The Negotiable Instruments Act, 1881

This Act may be called the Negotiable Instruments Act, 1881. Local extent. Saving of usages relating to hundis, etc.--It extends to the whole of India 1*** butnothing herein contained affects the 2Indian Paper Currency Act, 1871 (3 of 1871), section 21, or affectsany local usage relating to any instrument in an oriental language: Provided that such usages may be excluded by any words in the body of the instrument whichindicate an intention that the legal relations of the parties thereto shall he governed by this Act; Commencement.--and it shall come into force on the first day of March, 1882.

[ Repeal of enactments.] Rep. by the Repealing and Amending Act, 1891 (12 of 1891), s. 2 andthe Schedule I.

In this Act-- 1* * * * * Banker.2[banker includes any person acting as a banker and any post office savings bank;] 3* * * * *

A "Promissory note" is an instrument in writing (not being a bank-note or acurrency-note) containing an unconditional undertaking, signed by the maker, to pay a certain sum ofmoney only to, or to the order of, a certain person, or to the bearer of the instrument. Illustrations A signs instruments in the following terms: (a ) "I promise to pay B or order Rs. 500." (b) "I acknowledge myself to be indebted to B in Rs. 1,000, to be paid on demand, for value received." (c) "Mr. B, I O U Rs. 1,000. (d) "I promise to Pay B Rs. 500 and all other sums which shall be due to him." (e) "I promise to Pay B Rs. 500, first deducting thereout any money which he may owe me." (f) "I promise to Pay B Rs. 500 seven days after my marriage with C." (g) "I, promise to Pay B Rs. 500 on D's death, provided D leaves me enough to pay that sum." (h) "I promise to Pay B Rs. 500 and to deliver to him my black horse on 1st January next." The instruments respectively marked (a) and (b) are promissory notes. The instruments respectively marked (c),(d), (e), (f), (g) and (h) are not promissory notes.

A "bill of exchange" is an instrument in writing containing an unconditionalorder, signed by the maker, directing a certain person to pay a certain sum of money only to, or to theorder of, a certain person or to the bearer of the instrument. A promise or order to pay is not "conditional", within the meaning of this section and section 4, byreason of the time for payment of the amount or any instalment thereof being expressed to be on the lapseof a certain period after the occurrence of a specified event which, according to the ordinary expectation ofmankind, is certain to happen, although the time of its happening may be uncertain. The sum payble may be "certain", within the meaning of this section and section 4, although itincludes future interest or is payable at an indicated rate of exchange, or is according to the course ofexchange, and although the instrument provides that, on default of payment of an instalment, the balanceunpaid shall become due. The person to whom it is clear that the direction is given or that payment is to be made may be a"certain person", within the meaning of this section and section 4, although he is mis-named ordesignated by description only.