7/31/2019 Negotibale Instruments Law Star Provisions
1/1
ACT 2031: NEGOTIABLE INSTRUMENTS LAW
STAR PROVISIONS
SECTION 1.Form of negotiable instruments
An instrument to be negotiable must conform to the following
requirements:a. must be in writing and signed by the maker or the
drawer;b. must contain an unconditional promise or order to pay a
sum certain in money;c. must be payable upon demand or at a fixed
or determinable future time;d. must be payable to order or
bearer;e. where the instrument is addressed to the drawee, he must
be named orotherwise indicated therein with reasonable
certainty.
SECTION 14. BLANKS, WHEN MAY BE FILLED-
Where the instrument is wanting in any material particular, the
person inpossession thereof has a prima facie authority to complete
it by filling up theblanks therein. And a signature on a blank
paper delivered by the person makingthe signature in order that the
paper may be converted into a negotiableinstrument operates as a
prima facie authority to fill it up as such for any amount.In
order, however, that any such instrument when completed may be
enforcedagainst any person who became party thereto prior to its
completion, it must befilled up strictly in accordance with the
authority given and within a reasonabletime. but if any such
instrument, after completion, is negotiated to a holder in
duecourse, it is valid and effectually for all purposes in his
hands and he may enforce
it as if it had been filled up strictly in accordance with the
authority given andwithin reasonable time.
SECTION 15. INCOMPLETE INSTRUMENT NOT DELIVERED
Where an incomplete instrument has not been delivered, it will
not, if completedwithout authority, be a valid contract in the
hands of any holder, as against anyperson whose signature was
placed thereon before delivery.
SECTION 16. DELIVERY, WHEN EFFECTUAL, WHEN PRESUMED
Every contract on a negotiable instrument is incomplete and
revocable untildelivery of the instrument for the purpose of giving
effect thereto. As betweenimmediate parties and as regards a remote
party other than a holder in duecourse, the delivery in order to be
effectual, must be made either in such case,the delivery may be
shown to have been conditional, or for a special purposeonly, and
not for the purpose of transferring the property in the instrument.
But
where the instrument is in the hands of a holder in due course,
a valid deliverythereof by all parties prior to him so as to make
them liable to him is conclusivelypresumed. And where the
instrument is no longer in the possession of a partywhose signature
appears thereon, a valid and intentional delivery by him ispresumed
until the contrary is proved.
SECTION 23. FORGED SIGNATURE; EFFECT THEREOF
When a signature is forged or made without the authority of the
person whosesignature it purports to be, it is wholly inoperative,
and no right to retain theinstrument, or to give a discharge
thereof, or to enforce payment thereof againstany party thereto can
be acquired through or under such signature, unless theparty
against whom it is sought to enforce such right is precluded from
setting upthe forgery or want of authority.
SECTION 29. LIABILITY OF ACCOMMODATION PARTY
An accommodation party is one who has signed the instrument as
maker,
drawer, acceptor, or indorser, without receiving value therefor,
and for thepurpose of lending his name to some other person. Such a
person is liable on theinstrument to a holder for value,
notwithstanding such holder, at the time oftaking the instrument,
knew him to be only an accommodation party.
SECTION 34. SPECIAL INDORSEMENT; INDORSEMENT IN BLANK
A special indorsement specifies the person to whom or to whose
order, theinstrument is to be payable, and the indorsement of such
indorsee is necessaryto the further negotiation of the instrument.
An indorsement in blank specifies noindorsee, and an instrument so
indorsed is payable to bearer, and may benegotiated by
delivery.
SECTION 36. WHEN INDORSEMENT RESTRICTIVE
An indorsement is restrictive which either:a. prohibits the
further negotiation of the instrument;b. constitutes the indorsee
the agent of the indorser; orc. vests the title in the indorsee in
trust for or to the use of some other persons.
But the mere absence of words implying to negotiate does not
make anindorsement restrictive.
SECTION 38. QUALIFIED INDORSEMENT
A qualified indorsement constitutes the indorser a mere assignor
of the title tothe instrument. It may be made by adding to the
indorser's signature the words"without recourse" or any words of
similar import. Such an indorsement does noimpair the negotiable
character of the instrument.
SECTION 39. CONDITIONAL INDORSEMENT
Where an indorsement is conditional, the party required to pay
the instrumentmay disregard the condition and make payment to the
indorsee or his transfereewhether the condition has been fulfilled
or not. But any person to whom aninstrument so indorsed is
negotiated will hold the same, or the proceeds thereofsubject to
the rights of the person indorsing conditionally.
SECTION 52. WHAT CONSTITUTES A HOLDER IN DUE COURSE
A holder in due course is a holder who has taken the instrument
under thefollowing conditions:
a. that it is complete and regular upon its face;b. that he
became the holder of it before it was overdue, and without notice
thathas been previously dishonored, if such was the fact;c. that he
took it for value and in good faith;d. that at the time it was
negotiated to him, he had no notice of any infirmity in
thinstrument or defect in the title of the person negotiating
it.
SECTION 124. ALTERATION OF INSTRUMENT; EFFECT OF
Where a negotiable instrument is materially altered without the
assent of allparties liable thereon, it is avoided, except as
against a party who has himselfmade, authorized, or assented to the
alteration and subsequent indorsers.
But when an instrument has been materially altered and is in the
hands of aholder in due course not a party to the alteration, he
may enforce paymentthereof acording to its original tenor.
SECTION 126. BILL OF EXCHANGE, DEFINED
A bill of exchange is an unconditional order in writing
addressed by one person tanother, signed by the person giving it,
requiring the person to whom it isaddressed to pay on demand or at
a fixed or determinable future time a sumcertian in money to order
or to bearer.
SECTION 184. PROMISSORY NOTE, DEFINED
A negotiable promissory note within the meaning of this Act is
an unconditionalpromise in writing by one person to another, signed
by the maker, engaging topay on demand or at a fixed or
determinable future time, a sum certain in moneyto order or to
bearer. Where a note is drawn to the maker's own order, it is
notcomplete until indorsed by him.
SECTION 185. CHECK, DEFINED
A check is a bill of exchange drawn on a bank payable on demand.
Except as
herein otherwise provided, the provisions of this Act applicable
to a bill ofexchange payable on demand apply to a check.
http://hopefulivy.blogspot.in/2009/08/act-2031-negotiable-instruments-law.htmlhttp://hopefulivy.blogspot.in/2009/08/act-2031-negotiable-instruments-law.html
