Topic: “THE NEGOTIABLE INSTRUMENTS ACT,1881”
Date: 23rd February,2022.
Speaker: Mr. Nisarg Trivedi, a very well-known lawyer and SMPIC Alumni
Highlights: Mr. Nisarg Trivedi started his session by saying that there are very few laws which have been amended and changed since India was ruled by the superior authority and Negotiable Instruments act is one of them. According to the speaker the customary law also has to be preserved while framing any legal enactment and this Act is one of the centuries old laws. Way back in 1881 Negotiable Instruments Act was enacted after four successful amendments. This Act forecasted the today’s cashless transactions way back in 1800 some 140 years ago. He added that it is based on the First law of the land, the most famous – Magna Carta which was in Latin language. All laws are based on the fact that the most important principle of Nemo Dat Quad Non Habet – a person cannot transfer a better title than what he has – all laws are based on that. One major amendment that has come in this Act is about the validity of a bank cheque. The bank cheques in India were valid up to 6 months till 2012 but after that the validity of the cheque in India is 3 months and this amendment has brought a revolutionary change in the banking transactions today. He also talked about all the three basic negotiable instruments – Bills of exchange, Promissory note
and a Cheque. He quoted a classic old example of Hundi which we have in our Gujarati bhajan of lord Krishna written by Devotional poet Narsinh Mehta and further added that this is one of the law which is centuries old. Core concept of this Act is based on the fact of negotiability and flexibility and hence this Act was introduced. He further explained definitions of Promissory Note, Bill of Exchange and Cheques. In-depth he discussed about -Cheque one of the most widely used method of monetary transactions across the globe and India and the prevailing post-dated cheques in the current business scenario. Also by giving classic examples of judgments given by Supreme Court of India relating to the provisions of postdated cheque, he made the entire concept very easy. Further, he discussed the legal aspects of Clearing house and digital signature. Also, The RBI Guidelines as to Dishonour of cheque, whereby bank refuses to honour and bank can stop- insufficiency of funds-reasons. Once the complaint is filed, he has to appear in the witness box and the accused is summoned by the court where the non-bailable warrant is issued. On a humourous note he discussed the concept of Cross examination by citing examples of movies like Jolly LLB. While ending the session, he discussed the cases of Dalmia cements which held that Negotiable Instruments are easily transferable and law approves of it.