Ingredientsįollowing are the ingredients to be satisfied for qualifying to be holder: If the promissory note, bill of exchange, cheque gets lost or destroyed then the holder is the person who is entitled at the time of the loss or destruction. Sec 8 of the Act contemplates that any person who is entitled to get the possession and subsequently receive payment or recover payment from the parties for a promissory note, bill of exchange, cheque which he is entitled to possess. Generally a holder of a negotiable instrument is one which acquires it by a transfer. Section 8 and Section 9 of the Act discuss the concept and definition of a holder and holder in due course. It lays down the frame work under which these instruments operate and any contravention in these rules has been made punishable.įor the purposes of understanding the working of the negotiable instruments it is imperative to understand the complexities of the parties involved in a transaction in which a negotiable instrument is involved. The Negotiable Instruments Act, 1881 (hereinafter referred to as the Act) is a statute which regulates the working of instruments which can be negotiated for amount.
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