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Reduced price! Negotiable Instruments Act (As amended by The Negotiable Instruments (Amendment) Act, 2018, w.e.f. 1-9-2018) View larger

Negotiable Instruments Act (As amended by The Negotiable Instruments (Amendment) Act, 2018, w.e.f. 1-9-2018)

  Justice Ranganath Misra



23 rd Edn


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Bharat Law House Pvt Ltd Negotiable Instruments Act 23rd Edition 2020 by Bhashyam and Adiga (As amended by The Negotiable Instruments (Amendment) Act, 2018, w.e.f. 1-9-2018)



1 Short title, local extent, saving of usages relating to hundis, etc. Commencement

2 Repeal of enactments (Repealed)

3Interpretation clause "Banker"


Of notes, bills and cheques

4"Promissory note"

5"Bill of Exchange"


7"Drawer", "Drawee", "Drawee in case of need", "Acceptor", "Acceptor for honour", "Payee"


9"Holder in due course"

10"Payment in due course"

11Inland instrument

12Foreign instrument

13Negotiable instrument



16Indorsement "in blank" and "in full", "indorsee"

17Ambiguous instruments

18Where amount is stated differently in figures and words

19Instruments payable on demand

20Inchoate stamped instruments

21"At Sight", "On Presentment", "After Sight"

22"Maturity" Days of grace

23Calculating maturity of bill or note payable so many months after date or sight

24Calculating maturity of bill or note payable so many days after date or sight

25When day of maturity is a holiday


Parties to Notes, Bills and Cheques

26Capacity to make, etc., promissory notes, etc.


28Liability of agent signing

29Liability of legal representative signing

30Liability of drawer

31Liability of drawee of cheque

32Liability of maker of note and acceptor of bill

33Only drawee can be acceptor except in need or for honour

34Acceptance by several drawees not partners

35Liability of indorser

36Liability of prior parties to holder in due course

37Maker, drawer and acceptor principals

38Prior party a principal in respect of each subsequent party


40Discharge of indorser's liability

41Acceptor bound although indorsement forged

42Acceptance of bill drawn in fictitious name

43Negotiable instrument made, etc., without consideration

44Partial absence or failure of money consideration

45Partial failure of consideration not consisting of money

45AHolder's right to duplicate of lost bill


Of Negotiation


47Negotiation by delivery

48Negotiation by indorsement

49Conversion of indorsement in blank into indorsement in full

50Effect of indorsement

51Who may negotiate

52Indorser who excludes his own liability or makes it conditional

53Holder deriving title from holder in due course

54Instrument indorsed in blank

55Conversion of indorsement in blank into indorsement in full

56Indorsement for part of sum due

57Legal representative cannot by delivery only negotiate instrument indorsed by deceased

58Instrument obtained by unlawful means or for unlawful consideration

59Instrument acquired after dishonour or when overdue, Accommodation note or bill

60Instrument negotiable till payment or satisfaction


Of Presentment

61Presentment for acceptance

62Presentment of promissory note for sight

63Drawee's time for deliberation

64Presentment for payment

65Hours for presentment

66Presentment for payment of instrument payable after date or sight

67Presentment for payment of promissory note payable by instalments

68Presentment for payment of instrument payable at specified place and not elsewhere

69Instrument payable at specified place

70Presentment where no exclusive place specified

71Presentment when maker, etc., has no known place of business or residence

72Presentment of cheque to charge drawer

73Presentment of cheque to charge any other person

74Presentment of instrument payable on demand

75Presentment by or to agent, representative of deceased or assignee of insolvent

75AExcuse for delay in presentment for acceptance or payment

76When presentment unnecessary

77Liability of banker for negligently dealing with bill presented for payment


Of Payment and Interest

78To whom payment should be made

79Interest when rate specified

80Interest when no rate specified

81Delivery of instrument on payment or indemnity in case of loss


Of discharge from liability on Notes,

Bills and Cheques

82Discharge from liability — (a) by cancellation; (b) by release; (c) by payment

83Discharge by allowing drawee more than forty-eight hours to accept

84When cheque not duly presented and drawer damaged thereby

85Cheque payable to order

85ADrafts drawn by one branch of a bank on another payable to order

86Parties not consenting discharged by qualified or limited acceptance

87Effect of material alteration, Alteration by indorsee

88Acceptor or indorser bound notwithstanding previous alteration

89Payment of instrument on which alteration is not apparent

90Extinguishment of rights of action on bill in acceptor's hands


Of Notice of Dishonour 

91Dishonour by non-acceptance

92Dishonour by non-payment

93By and to whom notice should be given

94Mode in which notice may be given

95Party receiving must transmit notice of dishonour

96Agent for presentment

97When party to whom notice given is dead

98When notice of dishonour is unnecessary


Of Noting and Protest


100Protest, Protest for better security

101Contents of protest

102Notice of protest

103Protest for non-payment after dishonour by non-acceptance

104Protest of foreign bills

104A When noting equivalent to protest


Of reasonable time

105Reasonable time

106Reasonable time of giving notice of dishonour

107Reasonable time for transmitting such notice


Of acceptance and payment for honour and 

reference in case of need

108Acceptance for honour

109How acceptance for honour must be made

110Acceptance not specifying for whose honour it is made

111Liability of acceptor for honour

112When acceptor for honour may be charged

113Payment for honour

114Right of payer for honour

115Drawee in case of need

116Acceptance and payment without protest


Of compensation

117Rules as to compensation


Special rules of evidence

118Presumptions as to negotiable instruments — (a) of consideration; (b) as to date; (c) as to time of acceptance; (d) as to time of transfer; (e) as to order of indorsement; (f) as to stamps; (g) that holder is a holder in due course

119Presumption on proof of protest

120Estoppel against denying original validity of instrument

121Estoppel against denying capacity of payee to indorse

122Estoppel against denying signature or capacity of prior party


Of crossed cheques

123Cheque crossed generally

124Cheque crossed specially

125Crossing after issue

126Payment of cheque crossed generally, Payment of cheque crossed specially

127Payment of cheque crossed specially more than once

128Payment in due course of crossed cheque

129Payment of crossed cheque out of due course

130Cheque bearing "not negotiable"

131Non-liability of banker receiving payment of cheque

131AApplication of chapter to drafts


Of bills in sets

132Set of bills

133Holder of first acquired part entitled to all


Of international law

134Law governing liability of maker, acceptor or indorser of foreign instrument

135Law of place of payment governs dishonour

136Instrument made, etc, out of India but in accordance with the law of India

137Presumption as to foreign law


Of penalties in case of dishonour of certain cheques for insufficiency of funds in the accounts

138Dishonour of cheque for insufficiency, etc, of funds in the account

1Competence of the Parliament 

2Statement of objects and reasons 


4Salient features 

5Non- compliance with the provision




9Applicability of provisions to cheques issued before 1-4-1989 

10Issue of cheque is not an offence 

11Ingredients of the offence 

12Dishonour of cheque issued for discharge of legally enforceable debt/liability 

13Section 138 and Criminal Law

14Power of courts

15Interference by High Court in disputed questions of fact

16Bailable offence 

17Trial of offence: Summary procedure

18Directions for Summary Trial

19Defence evidence 

20 Month', meaning of 

21Presentation of cheques any number of times during validity period 

22Filing of a civil suit 

23Arbitration proceedings 

24Prosecution for cheating: Not barred

25Prosecution based on successive dishonour of cheque 

26Filing of a complaint

27Condonation of delay in filing complaint

28Place of filing complaint

29Locus standi to file complaint 

30Verification of complaint

31Cause of action 

32Complaint not signed by complainant

33Permissibility for the substitution of complainant

34Deficit Court Fee

35Sole proprietorship concern

36Complaint by company 

37Delegation of power of attorney

38Power of Attorney to witness transaction 

39Complaint by Power of Attorney Holder 

40Complaint, maintainability 

41Reasons for return 

42'Refer to drawer', meaning of 

43‘Such person shall be deemed to have committed an offence’ 

44Payment of cheque stopped by drawer 

45Propriety of order of issue process 

46Bank account closed 

47Exceeds arrangement: Dishonour on ground of 

48Insufficient balance 

49Cheque reported stolen 

50Alteration in date and drawer's signature differs 

51Drawer's signature incomplete 

52Drawer's signature denial 

53Recourse to Proceedings

54Making endorsement 'sans recourse' on cheque 

55Bank documents: Admissibility in evidence 

56Exclusion of mens rea 

57Cheque drawn by a person 

58Cheque issued in illegal transaction 

59Liability of director 

60Liability of drawer of cheque 

61Cheque issued by authorised signatory: Liability 

62Vicarious liability 

63Cheque issued by mandate holder: Liability 

64Forfeiture of right of holder/payee 

65Self drawn cheque 

66Pay Order, dishonour of 

67Post-dated cheques, dishonour of, effect 

68An account maintained with a banker 

69Joint bank account operated by 'Either or Survivor': Liability 


71Undated cheque 

72Any debt or other liability: Legally enforceable liability 

73Debt/Liability: Proof of 

74Existence of debt or liability on the date of cheque 

75Time-barred debt 

76Discharge of liability in excess of liability incurred

77Legally enforceable liability 

78Burden of proof 


80Modification of discharge of liability 

81Part payment 

82Other liabilities 

83Cheque received as guarantee or security 

84Chit funds 

85Uncertain future liabilities 

86Proceedings against guarantor: Maintainable 

87Blank cheque issued as security 

88Misuse of blank cheque: Expert opinion 

89Cheque issued as collateral security

90Liability need not be of drawer

91Discharge of debt of wife

92Discharge of Debt of Father

93Death of drawer of cheque

94Holder in due course

95Drawer alone can be prosecuted

96Cheque discounting facility with bank: Liability


98Failure' to make payment

99Cognizance of offence

100Quashing of Cognizance

101Without prejudice to any other provision of this Act

102Material alterations in cheque

103Typographical error

104Clubbing of complaints


(a)Prior to 6-2-2003

(b)On and from 6-2-2003

106Sentences to run concurrently: Powers of Court

107Sentence of imprisonment till rising of court

108Suspension of sentence

109Penalty provision created by legal fiction

110Provision, not for compensation


112Mode of recovery of fine and compensation

113Compensation, reduced

114Sentence of fine and compensation

115Inadequacy of sentence

116Payment of interest on award of compensation

117Default sentence

118Compounding of offence


120Propriety of order of acquittal


122Release on probation

123Pendency of parallel proceedings

124Lok adalats

125Presentation of cheque

126Territorial jurisdiction

127Transfer of cases

128Compliance of procedure of trial on transfer of a Magistrate


(1)Period for presentment: clause (a)

(2)Notice of demand for payment: clause (b)

130Issuance of notice

131Handwritten notice

132Construction of Proviso

133Demand notice: Limitation period

134Notice to company sufficient

135Notice to director itself

136Form or format of notice

137Permissibility for the use of printed format

138Notice not signed by Advocate: Validity

139Contents of notice

140Notice sent under certificate of posting

141Notice: Service of

142Fresh notice

143Constructive service of notice

144Deemed service of notice

145Demand notice sent by registered post

146Demand notice: Burden of proof of service

147Copy of demand notice: Admissibility

148Omnibus Demand in Notice

149Period for payment

150Date of service of statutory notice

151Period for filing of complaint

152Computation of period of limitation of notice

153Computation of period of one month for filing of complaint

154Extension of limitation period

155Averment in complaint

156"Date of receipt" to be understood as "date of knowledge of receipt" of the notice

157Proof of service of demand notice

158Receipt of notice by wife of accused drawer

159Notice, interpretation of

160Validity of demand notice

161Exact date of issue of notice or date of service of the notice in the complaint

162Words 'said amount of money', meaning

163Notice of demand: Cheque Number

164Dishonour of cheque for higher amount

165Prior discharge

166Consolidated notice for more than one cheques: Validity

167Premature complaint

168Subsequent events: Consequence of part payment by drawer after issue of notice

169Deposit by accused of entire amount during trial

170Single complaint in respect of more than one dishonoured cheque

171Summoning of accused

172Examination of complainant

173Production of additional evidence

174Examination of witnesses

175Dismissal of complaint

176Dismissal of complaint for non-appearance of complainant/counsel 

177Personal attendance of accused

178Death of payee

179Death of drawer

180Death of drawer-partner

181Death of complainant

182Discharge of accused

183Non-mention of necessary ingredients in pre-summoning statement 

184No grant of injunction

185Private complaint by accused: Maintainability

186Drawer declared insolvent

187Delay in disposal of cases: Practice and procedure

188Additional evidence: Permissibility

189Quashing of complaint

190Quashing of proceedings

191Propriety of non-consideration of issue of limitation

192Writ jurisdiction of High Court

193Nature and extent of presumption: Standard of proof

194Rejection of application for sending cheque to FSL

195Money lending transaction

196Application for Opinion of handwriting export

197Preponderance of probabilities

198Power of successor Magistrate

199Revision, scope

200Remand of case

201Instruction, while working abroad

202Filing of case against directors

203Cheques whether supported by consideration

139Presumption in favour of holder

1Presumption against the drawer, 


3Termination of dealership due to dishonour of cheque

4Nature and extent of presumption

5Shall be presumed

6Propriety of presumption

7Unless the contrary is proved

8Rebuttal evidence: Quantum of

9Holder of a cheque as referred to in section 138

10Rebuttal plea

11Non-rebuttal of presumption

12Presumption available to payee and holder

13Discharge in whole or in part of any debt or other liability

14Presumption of existence of legally enforceable debt

140Defence which may not be allowed in any prosecution under section 138


2Exclusion of mens rea

3It shall not be

4Reason to believe

5'Issuance' of cheque

6Cheque may be dishonoured on presentation

7Closure of account prior to date of drawal of cheque

141Offences by companies

1Offences by companies

2Non-banking financial companies


4“At the time the offence was committed”, scope of

5Complaint, maintainability

6Non-incorporation of particulars

7Reliance on affidavit


9Expression 'Company': Meaning and scope

10Expression "other association of individuals"

11Status of a sole proprietorship concern

12Liabilities of a firm and its partners

13Joint family business

14Legal liabilities of a company

15Trustees of a trust

16Hindu Undivided Family (HUF)

17Section 141, sub-section (1)

(a)Every person incharge

(b)Vicarious liability

(c)Quashing of prosecution

(d)As well as the company

18Post-dated cheques

19Demand notice

20Section 141 — First proviso — Meaning of

21Nominated directors not liable for prosecution — Second proviso 

22Section 141(2): With the consent or connivance of, or is attributable to, any neglect on the part of

23Section 141(2): Director — Manager or other officer — Meaning of 

24Vacation of office: Quashing of prosecution

25Vicarious liability: Prosecution of Director: Sustainability

26Winding up proceedings pending

27Explanation (b)

28Company not prosecuted

29Proceeding against company and its Managing Director

30Companies under winding up

31Sick industrial companies

32Duty of Courts: Frivolous litigation

33Company changing name

142Cognizance of offences


2Proviso differs prosecution

3Notwithstanding anything contained in Code of Criminal Procedure 

4Filing of complaint: Legal requirements

5Cognizance of the offence: Section 142(1)(a)

6Complaint by payee or holder in due course

7Fresh complaint remedy

8Complaint by company

9Complaint by co-operative society

10Complaint by Government Company

11Sole proprietorship firm

12Partnership firm

13Complaint by unregistered firm

14Limitation for taking cognizance

15Cheques issued in favour of bank

16Complaint in writing: Section 142(1)(b)

17Issuing of fresh demand notice

18Complaint filed by power of attorney holder

19Ingredients of offence

20Complaint filed by advocate

21Complaint sent by post

22"Within one month of the date on which the cause of action arises" 

23Quashing of prosecution

24Sufficient cause for not making a complaint within time

25Amendment prospective, not retrospective

26Premature complaint

27Jurisdiction of the court: Section 142(1)(c)

28Cause of action

29Defective notice

30Question of limitation

(a)With effect from 6-2-2003

(b)Prior to 6-2-2003

31Prospective operation

32Successive presentation of cheque: Cause of action: Computation of 

33Importance of date seal of court on copy of complaint to be served on accused

34Magistrate cannot refer the complaint to police for investigation 

35Nature of enquiry before issue of process

36Recommended procedure for trial of section 138 complaint

37Non-applicability of section 29(2) of the Cr PC

38When punishment more severe than Magistrate empowered to give warranted

39Power of Court

40Power of attorney holder

41Territorial jurisdiction settled by the insertion of section 142(2)

142AValidation for transfer of pending cases

143Power of Court to try cases summarily

1Trial of offence: Summary procedure

2Summary trial of cases

3Recording of reasons: Requirement of

4Summary trial provisions under the Code of Criminal Procedure 

5Sentence of imprisonment or fine

6When the Magistrate may not hold a summary trial

7Day to day trial

8Trials to conclude within six months

9Directions to courts, for speedy disposal of dishonour of cheque cases

144Mode of service of summons

145Evidence on affidavit

1Evidence on affidavit

2Section 145 not to be dissected into pre-summoning and post-summoning stage of trial

3Section 145 is an enabling provision

4Scope and nature of provision: Overriding effect

5Right to fair trial

6Amendment retrospective or prospective

7Territorial jurisdiction

146Bank's slip prima facie evidence of certain facts

147Offences to be compoundable

1Compounding of offence

2Right of accused to tender his evidence on affidavit

3Procedure to be followed: Applicability of section 320, Cr PC

4Permission from Court

5Deposit of 'Amount due' in Court

6Mere compromise and an action of compounding a crime: Distinction

Annexure 1Specimen Notices

SPECIMEN 1Proforma of a notice in connection with payment of arrears of salary

SPECIMEN 2Proforma of a notice in connection with rendering services

SPECIMEN 3Proforma of a notice on behalf of a business firm for the amount outstanding on account of supply of goods

SPECIMEN 4Proforma of a notice on behalf of the supplier of goods

SPECIMEN 5Proforma of a notice on account of purchases made on credit

SPECIMEN 6Proforma of a notice on behalf of a Bank

SPECIMEN 7Proforma of a notice on behalf of a company

SPECIMEN 8Proforma of a notice on behalf of a Pvt. Ltd. Company to a Limited Company on account of non-payment for the supply of goods

Annexure 2Specimen Complaints

SPECIMEN 1Proforma of a complaint for supply of goods on credit

SPECIMEN 2Proforma of a complaint on behalf of a sole proprietorship concern

SPECIMEN 3Proforma of a complaint on behalf of a Pvt. Ltd. Co. against a Limited Company

SPECIMEN 4Proforma of a complaint by a leasing company

SPECIMEN 5Proforma of a complaint on behalf of a Ltd. Company against another Ltd. Company

SPECIMEN 6Proforma of a complaint on behalf of a partnership concern

SPECIMEN 7Proforma of a complaint on behalf of a creditor against a debtor

SPECIMEN 8Proforma of a complaint on behalf of the sole proprietorship concern

Annexure 3     The Negotiable Instruments (Amendment) Act, 2018

Annexure 4The Negotiable Instruments (Amendment) Act, 2015

Annexure 4AThe Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002

Annexure 5Bankers' Books Evidence Act, 1891 [As amended by the Negotiable Instruments (Amendment & Miscellaneous Provisions) Act, 2002]

APPENDIX AAgreements controlling negotiable instruments

APPENDIX BPayment by bills, notes and cheques

APPENDIX CSuits on negotiable instruments

APPENDIX DBills of Exchange Act, 1882

APPENDIX EThe Cheques Act, 1957

APPENDIX FUniform Commercial Code




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Negotiable Instruments Act (As amended by The Negotiable Instruments (Amendment) Act, 2018, w.e.f. 1-9-2018)

Negotiable Instruments Act (As amended by The Negotiable Instruments (Amendment) Act, 2018, w.e.f. 1-9-2018)

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