Tuesday, November 06, 2007

NI Act_Practicle Problems_30

Which of the following is a bill of exchange? Give reasons.

a. “To Anderson, Dear Sir, We hereby authorise you to pay on our account, to the order of Wolf, the sum of six thousand rupees.”
b. “Rs. 500.” “Pay to my order the sum of five hundred rupees, for value received.” It is neither signed by any person as drawer nor addressed to any person as drawee. It is accepted by Lam.

Sec.5 of the Negotiable Instruments Act reads as “A bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money, only to, or to the order of a certain person or to the bearer of the instrument.”
a. In the given case there is no definite order to pay the sum of money. So, it is not a bill of exchange.
b. In the given case, drawee is neither named nor indicated with certainty. So, it is not a bill of exchange.

No comments: