The Negotiable Instruments Act, 1881
(Act No. 26 of 1881) — Assented to 9th December, 1881; came into force 1st March, 1882
An Act to define and amend the law relating to Promissory Notes, Bills of Exchange and Cheques.
Chapter I — Preliminary
- 1. Short title. Local extent, Saving of usages relating to hundis, etc., Commencement
- 2. [Repealed]
- 3. Interpretation-clause
Chapter II — Of Notes, Bills and Cheques
- 4. “Promissory note”
- 5. “Bill of exchange”
- 6. “Cheque”
- 7. “Drawer”, “Drawee”
- 8. “Holder”
- 9. “Holder in due course”
- 10. “Payment in due course”
- 11. Inland instrument
- 12. Foreign instrument
- 13. “Negotiable instrument”
- 14. Negotiation
- 15. Indorsement
- 16. Indorsement “in blank” and “in full”
- 17. Ambiguous instruments
- 18. Where amount is stated differently in figures and words
- 19. Instruments payable on demand
- 20. Inchoate stamped instruments
- 21. “At sight” — “On presentment”
- 22. “Maturity”
- 23. Calculating maturity of bill or note payable so many months after date or sight
- 24. Calculating maturity of bill or note payable so many days after date or sight
- 25. When day of maturity is a holiday
Chapter III — Parties to Notes, Bills and Cheques
- 26. Capacity to make, etc., promissory notes, etc.
- 27. Agency
- 28. Liability of agent signing
- 29. Liability of legal representative signing
- 30. Liability of drawer
- 31. Liability of drawee of cheque
- 32. Liability of maker of note and acceptor of bill
- 33. Only drawee can be acceptor except in need or for honour
- 34. Acceptance by several drawees not partners
- 35. Liability of indorser
- 36. Liability of prior parties to holder in due course
- 37. Maker, drawer and acceptor principals
- 38. Prior party a principal in respect of each subsequent party
- 39. Suretyship
- 40. Discharge of indorser’s liability
- 41. Acceptor bound, although indorsement forged
- 42. Acceptance of bill drawn in fictitious name
- 43. Negotiable instrument made, etc., without consideration
- 44. Partial absence or failure of money-consideration
- 45. Partial failure of consideration not consisting of money
- 45A. Holder’s right to duplicate of lost bill
Chapter IV — Of Negotiation
- 46. Delivery
- 47. Negotiation by delivery
- 48. Negotiation by indorsement
- 49. Conversion of indorsement in blank into indorsement in full
- 50. Effect of indorsement
- 51. Who may negotiate
- 52. Indorser who excludes his own liability or makes it conditional
- 53. Holder deriving title from holder in due course
- 54. Instrument indorsed in blank
- 55. Conversion of indorsement in blank into indorsement in full
- 56. Indorsement for part of sum due
- 57. Legal representative cannot by delivery only negotiate instrument indorsed by deceased
- 58. Instrument obtained by unlawful means or for unlawful consideration
- 59. Instrument acquired after dishonour or when overdue
- 60. Instrument negotiable till payment or satisfaction
Chapter V — Of Presentment
- 61. Presentment for acceptance
- 62. Presentment of promissory note for sight
- 63. Drawee’s time for deliberation
- 64. Presentment for payment
- 65. Hours for presentment
- 66. Presentment for payment of instrument payable after date or sight
- 67. Presentment for payment of promissory note payable by instalments
- 68. Presentment for payment of instrument payable at specified place and not elsewhere
- 69. Instrument payable at specified place
- 70. Presentment where no exclusive place specified
- 71. Presentment when maker, etc., has no known place of business or residence
- 72. Presentment of cheque to charge drawer
- 73. Presentment of cheque to charge any other person
- 74. Presentment of instrument payable on demand
- 75. Presentment by or to agent, representative of deceased, or assignee of insolvent
- 75A. Excuse for delay in presentment for acceptance or payment
- 76. When presentment unnecessary
- 77. Liability of banker for negligently dealing with bill presented for payment
Chapter VI — Of Payment and Interest
- 78. To whom payment should be made
- 79. Interest when rate specified
- 80. Interest when no rate specified
- 81. Delivery of instrument on payment or indemnity in case of loss
Chapter VII — Of Discharge from Liability on Notes, Bills and Cheques
- 82. Discharge from liability
- 83. Discharge by allowing drawee more than forty-eight hours to accept
- 84. When cheque not duly presented and drawer damaged thereby
- 85. Cheque payable to order
- 85A. Drafts drawn by one branch of a bank on another payable to order
- 86. Parties not consenting discharged by qualified or limited acceptance
- 87. Effect of material alteration
- 88. Acceptor or indorser bound notwithstanding previous alteration
- 89. Payment of instrument on which alteration is not apparent
- 90. Extinguishment of rights of action on bill in acceptor’s hands
Chapter VIII — Of Notice of Dishonour
- 91. Dishonour by non-acceptance
- 92. Dishonour by non-payment
- 93. By and to whom notice should be given
- 94. Mode in which notice may be given
- 95. Party receiving must transmit notice of dishonour
- 96. Agent for presentment
- 97. When party to whom notice given is dead
- 98. When notice of dishonour is unnecessary
Chapter IX — Of Noting and Protest
- 99. Noting
- 100. Protest
- 101. Contents of protest
- 102. Notice of protest
- 103. Protest for non-payment after dishonour by non-acceptance
- 104. Protest of foreign bills
- 104A. When noting equivalent to protest
Chapter X — Of Reasonable Time
- 105. Reasonable time
- 106. Reasonable time of giving notice of dishonour
- 107. Reasonable time for transmitting such notice
Chapter XI — Of Acceptance and Payment for Honour and Reference in Case of Need
- 108. Acceptance for honour
- 109. How acceptance for honour must be made
- 110. Acceptance not specifying for whose honour it is made
- 111. Liability of acceptor for honour
- 112. When acceptor for honour may be charged
- 113. Payment for honour
- 114. Right of payer for honour
- 115. Drawee in case of need
- 116. Acceptance and payment without protest
Chapter XII — Of Compensation
Chapter XIII — Special Rules of Evidence
- 118. Presumptions as to negotiable instruments
- 119. Presumption on proof of protest
- 120. Estoppel against denying original validity of instrument
- 121. Estoppel against denying capacity of payee to indorse
- 122. Estoppel against denying signature or capacity of prior party
Chapter XIV — Of Crossed Cheques
- 123. Cheque crossed generally
- 124. Cheque crossed specially
- 125. Crossing after issue
- 126. Payment of cheque crossed generally / crossed specially
- 127. Payment of cheque crossed specially more than once
- 128. Payment in due course of crossed cheque
- 129. Payment of crossed cheque out of due course
- 130. Cheque bearing “not negotiable”
- 131. Non-liability of banker receiving payment of cheque
- 131A. Application of Chapter to drafts
Chapter XV — Of Bills in Sets
Chapter XVI — Of International Law
- 134. Law governing liability of maker, acceptor or indorser of foreign instrument
- 135. Law of place of payment governs dishonour
- 136. Instrument made, etc., out of India, but in accordance with the law of India
- 137. Presumption as to foreign law
Chapter XVII — Of Penalties in Case of Dishonour of Certain Cheques for Insufficiency of Funds in the Accounts
- 138. Dishonour of cheque for insufficiency, etc., of funds in the account
- 139. Presumption in favour of holder
- 140. Defence which may not be allowed in any prosecution under section 138
- 141. Offences by companies
- 142. Cognizance of offences
- 142A. Validation for transfer of pending cases
- 143. Power of Court to try cases summarily
- 143A. Power to direct interim compensation
- 144. Mode of service of summons
- 145. Evidence on affidavit
- 146. Bank’s slip prima facie evidence of certain facts
- 147. Offences to be compoundable
- 148. Power of Appellate Court to order payment pending appeal against conviction
The Schedule
Amending Acts incorporated (selected): the Negotiable Instruments (Amendment) Act, 1988 (66 of 1988); the Information Technology Act, 2000 (21 of 2000); the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 (55 of 2002); the Negotiable Instruments (Amendment) Act, 2015 (26 of 2015); and the Negotiable Instruments (Amendment) Act, 2018 (20 of 2018).
