Evolution & Revolution of Negotiable Instruments

Team # 2
Roll No M1002 M1004 M1006 M1008 M1010 M1012 M1014 M1016 M1018 M1020 Members Sulabha Bhagat Fiona Cardoza Krunal Darji Kashyap Desai Sanket Gaikwad Rohan Ghadigaonkar Ajinkya Ingule Jatin Kambli RuchKapdi Poonam Khond

Content Of Presentation
y Introduction y Evolution of Payment Systems in India y Negotiable instruments y Types of Negotiable Instruments y Section 123-131 & 138 y Revolution of Payment Systems in India y Case Study y Conclusion

Introduction
y Evolution of trade and commerce leading to the introduction of

negotiable instruments:
y Non existence of commerce y Trade in the form of barter y Money as a medium of trade y Economy and growth of commerce y World economy and the world market

Evolution of Payment Systems in India(1/5)

y Coins punch marked or cast in silver and copper y In ancient India, loan deed forms were used namely rnapatra or

rnalekhya
y In the Buddhist period, loan deeds were called inapanna y In the Mauryan period, the bill of exchange was used. It was called

adesha

Evolution of Payment Systems in India (2/5)

y In the Mughal period, the deeds were called dastawez
y dastawez-e-indultalab was payable on demand y dastawez-e-miadi which was payable after a stipulated time

y In the twelth Century, the Hundis was introduced

Evolution of Payment Systems in India (3/5)

y Hundis
y Darshani Hundi y Sah-jog y Dhanni-jog y Firman-jog y Dekhavanhar y Muddati Hundi

Evolution of Payment Systems in India (4/5)

y 1740- the europeans coined the arcrot y 1770-Bank of Hindoosthan introduced the cheque y 1800 Paper money was introduced y 1827-The british introduced the post y 1833- the Bank of Bengal started granting loans

Evolution of Payment Systems in India (5/5)

y 1835- Rupee was introduced y 1839 - the Bank of Bengal began the buying and selling bills of

exchange
y 1861-The Paper Currency Act gave the Government of India the

monopoly to Issue Notes

y 1881- the Negotiable Instruments Act (NI Act) was passed

Negotiable Instruments
y Negotiable' means transferable from one person to another. y Instrument' means 'any written document by which a right is

created in favor of some person.'

y A negotiable instrument is a written document, signed by the

maker or drawer, and containing an unconditional promise to pay (or order to pay) a certain sum of money on delivery, or at a definite time, to the bearer (or to the order).

Types of Negotiable Instruments

y Promissory Note
Rs. 10,000/New Delhi September 25, 2002 On demand, I promise to pay Ramesh, s/o RamLal of Meerut or order a sum of Rs 10,000/- (Rupees Ten Thousand only), for value received. To , Ramesh Address..
The Payee The Endorser The Endorsee The Maker or Drawer

Sd/ Sanjeev Stamp

Types of Negotiable Instruments

y Bill of Exchange
Rs. 10,000/The Payee

New Delhi May 2,2001

Five months after date pay Tarun or (to his) order the sum of Rupees Ten Thousand only for value received. To Sameer Address Accepted Sameer Stamp S/d Rajiv

Types of Negotiable Instruments

Types: y Open cheque
y Crossed cheque y Bearer cheque y Order cheque

Section 123-131 & 138

y Section 123- Cheque crossed generally y Section 124- Cheque crossed specially y Section 125- Crossing after issue y Section 126- Payment of cheque crossed generally y Section 127- Payment of cheque crossed specially more than once y Section 128- Payment in due course of crossed cheque y Section 129- Payment of cheque crossed specially more than once y Section 130- Cheque bearing not negotiable y Section 138- Dishonour of cheque for insufficiency of funds in the

accounts

Revolution of Payment Systems in India

y Digital cash y Smart Card y Electronic fund transfer y Digital Cheque y Biometrics
y Behavioral y Physical

Case study-1
y JVG Case
y In September 1989, Sharma launched his first company JVG Finance. y Most part of the JVG empire was created largely from public fixed

deposits.
y JVG had exceeded its limits while accepting deposits . y In 1996 -RBI barred the group from accepting any more public

deposits.
y Investors then complained under the Negotiable Instruments Act .

Case study-1 (Continue)

y The companies had not provided any information about the rate of

interest to the investors on the receipts issued to them.

y Sharma alleged that his agents had issued fake certificates to depositors

for more than Rs 100 crore.

Case study-2
y Nanu-Appellant Versus Vijayan-Respondent

y y y y

Facts of the case a cheque of Rs 10,000 was issued 16th of January, 1994 . Cheque was dishonored for insufficiency of fund It was presented after 6 months of the date of issue (i.e. on 17th September, 1994). A complaint -under Section 138 of Negotiable Instruments Act. Judgment While calculating the validity of the cheque, the date of issue shall be included.

Conclusion