Maturity of Negotiable Instrument
What is negotiable instrument;-
The word 'negotiable' means, "transferable from one person to another in return for consideration". The word 'instrument' means, "a written document by which a right is created in favour of some person". Hence, the term Negotiable Instrument means "a document in writing which creates a right in favour of some person", and which is freely transferable by delivery.
According to Section 13(1) of the Negotiable Instrument Act, "A negotiable instrument means a promissory note, bill of exchange or cheque payable either to order or to bearer"
Maturity of Negotiable Instrument
The maturity of a promissory note or bill of exchange is the date at which it falls due. It's an important aspect of the Act.
How to Calculate Maturity of bill of note payable so many months after date or sight?
In calculating the date at which a promissory note or bill of exchange, made payable a stated number of months after date or after sight, or after a certain event, is at maturity, the period stated shall be held to terminate on the day of the month which corresponds with the day on which the instrument is dated, or presented for acceptance or sight, or noted for non-acceptance, or protested for non-acceptance or the event happens, or, where the instrument is a bill of exchange made payable a stated number of months after sight and has been accepted for honor, with the day on which it was so accepted. If the month in which the period would terminate has no corresponding day, the period shall be held to terminate on the last day of such month.
For example:-
A negotiable instrument, dated 29th January, 1878, is made payable at one month after date. The instrument is at maturity on the third day after the 28th February, 1878.
How to Calculate Maturity of bill of note payable so many days after date or sight?
In calculating the date at which a promissory note or bill of exchange made payable a certain number of days after date or after sight or after certain event is at maturity, the day of the date, or of presentment for acceptance of sight, or of protest for non-acceptance, or on which the event happens, shall be excluded.
In Case the day of Maturity is a Holiday;-
When the day on which a promissory note or bill of exchange is at maturity is a public holiday, the instrument shall be deemed to be due on the next preceding business day.
For instance:-
The expression "public holiday" shall mean the day or days declared by the Federal Government, by notification in the official Gazette to be public holidays.
