Days of grace under NI Act, 1881 applicable to :
Bill of Exchange
Section 22 of the Negotiable Instruments Act, 1881 provides that every promissory note or bill of exchange which is not expressed to be payable on demand, at sight or on presentment is at maturity on the third day after the day on which it is expressed to be payable. These three days are the days of grace.
Days of grace are thus allowed on a bill of exchange (and a promissory note) payable after a fixed period. They are not available for an instrument payable on demand, so a promissory note payable on demand gets no days of grace.
A cheque is by definition a bill drawn on a specified banker payable on demand (Section 6), and a bank draft is likewise payable on demand; hence neither enjoys days of grace.
Hence, the answer is Bill of Exchange.
Similar Questions
The following one is absolutely essential for a special crossing :
Non-acceptance is a valid mode of dishonour for :
The word ‘negotiation’ was defined in the NI Act, 1881 under Section:
Which section of the NI Act, 1881 justifies the dishonour of the cheque ?
Important Questions from Negotiable instrument Act, 1881
- Which of the following is not a negotiable instrument?
- Match List – I with List – II and select the correct answer using the codes given below :
List – I List – II i. Inchoate stamped instrument a. Union Bank of India Vs. Ankur Corp. ii. Liability of acceptor of a negotiable instrument b. Section 31 of the Negotiable Instrument Act iii. Liability of an endorser c. Section 35 of the Negotiable Instrument Act. iv. Liability of the drawee of a cheque. d. Section 20 of the Negotiable Instrument Act.
Codes : - Which of the following statements are correct ? Answer using codes given below :
In order that a person can be called a holder in due course, he must show :
i. that he is the drawer of the negotiable instrument.
ii. that he has obtained it without consideration.
iii. that he has obtained it before the maturity of the negotiable instrument.
iv. that he has obtained the negotiable instrument in good faith.
Codes : - Read Assertion (A) and Reason (R) and answer using code below :
Assertion (A) : Where a bill is unintentionally cancelled by the holder or his agent and the cancellation is not apparent thereon, the bill is discharged.
Reason (R) : Above principle is laid down in Section 82 of the Negotiable Instruments Act.
Code : - Which one of the following statements is true ?
