The Negotiable Instruments Act, 1881

( ACT NO. XXVI OF 1881 )

1♣An Act to define and amend the law relating to Promissory Notes, Bills of Exchange and Cheques.
WHEREAS it is expedient to define and amend the law relating to promissory notes, bills of exchange and cheques; It is hereby enacted as follows:-



1. Short title

Local extent Saving of usages relating to hundis, etc. Commencement

1A. Application of the Act

2. [Repealed]

3. Interpretation-clause.

4. “Promissory note”

5. “Bill of exchange”

6. “Cheque”

7. “Drawer” “Drawee” “Drawee in case of need” “Acceptor” “Acceptor for honour” “Payee”

8. “Holder”

9. “Holder in due course”

10. “Payment in due course”

11. Inland instrument

12. Foreign instrument

13. “Negotiable instrument”

14. Negotiation

15. Indorsement

16. Indorsement “in blank” and “in full” “Indorsee”

17. Ambiguous instruments

18. Where amount is stated differently in figures and words

19. Instruments payable on demand.

20. Inchoate stamped instruments

21. “At sight” “On presentment” “After sight”

21A. When note or bill payable on demand is overdue

21B. A note or bill payable at a determinable future time

21C. Anti-dating and post-dating

22. “Maturity” Days of grace

23. Calculating maturity of bill or note payable so many months after date or sight

24. Calculating maturity of bill or note payable so many days after date or sight

25. When day of maturity is a holiday

26. Capacity to make, etc., promissory notes, etc.


27. Agency

27A. Authority of partner

28. Liability of agent signing

28A. Transferor by delivery and transferee

29. Liability of legal representative signing

29A. Signature essential to liability

29B. Forged or unauthorised signature

29C. Stranger signing instrument presumed to be indorser

30. Liability of drawer

31. Liability of drawee of cheque

32. Liability of maker of note and acceptor of bill

33. Only drawee can be acceptor except in need or for honour

34. Acceptance by several drawees not partners

35. Liability of indorser

36. Liability of prior parties to holder in due course

37. Maker, drawer and accept or principals

38. Prior party a principal in respect of each subsequent party

38A. Liability of accommodation party and position of accommodation party

39. Suretyship

40. Discharge of indorser’s liability

41. Acceptor bound although indorsement forged

42. Acceptance of bill drawn in fictitious name

43. Negotiable instrument made, etc., without consideration

44. Partial absence or failure of money-consideration

45. Partial failure of consideration not consisting of money

45A. Holder’s right to duplicate of lost bill

46. Delivery

47. Negotiation by delivery

48. Negotiation by indorsement

49. Conversion of indorsement in blank into indorsement in full

50. Effect of indorsement

51. Who may negotiate

52. Indorser who excludes his own liability or makes it conditional

53. Holder claiming through holder in due course

53A. Rights of holder in due course

54. Instrument indorsed in blank

55. Conversion of indorsement in blank into indorsement in full

56. Requisites of indorsement

57. Legal representative cannot by delivery only negotiate instrument indorsed by deceased

57A. Negotiation of instrument of party already liable thereon

57B. Rights of holder

58. Defective title

59. Instrument acquired after dishonour or when overdue

Accommodation note or bill

60. Instrument negotiable till payment or satisfaction

61. Presentment for acceptance

62. Presentment of promissory note for sight

63. Drawee’s time for deliberation

64. Presentment for payment

65. Hours for presentment

66. Presentment for payment of instrument payable after date or sight

67. Presentment for payment of promissory note payable by instalments

68. Presentment for payment of instrument payable at specified place and not elsewhere

69. Instrument payable at specified place

70. Presentment where no exclusive place specified

71. Presentment when maker, etc., has no known place of business or residence

71A. What constitutes valid presentment and mode of presentment

72. Presentment of cheque to charge drawer

73. Presentment of cheque to charge any other person

74. Presentment of instrument payable on demand

75. Presentment by or to agent, representative of deceased, or assignee of insolvent

75A. Excuse for delay in presentment for acceptance or payment

76. When presentment unnecessary

77. Liability of banker for negligently dealing with bill presented for payment

78. To whom payment should be made

79. Interest when rate specified or not specified

80. Interest when no rate specified

81. Delivery of instrument on payment, or indemnity in case of loss

82. Discharge from liability-

(a) by cancellation

(b) by release

(c) by payment

83. Discharge by allowing drawee more than forty-eight hours to accept

84. When cheque not duly presented and drawer damaged thereby

85. Cheque payable to order

85A. Drafts drawn by one branch of a bank on another payable to order

86. Parties not consenting discharged by qualified or limited acceptance

87. Effect of material alteration

Alteration by indorsee

88. Acceptor or indorser bound notwithstanding previous alteration

89. Payment of instrument on which alteration is not apparent

90. Extinguishment of rights of action on bill in acceptor’s hands

91. Dishonour by non-acceptance

92. Dishonour by non-payment

93. By and to whom notice should be given

94. Mode in which notice may be given

95. Party receiving must transmit notice of dishonour

96. Agent for presentment

97. When party to whom notice given is dead

98. When notice of dishonour is unnecessary

99. Noting

100. Protest

Protest for better security

101. Contents of protest

102. Notice of protest

103. Protest for non-payment after dishonour by non-acceptance

104. Protest of foreign bills

104A. When noting equivalent to protest

105. Reasonable time

106. Reasonable time of giving notice of dishonour

107. Reasonable time for transmitting such notice

108. Acceptance for honour

109. How acceptance for honour must be made

110. Acceptance not specifying for whose honour it is made

111. Liability of acceptor for honour

112. When acceptor for honour may be charged

113. Payment for honour

114. Right of payer for honour

115. Drawee in case of need

116. Acceptance and payment without protest

117. Rules as to compensation

118. Presumptions as to negotiable instruments- (a) of consideration; (b) as to date; (c) as to time of acceptance; (d) as to time of transfer; (e) as to order of indorsements; (f) as to stamp; (g) that holder is a h

119. Presumption on proof of protest

120. Estoppel against denying original validity of instrument

121. Estoppel against denying capacity of payee to indorse

122. Estoppel against denying signature or capacity of prior party

122A. Revocation of Banker’s authority

123. Cheque crossed generally

123A. Cheque crossed “account- payee”

124. Cheque crossed specially

125. Crossing after issue

125A Crossing a material part of a cheque

126. Payment of cheque crossed generally

Payment of cheque crossed specially

127. Payment of cheque crossed specially more than once.

128. Payment in due course of crossed cheque

129. Payment of crossed cheque out of due course

130. Cheque bearing “not negotiable”

131. Non-liability of banker receiving payment of cheque

131A. Application of Chapter to drafts

131B. Protection to banker crediting cheque crossed “account- payee”

131C. Cheque not operating as assignment of funds

131D.Several drawees

131E. In whose favour a bill may be drawn

131F. When presentment for acceptance is necessary

131G. When presentment excused

131H. Holder’s right of recourse against drawn and indorsers

131-I. Holder may refuse qualified acceptance

132. Set of bills

133. Holder of first acquired part entitled to all

134. Law governing liability of parties to a foreign instrument

135. [Omitted]

136. Instrument made, etc., outside Bangladesh, but in accordance with their law

137. Presumption as to foreign law

138. Dishonour of cheque for insufficiency, etc. of funds in the account

138A. Restriction in respect of appeal

139. [Omitted]

140. Offences of Companies

141. Cognizance of offences