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The term Negotiable Instrument consists of two parts viz; Negotiable and Instrument.
The Word negotiable means transferable by delivery and The word instrument mean written documents by which a right is created in favour of some person.
4. Title of holder in due course:- A holder in due course ( i.e. the person who become the possessor of negotiable instrument before maturity, for valuable consideration and in good faith) get the instrument free from all defects in the title of transferor 5. Presumption as to considerations:- Every negotiable instrument is presumed to have been made, drawn, accepted, endorsed , negotiated or transferred for consideration.
Promissory Note
Promissory Note
A promissory note is an instrument (not being a bank note or a currency note ) in writing containing an unconditional undertaking, signed by the maker to pay a 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 money only to, or to the order of certain person to the bearer of the instrument.
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Definition of Cheque
A cheque is a bill of exchange which is
Drawn upon a specified banker And payable on demand
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Crossing of Cheque
A cheque is said to be crossed when it bears across its face two parallel transverse lines which are usually drawn on the left hand top corner of the Cheque
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Types of crossing
General Crossing Special Crossing
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Dishonor of Cheque
On dishonor of Cheque the drawer is punishable with imprisonment for a term not exceeding 1 year or with fine not exceeding twice the amount of cheque or with both.
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