Negotiation & Endorsement of Instrument

This wonderful online course is all about Negotiation & Endorsement of Instrument. You will learn in detail about Understanding about Negotiation & Endorsement, Types of Crossing of Cheques, Bills for Dishonour etc.

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 1h 54m | 12 Videos | 89652 Views |   Intermediate

In this course you will be learning about definition of negotiation under Section 14, Two types of negotiation – by delivery ( Section 47 ) and and by endorsement and delivery ( Section 48). Negotiation requires delivery to constitute a transfer, while assignment requires a written document signed by the transferor. Consideration is presumed in negotiation, while considertion has to be proved in case of assignment. The requirement of notice of transfer in assignment is important.

The right of transferee to sue a third party in his own name in case of negotiation is not available in case of assignment. Who can endorse an instrument, different types of endorsements by the payee or the endorsee.Provisions regarding endorsement. Effects and right to endorsement. The necessity of the delivery of the instrument after endorsement so as to complete the process of negotiation. The use of allonge when space is not available in the instrument for endorsement. The r Endorsement in blank and general and in such case the bearer becomes the holder of the instrument.Endorsement in part is prohibited. Similarly there is no right for endorsement to the legal representative. General rules regarding the endorsement, such as signature of the endorser, the correct use of spelling, no addition or deletion of the initial in the names and ensuring not to use the prefix and suffix while endorsing the instrument to become effective and valid. The requirement of giving name and full address of the witness, when endorsement is done by an illiterate person. Endorsement in blank and full,Sans recourse, restrictive endorsements, conditional endorsements, partial endorsement etc. What are its efficacies in a court of law and for the purpose of negotiation. Position regarding stolen cheques, fruadulent instruments, forged endorsement, instruments received for no consideration- in all these cases the holder of the instruments do not get a better title than to its true owner. What is crossing of cheques and what does not constitue crossing ? The two parallel transverse lines at the left hand corner of the cheque constitutes crossing. Two simple parallel lines with or without the words “and co” conforms to general crossing while ” Non-Negotiable” or “XYZ bank” constitute special crossing. The only drawer and the collecting banker can cross the cheques. Various protection available to the paying banker when making payment of a bearer instrument irrespective of any crossing, the liability of the paying banker under Section 126 are aslo of prime importance. When will a paying banker get protection under Section 31 ? If he acts in good faith, without negligence and if he makes payments in due course. Collecting banker gets protection under Section 131, if he collects the crossed instrument for his account holder. The Payee can go to a court of law under Section 138, if the cheque is dishonoured for want of funds. There are certains also to be fulfilled such as issuance of due notice to drawer within the stipulated time of 30 days. The Punishment under the same extends to 2 years’ imprisonment with fine. Dishonour can be two types- for non-acceptance and for non-payment. It is necessary to send a notice of dishonour to the drawee and other related parties when dishonour takes place, within a reasonable time by the easiest way of communication, depending upon the location of the drawer. Noting of the bill is required to be done for foreign bills. After noting of bills, protesting is also to be done. Noting and protesting is done by the Notary public at the place of the drawee, as per the law of the country concerned. Only after that, further action can be initiated against the drawee, like filing a recovery suit in a court of law.

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