Bills Of Exchange Introduction n Negotiable Instrument n

Bills Of Exchange

Introduction n

Negotiable Instrument n According To Section 13(1) Of The Negotiable Instrument Act, 1881, “ A Negotiable Instrument Means A Promissory Note, Bill Of Exchange Or Cheque Payable Either To Order Or To Bearer”

Types Of Negotiable Instrument n 1. 2. 3. Recognized By Statute Bills Of Exchange Promissory Notes Cheques n 1. 2. 3. 4. Recognized By Usage Or Custom Hundis Share Warrants Dividend Warrants Bearer

Bills Of Exchange n n According to section 5 of Negotiable Instrument Act, “A Bill Of Exchange is an instrument in writing containing an unconditional order, signed by the maker , directing a certain person to pay a sum of money only to or to the order of a certain person or to the bearer of the instrument”

Specimen Of A Bill Of Exchange JAMMU 27 th Nov. 2006 Three months after due date, pay XYZ or order, the Sum of Rs 1000(one thousand only) for value received. To, M/S ABC Gandhi Nagar Jammu Stamp

Parts Of A Bill Of Exchange Date n Term n Amount n Stamp n Parties n

Special features 1. 2. 3. 4. 5. 6. 7. A Bill Of Exchange is an instrument in writing It must be signed by the maker It contains an unconditional order The order must be to pay money and money only The sum payable must be specific The amount must be paid within a stipulated time The name of the drawee must be clearly mentioned

Parties to a Bill Of Exchange Drawer The person who draws or writes the Bill Of Exchange is called the Drawer. The Drawer must be the seller or creditor to whom the money is owing

Drawee n The Drawee is the person on whom the bill is drawn. He is the purchaser or debtor who is ordered by the Drawer to pay the amount

Payee n The person who has the right to receive the amount of the bill is called the Payee, the Payee may be a third person or the Drawer himself

Advantages of Bill of Exchange 1. 2. 3. 4. 5. A Bill of Exchange is used in settlement of debts It fixes the date of payment It is a written and signed acknowledgement of debt A debtor enjoys full period of credit A drawer can convert the bill into cash by getting it discounted with the bank

Kinds of Bills Of Exchange Inland Bill n Foreign Bill n

Kinds of Bills Of Exchange n Trade Bills n Accommodati on Bills

Kinds of Bills Of Exchange Demand Bill n Time Bill n

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