THE NEGOTIABLE INSTRUMENTS ACT, 1881

Act No. III of 1872 to Act No. II of 1882

( ACT NO. XXVI Of 1881 )

[ 9th December, 1881 ]

1♣An Act to define and amend the law relating to Promissory Notes, Bills of Exchange and Cheques.

Preamble

WHEREAS it is expedient to define and amend the law relating to promissory notes, bills of exchange and cheques; It is hereby enacted as follows:-

CONTENTS

SECTIONS

CHAPTER I

PRELIMINARY

  1. Short title

Local extent Saving of usages relating to hundis, etc. Commencement

1A. Application of the Act

  1. [Repealed]
  2. Interpretation-clause.

CHAPTER II

OF NOTES, BILLS AND CHEQUES

  1. “Promissory note”
  2. “Bill of exchange”
  3. “Cheque”
  4. “Drawer” “Drawee” “Drawee in case of need” “Acceptor” “Acceptor for honour” “Payee”
  5. “Holder”
  6. “Holder in due course”
  7. “Payment in due course”
  8. Inland instrument
  9. Foreign instrument
  10. “Negotiable instrument”
  11. Negotiation
  12. Indorsement
  13. Indorsement “in blank” and “in full” “Indorsee”
  14. Ambiguous instruments
  15. Where amount is stated differently in figures and words
  16. Instruments payable on demand.
  17. Inchoate stamped instruments
  18. “At sight” “On presentment” “After sight”

21A. When note or bill payable on demand is overdue

21B. A note or bill payable at a determinable future time

21C. Anti-dating and post-dating

  1. “Maturity” Days of grace
  2. Calculating maturity of bill or note payable so many months after date or sight
  3. Calculating maturity of bill or note payable so many days after date or sight
  4. When day of maturity is a holiday

CHAPTER III

PARTIES TO NOTES, BILLS AND CHEQUES

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

Minor

  1. Agency

27A. Authority of partner

  1. Liability of agent signing

28A. Transferor by delivery and transferee

  1. Liability of legal representative signing

29A. Signature essential to liability

29B. Forged or unauthorised signature

29C. Stranger signing instrument presumed to be indorser

  1. Liability of drawer
  2. Liability of drawee of cheque
  3. Liability of maker of note and acceptor of bill
  4. Only drawee can be acceptor except in need or for honour
  5. Acceptance by several drawees not partners
  6. Liability of indorser
  7. Liability of prior parties to holder in due course
  8. Maker, drawer and accept or principals
  9. Prior party a principal in respect of each subsequent party

38A. Liability of accommodation party and position of accommodation party

  1. Suretyship
  2. Discharge of indorser’s liability
  3. Acceptor bound although indorsement forged
  4. Acceptance of bill drawn in fictitious name
  5. Negotiable instrument made, etc., without consideration
  6. Partial absence or failure of money-consideration
  7. Partial failure of consideration not consisting of money

45A. Holder’s right to duplicate of lost bill

PART IV

OF NEGOTIATION

  1. Delivery
  2. Negotiation by delivery
  3. Negotiation by indorsement
  4. Conversion of indorsement in blank into indorsement in full
  5. Effect of indorsement
  6. Who may negotiate
  7. Indorser who excludes his own liability or makes it conditional
  8. Holder claiming through holder in due course

53A. Rights of holder in due course

  1. Instrument indorsed in blank
  2. Conversion of indorsement in blank into indorsement in full
  3. Requisites of indorsement
  4. Legal representative cannot by delivery only negotiate instrument indorsed by deceased

57A. Negotiation of instrument of party already liable thereon

57B. Rights of holder

  1. Defective title
  2. Instrument acquired after dishonour or when overdue

Accommodation note or bill

  1. Instrument negotiable till payment or satisfaction

CHAPTER V

OF PRESENTMENT

  1. Presentment for acceptance
  2. Presentment of promissory note for sight
  3. Drawee’s time for deliberation
  4. Presentment for payment
  5. Hours for presentment
  6. Presentment for payment of instrument payable after date or sight
  7. Presentment for payment of promissory note payable by instalments
  8. Presentment for payment of instrument payable at specified place and not elsewhere
  9. Instrument payable at specified place
  10. Presentment where no exclusive place specified
  11. Presentment when maker, etc., has no known place of business or residence

71A. What constitutes valid presentment and mode of presentment

  1. Presentment of cheque to charge drawer
  2. Presentment of cheque to charge any other person
  3. Presentment of instrument payable on demand
  4. Presentment by or to agent, representative of deceased, or assignee of insolvent

75A. Excuse for delay in presentment for acceptance or payment

  1. When presentment unnecessary
  2. Liability of banker for negligently dealing with bill presented for payment

CHAPTER VI

OF PAYMENT AND INTEREST

  1. To whom payment should be made
  2. Interest when rate specified or not specified
  3. Interest when no rate specified
  4. Delivery of instrument on payment, or indemnity in case of loss

CHAPTER VII

OF DISCHARGE FROM LIABILITY ON NOTES, BILLS AND CHEQUES

  1. Discharge from liability-

(a) by cancellation

(b) by release

(c) by payment

  1. Discharge by allowing drawee more than forty-eight hours to accept
  2. When cheque not duly presented and drawer damaged thereby
  3. Cheque payable to order

85A. Drafts drawn by one branch of a bank on another payable to order

  1. Parties not consenting discharged by qualified or limited acceptance
  2. Effect of material alteration

Alteration by indorsee

  1. Acceptor or indorser bound notwithstanding previous alteration
  2. Payment of instrument on which alteration is not apparent
  3. Extinguishment of rights of action on bill in acceptor’s hands

CHAPTER VIII

OF NOTICE OF DISHONOUR

  1. Dishonour by non-acceptance
  2. Dishonour by non-payment
  3. By and to whom notice should be given
  4. Mode in which notice may be given
  5. Party receiving must transmit notice of dishonour
  6. Agent for presentment
  7. When party to whom notice given is dead
  8. When notice of dishonour is unnecessary

CHAPTER IX

OF NOTING AND PROTEST

  1. Noting
  2. Protest

Protest for better security

  1. Contents of protest
  2. Notice of protest
  3. Protest for non-payment after dishonour by non-acceptance
  4. Protest of foreign bills

104A. When noting equivalent to protest

CHAPTER X

OF REASONABLE TIME

  1. Reasonable time
  2. Reasonable time of giving notice of dishonour
  3. Reasonable time for transmitting such notice

CHAPTER XI

OF ACCEPTANCE AND PAYMENT FOR HONOUR AND REFERENCE IN CASE OF NEED

  1. Acceptance for honour
  2. How acceptance for honour must be made
  3. Acceptance not specifying for whose honour it is made
  4. Liability of acceptor for honour
  5. When acceptor for honour may be charged
  6. Payment for honour
  7. Right of payer for honour
  8. Drawee in case of need
  9. Acceptance and payment without protest

CHAPTER XII

OF COMPENSATION

  1. Rules as to compensation

CHAPTER XIII

SPECIAL RULES OF EVIDENCE

  1. Presumptions 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 indorsements; (f) as to stamp; (g) that holder is a h
  2. Presumption on proof of protest
  3. Estoppel against denying original validity of instrument
  4. Estoppel against denying capacity of payee to indorse
  5. Estoppel against denying signature or capacity of prior party

CHAPTER XIV

SPECIAL PROVISIONS RELATING TO CHEQUES

122A. Revocation of Banker’s authority

  1. Cheque crossed generally

123A. Cheque crossed “account- payee”

  1. Cheque crossed specially
  2. Crossing after issue

125A Crossing a material part of a cheque

  1. Payment of cheque crossed generally

Payment of cheque crossed specially

  1. Payment of cheque crossed specially more than once.
  2. Payment in due course of crossed cheque
  3. Payment of crossed cheque out of due course
  4. Cheque bearing “not negotiable”
  5. Non-liability of banker receiving payment of cheque

131A. Application of Chapter to drafts

131B. Protection to banker crediting cheque crossed “account- payee”

131C. Cheque not operating as assignment of funds

CHAPTER XV

SPECIAL PROVISIONS RELATING TO BILLS OF EXCHANGE

131D.Several drawees

131E. In whose favour a bill may be drawn

131F. When presentment for acceptance is necessary

131G. When presentment excused

131H. Holder’s right of recourse against drawn and indorsers

131-I. Holder may refuse qualified acceptance

  1. Set of bills
  2. Holder of first acquired part entitled to all

CHAPTER XVI

OF INTERNATIONAL LAW

  1. Law governing liability of parties to a foreign instrument
  2. [Omitted]
  3. Instrument made, etc., outside Bangladesh, but in accordance with their law
  4. Presumption as to foreign law

2CHAPTER XVII

ON PENALTIES IN CASE OF DISHONOUR OF CERTAIN CHEQUES FOR INSUFFICIENCY OF FUNDS IN THE ACCOUNTS

  1. Dishonour of cheque for insufficiency, etc., of funds in the account

138A. Restriction in respect of appeal

  1. [Omitted]
  2. Offences of Companies
  3. Cognizance of offences

Related Links

Bangladesh Government Official Web Site

Legislative and Parliamentary Affairs Division

Parliament Secretariat

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