Negotiable Instruments Act 16 Of International Law

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Negotiable Instruments Act, 1881

Chapter – NIA 01 Preliminary
Chapter – NIA 02 Of Notes Bills and Cheques
Chapter – NIA 03 Parties to Notes Bills and Cheques
Chapter – NIA 04 Of Negotiation
Chapter – NIA 05 Of Presentment
Chapter – NIA 06 Of Payment and Interest
Chapter – NIA 07 Of Discharge from Liability on Notes Bills and Cheques
Chapter – NIA 08 Of Notice of Dishonour
Chapter – NIA 09 Of Noting and Protest
Chapter – NIA 10 Of Reasonable Time
Chapter – NIA 11 Of Acceptance and Payment for Honour and Reference in Case of Need
Chapter – NIA 12 Of Compensation
Chapter – NIA 13 Special Rules of Evidence
Chapter – NIA 14 Of Crossed Cheques
Chapter – NIA 15 Of Bills in Sets
Chapter – NIA 16 Of International Law
Chapter – NIA 17 Of Penalties in Case of Dishonour of Certain Cheques for Insufficiency of Funds in the Accounts

Chapter XVI – Of International Law

Section 134 – Law governing liability of maker, acceptor or indorser of foreign instrument

In the absence of a contract to the contrary, the liability of the maker or drawer of a foreign promissory note, bill of exchange or cheque is regulated in all essential matters by the law of the place where he made the instrument, and the respective liabilities of the acceptor and indorser by the law of the place where the instrument is made payable.

Illustrations

A bill of exchange was drawn by A in California, where the rate of interest is 25 per cent., and accepted by B, payable in Washington, where the rate of interest is 6 per cent. The bill is endorsed in India, and is dishonoured. An action on the bill is brought against B in India. He is liable to pay interest at the rate of 6 per cent only; but if A is charged as drawer, A is liable to pay interest at the rate of 25 per cent.

Section 135 – Law of place of payment governs dishonour

Where a promissory note, bill of exchange or cheque is made payable in a different place from that in which it is made or indorsed, the law of the place where it is made payable determines what constitutes dishonour and what notice of dishonour is sufficient.

Illustrations

A bill of exchange drawn and indorsed in India, but accepted payable in France, is dishonoured. The indorsee causes it to be protested for such dishonour, and gives notice thereof in accordance with the law of France, though not in accordance with the rules herein contained in respect of bills which are not foreign. The notice is sufficient.

Section 136 – Instrument made, etc., out of India, but in accordance with the law of India.

If a negotiable instrument is made, drawn, accepted or indorsed outside India, but in accordance with the law of India, the circumstance that any agreement evidenced by such instrument is invalid according to the law of the country wherein it was entered into does not invalidate any subsequent acceptance or indorsement made thereon within India.

Section 137 – Presumption as to foreign law

The law of any foreign country regarding promissory notes, bills of exchange and cheques shall be presumed to be the same as that of India, unless and until the contrary is proved.


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Negotiable Instruments Act Chapter 16 Of International Law Bare Act