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Negotiable Instruments Act (Module 2)
CERTIFICATE COURSE ON ENFORCEMENT OF
FUNDAMENTAL RIGHTS
ANALYZING THE ENACTMENT
Module 2: Basic Provisions and Liabilities
1. LIABILITY OF DRAWER AND DRAWEE [S.30 AND 31]
The drawer of a bill of exchange or cheque is bound in case of dishonor by the drawee or acceptor thereof, to compensate the holder, provided due notice of dishonor has been given to, or received by, the drawer as hereinafter provided. The drawee of a cheque having sufficient funds of the drawer in his hands properly applicable to the payment of such cheque must pay the cheque when duly required so to
Negotiable Instruments Act (Module 2) do, and, in default of such payment, must compensate the drawer for any loss or damage caused by such default.
2. BASICS OF CHAPTER V When no rate of interest is specified in the instrument, interest on the amount due thereon shall, notwithstanding any agreement relating to interest between any parties to the instrument, be calculated at the rate of 24[eighteen per centum] per annum, from the date at which the same ought to have been paid by the party charged, until tender or realization of the amount due thereon, or until such date after the institution of a suit to recover such amount as the court directs. Explanation: When the party charged is the indorser of an instrument dishonored by non-payment, he is liable to pay interest only from the time that he receives notice of the dishonor. This is to say that when no interest rate is mentioned, the same is presumed to be 18% per annum. The date ranges from the initiation until the realization of the note. Any person liable to pay, and called upon by the holder thereof to pay, the amount due on a promissory note, bill of exchange or cheque is before payment entitled to have it shown, and is on payment entitled to have it delivered up, to him, or, if the instrument is lost or cannot be produced, to be indemnified against any further claim thereon against him. This is to say that any payer is entitled to have the negotiable instrument delivered upon the completion of process therein.
2.2. Discharge from liability [S.82]
