CHAPTER - I
1.1 INTRODUCTION
This paper discusses the legal structure that governs bills of trade, as well as the similarities and differences between them. A “bill of exchange” is a sort of paper that authorizes the holder to pay a specific amount of money toward the debtor named in the document. A bill of exchange is a payment form as well as a method of accepting payment, and they are mainly used in international trade but due to various forms of payment, their use has been declined. The cabinet gives an unrestricted request to the drawee to pay a specific add up to the payee indicated on the bill of trade. It is such promissory notes where the underwriter transforms into an assertion not in response to popular. The bill of exchange anyway appears as strategies for portion and an instrument for getting the portion in it like considering the way that the bill of exchange can transform into a front line tool of crediting and with the progress of the credit market, the bill of exchange changes into a technique for the agency and the drawee. With this bill of exchange changes into a cost for markdown. The presence of any earlier lawful relations between the gatherings concerned, which have such legitimate activities as a premise, and every individual has the nature of lender or account holder dependent on these lawful relations, which are referred to as fundamental relations. In the case of “C.C. Sinha vs Bidhu Bhusan De and Anr.[1]” on 31 August 1954, the court held that the defendant's pledge to pay was convincing proof' that he was the person to whom it was addressed. The obligations of the previous legitimate ties are satisfied by introducing a bill of trade and making an installment. The crossing out of essential lawful ties doesn't happen when a bill of trade is given. But when the gatherings consent to a subbed contract, which implies the expulsion of the old commitment from the central relationship and it’s supplanting with another commitment characterized by the trade study, these lawful relations proceed. Also in the case of “Punjab National Bank vs Britannia Industries Ltd.[2]” on 3 April 2001, it was held that the bill of exchange is the most important document in this situation, and it is the foundation of Britannia's entire cause of action. As a result, it was up to Britannia to prove it. Given the facts presented in support of the supposed proof of the bill of exchange, the Court is compelled to conclude that the bill of exchange has not been proven and that the suit cannot succeed. The bill of exchange is a defense as a method of payment in order that is governed by laws that apply to all securities in order. In reality, the bill of exchange is a much more detailed regulated type of protection to us, emphasizing its unique character in comparison to other securities. It is a legal document that must always be followed by a certain number. Therefore, the bill of exchange serves fundamentally as a loaning office to get the case and the bill of trade is additionally a significant instrument for guaranteeing ware. There are mainly two types of bills of exchange; Bills of exchange payable at sight and bills of exchange after a certain period. And these bills of exchange are governed by the Indian negotiable instrument act, 1881 under section 5 of this act. The Reserve Bank of India and the Indian Government can only draw a bill payable on demand to the person who is the bearer of the bill.
Bill of Exchange is used mainly in international trade. In the United States, it is referred to as the "Draft." A bank draft is a bill of exchange that has been drawn on a bank.
1.2 REVIEW OF LITERATURE
The research paper includes information compiled from several sources such as published articles and journals, which includes the Enactment on the proclamation of The Law on Bills of Exchange passed by the Republic of Montenegro, which talks about the law that manages the substance and state of a bill of exchange, just as the demonstrations that are responsible under a bill of trade and how the bill of trade business exercises are done. It explains different articles such as Articles 5, 6, and so on to give a brief understanding of a bill of exchange. The article i.e. “Bills of exchange and promissory notes – comparative perspective[3]”, written by Ileana Voica, analyses procedures of issuing a bill of exchange, the transmission of the bill of exchange, presentation of bills of exchange, and in foreign trade law, the law that applies to bills of exchange and promissory notes. The next article that was referred to was “Bills of Exchange: Features, Contents, and Advantages[4]” written by A Sharma, which talks about the relationship between bill of exchange and promissory note and gives in-depth knowledge about the feature, advantages, and importance of Bills of Exchange by explaining with the help of different examples. There is also another article named “The Origin of the Bill of Exchange[5]” written by Abbott Payson Usher. This article talks about the existence of credit instruments in the Middle Ages and how the bills of exchange came into force. In the case of “F. Nanak Chand Ramkishan Das and Ors. vs Lal Chand Ganeshi Lal and Ors.[6]” on 8 January 1958, the Madras High Court Division Bench held that a bill of exchange payable at sight or on demands can be submitted for approval at the holder's choice, and if it is not approved by the drawee, it will be considered dishonored, and the case will fall under Sections 91 and 93 of the Act.
1.3 RESEARCH QUESTIONS
1.3.1. What are bills of exchange and what are their types?
1.3.2. What are the different features of bills of exchanges?
1.3.3. Who are parties in bills of exchange and which parties are essential?
1.3.4. How bills of exchange are good security and how has it developed in the credit market and foreign markets?
1.4 RESEARCH OBJECTIVES
1.4.1 To understand the meaning and features of the bill of exchange.
1.4.2 To differentiate between a bill of exchange and a promissory note.
1.4.3 To understand various types of bills of exchange and the parties involved in them.
1.4.4 To explain the significance of various terms engaged with the bill exchange. (for example term of the bill and long periods of elegance, date of development, bill after date, exchange, underwriting, limiting of the bill, shame and taking note of bill, the bankruptcy of acceptor, retirement, and reestablishment of a bill.)
1.4.5 To understand its importance in the credit market and foreign markets.
1.5 RESEARCH METHODOLOGY
The approach used to perform this research is doctrinal, and it is primarily theoretical, analytical, and descriptive. The majority of the reference material employed in the research is secondary in characters, such as examinations of reports, bills, legislation, books, law journals, articles, and judicial decision analyses. The research is qualitative since it will attempt to assess the principles previously established by law and, if better options exist, recommend them.
CHAPTER – II
BILLS OF EXCHANGE
2.1 DEFINITION - A bill of exchange is a sort of paper that authorizes the holder to pay a specific amount of money toward the debtor named in the document
2.2 FEATURES - There are various features of bills of exchange mentioned below:-
- It is a legally written document.
-It comprises an unconditional payment order to a specific person with no conditions attached.
-The drawer, drawee, and Payee are the three persons involved in this transaction.
-The bill of exchange that has been chosen must be specific, and both parties should agree on them.
-On the BoE, both the drawer and the drawer's signatures should be present.
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[1] C.C. Sinha v Bidhu Bhusan De and Anr, (1954) AIR 1955 Cal 562 (India). [2] Punjab National Bank v Britannia Industries Ltd, (2001) 2 CALLT 219 HC, 2001 106 CompCas 293 Cal (India) [3] Ileana Voica, Bills of exchange and promissory notes – comparative perspective (1958) [4] A Sharma, Bills of Exchange: Features, Contents and Advantages (1989) [5] Abbott Payson Usher, The Origin of the Bill of Exchange (1914) [6] F. Nanak Chand Ramkishan Das and Ors. v Lal Chand Ganeshi Lal and Ors, (1958) AIR 1958 P H 222 (India)
AUTHOR DETAILS:
Name: Sanket
Course: BBA-LLB
Year of Study: 1st
University: Symbiosis Law School, Hyderabad
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