, by reason of the cheque ' having been crossed, or of thecrossing having been obliterat-- ' ed or having been added to or altered otherwise than as authorised by this Act, and' of payment having been made otherwise than to a banker or to the banker to whom the « cheque is or was crossed» or to his agent for collection, being "7 a banker, as the case' may be'. ' * '

1. See sec. 79 (1), B.B.A.

2. Cf. sec. 79 (2) proviso, B.E.A. Sec. 150 Protection to banker and drawer where cheque is crossed.

[S. 128.

mod.ﬁed] Sec. 151.

Cheque bearing ' v. ords "not negotiable".

[S. 130] Sec. 152.

Protection to collecting banker.

[S. 131] Sec. 153.

Protection to banker crediting cheque crossed " account ' payee".

[New] , ment a 128 .

Where the banker, on whom a crossed chequ'e is drawn, in good faith and without negligence pays it, if crossed genah rally,- toa banker, and if crossed specially, to the banker to whom it is crossed, or his agent for collection. being a banker', the banker paying the cheque, and, if the cheque has come to the hands of the payee, the drawer thereof, shall respectively be entitled to the same rights and be placed in the same position in all respects as if payment of the cheque had been made to the true owner thereof.

Where a person takes a cheque crossed generally or spe- cially, bearing in either case the words "not negotiable", he shall not have, and shall not be capable of giving, a better title to the cheque than that which the person from whom he took it had.

Subject to the provisions of this Act relating to cheques cro.s'sed "account payee", where a banker in good faith and without negligence receives payment for a customer of a cheque crossed generally or specially to himself, and the customer has to title or a defective title thereto?, the banker shall not cheque by reason only of having received such payment.

Explanation:

A banker receives payment of a crossed cheque for a customer within the meaning of this section notwithstanding that he credits his customer's account with the amount of the cheque before receiving payment thereof.

Where a cheque is delivered for collection to a banked' which does not at the time of such delivery appear to be crossed "account payee" or to have had a crossing -"account payee" which has been obliterated or altered, the banker, in good faith and without negligence of the cheque and crediting the proceeds thereof to a customer, shall not incur any liability by reason of the cheque having been crossed "account payee", or. of

1. See sec. 80, B.E.A

2. See sec. 32 B.E.A..

incur' any liability to the true owner of the y collecting pay- ..

129

"such crossing having been obliterated or altered, and of the proceeds of the cheque having been credited to a person who is not the payee thereof.

A' cheque, of itself, does not operate as an assignment of Sec. ﬁt. eq . . . C any part of the funds to the credit of the drawer Wlth the not operating banker' as assign-

- - ment of funds.

[New] (1) Where a cheque is not presented for payment within Sec. 151 a reasonable time of its issue, and the drawer or person on When whose account it is drawn had the right, at the time when §'3'E"$','ﬁ, presentment ought to have been made, as between himself gflfffﬂtaegﬂ, and" the banker, to have the cheque paid and suffers actual ffgggid damage through the delay, he is discharged to the extent of [S 84(1)] such damage, that is to say, to the extent to which such drawer or person is a creditor of the banker' to a larger amount than he would have been if such cheque had been paid.

nun can ... ,, (2) The holder of a cheque as to which such drawer or [5- 34(3)! person is so discharged shall be a creditor, in lieu of such- drawer or person, of such banker to the extent of such dis- charge and entitled to recover the amount from him.

Where any draft, that is, an order to pay money, drawn Sec. 156. by one oiﬁce of a bank upon another oﬂice of the same bank ['§_";f§f,;, 'for a sum of money payable to order on demand, purports 'to be gindorsed by or on behalf of the payee, the bank is.dis- charged by payment in due course.

The provisions of this Chapter shall. apply to any draft, i°°-h!57t-. . , . C3 I013 as defined in section 156. as if the draft were a cheque. otflpgnis

- . t fo3'.3a°n's.

ES. 131A]

1. er. s. 53(1). read with para. 2 of s:/3, B.E.A:--4"

PART V MISCELLANEOUS sec. 158. The Negotiable Instruments Act. 1881. is hereby re-

f§Pa°:;" vealed.

APPENDIX II TABLE A Showing the provisions in the existing Act and the corresponding provisions, if any, in Appendix I. Existing provision Correspongling provision, if any ,. ' in Appendix I 1 2 Section 1 Sections 1 and 2 ' Section 2 (Repealed) . .

Section 3 Section 4 (5).

Section 4 Section 4 (29) Section 5, para. 1 Section 4 (7) (ii) Section para. 2 Section 13 (b) Section para. 3 Section 13 (a) Section para. 4 Section 13 (d) Section 6 Section 4 (8) Section 7, para. 1 Section 4 (10) Section para. 2 Section 4 (l 1) Section para. 3 Section 4 (1) Section para. 4 Section 4 (2) Section para. 5 Section 4 (27) Section 8 Section 4 (12) Section 9 Section 4 (13) Section 10 Section 4 (28) Section 11 1 Section 4 (15) Section 12 f ,4 Section 4 (23) Section 13(1), main para. Section Expln. (i) Section 4 (I8) Expln. (ii) section 4 (17) Expln. (iii) Section 18 Section 13 (2) Section 2 5 Section 14 Section 4(24) Section 15 Section 4 (14), part Section 16 (1), part Section 34 Section 16 (1) ,, Section 4 (14), part Section 16 (2) Section 35 Section 17 Section 24 Section 18 ' Section 23 Section 19, part Section 14 (b) ' Section 19, part Section 14 (c) Section 20 Section 20 Section 2-], earlier half s t' 16 & s. 4 4 , Section 21, latter half ec Ion ( ) pan Section 14 & s. 4 (4), art Section 22, para. 1 Section 4 (22) p Section 22, para. 2 Section 29 (l) Section 23 Section 29 (2) Section 24 . Section 29 (3) Section 25 Section 29 (4) Section 26, para. 1 Section 5 Section 26, para. 2 Section 6 Section 26, para. 3 -Section 7 Section 27 Section 8 132 Section 28, earlier part Section 28, latter part Section 29 Section 30, part Section 30, part Section 31 Section 32, part Section 32, part Section 32, part Section 33 Section 34 Section 35, para.

Section 35, para.

Section 36 Section 37, part 'Section 37, part Section 38, part Section 38, part Section 39 Section 40 Section 41 Section 42 Section 43, para.

Section Section Exc. I Section Exc. II Section 44, para.

1, part 1, part 2 1, earlier half para. 1 latter half 1 Section 44, Expln.

Section 45 Section 45A Section 46, para.

Section 46, para.

Section 46, para Section 46, para.

Section 47, main Section 47, Exc.

Section 48 Section 49 1 2 4 5 part Section 50, earlier half Section 50, latter half Section 51 Section 52, para.

'Section 52, para.

Section 52, para.

Section 53 'Section 54 Section 55 Section 56 Section 57 Section 58 lpart 1 2 Section 59, main para.

Section 59, proviso Section 60 Section 61, para.

Section 61, para.

1, part 1 part Section 61, para. 2 Section 61, para.

Section 61, para.

Section 62 3, part 3 part 4 Section 66 (1) Section 66 (2) Section 67 Section 56(1) Section 57 (l) Section 57 (2) Section 56 (3) Section 58 Section 61, part Section 113 Section 115 Section 59 Section 61, part Section 14 (d) Section 63 .

Section 60 (1) & (2) Section 61, part Section 60 (3) Section 61, part Section 62 Section Section 56 (4) Section 116 Section 10 (a) Section 10 (b) Section 64 (3) Section 65 Section 11 Section 22 Section 12 Section 53 Section 21 ( 1) c 1011 21 (3) Section 30 (a), part Section 30 (b), part Section 30(a), part Section 42 Section 30 (b), part Section 36 Section 45 Section 39 Section 31 Section 40 Section 41 (1) Section 41 (2) Section 51 (1) Section 37 Section 38 Section 32 Section 43 Section 28 Section 49 Section 50 Section 46 Section 119 Section 120 (1) (3.), part Omitted [see sec. 120 (3) (d\] Section 120(1) (1)) (1') Section 120 (3)(b) Section 121 Section 140 133 "C;

1 2 Section 63 Section 114 (1) Section 64, para. 1 part Section 79 (2) Section 64, para. 1 part . Section 69 (1), main para. Section 64, para. 1, part Section 79(1) Section 64, para. 1 , Section 73 (2) Section 64, para. 1 part Section 73 (3), part Section 64, para. 2 Section 74 (1) Section 64, Exception~.--_------------d"*Section 69 (1), Exception Section 65 Section 73 (5) .

Section 66 Section 73 (4) (i) Section 67, earlier part Section 73 (4) (iii) Section 67 latter par mitted Section 68 Section 73 (6) (i), part Section 69 Section 73 (6) (i), part Section 70 Section 73 (6) (iii) Section 71, part-(-----T.__?j_Section 73 (6) (iv), main para.

Section 71, part,____..____._.------ Section 120 (1) (b) (iv) Section 72 Section 73 (4) (iv) Section 73 Section 73 (4) (v) Section 74 Section 73 (4) (ii) Section 75, part ection 73 (3), part Section 75, part ,/\------------'--~----+Section 120 (1) (a), part Section 75, part Section 120 (1) (a), part Section 75A, part Section 73 (7) Section 75A, part Section 120 (2) Section 76 (a), para. 1 Section 75 (a) Section 76 (a), para. 2 Section 75 (b) Section 76 (a), para. 3 Section 75 (c) Section 76 (a), para. 4 Section 75 (d) Section 76 (b) Section 75 (e) Section 76 (c) Section 75 (f) Section 76 (d wtion 75 (g) Section 77 Section 126 Section 78 Section 76 (1) Section 79 Section 82 (a) Section 80, para. 1 Section 82 (b) Section 80, Expln Omitted Section 81 Section 77 Section 82 (a) Section 78 (1) (a) Section 82 (b) Section 78 (1) (b) 'Section 82 (c) Section 76 (2) Section 83 Section 114 (2) Section 84 (1) Section 155 (1) 'Section 84 ( mitted Section 84 (3) Section 155 (2) Section 85 (1) Section 141 (1) Section 85 ( tion 141 (2) Section 85A _ Section 156 Section 86, rnain para.--part Section 80 Section main para. part Section 123, Exp]. (e)' Section Expln. Section 123, Expl. (a) to (d) Section 87, para. 1 Section 81 (1) Section para. 2 Section 81 (2) Section para. 3 Section 81 (3) Section 88 Section 81 (4) Section 89, part Section 76 (5) Section Part . Section 149, proviso Section 90 Section 78 (1) (c) Section 91', para. 1, part Section 122 (1) (a) Section 91. Daft 1. D811 Section 122 (1) (b) Section, 91, para. 2 Section 122 (1) (c) Section 92 _ Section 84 134 1 2 Section 93, para. 1, part Section 70 (1), 125 (1) Section para. 1, part Section 85, opening Ii-nes Section para. 1, part Section 125 (1) Section para 1, part Section 85 (a) Section 93, para. 2 ' Section 70 (2) S ' . , pa tion 86 Section para. 1, part Section 87 (1) Section para 2. Section 88 Section 95 Section 89 Section 96 Section 87 (2) Section 97 Section 90 Section 98 Section 91 Section 99 Section 92 Section 100, para. 1 ,1 Section 93 (1) Section 100, para. 2 Section 93 (2) Section 101 Section 94 Section 102 Section 95 ' Section 103 . Section 96 Section 10;'; Section 71 Section 1MA Smtion 97 Section 105 Section 98 Section 106, para. 1 Section 99 (1) Section 106, para. 2 mtion 99 (2) ' "wrr Qertinn 100 Section 108 Section 130 Section 109 Section 131 Section 110 Section 132 Section 111. Dafa- 1 Section 133, main para. Section Para. 2 Section 133, proviso (a) Section 112 Section 133, proviso (b) Section 113 Section 134 Section 114 Section 136 (2) Section 115 Section 128 Section 116 Section 129 Section 117 (d) ' Section 101 (1) (a) Section 117 (b) Section 101 (1) (J), part Section 117 (6) Section 101 (1) (c) Section 117 (d) Section 101 (1) (d), part Section 117 (e), earlier half Section 101 (2) Section 117 (e), latter half Section 101 (3) Section 118 Section 102 S . "9 S . 1"

Section 120 Section 105 Section 121 Section 106 Section'122 Section 107 Section 123 ' Section 143 (1) Section 124 Section 143 (2) Section 125, para. 1 Section 145 (2) Section para. 2 Section 145 (3) Section para. 3 Section 145 (4) Section para. tion 145 (5) Section 126 Section 147 Section 127 Section 148 Section 128 Section 150 Section 129 Section 149, main para. Seet~ion----}3f'r 5ectioﬁ'15-!-- Section 131 Section 152 Section 131A Section 157 Section 132 Section 138 Section 133 Section 139 Section 134, part Section 108 (a), main pltl.

' 135 Section 134, part Section 135, part Section part

- Section 136 Secttion 137 Section 138 (repealed) Section 139 (repealed) Section 108 (b) (1') Section 108 (b) (iv) Section 108 (b) (v) _ Section 108 (a) pI'0VlSO (i) Section 109 APPENDIX H TABLE B Showing the provisions in Appendix 1 to the proposals and the corresponding provisions, 1' f any, in the existing Act, the Bills of Exchange Act, 1882, and the Uniform Negotiable Instruments Law.

Appendix I Existing Act B. E. Act N.I.L. 1 2 3 _ 4 S. l ..

S. 2 S. 1, para. 2, part S. 3 .----------\ -_-New .. ..

S. 4 (I) S. 7, para. 3 S. 17 (1) S. 132 S. 4 (2) S. 7, para. 4 S. 65 (1) S. 161 S. 4 (3) New S. 28 (1) S. 29 S. 4 (4) S. 21 S. 10 (1) (a) S. 7 (1) S. 4 (5) S. 3 S. 2 S. 191, part S. 4 (6) New S. 2 S. 19], part S. 4 (7) (i) New S. 2 S. 191, part S. 4 (7) (ii) S. 5, para. 1 S. 3 (1) S. 126 S. 4 (8) S. 6 S. 73 S. 185 S. 4 (9) New S. 2 S. 191, part S. 4 (10) S. 7, para. 1 .. ..

S. 4 (11) S. 7, para. 2 S. 15 S. 131 S. 4 (12) S. 8 S. 2 S. 191, part S. 4 (13) S. 9 S. 29 S. 52 S. 4 (14) S. 15 and S. 32 (1) S. 31 S. 16 (1), part S. 4 (15) S. 11 & 12 S. 4 (1) S. 129 S. 4 (16) New . . . .

S. 4 (17) S. 13 (I), Expln. S. 8 (3) S. 9

(ii) S. 4 (18) S. 13( (1), Expln. S. 8 (4) S. 8

i) S. 4 (19) New S. 2 S. 191 S. 4 (20) New .. ..

S. 4 (21) New S. 64 (2) S. 125 S. 4 (22) S. 22, para. 1 .. ' ..

S. 4 (23) S. 13 (1) main para.

S. 4 (24) S. 14 S. 31 (1) S. 30 S. 4 (25) New ..

S. 4 (26) New S. 4 (27) S. 7, para. 5 .. . ..

S. 4 (28) S. 10 S. 59 (1), para. 2 S. 88 S. 4 (29) S. 4 S. 83 (1) S. 194 S. 4 (30) New .. ..

S. 5 S. 26, para. 1 S. 22 (1), para. .. S. 6 S. 26, para. 2 S. 22 (2) S. 22, part S. 7 S. 26, para. 3 S. 22 (1), proviso S. 22, part S. 8 S. 27 .. S 19.

S. New S. 23 (2) .

S. 10 (1) S. 43, para. 1 .. S. 28.

earlier half S. 10 (2) S. 43, para. 1 latter half 136 137 1 ' 2 3 4 S. 11 S. 44, para. 1 .. .

S. 12 S. 45 , - . . .

S. 13 (a) S. 5, para. 3 S. 9 (1) S. 2 S. 13 (b) S. 5, para. 2 . ..

S. 13 (c) New S. 3 (3) S. 3 S. 13 (d) S. 5, para. 4 ' S. 7 (1) S. 8 S. 13 (e) New S. 7 (3) _ S. 9 (3) S. 14 (a) S. h211,f earlier S. 10 (1) (a) S. 7 (1) a S. 14 (b) S. 19, part S. 10 (1) (b) S. 7 (2) S. 14 (c) S. 19, part .. .. _ S. 14 (d) S. 35, para. 2 S. 10 (2) S. 7, last para.- S. 15 New S. 36 (3) ..

S. 16 S. 21, latter half S. 10 (1) (a) S. 7 (1) S. 17 New . S. 11 S. 4 S. 18 S. 13 (1) expln. S. 8 (5) ..

(iii) ' S. 19 New S. 13 (2) S. 12 S. 20 S. 20 S. 20 S. 14 S. 21 (1) S. 46 para. 1 S. 21 (1) S. 16, part s. 21 (2) s. 46, para. 2 s. 21 (2) (a) s. 16, part S. 21 (3) S. 46, para. 3 S. 21 (2) (b) V S. 16, part S. 22 . S. 44, Expln. .. ..

s. 23 s. 18 s. 9 (2) s. 17(1) S. 24 S. 17 S. 5 (2) S. 17 (5) and ' S. 130 V S. 25 S. 13(2) S. 7 (2) S. 86(4) and . 8 ' S. 26 New S. 23 (1) S. 18, latter hall"

S. 27 New S. 24 S. 23 S. 28 S. 58 S. 29 (2), S. 55 and S. 38 (2), and S. 57 S. 38 (3) S. 29(1) S. 22, para 2 S. 14(1), part, S. 85, earlier part S. 29(2) S. 23 S. 14 (4) . .

S. 29(3) S. 24 S. 14 (2) and S. 86 ' 14(3) S. 29 (4) S. 25 S. 14 (1) (a) and.' S. 85, later part. (b S. 30 (a) S. 46, para. 4 S. 31 (2) S. 30, part and S. 47 main, part S. 30 (b) S. 46, para. 5 S. 31 (3), part S. 30, part and S. 48 S. 31 S. 51 S. 31 (3), part and S. 30, part and' , s. 32(3) s. 41 S. 32 S. 56 S. 32 (2) S. 32 S.' 33' New S. 32 (6) S. 33 S. 34 S. 16 (1), part S. 34 (1), part S. 34 p and 34 (2) S. 35 S. 16 (2) . .

S. 36 S. 49 S. 34 (4) S. 35 S. 37 S. 54 S. 34]f(l), latter S. 9 (5) ha S. 38 S. 55 S. 40, latter half S. 39 S. 50, latter half S. 35 S. 36 & S. 37 ' S. 40 S. 52, para. 1, ' S. 33 S. 39, earlier, part half S. 41 (1) S. 52, para 1, S. 16 (1) S. 38 , part ' S. 41 (2) S. 52, para. 2 ..

'138 1 2 3 4 S. 42 S. 47, exception S. 43 S. 57 . . . .

S. 44 New S. 37, part S. 50, part S. 45 S. 50, earlier, . . . .

half S. 46 S. 60 S. 36(1) S. 47

(a) and (/2);

S. 47 New S. 38, part S. 51, part S. 48 New S. 37, part S. 50, part S. 49 ' S. 59, main para. S. 36 (2) and S. 52 (2) 36(5) S. 50 S. 59, proviso . . . .

S. 51 (1) S. 53 S. 29 (3) S. 57, latter half S. 51 (2) New S. 38 (3) . .

S. 52 New S. 38 (2) S. 57, earlier half S. 53 S. 45A S. 69 .S. 54 New S. 55 New S. 56 S. 63 S. 56(1) S. 30, part S. 55 (1) S. 61 ' (2) New S. 53 (1) (3) S. 32, part S. 55 (2) S. 62 (4) S. 41 . .

S. 57(1) S. 30, part S. 73, para. 2 and S. 61 read with . S. 55(1) S. 185 S. 57(2) S. 31 S. 74 S. 58 S. 32, part S. 88 (1) S. 60 S. 59 S. 35, para. 1, S. 55 (2) S. 66, last para part S. 60 (1) & (2) S. 37, part 3 S. 38, part S. 61 . , S. 35, para. 1, part S. 37, part S. 38, part S. 6 S. 63 S. 36 S. 64(1) New S. 28 (9) S. 29 S. 64(2) New S. 64(3) S. 43, Exc. I S. 121 (2) S. 65 S. 43, Exc. II S. 28 S. 66 (1) S. 28, earlier part S. 26(1) S. 69, 20, part (2) S. 28, latter part S. 67 S. 29 S. 26 (1), part S. 20, part S. 68 New S. 58 S. 65, part S. 69 (1) S. 64, para. 1 part S. 45, 1st line S. 70, part main para.

S. 69(1) Exc. S. 64, Exc. S. 87 ' S. 70, part S. 69(2) New S. 70 (1) S. 93, para, 1 part S. 48, part S. 89, part (2) S. 93, para. 2 S. 48, part S. 89, part S. 71 S. 104 S. 51 (2) S. 152 S. 72 New S. 73(1) New (2) S 64, para 1, S. 45 (3) part S. 72(1) rt (3) S 64, para. 1, S. 45 (3), part S. 72 (4), gagtsan and S. 45 (6) and S. 78 S. 73 (4) (i) S. 66 S. 45 (1) S. 71, earlier half (4) (ii) S. 74 S. 45 (2) S. 71, latter half, part.

139

1 2 3 4 S. 73 (4) (iii) S. 67, earlier part (4) (iv) S. 72 S. 74 (1) S. 186 (4) (v) S. 73 S. 45 (2) read S. 71, latter half, I w1th S. 73 part (5) . S. 65 S. 45 (3), S. 72 (2) (6) (1) S. 68 & S. 69 S. 45 (4) (a) S. 73 (1) (6) (z_Q New S. 45 (4) (b) S. 73 (2) (6) (qt) S. 70 S. 45 (4) (c) S. 73 (3) Egg g;)pln NWS. 71, part S 45 (4) (J) S. 73 (4) ( s. 75A, part s. 46(1) s. 81 ' S. 74 (1) S. 64, para. 2 S. 45 (8) and S. 74, part (2) New S. 52 (4), part S. 75 Cl. (a) S. 76 (a), para. 1

(b) S. 76 (a), para 2 76 (a), para. 3 s. 46(5)

(d) S. 76 (a), para. 4

(e) S. 76 (b) S. 46 (2) (6'). part S. 82 (3.). part (D s. 76 (c) s. 46 (2) (c). part s. 82 (3). part

(g) S. 76 (d) ([1) . New S. 46 (2) (b) S. 82 (2) (a_) New s. 46 (2) (d) s. so (1) ~ New S. 46 (2) (a), S. 82 (1) para. 1

(k) _ New Explanation New S. 546 (2) (0), para S. 76 (1) S. 78 S. 59 (1), part S. 119 (1), part (2) S. 82 (c) S. 59 (1). part S. 119(1), part (3) New S. 59(3) S. 119(2) (4) New S 59(2) S. 121 (5) S. 89, part S. 64'(1), pro--

s 77 s 81 s 33(4) 7 . . . , part S. 4. part S. 78 (1) (a) S. 82 (a) S. 64 S. 119 (3) (1) (b) S. 82 (b) S 62 S. 122

(c) N S. S. 61 d (6) ew . an 3 S. 40 S 79 (1) S. 64, para 1 S. 45 & S. 70, part part. S. 87 (2) (2) S. 64, para. 1, S. 87 (1) S. 70, part part, read With Exc.

S. 80 S. 86, main para. S. 44(2) S. 142, part part.

S. 81 (1) S. 87, para. 1 S. 64 (1), S. 124, part mam para , (2) S. 87, para. 2 ' (3) S. 87, para. 3 (4) S. 88 S. 64(1), main S. 124, part para., part S. 82 (a) S. 79 S. 9(3) S. 17 (2)

(b) S. 80, para. 1 S. 83 New S. 84 S. 92 S. 47 (1) S. 83 S. 85, opening lines S. 93, para. 1, S. 48, para 1, S. 89, part part. part.

Cl. (a) S. 93, para. 1, S. 48, para. 1. S. 89, part Part D811 50 M. of Law-19 140 S. 1 S. 101 (1) (a) S. 101 ((11) (b) V) 1- 0 I0 103 104 105 106 S. 107 S. 108 C1. (a), main para.

8. Eng, prov.

. a, rov. 11 c1. 1; (5 S. 107 S. 117 (a) N ew S. 117 (c) S. 117 (b) and (:1) New S. 117 (e), earlier h If a S. 117 (e), latter half S. 118 S. 119 New S. 120 S. 121 S. 122 S. 134, part S. 136 New S. 134, part New New S. 135, part ' S. 135, part New S. 137 New New s. 13 (ii; 30(1), 30 (2), 32 (5) and 36 (4) S. 54 (2) S. 54 (2) (a) S. 54 (2) (c), S. 55 (1) (b), and 88 (2) S. 55 (2) (b) S. 72(1) S. 72 prov. (a) s. 72 (33; part s. 72 (5) s. 72 (3'i' part s. 72 (4) s. 6(2)".

1 2 3 4 C]. (b) S 94, para 1, S. 49 (8), (9) and S. 97, part part. (10). S. 98 and S. 101.

S. 86 S 94, para 1, S. 49 (5) S. 96 part S. 87 (1) S. 94, para. 1, part S. 49 (12) S. 102 (2 S. 96 S. 49 (13) S. 94, part S. 88 S. 94 para. 2 S. 49 (15) S. 105 S. 89 S. 95 S. 90 S. 97 S. 91 S. 98 S. 50 (2) S. 109, S. 112

- _ S. 114 & S. 115 S. 92 S. 99 S. 51 (1) and S. 54 (4) S. 93(1) S. 100, para. 1 S. 51 (2) S. 152 & S. 154 (2) S. 100, para. 2 S. 51 (5) S. 159 S. 94 S. 101 S. 51 (7) S. 153 S. 95 S. 102 S. 96 S. 103 S. 51 (6) (b) S. 156, part S. 97 S. 104A S. 93 S. 15% latter hal .

S. 98 S. 105 S. 45 (2) S. 193 latter half, _ S. 74(2) and S. 86 (2).

S. 99 (1) S. 106, para. 1 S. 49 (12) (b) S. 104 and S. 103 (3) (2) S. 106, para. 2 S. 49 (12) (a) S. 103 (1) «~--~»-~~ '$1 and (2) s. 11, s'."24 and 45 s. 62(1)."

s. 62 (2) S. 66, read with S. 65 s. 128 141 1 2 3 4 S. 112 1 New S. 5 (1) S. 8 (2) and 8(3) s. 113 s. 33 _ S. 114(1) S. 63 S. 42, earlier, half S. 136 (2) S. 83 S. 42, latter half S. 115 S. 34 S. 116 S. 42 S. 117 New S. 118 New S. 119 S. 61, para. 1, S. 40 S. 143 (1) and part 144. .

S. 120 (1) (a) S. 61, para. 1, S. 41 (1) (a) (c) S. 145, opening part & S. 75, and (d) lmes & (2) part & (3).

S. 120 (1) (b) (i) S. 61, para. 3, part S. 120 (1) (b) (ii) New S. 120 (1) (b) (iii) New S. 120(1) (b) (iv) S. 71 part .S. 120 (1) (c) ew S. 41 (1) (b) S. 145 (1) S. 120(2) S. 75A part S. 120 (3) (a) ew S 41 (2 )(a) S. 148 (1), part 'S. 120 (3) (b) S. 61, para 3, S. 148 (1), part part ' S. 120 (3) (c) New S. 39 (4) S. 120(3) (d) New S. 41 (2) (b) S. 148 (2) 'S. 120 (3) (e) New S. 41 (2) (c) S. 148 (3) S. 120 (4) New S. 41 (3) S. 121 S. 61, para 4 S. 41 (1) (e) s. 122 (1) (a) s. 91, para 1, s. 43 (1) (a) s. 149(1) part (1) (b) S 91, para 1, S. 43 (1) (b) S. 149 (2) part (1) (c) S. 91, para 2 2 New S. 43 (2) ~ S. 151 'S. 123, main para. New S. 44 (1) S. 142, earlier part Expln. C]. (a) to (d) S. 86, Exp]. S. 141 (1) to (4) Expln. C]. (e) S. 86, mam para. S. 141 (5) part S. 124 New S. 52(2) .S. 125 (1) S. 93, para 1, S. 48, part S. 89, part part 'S. 125 (2) New S. 48, part S. 89, part S. 126 S. 77 ...

S. 127 New S. 128 S 115 S. 131, last sentence.

S. 129 S. 116 S. 67 (1) S. 130 S. 108 S. 65 (1) S. 161 S. 131 S. 109 S. 65 (3) S. 162 S. 132 S. 110 S. 65 (4) S. 163 S. 133 main para. S. 111, para. 1 S. 66 S. 164 prov. (a) S. 111, para. 2 S. 67(2) S. part and prov. (b) S. 112 S. 67 (1) S. 167 'S. 134 S. 113 S. 68 (1) (3) S. 171 to 173 and (4) 'S. 135 New S. 68 (2) S. 174 S. 136(1) New S. 68 (6) S. 177 s. 136(2) s. 114 s. 68(5) s. 175, latter half S. 137 New S. 65 (5) S. 166 142 1 2 3 4 S. 138 S. 132 S. 71 (1) S. 178 71 (2) S. 180 71 (4) S. 181 71 (6) S. 183 S. 139 S. 133 S. 71 (3) S. 179 S. 140 S. 62 S. 40(1) read with S. 89 S. 141 (1) S. 85 (1) -S. 60 read with S. 73, para. 2 (2) S. 85 (2) S. 142 New S. 75 S. 143(1) S. 123 S. 76(1) (2) S. 124 S. 76 (2) .

S. 144 New .

S. 145 (1) New S. 77 (1) .

(2) S. 125, para. 1 \ S. 7] (2) .

(3) S. 125, para. 2 S. /7 (3) .

(4) S. 125, para. 3 S. 77 (4) .

E5) S. 125, para. 4 S. 77 (5) .

S. 146 ,_j.r_,-.Alc.w+___?S. 78 . S. 147 S. 126 S. 148 S. 127 S. 79 (1) S. 149 main para S. 129 S. 79 (2), main para.

proviso S. 89, part S. 79 (2), proviso .. S. 150 S. 128 S. 80 S. 151 S. 130 S. 81 ..

S. 152 S. 131 S. 82 ..

S. 153 New .

S. 154 New S. 53 (1) read . .

with S. 73, para. 2 S. 155(1) S 84(1) S 74(1) (2) S 84 (3) S. 74 (3) ..

S. 156 S. 85A .. ..

S. 157 S. 131 A ..

S. 158 Ne ..

APPENDIX II TABLE C Showing the contents of the sections in Appendix I with the corresponding section in the existing Act Ysoction Corresponding sectia 1] Appendix I Contents in existing Act PART I-----GENERAL CHAPTER I--PRELIMINARY

-'Section 1 Short title, extent and commencement Section 2 Saving_ . . . ._ ._ . . S. 1. para. 2, part. Section 3 Operation of the Act on negotiable instruments New Section 4 Deﬁnitions----

, (1) Acceptor . S. 7, para. 3.

(2) Acceptor for honour S. 7, para. 4. (3) Accommodation party . . New (4) " At sight" " on presentment", "after ' sight ". . . . S. 21 (5) Banker . S. 3, ampliﬁed (6) Bearer . . New (7) (i) Bill . . . . New

(ii) Bill of exchange . . S. 5, para 1 (8) Cheque . , S. (9) Delivery . . . New (10) " Drawer " and " drawee " S. 7, para. 1. (11) " Drawee in case of need " S. 7, para. 2. (12) " Holder " . . S. 8.

Explanation . New (13) " Holder in due course " . . . S. 9. (14) " Indorsemen " " indorser " and " indor- see " . . . . . . S. 15 S. 16 (1), part.

(15) " Inland instrument " and "Foreign instrument " . . . . . . S.S. 11 and 12. (16) " Instrument " . . . New (17) " Instrument payable to bearer " S. 13 (1), Exp1n.(ii') (18) Instrument payable to order . S. 13 (i), Expln. (I) (19) " Issue " . . . . New (20) " Maker_" . . . New , (21) " Material alteration" . . New (22) " Maturity " . . . . S. 22, para. 1 (23) " Negotiable instrument " . . S. 13 (1) main para. (24) " Negotiation " . . s, 14 (25) " Notary " . New (26) " Note " . New (27) " Payee " . . . . S. 7, para 5.

(28) " Payment in due course" S. 10 (29) " Promissory Note " S. 4.

(30) " Representative " New 143 144 CHAPTER 11 FORM AND INTERPRETATION 1 2 3 Section 5 Applicability of the Contract Act . . Sh2g, para 1, modi- e .

Section 6 Incapacity of minor . . / . . ' . S. 26, para, 2 modiﬁed; Section 7 Corporation's power . . . . . S. 26, para. 3 Section 8 Agent's authority . . . . . S. 27 Section 9 Authority of partners . . . . New Section 10 Instrument made without consideration . (1) S. 43, para. 1 earlier half.

(2) S. 43, para. 1 _ latter half.

Section 11 . Partial absence or failure of money considera- tion. . . . . . - . . S. 44. para. 1.

Section 12 . Partial failure of consideration not consisting of money . . . . . S. 45 Section 13 . " Certain sum " " unconditional " "certain person " and ﬁctitous payee . . . (a) S. 5, para 3..

(b) s. 5, para 2.

(d) S. 5, para 4,

(e) New Section 14 . Instruments payable on demand . . (a) S. 21, ealier ham.

- (b) S. 19, part.

Section 15 . When instrument payable on demand overdue . New Section 16 . " After sight " . . . . . . S. 21, latter half. Section 17 . Instrument payable at a determinable future time . . . . . . . New Section 18 . Effect of drawing or indorsing instrument payable to order . . . . . S. 13 (I), Expl. (III).-

Section 19 . Effect of ante dating and post dating . . . New Section 20 . Inchoate instrument . . ' . . S. 20.

Section 21 . Negotiable instrument when complete . (1) S. 46, para. 1 (2) S. 46, para. 2..

_ . (3) S. 46, para. 3., Section 22 . Immediate parties . . . . . S. 44, Expln, Section 23 . Diﬁerence in ﬁgures and words . . . S. 18 Section 24 . Ambiguous instruments . . . . S. 17 Section 25 . Payees may be Joint . . . . S. 13 (2).

Section 26 . Signature in trade or assumed name . . New Section 27 .' Forged or unauthorised signature . . New ' Section 28 . Defective title . . . . . . S. 58, modiﬁed. Section 29 . Maturity how determined . . . . (1) S. 22, para. 2.

(2) S. 23 (3) S. 24 (4) S. 25 CHAPTER III NEGOTIATION Section 30 . Mode of negotiation . . . . . (a) S. 46, para. 4 andﬁ S. 47, main para.

(b) S. 46, para. 5 and . S. 48 145 2 3 Section 31 . Persons entitled to negotiate . . . S. 51 Section 32 . Requisites indorsement . . . S. 56 Section 33 . Kinds of indorsements . . . New Section 34 . Indorsement in blank and in full . . S. 16 (1') part.

Section 35 . Provision for payee to apply to indorsee S. 16 (2) Section 36 Conversion of indorsement in blank into in-

dorsement in full . . . . . S. 49 Section 37 . Instruments indoresed in b ank . S. 54 Section 38 . Indorsement in blank followed by indo . ment in full . . . . S. 55 Section 39 Restrictive indorsement . . S. 50, latter half modiﬁed.

Section 40 . Conditional indorsement . . . . S. 52, para. 1, part Section 41 . Qualiﬁed indorsement . . . . (1) S. 52, para. 1, part (2) S. 52, para. 2.

Section 42 Conditional delivery . . . . . S. 47, Exception} Section 43 . Negotiation by legal representatives . . S. 57 Section 44 . Negotiation back before maturity New Section 45 . Effect of negotiation . . . S. 50, earlier half modiﬁed.

Section 46 When negotiability ceases ' . . . . S. 60. CHAPTER IV RIGHTS OF HOLDER AND HOLDER IN DUE COURSE Section 47 . Right of holder . . . . . New Section 48 . Rights of holder of an instrument negotiated back to him . . . . . . New Section 49 . Instrument acquired after dishonour or when overdue . . . . . . . S. 59, main para. Section 50 . Accommodation note or bill . . . S. 59, Proviso. Section 51 . Holder claiming through holder in due OOUTSC 0 o 0 o - o a S. 53, modiﬁed.

(2) New Section 52 . Rights of holder in due course . . . New Section 53 . Holders right to duplicate of lost instrument S. 45A. CHAPTER V LIABILITY OF PARTIES Section 54 . Scope of chapter . . . . . New Section 55 . Stranger signing instrument presumed to be indorser . . . . . ._ . New Section 56 . Liability of drawer or acceptor of a bill of exchange . . . . . . (1) S. 30, part. modi- ﬂed.

(2) New (3) S. 32, part, modiﬁed (4) S. 4].

Section 57 Liability of drawer or drawee of cheque 3(1), part Section 58 Liability of a maker of a promissory note S. 32, part, modiﬁed. Section 59 Liability of indorser of any instrument S. ﬁgagga. 1, part 11''! 1 .

Section 60 . Extent of liability of parties . . . . '_'f " 5"' east (2) S. 37, part _ (3) S. 38, part Section 61 Provision for contract to the contrary S. 32, part S, 45 para. 1 . part S, 37, part, S. 38 . . . . Pa"-

Section 62 . Liability of surety . . . S. 39 Section 63 . Duration of liability . . S. 36 Section 64 . Liability of accommodation party and position of accommodated party . (1) New (2) New (3) S. 43 Exception Section 65 . Liability of party inducing another to make etc. an instrument . . . . S. 43 Exception II Section 66 . Liability of person signing as agent . . (1) S. 28, earlier part modiﬁed.

. (2) S. 28, later part.

Section 67 . Liability of legal representative . . S. 29 Section 68 . Transfer by delivery and transferee . . New Section 69 . Presentment . . . . .

(1) S. 64, para. 1, rt pa Exception S. 64 Exc.

modiﬁed.

_ _ _ (2) New Section 70 . Notice of dishonour for non-payment when obligatory . . . . . (1) S. 93, para. 1, part _ (2) S. 93, para. 2 Section 71 . Necessity for noting and protest . S. 104 CHAPTER VI PRESENTMENT FOR PAYMENTS Section 72 . Deﬁnition . . . . . . . New Section 73 . Rules governing presentment for payment . (1) New (2) S. 64 para. 1, part (3) S. 64, para. 1, part & S 75 (4) (1') S. 66

(ii) S. 74

(iii) S.67, earlier part

(iv) S. 72

(v) S. 73 (5) S. 65 (6) (i)_Ss.68--69.

modiﬁed.

(ii) New

(iii) S. 70

(iv) S. 71, part Explanation New _ _ _ ' (7) s. 75A part.

Section 74 . What constitutes valid presentment and the , mode of presentment. . . . . (1) S. 64 para. 2. modiﬁed.

. (2) New Section 75 . When presentment unnecessary . . S 76 (-a) Cl. (a) para. 1,

(b) C]. (a) para. 2.

Explanation New 147 .1 2 . 3 CHAPTER VII PAYMENT, DISCHARGE AND INTEREST Section 76 Discharge by payment (1) S. 78 modiﬁed. (2) S. 82(c) modiﬁed.

(3) New (4) New (5) S. 89, part Section 77 . Instrument tobedelivered on payment . S. 81 .Section 78 . Other modes of discharge (1) (a) S. 82 (a)

(b) S. 82(b)

(c) S. 90, modiﬁed (2) New (3) S. 40.' Section 79 . Discharge for non-presentment: (1) S. 64, para. 1, part. (2) S. 64, para. 1, part, read with excep-

_ _ tions.

'Section 80 Discharge of parties not consenting to quali- S. 86, main para. part. ﬁed or limited acceptance.

Section 81 Discharge by material alteration (nﬁga 87, para. 1, modi- (2) S. 87. Para. 2.

(3) S. 87, para. 3 ' _ (4) S. 88.

Section 82 . Interest when rate speciﬁed and not speci- (a) S. 79, modiﬁed ﬁed. (b) S. 80, para. 1, modi-

ﬂed.

CHAPTER VIII NOTICE OF DISHONOUR .Section 83 . Dishonour New Section 84 . Dishonour by non-payment S. 92. Section 85 . Notice of dishonour by whom and to whom S. 93, para. 1,part to begiven. (a) S. 93, para. 1, part.

(b) S. 94, para. 1, . . . . Daft-

Section 86 . Mgde _in which notice of dishonour should S. 94, para. 1, part c given.

'Section 87 Time and place of notice (1) S. 94, para. 1, part

2) S. 96.

Section 88 . Notice miscarried in post. (S, 94, para, 2_ Section 89 . Party receiving must transmit notice of dis- S. 95. honour.

Section90 When party to whom notice given is dead. S. 97 Section 91 When notice of dishonour is unhecessary S. 98. CHAPTER IX NOTING AND PROTEST Section 92 . Noting s, 99 Section 93 . Protest (1) s, 100, pm»; 1 _ (2) S. 100, para 2 Section 94 Contents of protest s, 101 Section 95 Notice of protest s_ 102 Section 96 Protest for non-payment after dishonour by S. 103 . non-acceptance. -

Section 97 When noting equivalent to protest ._ 148 1 2 3 CHAPTER X REASONABLE TIME Section 98 Reasonable time S. 105 5ection 99 Reasonable time for giving notice of disbonour (1) S. 106, para. 1 modiﬁed.

(2) S. 106, para. 2:

modiﬁed.

Section 100 Reasonable time for transmitting such notice. S. 107 CHAPTER XI COMPENSATION Section 101 Rule as to compensation (1) (a) S. ll7(a) b New

(c) S. ll7(c)

(d) S. 117 (b) nnd (d) modiﬁed.

(e) New (2) S. 117 (e), earlier half.

(3) S. 117 (e), latter' half.

CHAPTER XII SPECIAL RULES OF EVIDENCE Section 102 Presumptions as to negotiable instruments S. 118 Section 103 Presumption on proof of protest S. 119 Section 104 Estoppel against acceptor ew Section 105 Estoppel against denying original validity of S. 120 instrument.

Section 106 Estoppel against denying capacity of payee to S. 121 indorsee.

Section 107 Estoppel against denying signature or capacity S. 122 of prior party.

CHAPTER XIII CONFLICT OF LAWS Section 108 Law governing liability of maker, acceptor (fciz)dS. 134, part, modi- e Section 109 or indorser of a foreign instrument. ._ Prov1so--(t') S. 136.

(ii) New (0; (1') 5- mo Iiﬁed.

(ii) New

(iii) New 1:25» var' U') - 3 5111

(vi) New 154, part, S. 137.

Presumption as to foreign law -

/ 1'19 1 2 3 PART II BILLS OF EXCHANGE Section 110 Presentment New Section 111 Several drawees New . Section 112 In whose favour a bill may be drawn New Section 113 Only drawee can be acceptor except in case S. 33 of need or for honour.

Section 114 Time for deliberation by drawee S. S. Section 115 . Acceptance by several drawees not partners S. 34 Section 116 ' Acceptance of bill drawn in ﬁctitious name S. 42 Section 117 When presentment for acceptance is necessary New Section 118 Acceptance of overdue bill New Section 119 Time for presentment for acceptance of a bill S. 61, para. 1, part' payable after sight. modiﬁed.

Section 120 Rules as to presentment for acceptance and (1) (a) S. 61, part' excuses for non-presentment. I, 1, part, modiﬁed j and S. 75, part.

(b) (1') S. 61, para. 3,.

part.

(ii) New

(iii) New

(iv) S. 71, part

(b) S. 61, para. 3, part,_ modiﬁed.

(d) New

(e) New (4) New Section 121 Presentment by post S. 61, para. 4.

Section 122 Dishonour by non-acceptance and its conse- (1) (a) S. 91 para. 1', quences. pa .

(b) S. 91 para. 1, part.

S. 86, Ex 1.

Exp!n.--(e) S. 86,.

_ mam para. part.

Section 124 Non-presentment for payment in cases of New qualiﬁed acceptance when does not discharge the acceptor.

Section 125 Notice of dishonour for non-acceptance (1) S. 93, para. l,part modiﬁed.

(2) New Section 126 Liability of banker for negligently dealing with bill presented for payment. S. 77 Section 127 Mode of giving notice of dishonour New Section 128 Drawee in case of need S. 115 Section129 Acceptanoeand payment without protest S. 116 Section 130 Acceptance for honour S. 108 Section 131 How acceptance for honour must be made S. 109 Section 132 Acceptance not specifying for whose honour S. 110 it is made 150 I 2 3 Section 133 Liability of acceptor for honour S. 1l_l, para. 1. ' Prov1so---(0) S. 111, para. 2.

(b) S. 112.

'Section 134 Payment for honour S. 113.

'Section 135 Two or more persons offering to pay for honour New 'Section 136 Rights and duties of payer for honour 9)) gen' 2 .

"Section 13? Calculation of maturity in case of a bill ac- New cepted for honour.

Section 138 Set of bills 5. 132. Section 139 Holder of iirst acquired part entitled to all S. 133 PART III PROMISSORY NOTES 'Section 140 Presentment of promissory note for sight S. 62 PART IV ' CHEQUFS Section 141 Cheque payable to order or bearer (1) 5- 85 (1) (2) s. 85(2) Section 142 Revocation of banker's authority New (I) 3- 123 Section 143 General and special crossing deﬁned (2) 8. 12A Section -144 Cheque crossed "account payee". New 'Section 145 Crossing by drawer or after issue (I) New (2% s. 125, para. 1 (3 S. 125, para. 2 (4) S. 125, para. 3..

(S) S. 125. para. 4.

_ (6) New Section 146 Crossing a material part of a cheque New 'Section 147 Payment 9% a cheque crossed generally or S. 126 pec .

Section 148 Dutigs ofhliaiiker as to crossed cheques S. 127 , Section 149 Liability of a banker paying crossed cheques S. 129, modiﬁed otherwise than to a banker. Proviso----S. _89, part 'Section 150 Protection ego banker and drawer where cheque S. 128, modified, JS cross .

Section 151 Cheque bearing words "not negotiable". S. 130 Section 152 Protection to collecting banker S. 131 Section 153 Protection to banker crediting cheque cros- New sed "account payee".

Section 154 Cheque not operating as assignment of funds New Section 155 When cheque not dnlypresented and drawer (1) S. 84(1) damaged thereby. (2) S. 84(3) Section 156 Drafts. 8. 85A 'Section 157 Application of this'Chapter to drat'-ts. S. 131A PART V 'MISCELLANEOUS

-Section 'I58 'Repeal New ,_I.--

APPENDIX III SUGGESTIONS REGARDING OTHER AC1:

Evidence Act.

S. ll7~Omit---

(a) The words-

"No acceptor of a bill of exchange shall be remitted to deny that the 7drawer had'. authority to draw such bill or to endorse it. ""

(b) Explanation (1) [ Para. 164] 1.5 Is' APPENDIX IV ' COMMERCIAL BODIES &. ASSOCIATIONS WHOSE SUGGESTIONS WERE

- PARTICULARLY INVITED

1. The Secretary Ahmedabad Maskati Cloth Market Association, Maskati Closh Market, Railwaypura, Post Box No. 2, Ahmedabad. .2. The Secretary, Ahrnedabad Mill owners' Asson., Navrangpura. Post Box. No.7 Ahmedabad. _

3. The Secretary, All-India Food Preservers' Association, 93, Apollo Street, Bombay-1.

4. The Secretary, All-India Importers' Asson., Churchgate House_ Veer Nariman Road, Fort, Bombay.

5. The Secretary, All-India Sindwork Merchants Asson., 231, Hornby Road, (4th ﬂoor) Bombay.

6. The Secretary, All-India Starch Manufacturers Association, 12, Rampart Row Bombay.

'7. The Secretary, Andhra Chamber of Commerce, 272-273, Angappa Naick St. G. T. Madras.

8. The Secretary, Association of Merchants & Mfrs. of Textiles Stores & Machinery Sir Vlthaldas Chambers (Top Floor), 16, Apollo Street, Fort, Bombay.

' 9. The Secretary, Automotive Mfrs. Association of India, 'India Exchange', Calcutta--1

10. The Secretary, Bengal Glass Mfrs. Asson., P-ll, Mission Row Extension, Calcutta =11. The Secretary, Bengal National Chamber of Commerce & Industry, P-ll, Missio Row Extension, Calcutta.

12. The Secretary, Bengal Sugar Merchants' Association, 161/1, H arrison Road, Calcutta «[3. The Secretary, Bharat Chamber of Commerce, State Bank Building, (Burrabazar , Branch), Calcutta-7.

14. The Secretary, Bihar Chamber of Commerce, Judges' Court Road, Post Box No. 71, Patna-1.

'15. The Secretary, Bihar Industries Asson., Fraser Road, Post Box No. 7, Patna-l. '16. The Secretary, Bombay Bullion Association Ltd., Shaikh Memon Street, Bombay.

17. The Secretary, Bombay, Oilseeds & Oils Exchange Ltd., Jenabai Building, Musjid Bunder Road, Bombay.

18. The Secretary, Bombay Cotton Merchants and Muceadums Association, S/72-73 Cotton Exchange Bldg., Sewree, Post Box No. 15, Bombay.

19. The Secretary, Bombay Piece-Goods Merchants Mahajan, Mulji Jetha Market Halls ' Shaikh Memon Street, Bombay.

. The Secretary, Bombay Shroffs Asson., Ltd., 233, Shroﬁ' Bazar, Bombay. The Secretary, Bombay Sugar Merchants Association Ltd., 104-114, Frere Road Bombay-9.

The Secretary, Bombay Yarn Merchants' Asson., & Exchange Ltd., 111, Chawla Building, Tambakanata, Post Box No. 3, Bombay.

23. The Secretary, Calcutta Biri Tobacco Merchants Asson., 1, Bup Chand Roy Street, Calcutta-7.

. The Secretary, Calcutta Bullion Asson., 68, Cotton Street, Calcutta. The Secretary, Calcutta Jute Exchange Ltd., 5/1, Royal Exchange Place, Calcutta. The Secretary, Calcutta Wheat & Seeds' Asson., 149, Cotton Street, Calcutta.

27. The Secretary, Calcutta Kirana (Spices) Merchants' Asson., 29, Armenian Street Ca cutta.

:28. The Secretary, Cycle Manufacturers' Asson., of India, 'India Exchange', Calcutta-l. :29. The Secretary, Delhi "Chamber of Commerce, 'Dilbar Building' Deshbandhu Gupta Road, Paharganj, New Delhi-l.

E3338 835 152 .30.

31.

32.

33.

34.

35.

36.'

37.

38.

39. . The Secretary, Federation of Electricity Undertakings of India, Killick Bldg., Home

41. »42.

'43.

45. ~46.

v47.

48. '49.

.50.

54. .55.

56.

57.

58. 153 The Secretary, Delhi Factory Owners' Federation, Scindia House, Curzon Rd. Post Box No. 130., New Delhi-1.

The Secretary, Delhi Hindustani Mercantile Association, 641 /I213, Chandni Chowlr, Delhi.

The Secretary, Eastern Chamber of Commerce, 15, Clive Row, Calcutta.

The Secretary, East India Cotton Association, Ltd., Cotton Exchange, Marwari . Bazar, Bombay.

The Secretary, East India Jute & Hessian Exchange, 43, Netaji Subhas Road, Calcutta.

The Secretary, Eastern Zone,Mining Asson., Chaibasa (Singhbhum), Bihar, S.E.Rly.

The Secretary, Engineering Association of India, 'India Exchange', Calcutta-1. The Secretary, Employers' Association, 'India Exchange'. Calcutta-1.

The Secretary, Fan Makers' Asson. of India, India Exchange (7th Floor), Calcutta. The Secretary, Federation of Gujrat Mills and Industries, Baroda.

St., Bombay.

The Secretary, Federation of Woollen Mfrs. in India, J. K. Bldg., Dougall Road, Ballard Estate, Bombay.

The Secretary, Federation of Commerce and Industries (Hyderabad St.), 352, Sultan Bazar, Hyderabad-1.

The Secretary,.Grain Oilseeds Merchants' Association, Masjid Bunder Road, Bombay. .

. The Secretary, Gujrat Vepari Mahamandal, Gujrat Samachar Bldg., Khanpur Ahmedabad. .

The Secretary, Hindustan Chamber of Commerce, 168, Broadway, Gujerathi Mandal Bldg., (1st Floor), Madras.

The Secretary, Hindustani Merchants and Commission Agents' Asson., 342, Kal- badevi Road, Bombay. ' ' The Secretary Hyderabad (Dn.) Chamber of Commerce and Industries, 171, Chapel Road, Opp. Stanley Girls School, Near Hyderabad State Bank, Hyderabad.

The Secretary, Indian Banks Association, Devkaran Nanjee Bldgs., Elphinston¢ Circle, Fort, Bombay.

The Secretary, Indian Chamber of Commerce, 'India Exchange' Calcutta-l.

The Secretary, Indian Chamber of Commerce, 'Jagadalaya', Post Box No 200, Coimbatore. ' -

. The Secretary, Indian Chamber of Commerce, Mattancheri (Cochin). '52.

53. The Secretary, Indian Chamber of Commerce, Tuticorin (S. India).

The Secretary, Indian Chemical Mfrs. Asson., 'India Exchange' (7th Floor, Calcutta-1.

Eh; Secretary, Indian Chemical Merchants Association, India Exchange (8th Floor.

cutta- . I The Secretary, Indo-Afghan Chamber of Commerce, 586, Gandhi Cloth Market, Chandni Chowk, Delhi-6.

The Secretary, Indian Colliery Owners' Association, Post Box No. 70, Dhanbad.

The Secretary, Indian Confectionery Mfrs', Association, 'India Exchange' Calcutta-I The Secretary, Indian Insurance Companies Association, Co-operative Insurance Bldg., Sir Pherozshah Mehta Road, Fort, Bombay.

. The Secretary, Indian Insurance Companies Asson., India Exchange, Calcutta-1. . The Secretary, Indian Merchants, Chamber, Backbay Reclamation, Churchgatc Street, Fort, Bombay.

The Secretary, Indian Mining Federation, I35, Canning Street, Clacutta.

. The Secretary, Indian National Steamship Owners' Association, Scindia House, Ballard Estate, Bombay .

. The Secretary, Indian Non-Ferrous Metals Mfrs' Association, 'India Exchange' (8th Floor), Calcutta-1.

The Secretary, Indian Paint Manufacturers' Association, 'India Exchange, (8th Floor), Calcutta-1. ,

65.

66.

67.

68. 69;

70. 71

72.

73.

74. 7'5.

76.

77.

78.

79.

80.

81.

82.

83.

84.

85.

86.

87.

38. 89

90. 91 92 93

94.

95.

96.

97.

98. '99.

154

The Secretary, Indian Paper Mills' Asson., 'India Exchange'. (8th Floor) Calcutta-I- The Secretary, Indian Produce Asson., 402, Upper Chitpore Road, Calcutta.

Tgielsecretary, Indian Rope Manufacturers' Association, 'India Exchange' (8th Floor) a cutta~1.

The Secretary, Indian Stock Exchange Ltd., 'Laxmi Building' Sir Phirozshah Mehta Road, Bombay.

The Secretary, Indian Soap & Toiletries Makers' Association, P-ll, Mission Road Extension, Calcutta-I. The Secretary, Indian Tea Planters' Asson., Post Box No. 74, Jalpaiguri.

. The Secretary, Indian Sugar Mills' Asson., 'India Exchange' Calcutta-1.

The Hony, Gen. Secretary, Iron & Steel & Hardware, Merchants', Chamber of India, 'Steel Chambers' 153, Naryan Dhuru Street, Bombay-3.

The Secretary, Jaipur Chamber of Commerce, and Industry, Johri Bazar, Jaipur City. The Secretary, Jute Balers' Association, 5 Royal Exchange Place. Calcutta.

The Secretary, Karnatak Chamber of Commerce, Post Box No. 16, Hubli.

The Secretary, Lantern Mfrs. Association, India Exchange (7th Floor) Calcutta-1.

13;?' Secretary, Madhya Pradesh Miliowners' Association, 11, South Tulcoganj ore.

The Secretary, Madhyabharat Chamber of Commerce and Industry, Dharam Mandir Road, Laskar (Gwalior).

The Secretary, Madhya Pradesh Mineral Industry Association, Above Khemka Motors, Residency Road, Nagpur.

The Secretary, Madhura Ramnad Chamber of Commerce, 90-92, East Avanimoola St., Madurai (S. India).

The Secretary, Madras Piecegoods Merchants, Association, 103, Godown Street Madras-1. ' The Secretary, Maharshtra Chamber of Commerce, 12, Rampart Row (3rd Floor) Fort Bombay.

The Secretary Mahratta Chamber of Commerce, and Industries, Tilxlc Road, Poona-2 The Secretary, Merchants Chamber of U.P., 15/17 Civil Lines, Kanpur.

The Secretary, Merchants' Chamber of Commerce, 173, Harrison Road, Calcutta-7 The Secretary, Mysore Chamber of Commerce, Bangalore City.

The Secretary, Nag Vidarbha Chamber of Commerce, Temple Road, Civil Station, Post Box No. 33, Nagpur-1.

The Secretary, Native Share & Stock Brokers' Association, Dalal Street, Fort, Bombay.

. The Secretary, Northern India Chamber of Commerce, Ambala Cantonment.

The Secretary, Oriental Chamber of Commerce, 6, Clive Row, Calcutta.

. The Secretary, Orissa Chamber of Commerce, Tinkonia Bagicha, Cuttack-l. . The Secretary, Pepper & Ginger Merchants' Association Ltd., 285-87, Narsi Natha Street, Bombay~9.

. '(I:'ha]e Secretary, Plywood Mfrs, Association of India, P-ll Mission Row Extension cutta.

The Secretary Punjab Federation of Industry and Commerce, Amritsar. 'I('l:ie Secretary, Rajasthan Chamber of Commerce and Industry, Johri Bazar, Jaipur ity.

The Secretary, Rajasthan Textile Mills Association, (Premises of Jaipur Spg. and Wvg. Mills Ltd.), Jaipur.

The Secretary, Rayon Mfrs. Association, Ewart House, Bruce Street, Fort, Bombay- The Secretary, Saurashtra Millowners' Association, Dharangadhara House, Sumn- dmnagar.

The Secretary, Silk & Art Silk Mills Asson., Resham Bhawan, Ltd., 78, Veer Nari-N man Road, Fort, Bombay.

100. The Secretary, Silk Merchants' Association, 'DHANUKAR Building', Kalbadevi Road.

Bombay-2.

I01.

102. _ 103."

104.

105.

106.

107.

108.

109. 1 10.

111

112.

113. I14.

115.

116.

117. 155 The Secretary, Saurashtra Ch. of Commerce, Mahatma Gandhi Road, Lokhan Bazar, Bhavnagar. \ The Secretary, Southern India Chamber of Commerce, 28/30, North Beach Road, Madras-1.

The Secretary, Southern India Skin & I~Iide Merchants' Association, 16, Syd mham Rd., Periamet, Madras.

The Secretary, Southern India Millowners' Association, Race Course, Coimbatore.

The Secretary, Steel Re-rolling Mills Association of India, 20 Strand Road, Calcutta.

$The Secretary, Surat Chamber of Commerce, 'Safe Deposit Chambers', Bhagtalao, 'unit.

The Secretary,' Tamil Chamber of Commerce, 310/311, Linghi Chetty St., (lst Floo r) Madras-1. ' The Secretary, Tea Association of India, India Exchange, (8th Floor) Calcutta-I. The Secretary, Textile Mfrs Association. 4.Queens' Road, Amritsar.

ghlii Secretary, United Chamber of Trade Associations, Katra Rathi, Nai Sarak e .

The Secretary, United Pianters Asson., of Soughern India, Glenview Post Box No. 11 Coonoor (Nilgris).

The Secretary, U. P. Chamber of Commerce, 15 /197 Civil Lines, Kanpur.

The Secretary, Utkal Mining & Industrial Association, Gandhi House, 16, Ganesh Ch. Avenue, Calcutta-13.

The Secretary,Vanaspati Mfrs., Association of India. Scindia House, (5th Floor; Fort Street, Opp. G. P. 0., Bombay.

The Secretary, Vidarbha Chamber of Commerce, Rajasthari Building, Akola.

The Secretary, Western India Chamber of Commerce, 232-234, Kalbndevi Road, Bombay.

The Secretary, Western India Minerals' Asson., Killick Building, Horne Street Bombay.

118.

119. I20.

The Secretary, Western U P. Chamber of Commerce, Pooran Chand Building, Bombay Bamr, Meerut Cantonment.

District Bar Association, Alipur.

Federation Indian Chambers of Commerce and Industry, 28, Ferozshah Road, New Delhi.

APPENDIX V « CHAMBERS OF COMMERCE AND ASSOCIATIONS WHO HAVE SUD TED MEMORANDUM Bharat Chamber of Commerce, Calcutta.

Bengal National Chamber of Commerce, Calcutta;

Indian Chamber of Commerce, Calcutta.

Calcutta Stock Exchange.

Indian Merchants, Chambers, Backbay Reclamation, Bombay. Madras Centre of Indian Bank Association, Madras.

Andbra Chamber of Commerce, Madras.

Madras Chamber of Commerce, Madras.

South Indian Chamber of Commerce, Madras.

10. European Chamber of Commerce, Madras.

11. Indian Banks Association. Bombay.

12. District Bar Association. Alipur.

'.°.°".".°'E";"."'!"."

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Negotiable Instruments Act. 1881