UGC NET COMMERCE June 2019 Q37
0. Which among the following is NOT included in negotiable instrument?
- Option : D
- Explanation : According to Section 13 of Negotiable Instrument Act, 1881, “Negotiable instrument means a promissory note, a bill of exchange or a cheque payable either to order or to bearer, whether the word ‘orderf’ or ‘bearer’ appear on the instrument or not.”
According to Justice Willis, “A negotiable instrument is one, the property in which is acquired by anyone who takes it bonafide and for value notwithstanding any defects of the title in the person from whom he took it.”
Thus, the term, negotiable instrument means a written document which creates a right in favour of some person and which is freely transferable. The Act mentions only these three instruments such as a promissory note, a bill of exchange and cheque. However other similar instruments satisfying the conditions of the act can also be included in the ambit of negotiable instruments.
Negotiable instrument is such instrument–a written document for the transfer of money value or for the settlement of payment by the exchange of such written document called instrument of payment. Cheque, demand draft, bills of exchange, promissory notes, hundi and similar such instruments (written documents) are the most frequently used negotiable instruments. Negotiability of these instruments means that these can be transferred or endorsed from one party to another party for the settlement of monetary claims.
