Presentation of Credit Mangement With Names

8/6/2019 Presentation of Credit Mangement With Names

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Arslan Ahmed(MBA-FA09-02)

Junaid Yasin(MBA-FA09-

Zubair Rashid(MBA-FA09-36)Rashid Sarwar(MBA-FA09-46)

Rana Shehzad(MBA-FA09-54)

Numan Khalid(MBA-FA09-81)


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` The law relating to negotiable instruments is contained

in the Negotiable Instruments Act. 1881 which applies

and extends to the whole of India.


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` The word negotiable means transferable by delivery

and instrument means a written document by which a

right is created in favor of some person or persons.

` Thus, the term negotiable instrument literally means awritten document which creates a right in favor of

somebody and is freely transferable.


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A negotiable instrument is a piece of paper which

entitles a person to a certain sum of money and which

is transferable from one to another person by a delivery

or by endorsement and delivery. Example - Promissory note, Cheque and a Bill of

exchange,


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` Free transferability or easy negotiabilityx Negotiable instrument is freely transferable

` Title of holder is free from all defectsx A person who takes negotiable instrument bona-fide and for value gets

the instrument free from all defects in the title. The holder in due course

is not affected by defective title of the transferor or of any other party.


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Of consideration : that every negotiable instrument,

was made or drawn for consideration.

As to date : that every negotiable instrument bearing

a date was made or drawn on such date.


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As to time of acceptance :

that every accepted bill of exchange was

accepted within a reasonable time after its date

and before its maturity.As to time of endorsements :

that the endorsements appearing up to negotiable

instrument were made in the order in which they

appear thereupon.


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` As to stamps : that a last promissory-note, bill ofexchange or cheque was duly stamped.

` As to a holder in due course : that every holder of anegotiable instrument is holder in due course.

` As to time of transfer : that every transfer of anegotiable instrument was made before its maturity.


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` Promissory note

A promissory note is an instrument in writing (not

being a bank-note or a currency-note) containing an

unconditional under-taking, signed by the maker, to paya certain sum of money only to, or to the order of, a

certain person, or to the bearer of the instrument.


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` Bill of exchange

A bill of exchange is an instrument in writing

containing an unconditional order, signed by the maker,

directing a certain person to pay a certain sum of moneyonly to, or to the order of, a certain person or to the

bearer of the instrument.


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` A promise or order to pay is not conditional

` The sum payable may be certain

` The person to whom it is clear that the direction is given

or that payment is to be made may be a certain person


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` Cheque

A cheque is a bill of exchange drawn on a specified

banker and not expressed to be payable otherwise than

on demand.


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` Drawer, Drawee

The maker of a bill of exchange or cheque is called the

drawer; the person thereby directed to pay is called the

drawee.` Drawee in case of need

When in the bill or in any endorsement 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 adrawee in case of need.


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` Acceptor

After the drawee of a bill has signed his assent upon the

bill, or, if there are more parts thereof than one, upon one

of such parts, and delivered the same, or given notice ofsuch signing to the holder or to some person on his

behalf, he is called the acceptor.

` Payee

The person named in the instrument, to whom or towhose order the money is by the instrument directed to

be paid, is called the payee.


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` Capacity to make the negotiable instrument

Every person capable of contracting, according to the

law to which he is subject, may bind himself and be

bound by the making, drawing, acceptance,endorsement, delivery and negotiation of a promissory

note, bill of exchange or cheque.

` Agency

Every person capable of binding himself or of beingbound, as mentioned in section 26, may so bind himself

or be bound by a duly authorized agent acting in his

name.


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` Liability of agent signing

An agent who signs his name to a promissory note, bill ofexchange or cheque without indicating thereon that he signsas agent, or that he does not intend thereby to incur personal

responsibility, is liable personally on the instrument, exceptto those who induced him to sign upon the belief that theprincipal only would be held liable.

` Liability of legal representative signing

A legal representative of a deceased person who signs hisname to a promissory note, bill of exchange or cheque isliable personally thereon unless he expressly limits hisliability to the extent of the assets received by him as such.


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` Liability of drawer

The drawer of a bill of exchange or cheque is bound, in case

of dishonour by the drawee or acceptor thereof, to

compensate the holder, provided due notice of dishonour has

been given to, or received by, the drawer as hereinafter

provided.

` Liability of drawee of cheque

The drawee of a cheque having sufficient funds of the drawer

in his hands properly applicable to the payment of such

cheque must pay the cheque when duly required so to do,

and, in default of such payment, must compensate the drawer

for any loss or damage caused by such default.


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` Delivery

The making, acceptance or endorsement of a

promissory note, bill of exchange or cheque is

completed by delivery, actual or constructive. A promissory note, bill of exchange or cheque payable to bearer is

negotiable by the delivery thereof. A promissory note, bill of exchange or cheque payable to order is

negotiable by the holder by endorsement and delivery thereof.


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` Negotiation by endorsement

Subject to the provisions of section 58, a promissory note,

bill of exchange or cheque payable to order, is negotiable by

the holder by endorsement and delivery thereof.

` Effect of endorsement

The endorsement of a negotiable instrument followed by

delivery transfers to the indorse the property therein with the

right of further negotiation; but the endorsement may, by

express words, restrict or exclude such right, or may merely

constitute the endorsee an agent to indorse the instrument,

or to receive its contents for the endorser, or for some other

specified per-son.


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` Who may negotiate

Every sole maker, drawer, payee or endorsee, or all of

several joint makers, drawers, payees or endorsees, of a

negotiable instrument may, if the negotiability of suchinstrument has not been restricted or excluded as

mentioned in section 50, indorse and negotiate the same.


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` Presentment for acceptance If the bill is directed to the drawee at a particular place, it must

be presented at that place; and if at the due date for presentment

he cannot, after reasonable search, be found there, the bill is

dishonored.

Where authorized by agreement or usage, a presentment

through the post office by means of a registered letter is

sufficient.


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` To whom payment should be made

Subject to the provisions of section 82, clause (c),

payment of the amount due on a promissory note, bill of

exchange or cheque must, in order to discharge themaker or acceptor, be made to the holder of the

instrument


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` Interest when rate specifiedWhen interest at a specified rate is expressly made payableon a promissory note or bill of exchange, interest shall becalculated at the rate specified, on the amount of the principalmoney due thereon, from the date of the instrument, untiltender or realization of such amount.

` Interest when no rate specifiedWhen no rate of interest is specified in the instrument,interest on the amount due thereon shall, notwithstandingany agreement relating to interest between any parties to the

instru-ment, be calculated at the rate of [eighteen] per annumfrom the date at which the same ought to have been paid bythe party charged, until tender or realization of the amount


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` bycancellation

to a holder thereof who cancels such acceptors orendorser's name with intent to discharge him, and to allparties claiming under such holder

` byreleaseto a holder thereof who otherwise discharges such maker,acceptor or endorser, and to all parties deriving title undersuch holder after notice of such discharge

` bypayment

to all parties thereto, if the instrument is payableto bearer,or has beenindorsed inblank, and such maker, acceptor orendorser makes paymentinduecourseoftheamountduethere-on.


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` Dishonor by non-acceptance

A bill of exchange is said to be dishonored by non-acceptance when the drawee, or one of several draweesnot being partners, makes default in acceptance upon

being duly required to accept the bill, or wherepresentment is excused and the bill is not accepted.

` Dishonor by non-payment

A promissory note, bill of exchange or cheque is said to

be dishonoured by non-payment when the maker of thenote, acceptor of the bill or drawee of the cheque makesdefault in payment upon being duly required to pay thesame.


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` Cheque crossed generally

Where a cheque bears across its face an addition of the

words and company or any abbreviation thereof,

between two parallel transverse lines, or of two paralleltransverse lines simply, either with or without the words

not negotiable, that addition shall be deemed a

crossing, and the cheque shall be deemed to be crossed

generally.


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` Cheque crossed specially

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 shall be deemed a crossing,and the cheque shall be deemed to be crossed specially,

and to be crossed to that banker.


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` Crossing after issue

Where a cheque is uncrossed, the holder may cross it

gener-ally or specially.x

Where a cheque is crossed generally, the holder may cross itspecially.

x Where a cheque is crossed generally or specially, the holder may

add the words not negotiable.

x 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.


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` Payment of cheque crossed generally

Where a cheque is crossed generally, the banker on

whom it is drawn shall not pay it otherwise than to a

banker.` Payment of cheque crossed specially

Where a cheque is crossed specially, the banker on

whom it is drawn shall not pay it otherwise than to the

banker to whom it is crossed, or his agent for collection.


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` Payment of cheque crossed specially more than once

Where a cheque is crossed specially to more than one

banker, except when crossed to an agent for the purpose

of collection, the banker on whom it is drawn shall refusepayment thereof.

Presentation of Credit Mangement With Names

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