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Understanding Negotiable Instruments

Negotiable Instruments are transferable documents that provide legal rights or payments to the holder, including Promissory Notes, Bills of Exchange, and Cheques as per Indian law. They can be transferred through delivery or endorsement, with specific examples provided for each type. Non-Negotiable Instruments require additional legal documents for transfer, distinguishing them from their negotiable counterparts.

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0% found this document useful (0 votes)
9 views3 pages

Understanding Negotiable Instruments

Negotiable Instruments are transferable documents that provide legal rights or payments to the holder, including Promissory Notes, Bills of Exchange, and Cheques as per Indian law. They can be transferred through delivery or endorsement, with specific examples provided for each type. Non-Negotiable Instruments require additional legal documents for transfer, distinguishing them from their negotiable counterparts.

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singhprati35
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We take content rights seriously. If you suspect this is your content, claim it here.
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1️⃣ Negotiable Instrument kya hai?

Negotiable Instruments aise papers hote hain jo ek person se dusre person ko transfer kiye ja
sakte hain aur jiske paas yeh hote hain, usko uska legal benefit ya payment milta hai.
Or
Aise documents jo ek person dusre person ko transfer kar sakta hai, aur jiske paas yeh
document hoga, usko uska legal right ya payment milega.
Or
Negotiable Instrument ek tarah ka written proof hota hai jo legal way me paisa ya goods lene ka
haq deta hai.

●​ Negotiable Instruments: Bas format ya paper fill karne se transfer ho jate hain, koi
extra documents nahi chahiye hote.

Indian law ke Negotiable Instruments Act ke Section 13 ke according, teen tareeke ke


negotiable instruments hote hain:
1️⃣ Promissory Note
2️⃣ Bill of Exchange
3️⃣ Cheque

Lekin kuch aur documents bhi market me negotiable instruments jaise treat kiye jate
hain, jaise:

1️⃣ Hundies – Traditional Indian credit instruments (jaise ek type ka promissory note).
2️⃣ Treasury Bills – Government ke short-term borrowing papers.
3️⃣ Bearer Debentures – Aise debentures jo jiske paas honge, wahi uska owner mana
jayega.
4️⃣ Railway Receipts – Yeh proof hota hai ki railway ek shipment carry kar rahi hai.
5️⃣ Delivery Orders – Ek written order jo kisi goods ki delivery allow karta hai.
6️⃣ Bill of Lading – Ek document jo shipment ka proof hota hai, mostly international trade
me use hota hai.

●​ Non-Negotiable Instruments: format ya paper fill karna padta hai, lekin legal
documents bhi chahiye hote hain transfer ke liye.

2️⃣ Kaise transfer hota hai?

1.​ Delivery (No Endorsement )→ Bearer instruments

Example :

1.​ Bearer Cheque


2.​ Endorsement + delivery (Endorsement) → Order Instruments
Example :

1.​ Promissory note


2.​ Bill of exchange

Bill of Exchange

Date: 01-Apr-2025

Amount: ₹10,000

Amount in Words: Ten Thousand Rupees Only

Drawer: Ravi Kumar, 12, XYZ Street, Delhi

Drawee: Ajay Verma, 45, ABC Road, Mumbai

Payable Date : Payable on Demand or 30 days after sight Or 01 - May - 2025 (Specific
date be mantion kar sakte hai )

Payee: Sharma Traders, 88, PQR Market, Kolkata

Signature of Drawer:_____________________

Terms Meaning :

1.​ Drawer (Seller/Person Issuing Bill):

Yeh wo person hota hai jo bill issue kar raha hai. Iski details likhni hoti hai, jaise naam, address,
etc.

2.​ Drawee (Buyer/Person Who Will Pay):

Yeh wo person hota hai jise bill pay karna hota hai. Iski bhi details mention karni hoti hai.

3.​ Payee:

Yeh wo person ya company hota hai jo paisa receive karega.

Scenario:

B ne A se ₹500 liye the, 1st May, 2024 ko.

A ne C se ₹500 ka samaan liya tha, lekin paisa abhi tak nahi diya.

Ab, A ne ek Bill of Exchange issue kiya, jisme A ne B ko instruct kiya ki wo C ko ₹500 pay
kare.
3.​ Order cheque

Drawee Bank: State Bank of India

Date: 01-Apr-2025

Payee: Ravi Kumar Only

Amount in Words: Twelve Thousand Rupees Only

Amount in Figures: ₹12,000

A/C No.: 1234567890

MICR Code: 110002022

Signature: _______________________________

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