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CCP504 (B)
CCP504 (B)
ANDHRA PRADESH
Name : P. Samba Murthy
Designation : Head of Department
Branch : D.C.C.P
Institute : SRRS Govt. Polytechnic,
Sircilla, Karimnagar District
Year/Semester : V Semester
Subject : BANKING – I
Subject Code : CCP504(B)
Topic : Negotiable Instrument Act
Duration : 50 Mts
Sub Topic : Promissory Note, Bill of Exchange
and Cheque
Teaching aids : PPT, ANIMATIONS
CCP504(B).54 1
Objectives :
CCP504(B).54 2
Recap :
CCP504(B).54 3
Known to Unknown :
CCP504(B).54 4
Definition of Bill of Exchange :
CCP504(B).54 5
Specimen of Bill of Exchange :
Rs.30,000/- Hyderabad,
Dated : 13-04-2008.
Sd/-
Vijay Kumar
To
Sri V.G.Krishna,
147 Ashoknagar,
Secunderabad
CCP504(B).54 6
Bill of Exchange
CCP504(B).54 7
Bill of Exchange
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Parties to Bill of Exchange :
There are three parties to a bill of exchange namely,
Drawer:
The person who gives the order to pay or the
maker of the bill,
Drawee or acceptor:
The person on whom the obligation to pay rests
and
Payee:
The person to whom the bill is payable.
Generally, the drawer himself is the payee in
most of the cases, but a person other than the
drawer can also be a payee
CCP504(B).54 9
Features of Bill of Exchange :
There following are the essential features of a
bill of Exchange:
It must be in writing:
Like a promissory note, a bill of exchange must
also be in writing.
It must contain an order to pay:
If the language of the draft does not show any
order to pay, the draft will not be considered as
a bill of exchange.
The order must be unconditional.
It must be signed by the drawer and accepted
by the drawee.
CCP504(B).54 10
Features of Bill of Exchange :
It must contain an order to pay money only:
The sum payable must be written clearly and
unambiguously.
The parties must be certain:
In the case of a bill of exchange, the drawer, the
drawee (and acceptor when he accepts the bill) and
the payee must be indicated with reasonable
certainty.
Sometimes, the drawer and the payee are the
same persons for e.g., when a bill is drawn pay to
me or my order .
CCP504(B).54 11
BILLS OF EXCHANGE
Formalities:
The formalities relating to number, date, place
and consideration, though usually found in bills
of exchange, are not essential.
The bill of exchange may be made payable on
demand.
CCP504(B).54 12
BILLS OF EXCHANGE
Maturity of a Bill:
Maturity of a bill of exchange or promissory note,
according to sec. 22 of negotiable instrument
Act, means the date on which it falls due.
A bill, which is not payable on demand, matures
on expire on the stipulated period but falls due
and is payable three days thereafter.
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BILLS OF EXCHANGE
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Definition of Cheque :
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Features of A Cheque :
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Features of A Cheque :
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Features of A Cheque :
A cheque can be crossed and payment of cheque
may be countermanded (Cancel/stop) by the
drawer.
But payment of a bill cannot be countermanded
by the drawer.
When a bill is not duly presented for payment the
drawer is discharged from liability.
The drawer of a cheque is not usually discharged
by delay of the holder in presenting the cheque
for payment.
CCP504(B).54 18
CHEQUE
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Specimen of Cheque :
Date …………
Pay ………………………………………………………. or
Bearer Rupees …………………………………………………
………… only
Rs. ________
Account No.12345678
Andhra Bank
Ashoknagar
Hyderabad
765432 500600700 654321 10
CCP504(B).54 20
ESSENTIALS OF CHEQUE
Drawer’s signature:
A cheque must be signed by the drawer or his
authorized agent.
The drawer should sign the cheque in accordance
with his specimen signatures supplied to bank at
the opening of account.
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ESSENTIALS OF CHEQUE
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ESSENTIALS OF CHEQUE
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Material Alteration:
If there is any material alteration i.e., alternations
on the date of the instrument or place of payment
or the sum payable or the party to whom the
money is payable, all such material alterations
should generally be evidenced by the full signature
of the drawer
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Summary :
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Summary :
A cheque is a bill of exchange drawn on a
specified banker and not expressed to be payable
otherwise tan on demand.
A cheque is always drawn on a specified banker.
Thus, the drawee in case of a cheque is the
banker.
A cheque is always payable on demand.
Thus, all cheques are bills of exchange but all bills
of exchange are not cheques.
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Quiz :
1. A Bill of exchange is an
a) Unconditional promise
b) Unconditional order
c) Demand draft
d) None
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Quiz :
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Frequently Asked Questions :
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Assignment :
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