Negotiable Instrument Terms;-
Definitions of the Terms used in the Act (Section 3).
Who is a Drawer & a Drawee?
The marker of a bill of exchange or cheque is called the "drawer. Whereas, the person thereby directed to pay is called the "drawee."
Who is a Holder?
The "holder" of a negotiable instrument is the payee or endorsee who is in possession of it or the bearer thereof but does not include a beneficial owner.
Explanation;-
Where the note, bill or cheque is lost and not found again, or is destroyed, the person in possession of it or the bearer thereof. At the time of such loss or destruction shall be deemed to continue to be its holder.
Who is Holder in Due Course?
"Holder in due course" means any person who for consideration becomes the possessor of a promissory note, bill of exchange or cheque if payable to bearer, or the payee or endorsee, if payable to order, before it became overdue, without notice that the title of the person from whom he derived his own title was defective.
Define 'Payment in Due Course'
"Payment in due course" 'means payment in accordance with the apparent tenor of the instrument in good faith and without negligence to any person in possession thereof under circumstances which do not afford a reasonable ground for believing that he is not entitled to receive payment of the amount therein mentioned.
What is Inland Instrument?
A promissory note, bill of exchange or cheque drawn or made in Pakistan and made payable in, or drawn upon any person resident in, Pakistan shall be deemed to be an inland instrument.
Definition of Foreign Instrument
Any such instrument not so drawn, made or made payable shall be deemed to be foreign instrument.
What is Negotiation?
When a promissory note, bill of exchange or cheque is transferred to any person, so as to constitute that person the holder thereof, the instrument is said to be negotiable.
Accommodation Party;-
It means a person who has signed a negotiable instrument as a marker, drawer acceptor or endorser without receiving the value and for the purpose of lending his name to some other person.
Banker;-
Banker is a person transacting the business of accepting, for the purpose of lending or investment, of or deposits of money from the public, repayable on demand otherwise withdrawable by cheque, draft, order, or otherwise, and includes any Post Office Savings Bank.
Bearer;-
Bearer is a person who by negotiable comes into possession of a negotiable instrument, which is payable to bearer.
Delivery;-
It is transfer of possession actual or constructive, from one person to another.
Issue;-
Means the first delivery of a promissory notice, bill of exchange of cheque complete in form to a person' who takes it as holder.
Material Alteration;-
In relation to a Promissory note, bill, of exchange or cheque includes an alteration of the date, the sum payable, the time of payment, the of payment, and, where any such instrument has been accepted generally, the addition of a place of payment without the acceptor's assent.
Notary Public;-
It includes any person appointed by the Central Government to perform the functions of notary public under this Act and a notary appointed under the Notaries Ordinance, 1961.
