Negotiable Instrument Act 1881
Some important sections of Negotiable Instrument Act, 1881 with short explanations, which may help Bankers (our official staff) in their day to day Banking Law and Practice.
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 on demand or at a fixed or determinate future time a certain sum of money only to or to the order, of, certain person or to the bearer of the instrument. In terms of the above section the following are the requisites of the Bill of Exchange:
a) It must be in writing;
b) It must contain an order to pay on demand or at a fixed or determinable future time;
c) It must be unconditional;
d) It must be signed by the drawer;
e) The ‘drawee of the bill must be certain;
f) The sum payable must be certain;
g) It must contain an order to pay money only; and h) The payee must be certain.
From the above section it is evident that draft is also a Bill of Exchange.
“A Cheque is a Bill of Exchange drawn on a specified banker and not expressed to be payable otherwise than on demand”.
Though there are distinction between Bills of exchange and cheques still all cheques are Bill of Exchange but all Bills of Exchange are not cheques.
Essential requirements for payment in due course:
a) The payment should be made in accordance with the apparent tenor of the instrument;
b) The person to whom payment is made should be in possession of the instrument; and
c) The payment should be made on good faith & without negligence.
“A negotiable instrument means a promissory note, bill of exchange or cheque payable either to order or bearer.”
Amount in Words and Figures Differ
“If the amount undertaken or ordered to be paid is stated differently in figures & Words, the amount stated in words shall be the amount undertaken or order to be paid provided that if the Words are ambiguous or uncertain the amount may be ascertained by referring to the figures.’
Section – 21
C: Anti Dating and Post Dating
“A Promissory note, bill of exchange or cheque is not invalid by reason only that it is anti- dated or post dated provided that the antedated or post dating does not involve any illegal or fraudulent purpose of transaction.”
Liability of Drawer
A) The drawer of a bill of exchange by drawing it engages that on due presentation it shall be accepted and paid according to its tenor and that if it is dishonored he will compensate the holder or any endorsee who is compelled to pay it.
b) The drawer of a cheque by drawing it, engages that in the case of dishonor by the drawee he will compensate the holder provided that due notice of dishonour of the bill or cheque has been ven to or received by the drawer as herein after provided
2. The drawee of the bill of exchange is not liable thereon until acceptance in the manner provided by this Act.
Liability of Drawee of Cheques
“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.
Section – 85
Cheque Payble to Order
Protection of Paying Banker
1. “Mthere a cheque payable to order purports to be endorsed by or on behalf of the payee, the drawee is discharged by payment in due course”.
2. “Where a cheque is originally expressed to be payable to bearer, the drawee is discharged by payment in due course to the bearer thereof. Notwithstanding any endorsement whether in full or in blank appearing thereon and not withstanding that any such endorsement purports to restrict or exclude further negotiation”
Protection shall be available in two cases only (a) Where the endorsement of the payee is forged (b) Where the agent of the payee without his authority endorses it on behalf of the payee provided such payments must, however, be payments in due course and in accordance with apparent tenor of the instruments and the endorsements in the cheques are regular.
Drafts drawn by one branch of a Bank on another payable to order “where any draft, that is, an order to pay money drawn by one office of the same bank for a sum of money payable to order on demand purports to be endorsed by or on behalf of the payee, the bank is discharged by payment in due course.”
Effect of Material Alteration, Alteration by Indorsee ‘Any material alteration of a negotiable instrument renders the same void as against anyone who is a party thereto at the time of making such alternation and does not consent thereto, unless it was made in order to carry out the common intention of the original parties.
And any such alteration if made by an indorsee, discharges his endorser from all liability to him in respect of the consideration thereof.”
Revocation Bankers Authority
“Th& duty & authority of a banker to pay a cheque drawn on him by his customer are determined by:
a) Counterman of payment.
b) Notice of the customers death; and
c) Notice of the adjudication of the customer as an insolvent”.
Cheque Crossed Generally
“When 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 parallel transverse lines simply either with or without the words “Not Negotiable” that addition shall be deemed a crossing & the cheque shall be deemed to be crossed generally.”
a) The words “and Company” or any abbreviation there of between two parallel transverse lines either with or without the words “Not Negotiable”
b) Two parallel transverse lines simply either with or without the words “Not Negotiable”.
Cheque Crossed Account Payee
1. “Where a cheque crossed generally bears accross its face an addition of words “Account Payee” between two parallel transverse lines constituting to 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 eases to be negotiable and,
b) It shall be the duty of the banker collecting payment of the cheque to credit the proceeds thereof only to the account of the payee named in the cheque.
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 as a crossing & the cheque shall be deemed to be crossed specially & to be crossed to that banker.
Payment of Cheque Crossed Generally
“Where a cheque is crossed generally, the banker on whom it is drawn shall not pay it other-wise than to a banker”.
Payment of Cheque Crossed Specially
“Where a cheque is crossed specially, the bankers on whom it is drawn shall not pay it otherwise that to the banker to whom it is crossed or his agent for collection.
Cheque Bearing “Not Negotiable
“A person taking a cheque crossed generally or specially bearing in either case the words “Not Negotiable” shall not have & shall not be capable of giving a better title to the cheque than that which the person from whom he took it had”.
1. Leave is earned by duty only. For the purposes of these regulations, the period spent on deputation shall count as duty.
2. All applications for leave shall be addressed to the competent authority and shall be submitted through the proper channel.
3. Leave cannot be claimed as a matter of right, and leave admissible under these regulations, may be granted by the competent authority who may refuse leave, grant leave for a shorter period than applied for, revoke leave of any description and recall an employee before the expiry of his leave.
4. All employees shall resume duties on the expiry of leave as initially granted or as subsequently curtailed or extended. Overstay all of leave may entail punishment including dismissal from service. An employee on leave shall not accept any employment.
5. Before proceeding on leave, an employee shall make over charge to another employee as directed by the competent authority.
6. An employee on leave of any description shall, unless instructed otherwise, report in writing his return to duty to his immediate superior at the place wherefrom he proceeded on leave.
7. An employee who was granted leave on medical ground shall not return to duty without, first producing a certificate of fitness from the medical authority specified by the Bank in this behalf.
Provided that no such certificate shall be necessary if the leave was for seven days or less.
8. In the event of any employee on leave for not less than one month, being required by the competent authority to resume duty in the interest of the bank before expiry of the leave already sanctioned, the Managing Director in the case of officers, and the General Manager in the case of others, may allow him the actual cost of passage from the place of recall in Bangladesh to the place of duty in Bangladesh and to count the time spent on the journey as on duty.
9. Unless permitted by the competent authority to do so, an employee on leave may not return to duty more than fourteen days before the expiry of the period of leave granted to him.