The Negotiable Instruments Act, 1881
“Promissory note”
4. A “promissory note” is an instrument in writing (not being a bank-note or a currency-note) containing an unconditional undertaking, signed by the maker, to pay on demand or at a fixed or determinable future time a certain sum of money 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 Taka 500.”
(b) “I acknowledge myself to be indebted to B in Taka 1,000 to be paid on demand, for value received.”
(c) “Mr. B, I O U Taka 1,000.”
(d) “I promise to pay B Taka 500 and all other sums which shall be due to him.”
(e) “I promise to pay B Taka 500, first deducting thereout any money which he may owe me.”
(f) “I promise to pay B Taka 500 seven days after my marriage with C.”
(g) “I promise to pay B Taka 500 on D's death, provided D leaves me enough to pay that sum.”
(h) “I promise to pay B Taka 500 and to deliver to him may 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) “I promise to pay B or order Taka 500.”
(b) “I acknowledge myself to be indebted to B in Taka 1,000 to be paid on demand, for value received.”
(c) “Mr. B, I O U Taka 1,000.”
(d) “I promise to pay B Taka 500 and all other sums which shall be due to him.”
(e) “I promise to pay B Taka 500, first deducting thereout any money which he may owe me.”
(f) “I promise to pay B Taka 500 seven days after my marriage with C.”
(g) “I promise to pay B Taka 500 on D's death, provided D leaves me enough to pay that sum.”
(h) “I promise to pay B Taka 500 and to deliver to him may 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.
5. “Bill of exchange”
5. A “bill of exchange” is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay on demand or at fixed or determinable future time a certain sum of money only to, or to the order 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, by reason of the time for payment of the amount or any instalment thereof being expressed to be on the lapse of a certain period after the occurrence of a specified event which, according to the ordinary expectation of mankind, is certain to happen, although the time of its happening may be uncertain.
The sum payable may be “certain,” within the meaning of this section and section 4, although it includes future interest or is payable at an indicated rate of exchange, or is payable at the current rate of exchange, and although it is to be paid in stated instalments and contains a provision that on default of payment of one or more instalments or interest, the whole or the unpaid balance shall become due.
Where the person intended can reasonably be ascertained from the promissory note or the bill of exchange, he is a “certain person” within the meaning of this section and section 4, although he is misnamed or designated by description only.
An order to pay out of a particular fund is not unconditional within the meaning of this section; but an unqualified order to pay, coupled with-
(a) an indication of a particular fund out of which the drawee is to reimburse himself or a particular account to be debited to the amount, or
(b) a statement of the transaction which gives rise to the note or bill, is unconditional.
Where the payee is a fictitious or non-existing person the bill of exchange may be treated as payable to bearer.
A promise or order to pay is not “conditional”, within the meaning of this section and section 4, by reason of the time for payment of the amount or any instalment thereof being expressed to be on the lapse of a certain period after the occurrence of a specified event which, according to the ordinary expectation of mankind, is certain to happen, although the time of its happening may be uncertain.
The sum payable may be “certain,” within the meaning of this section and section 4, although it includes future interest or is payable at an indicated rate of exchange, or is payable at the current rate of exchange, and although it is to be paid in stated instalments and contains a provision that on default of payment of one or more instalments or interest, the whole or the unpaid balance shall become due.
Where the person intended can reasonably be ascertained from the promissory note or the bill of exchange, he is a “certain person” within the meaning of this section and section 4, although he is misnamed or designated by description only.
An order to pay out of a particular fund is not unconditional within the meaning of this section; but an unqualified order to pay, coupled with-
(a) an indication of a particular fund out of which the drawee is to reimburse himself or a particular account to be debited to the amount, or
(b) a statement of the transaction which gives rise to the note or bill, is unconditional.
Where the payee is a fictitious or non-existing person the bill of exchange may be treated as payable to bearer.
6. “Cheque”
6. A “cheque” is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.
7. “Drawer” “Drawee” “Drawee in case of need” “Acceptor” “Acceptor for honour” “Payee”
7. The maker of a bill of exchange or cheque is called the “drawer;” the person thereby directed to pay is called the “drawee.”
When in the bill or in any indorsement thereon the name of any person is given in additional to the drawee to be resorted to in case of need, such person is called a “drawee in case of need.”
After the drawee of a bill has signed his assent upon the bill, or, if there are more parts thereof than one, upon one of such parts, and delivered the same, or given notice of such signing to the holder or to some person on his behalf, he is called the “acceptor”.
When a bill of exchange has been noted or protested for non-acceptance or for better security, and any person accepts it supra protest for honour of the drawer or of any one of the indorsers, such person is called an “acceptor for honour.” “Acceptor for honour”
The person named in the instrument, to whom or to whose order the money is by the instrument directed to be paid, is called the “payee”.
When in the bill or in any indorsement thereon the name of any person is given in additional to the drawee to be resorted to in case of need, such person is called a “drawee in case of need.”
After the drawee of a bill has signed his assent upon the bill, or, if there are more parts thereof than one, upon one of such parts, and delivered the same, or given notice of such signing to the holder or to some person on his behalf, he is called the “acceptor”.
When a bill of exchange has been noted or protested for non-acceptance or for better security, and any person accepts it supra protest for honour of the drawer or of any one of the indorsers, such person is called an “acceptor for honour.” “Acceptor for honour”
The person named in the instrument, to whom or to whose order the money is by the instrument directed to be paid, is called the “payee”.
8. “Holder”
“Payee”
8. The “holder” of a promissory note, bill of exchange or cheque means the payee or indorsee who is in possession of it or the bearer thereof but does not include a beneficial owner claiming through a benamidar. “Holder”
8. The “holder” of a promissory note, bill of exchange or cheque means the payee or indorsee who is in possession of it or the bearer thereof but does not include a beneficial owner claiming through a benamidar. “Holder”
“Negotiable instrument”
13.(1) A “negotiable instrument” means a promissory note, bill of exchange or cheque payable either to order or to bearer.
Explanation (i) - A promissory note, bill of exchange or cheque is payable to order which is expressed to be so payable or which is expressed to be payable to a particular person, and does not contain words prohibiting transfer or indicating an intention that it shall not be transferable.
Explanation (ii) - A Promissory note, bill of exchange or cheque is payable to bearer which is expressed to be so payable or on which the only or last indorsement is an indorsement in blank.
Explanation (iii) - Where a promissory note, bill of exchange or cheque either originally or by indorsement, is expressed to be payable to the order of a specified person, and not to him or his order, it is nevertheless payable to him or his order at his option.
(2) A negotiable instrument may be made payable to two or more payees jointly or it may be made payable in the alternative to one of two, or one or some of several payees. Dishonour by non-acceptance
Explanation (i) - A promissory note, bill of exchange or cheque is payable to order which is expressed to be so payable or which is expressed to be payable to a particular person, and does not contain words prohibiting transfer or indicating an intention that it shall not be transferable.
Explanation (ii) - A Promissory note, bill of exchange or cheque is payable to bearer which is expressed to be so payable or on which the only or last indorsement is an indorsement in blank.
Explanation (iii) - Where a promissory note, bill of exchange or cheque either originally or by indorsement, is expressed to be payable to the order of a specified person, and not to him or his order, it is nevertheless payable to him or his order at his option.
(2) A negotiable instrument may be made payable to two or more payees jointly or it may be made payable in the alternative to one of two, or one or some of several payees. Dishonour by non-acceptance
91. A bill of exchange is said to be dishonoured by non-acceptance when the drawee, or one of several drawees not being partners, makes default in acceptance upon being duly required to accept the bill, or where presentment is excused and the bill is not accepted.
Where the drawee is incompetent to contract, or the acceptance is qualified, the bill may be treated as dishonoured.
Where the drawee is incompetent to contract, or the acceptance is qualified, the bill may be treated as dishonoured.
138. Dishonour of cheque for insufficiency, etc., of funds in the account
138. ২২[ (1)] Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account
is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to ২৪[ thrice] the amount of the cheque, or with both:
(3) Notwithstanding anything contained in sub- section (1) and (2), the holder of the cheque shall retain his right to establish his claim through civil Court if whole or any part of the value of the cheque remains unrealized.]
Provided that nothing contained in this section shall apply unless-
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within ২৫[ thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of
the cheque, within ২৬[ thirty days] of the receipt of the said notice.
২৮[ (1A) The notice required to be served under clasue (b) of sub-section (1) shall be served in the following manner-
(a) by delivering it to the person on whom it is to be served; or
(b) by sending it by registered post with acknowledgement due to that person at his usual or last known place of abode or business in Bangladesh; or
(c) by publication in a daily Bangla national newspaper having wide circulation.]
২৯[ (2) Where any fine is realized under sub-section (1), any amount upto the face value of the cheque as far as is covered by the fine realized shall be paid to the holder.
(3) Notwithstanding anything contained in sub- section (1) and (2), the holder of the cheque shall retain his right to establish his claim through civil Court if whole or any part of the value of the cheque remains unrealized.]
is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to ২৪[ thrice] the amount of the cheque, or with both:
(3) Notwithstanding anything contained in sub- section (1) and (2), the holder of the cheque shall retain his right to establish his claim through civil Court if whole or any part of the value of the cheque remains unrealized.]
Provided that nothing contained in this section shall apply unless-
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within ২৫[ thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of
the cheque, within ২৬[ thirty days] of the receipt of the said notice.
২৮[ (1A) The notice required to be served under clasue (b) of sub-section (1) shall be served in the following manner-
(a) by delivering it to the person on whom it is to be served; or
(b) by sending it by registered post with acknowledgement due to that person at his usual or last known place of abode or business in Bangladesh; or
(c) by publication in a daily Bangla national newspaper having wide circulation.]
২৯[ (2) Where any fine is realized under sub-section (1), any amount upto the face value of the cheque as far as is covered by the fine realized shall be paid to the holder.
(3) Notwithstanding anything contained in sub- section (1) and (2), the holder of the cheque shall retain his right to establish his claim through civil Court if whole or any part of the value of the cheque remains unrealized.]
138A. Restriction in respect of appeal
138A. Notwithstanding anything contained in the Code of Criminal Procedure, 1898, no appeal against any order of sentence under sub-section (1) of section 138 shall lie, unless an amount of not less than fifty per cent of the amount of the dishonoured cheque is deposited before filing the appeal in the court which awarded the sentence.]
139. [Omitted]
139. ৩১[ Omitted by section 3 of the Negotiable Instruments (Amendment) Act, 2000 (Act No. XVII of 2000).]
140. Offences of Companies
140. (1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation - For the purposes of this section-
(a) “company” means any body corporate and includes a firm or other association of individuals; and
(b) “director” in relation to a firm, means a partner in the firm.
Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation - For the purposes of this section-
(a) “company” means any body corporate and includes a firm or other association of individuals; and
(b) “director” in relation to a firm, means a partner in the firm.
141. Cognizance of offences
141. Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (Act V of 1898),-
(a) no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;
(b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138;
(c) no court inferior to that of a Court of Sessions shall try any offence punishable under section 138.
(a) no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;
(b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138;
(c) no court inferior to that of a Court of Sessions shall try any offence punishable under section 138.
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