Negotiable Instruments Act, 1881

NIA India, Act No. 26 OF 1881

Chapters in NIA
Updated with amendments of 2015
01 Preliminary
02 Of Notes Bills and Cheques
03 Parties to Notes Bills and Cheques
04 Of Negotiation
05 Of Presentment
06 Of Payment and Interest
07 Of Discharge from Liability on Notes Bills and Cheques
08 Of Notice of Dishonour
09 Of Noting and Protest
10 Of Reasonable Time
11 Of Acceptance and Payment for Honour and Reference in Case of Need
12 Of Compensation
13 Special Rules of Evidence
14 Of Crossed Cheques
15 Of Bills in Sets
16 Of International Law
Of Penalties in Case of Dishonour of Certain Cheques for Insufficiency of Funds in the
17
Accounts

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

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:

Chapter I – Preliminary
Section 1 – Short title
Section 2 – Commencement
Section 3 – Interpretation-clause

Chapter II – Of Notes, Bills and Cheques

Section 4 – “Promissory note”
Section 5 – “Bill of exchange”
Section 6 – “Cheque”
Section 7 – Drawer, Drawee
Section 8 – “Holder”
Section 9 – “Holder in due course”
Section 10 – “Payment in due course”
Section 11 – Inland instrument
Section 12 – Foreign instrument
Section 13 – Negotiable instrument
Section 14 – Negotiation
Section 15 – Indorsement
Section 16 – Indorsement in “blank” and “in full”.
Section 17 – Ambiguous instruments
Section 18 – Where amount is stated differently in figures
and words
Section 19 – Instruments payable on demand
Section 20 – Inchoate stamped instruments
Section 21 – “At sight”
Section 22 – “Maturity”
Section 23 – Calculating maturity of bill or note payable so
many months after date or sight
Section 24 – Calculating maturity of bill or note payable so
many days after date or sight
Section 25 – When day of maturity is a holdiay

Chapter III – Parties to Notes, Bills and

Cheques
Section 26 – Capacity to make, etc., promissory notes, etc.
Section 27 – Agency
Section 28 – Liability of agent signing
Section 29 – Liability of legal representative signing
Section 30 – Liability of drawer
Section 31 – Liability of drawee of cheque
Section 32 – Liability of maker of note and acceptor of bill
Section 33 – Only drawee can be acceptor except in need or
for honour
Section 34 – Acceptance by several drawees not partners
Section 35 – Liability of indorser
Section 36 – Liability of prior parties to holder in due course
Section 37 – Maker, drawer and acceptor principals
Section 38 – Prior party a principal in respect of each
subsequent party
Section 39 – Suretyship
Section 40 – Discharge of indorser’s liability
Section 41 – Acceptor bound, although, indorsement forged
Section 42 – Acceptance of bill drawn in fictitious name
Section 43 – Negotiable instrument made, etc., without
consideration.
Section 44 – Partial absence or failure of money
consideration
Section 45 – Partial failure of consideration not consisting of
money
Section 45A – Holder’s right to duplicate of lost bill

Chapter IV – Of Negotiation
Section 46 – Delivery
Section 47 – Negotiations by delivery
Section 48 – Negotiation by indorsement
Section 49 – Conversion of indorsement in blank into
indorsement in full
Section 50 – Effect of indorsement
Section 51 – Who may negotiate
Section 52 – Indorser who excluds his own liability or makes
it conditional
Section 53 – Holder deriving title from holder in due course
Section 54 – Instrument indorsed in blank
Section 55 – Conversion of indorsement in blank into
indorsement in full
Section 56 – Indorsement for part of sum due
Section 57 – Legal representative cannot by delivery only
negotiate instrument indorsed by deceased
Section 58 – Instrument obtained by unlawful means or for
unlawful consideration
Section 59 – Instrument acquired after dishonour or when
overdue
Section 60 – Instrument negotiable till payment or
satisfaction

Chapter V – Of Presentment
Section 61 – Presentment for acceptance
Section 62 – Presentment of promissory note for sight
Section 63 – Drawee’s time for deliberation
Section 64 – Presentment for payment
Section 65 – Hours for presentment
Section 66 – Presentment for payment of instrument payable
after date or sight
Section 67 – Presentment for payment of promissory note
payable by instalments
Section 68 – Presentment for payment of instrument payable
at specified place and not else where
Section 69 – Instrument payable at specified place
Section 70 – Presentment where no exclusive place specified
Section 71 – Presentment when maker, etc., has no known
place of business or residence.
Section 72 – Presentment of cheque to charge drawer
Section 73 – Presentment of cheque to charge any other
person
Section 74 – Presentment of instrument payable on demand
Section 75 – Presentment by or to agent, representative of
deceased, or assignee of insolvent
Section 75A – Excuse for delay in presentment for
acceptance or payment
Section 76 – When presentment unnecessary
Section 77 – Liability of banker for negligently dealing with
bill presented for payment

Chapter VI – Of Payment and Interest

Section 78 – To whom payment should be made
Section 79 – Interest when rate specified
Section 80 – Interest when no rate specified
Section 81 – Delivery of instrument on payment, or
indemnity in case of loss
Section 81A – Application of the Act to electronic cheque
and truncated cheque

Chapter VII – Of Discharge from Liability on

Notes, Bills and Cheques
Section 82 – Discharge from liability
Section 83 – Discharge by allowing drawee more than forty-
eight hours to accept
Section 84 – When cheque not duly presented and drawer
damaged thereby.
Section 85 – Cheque payable to order.
Section 85A – Drafts drawn by one branch of a bank on
another payable to order
Section 86 – Parties not consenting discharged by qualified
or limited acceptance
Section 87 – Effect of material alteration
Section 88 – Acceptor or indorser bound notwithstanding
previous alteration
Section 89 – Payment of instrument on which alteration is
not apparent
Section 90 – Extinguishment of rights of action on bill in
acceptor’s hands

Chapter VIII – Of Notice of Dishonour

Section 91 – Dishonour by non-acceptance
Section 92 – Dishonour by non-payment
Section 93 – By and to whom notice should be given
Section 94 – Mode in which notice may be given
Section 95 – Party receiving must transmit notice of
dishonour
Section 96 – Agent for presentment
Section 97 – When party to whom notice given is dead
Section 98 – When notice of dishnour is unnecessary

Chapter IX – Of Noting and Protest

Section 99 – Noting
Section 100 – Protest
Section 101 – Contents of protest
Section 102 – Protest for non-payement after dishonour by
non-acceptacne
Section 103 – Protest for non-payement after dishonour by
non-acceptacne
Section 104 – Protest of foreign bills
Section 104A – When noting equivalent to protest

Chapter X – Of Reasonable Time

Section 105 – Reasonable time
Section 106 – Reasonable time of giving notice of dishonour
Section 107 – Reasonable time for transmitting such notice

Chapter XI – Of Acceptance and Payment for

Honour and Reference in Case of Need
Section 108 – Acceptance for honour
Section 109 – How acceptance for honour must be made
Section 110 – Acceptance not specifying for whose honour it
is made
Section 111 – Liability of acceptor for honour
Section 112 – When acceptor for honour may be charged
Section 113 – Payment for honour
Section 114 – Right of payer for honour
Section 115 – Drawee in case of need
Section 116 – Acceptance and payment without protest

Chapter XII – Of Compensation

Section 117 – Rules as to compensation

Chapter XIII – Special Rules of Evidence

Section 118 – Presumptions as to negotiable instruments
Section 119 – Presumption on proof of protest
Section 120 – Estoppel against denying original validity of
instrument
Section 121 – Estoppel against denying capacity of payee to
indorse
Section 122 – Estoppel against denying signature or capacity
of prior party

Chapter XIV – Of Crossed Cheques

Section 123 – Cheque crossed generally
Section 124 – Cheque crossed specially
Section 125 – Crossing after issue
Section 126 – Payment of cheque crossed generally
Section 127 – Payment of cheque crossed specially more than
once
Section 128 – Payment in due course of corssed cheque
Section 129 – Payment of crossed cheque out of due course
Section 130 – Cheque bearing “not negotiable”
Section 131 – Non-liability of banker receiving payment of
cheque
Section 131A – Application of Chapter to drafts

Chapter XV – Of Bills in Sets

Section 132 – Set of bills
Section 133 – Holder of first acquired part entitled to all

Chapter XVI – Of International Law

Section 134 – Law governing liability of maker, acceptor or
indorser of foreign instrument
Section 135 – Law of place of payment governs dishonour
Section 136 – Instrument made, etc., out of India, but in
accordance with the law of India.
Section 137 – Presumption as to foreign law

Chapter XVII – Of Penalties in Case of

Dishonour of Certain Cheques for
Insufficiency of Funds in the Accounts
Section 138 – Dishonour of cheque for insufficiency, etc., of
funds in the account.
Section 139 – Presumption in favour of holder
Section 140 – Defence which may not be allowed in any
prosecution under section 138
Section 141 – Offences by companies.
Section 142 – Cognizance of offences
Section 142A – Validation for transfer of pending cases
Section 143 – Power of Court to try cases summarily
Section 144 – Mode of service of summons
Section 145 – Evidence on Affidavit
Section 146 – Bank's slip prima facie evidence for certain
facts
Section 147 – Offences to be compoundable