Evolution and Revolution of Negotiable Instruments as Facilitators for Trade and Commerce & 10 Years taking forward
MET LEAGUES OF COLLEGES MASTER IN MANAGEMENT STUDIES Semester II Division (B)
A paper submitted under the partial fulfillment for the subject
LEGAL ASPECTS OF BUSINESS
Under the Guidance of Prof. Anant Amdekar
Batch: 2014-2016 GROUP NO: 4 SR.N GROUP MEMBER ROLL NO O 1. Chintan Mhatre 82 2. Vinay Mhatre 84 3. Sumedh Munje 86 4. Abhiskek Nagdeve 88 5. Aadya Naik 90 6. Prachiti Niwate 92 7. Tushar Oswal 94 8. Riddhi Palkar 96 9. Vivek Pange 98 10. Amit Paratwar 100
1 PROJECT CONTENTS
CHAPTER SCHEME.
Sr.No. Topic Page No. A. CHAPTER I. Introduction to Negotiable Instruments 1. Meaning 2. Need and features for Negotiable Instruments.
B. CHAPTER II. Evolution of Negotiable Instruments 1. History 2. World Economy & World Market with respect to Economy & Growth of Commerce
C. CHAPTER III. The Negotiable Instrument Act, 1881 1. Meaning under SECTION 13 2. Reserve Bank of India Act, 1934 SECTIONS 31 and 32 3. Essentials under SECTIONS 118 and 119 4. History of the Act 5. Modern Era and Amendments
D. CHAPTER IV. Types of Negotiable Instruments 1. Hundis Meaning and Parties involved Requisites of a Hundi Decoding a Hundi Types of Hundis Dishonor of Hundi
2. Promissory Note under SECTION 4 Meaning and Parties involved Requisites of a Promissory Note Decoding a Promissory Note Types of Promissory Notes Dishonor of Promissory Notes under SECTION 93
3. Bills of Exchange under SECTION 5 Meaning and Parties involved
2 Requisites of Bills of Exchange. Decoding a Bills of Exchange Types and Classification of Bills of Exchange Dishonor of Bill of Exchange
4. Cheques under SECTION 6 Meaning and Parties involved Requisites of Cheque Decoding a Cheque Types of Cheques & Cheque Crossing Dishonor of Cheques under SECTION 138 Cheque Forgery
E. CHAPTER V. Revolution in Negotiable Instruments and Global Trade 1. Current trends in Payment Structure 2. Payment Systems in India 3. Comparison between India and Australia on bases of Negotiable Instruments 4. Changing face of Trade and Commerce
F. CHAPTER VI. Primary Research On Scope Of Negotiable Instruments 1. Preliminary Research Analysis 2. Research Methodology and Interpretation Database 3. Interview with Allahabad Bank Manager 4. Statistical Data on Disposal and Pendency of Negotiable Instruments
G. CHAPTER VII. 1. Conclusion: 10 Years Going Forward 2. Suggestions: Social networking & Negotiable Instruments 3. Recommendations: Future Prospects on Transactions
H. CASE STUDIES
INTRODUCTION TO NEGOTIABLE INSTRUMENTS
MEANING
3 Exchange of goods and services has always been the basis of every business activity. Goods are bought and sold for cash as well as on credit. All these transactions require flow of cash either immediately or after a certain time. In modern business, large number of transactions involving huge sums of money takes place every day. It is quite inconvenient as well as risky for either party to make and receive payments in cash. Therefore, it is a common practice for businessmen to make use of certain documents as means of making payment. Some of these documents are called negotiable instruments.
Today the world as a whole has been the CENTRE OF COMMERCE because this exchange is not only between individuals but also between people and nations. This naturally implies the existence of certain surplus of wealth and certain provision for communication. Both of which are essential for growth of commerce. Unless there is a surplus of wealth and provision for communication, commerce cannot grow. Increase in Globalization led to the EVOLUTION of negotiable instruments which further REVOLUTIONZED with the course of time, acting as a FACILITATOR to trade and commerce and with the advent of technology in transactions, it’s become a modernized concept
Negotiable Instruments are moreover a document of title which clearly explains the rights towards the payment of money or a security for money which is transferable by delivery either by custom or by legislation. The use of Negotiable Instrument is mainly to facilitate payment for exports and imports of trade. Because money is promised to be paid, the instrument itself can be used by the holder in due course as a store of value. The instrument may be transferred to a third party; it is the holder of the instrument who will ultimately get paid by the payer on the instrument.
The rapid growth of technology has revolutionized the world with computer, which is used in every field of profession. This has reduced the use of negotiable instrument and in future it may decline more. Even though the electronic revolution has got more advantages it may be considered as the next step because the world needs time to get used to it.
Example 1: If Chintan issues a cheque worth Rs. 15,000/ - in favor of Vinay, then Vinay can claim Rs. 15,000/- from the bank, or he can transfer it to Sumedh to meet any business obligation,
4 like paying back a loan that he might have taken from Sumedh. Once he does it, Sumedh gets a right to Rs. 15,000/- and he can transfer it to Abhiskek, if required. Such transfers may continue till the payment is finally made to somebody.
In the above examples, we find that there are certain documents used for payment in business transactions and are transferred freely from one person to another. Such documents are called Negotiable Instruments. Thus, we can say negotiable instrument is a transferable document, where negotiable means transferable and instrument means document. To elaborate it further, an instrument, as mentioned here, is a document used as a means for making some payment and it is negotiable i.e., its ownership can be easily transferred.
The term ‘Negotiable Instrument’ is made up of two parts, ‘Negotiable’ and ‘Instrument’. The word, ‘negotiable’ means being transferable (from one person to another), and the word ‘instrument’ signifies ‘any written document’ through which a right is created in favor of some person. Thus, the term ‘Negotiable Instrument’ signifies any ‘document, necessarily in writing’, through which the rights, vested in one person, could be transferred in favor of another person, of course, in accordance with the provisions of the Negotiable Instruments Act, 1881
NEED FOR NEGOTIABLE INSTRUMENTS Negotiable instruments such as Hundi, Promissory Notes, Bills of Exchange and Cheques are playing a vital role in today's boosting trade and commerce. One of the reasons behind the expansion of trade and commerce so rapidly are because of the negotiable instruments. In trade the transactions are now becoming much depending on the negotiable
5 instruments. Wherein commerce also the negotiable instruments are helping us in the following ways.
Helpful in Dealing Business on Credit bases Imagine how it is possible to get the business products for resale purpose without the use of money. This is happening just because of the negotiable instruments. Further suppose that, you want to do a business of computers but you do not have the money to purchase the computers for resale purpose. And also if you do not have any other resource to get the money for purchase you can still purchase the products for your business purpose with the help of the negotiable instruments. Negotiable instruments such as promissory note and specially the bills of exchange are specially made for this purpose so business can happen on credit bases which is usually the styles nowadays.
Cash Free Asset Due to the negotiable instruments it is became so easy to make payments through negotiable instruments such as Cheques so that the use of cash is not their because most of the times when you are taking cash with you anywhere it is not felt secure that because the cash may be stolen by any one. The law relating to negotiable instruments is the law of the commercial world which was enacted to facilitate the activities in trade and commerce making provision of giving sanctity to the instruments of credit which could be deemed to be convertible into money and easily passable from one person to another.
Instant receipts and payments of the dealings and transactions We don’t need to wait for days to get money from the bank and from the other places but instead of it we just have to pay in the form of negotiable instrument such as cheques etc. so that the people to whom we have to pay would receive that money.
FEATURES OF NEGOTIABLE INSTRUMENTS
1) Free Transferability The instrument are freely transferable, i.e. the title to the ownership of the instrument could be transferred, from one person to any other person, without any restrictions. Such transfer of the title could take place by way of mere delivery, in case of bearer instrument and
6 by endorsement with its delivery. Usually, when we transfer any property to somebody, we are required to make a transfer deed, get it registered, pay stamp duty, etc. But, such formalities are not required while transferring a negotiable instrument. Example 2: Aadya draws a bearer cheque in favour of Prachiti but, instead of delivering it to her, keeps it in the drawer of her table. However, in the absence of Aadya, Prachiti picks up the cheque from Aadya’s drawer. This will not amount to a valid transfer of the title to the cheque, drawn in favour of Prachiti, even though it is made payable to the bearer.
2) Holder’s Title to be Free from Defects It means that a person who receives a negotiable instrument has a clear and undisputable title to the instrument. However, the title of the receiver will be absolute, only if he has got the instrument in good faith and for a consideration. Also the receiver should have no knowledge of the previous holder having any defect in his title. Such a person is known as ‘Holder in due Course’. Example 3: Tushar issued a bearer cheque payable to Riddhi. It was stolen from Riddhi by a person, who passed it on to Vivek. If Vivek received it in good faith and for value and without knowledge of cheque having been stolen, he will be entitled to receive the amount of the cheque. Here, Vivek will be considered as ‘Holder in due Course’.
3) Holder in Due Course can Sue in his own name The holder in due course is entitled to sue in his own name in regard to the instrument, on the ground that he is holding it in consideration of some values, i.e. having his own stake involved in the instrument.
Example 4: In the same above example, Vivek is Holder in Due Course so he can sue the drawer who is Tushar in case he denies the payment for consideration. The most important point here is the instrument should be bearer in nature.
4) Negotiable instrument must be in writing and must bear signature of its maker
7 All negotiable instruments must be in writing and signed in accordance with the rules of instrument. Writing includes handwriting, typing, computer printout and engraving, etc. Without the signature of the drawer or the maker, the instrument shall not be a valid one.
5) The payee must be a certain person It means that the person in whose favor the instrument is made must be named or described with reasonable certainty. The term ‘person’ includes individual, body corporate, trade unions, even secretary, director or chairman of an institution. The payee can also be more than one person.
6) Promise for payment for a certain sum of money only In every negotiable instrument there must be an unconditional order or promise for payment. The instrument must involve payment of a certain sum of money only and nothing else. For example, one cannot make a promissory note on assets, securities, or goods.
7) The time of payment must be certain It means that the instrument must be payable at a time which is certain to arrive. If the time is mentioned as ‘when convenient’ it is not a negotiable instrument. However, if the time of payment is linked to the death of a person, it is nevertheless a negotiable instrument as death is certain, though the time thereof is not. For instance, if Amit issues a cheque dated 1st April 2015 and the current date is 1st December 2015, then that’s not a valid negotiable instrument.
8) Delivery of the instrument is essential Any negotiable instrument like a cheque or a promissory note is not complete till it is delivered to its payee. For instance, you may issue a cheque in your brother’s name but it is not a negotiable instrument till it is given to your brother. EVOLUTION OF NEGOTIABLE INSTRUMENTS
HISTROY Humans have paid for things throughout history from barters to bytes, financial exchanges have evolved with civilization. Just a few centuries ago, mankind paid and bartered goods with slabs of meat and baskets of berries. In the digital age, we now have the
8 convenience of virtual payments which allow us the freedom to pay for goods almost anywhere. So let’s have a look at the timeline
Pastoral stage Barter Exchange (Earliest forms of civilization)
Agricultural stage Grain Barter (9000 - 8000 BC) Livestock (8000 - 6000 BC)
Handicraft stage Crude Metal Coins (1000 - 600 BC)
Guild stage Precious Metal Coins (700 BC)
Domestic stage Paper Money (806)
Factory stage Gold (1816)
Industrial Revolution Gold Bullion (1900)
Post Great Depression Coins and Paper Money (1921 onwards)
1) Pastoral stage In primitive society man used things just as they were found in nature. With time, he learned to domesticate animals and breed them for food and clothing. But in this stage his work served mainly to support only him with his own needs and left very little surplus available foe exchange on a business basis.
9 2) Barter Exchange (Earliest forms of civilization) One of the earliest forms of trading was done by form of Barter Exchange. Early man used resources and services for the benefit of each party
3) Agricultural stage In course of time, the nomadic tribes settled permanently at fixed places and growing corns, grasses etc. became the main occupation. Agriculture emerged as the basic feature of economic living of man. He gradually produced more and then started to exchange it with other commodities. This was known as barter system.
4) Grain Barter (9000 - 8000 BC) Grain was used as currency in Greece, using a shekel as a measurement of weight. The shekel later evolved into an equivalent to silver, bronze, and copper.
5) Livestock (8000 - 6000 BC) Animals are considered the oldest form of currency, with livestock such as camels, sheep, and cows being the most commonly used.
6) Handicraft stage In this stage manufacturing was limited to the human efforts to transform raw materials into finished goods. It included candle and soap making, spinning, weaving, making of clothes and shoes, blacksmithing, leather dressing, carpentry etc.
7) Crude Metal Coins (1000 - 600 BC) Coins made from base metals first appeared in China. However, the base metals are non-precious, making them difficult to use for more expensive purchases.
8) Guild stage A guild is an association of persons following a similar occupation and it is formed to protect and promote the interest of its members through cooperative endeavors.
9) Precious Metal Coins (700 BC) Gold and silver coins were first used in ancient Lydia (modern-day Turkey) and coastal Greek cities. The profiles of gods and emperors were stamped into the metal.
10 10) Domestic stage A new class entrepreneur emerged as a link between producer and consumer. Now entrepreneur purchased the raw materials for the purpose of manufacture and sale but did not do the processing himself. He took the risk of productions and sale. Out of the proceeds of his undertaking, he paid for the materials and labor. The amount left was his profit
11) Paper Money (806) Paper banknotes first appeared in China, though the first widely accepted paper money did not appear in China until around 960. This was followed by centuries of figuring out the balance of production and inflation, until paper money in China disappeared in 1455 for several hundred years.
12) Domestic stage A new class entrepreneur emerged as a link between producer and consumer. Now entrepreneur purchased the raw materials for the purpose of manufacture and sale but did not do the processing himself. He took the risk of productions and sale. Out of the proceeds of his undertaking, he paid for the materials and labor. The amount left was his profit
13) Gold (1816) Though it is certainly not the first time the element is part of a payment system, gold was officially the standard of value in England. After centuries of banknote use, Europe moved forward with a non-inflationary production of banknotes on the gold standard.
World Economy & World Market with respect to Economy & Growth of Commerce
Commerce reached into the stage of growth when money was evolved as medium of exchange to remove the limitations of barter. Introduction of money began led to the extension of division of labor and specialization. People began to produce goods for certain local markets. Thus, division of labor was extended to a locality. Gradually a separate class of
11 artisans and traders came into existence. They settled down at fixed places which came to be known as towns. Growth of these towns gave great stimulus to commerce. The size of the market and the number of commodities exchanged in the market, both increased. Traders from other countries brought luxury articles, metals and ornaments for sale.
Commerce continued to grow both in volume and space. After the decline of Guild system, a new class of people, ENTERPRENEUR class, came into existence. This class of people became a real intermediary between the producers and consumers. Further, growth of commercial enterprise took place. Trade began to assume fixed forms. Production began to be undertaken for the markets extended for the whole country. Division of labour received further impetus. Production was divided into several branches and each branch tended to be localized.
Commerce entered into another stage of its growth when nations of the world were brought into commercial relationships through the invisible thread of trade. As a result of the geographical discoveries of the late 15th, 16th and 17th centuries new trade routes were opened up and commerce grew between nations. Now, in addition to the local market and the trade extending over the whole area of a single country, commodities came to be sold and purchased between traders from different countries in the world. This gave rise to an international world market and to the international trade. Thus the nations of the world were linked together through the medium of the world market.
Evolution of commerce is a never ending process. Almost every day new experiments in its mechanism are made. New forms and methods are being evolved in both socialist and capitalist countries, in both developed and developing nations. THE NEGOTIABLE INSTRUMENTS ACT, 1881
Negotiable Instruments Act, 1881 is an act dating from the period of British colonial rule in India that is still in force largely unchanged.
Meaning under SECTION 13
12 ‘A negotiable instrument means a promissory note, bill of exchange or cheque, payable either to order or to bearer’. It may, however, be clarified here that Section 13 does not exclude any other instrument from being treated as a negotiable instrument, provided, of course, it does have the characteristics of being negotiable.
The above definition clearly stats that the act signifies any written document through which a right is created in favour of some person, through which the rights, vested in one person, could be transferred in favour of another person, in accordance with the provisions of the Negotiable Instruments Act, 1881.
Reserve Bank of India Act, 1934
Sections 31 and 32
The Negotiable Instruments Act, 1881 is operative and enforceable within the provisions of Section 31 and 32 of the Reserve Bank of India Act, 1934 and any violation of such provisions will be punishable under the law with fine
Section 31 of the RBI Act says that ‘no person (other than the Reserve Bank of India or the Central Government), can draw, accept, make or issue any bill of exchange or a promissory note payable to bearer on demand’.
Section 32 of the RBI Act is a punitive clause which provides that if a person issues any bill of exchange or a promissory note, payable to the bearer on demand, shall be punishable with fine.
The rationale behind Sections 31 and 32 is reduce the risk of nonpayment for lack of funds, transfer any number of times and have upper hand in issuing of negotiable instruments to maintain the liquidity flow in Indian Economy as well as Global Economy.
Essentials under SECTIONS 118 and 119
1) Consideration: It is assumed that all negotiable instruments are drawn, made, accepted, endorsed, negotiated, purchased, discounted or transferred for some consideration for value received
13 2) Money: Negotiable instruments are payable by legal tender money of India. The liabilities of the parties of Negotiable Instruments are fixed and determined in terms of legal tender money.
3) Regarding Date : Every negotiable instrument must bear the date of its execution or drawing or acceptance for payment
4) Regarding Acceptance: It is presumed that every time any negotiable instrument is accepted within a reasonable time after the date appearing thereon, and before the date of its maturity, i.e. due date of payment.
5) Writing and Signature: Negotiable Instruments must be written and signed by the parties according to the rules relating to Promissory Notes, Bills of Exchange and Cheques
6) Title: The transferee of a negotiable instrument, when he fulfills certain conditions, is called the holder in due course. The holder in due course gets a good title to the instrument even in cases where the title of the transferor is defective.
7) Notice: It is not necessary to give notice of transfer of a negotiable instrument to the party liable to pay. The transferee can sue in his own name.
8) Evidence: A document which fails to qualify as a negotiable instrument may nevertheless be used as evidence of the fact of indebtedness.
9) Regarding Dishonor of an Instrument: Where a suit has been filed, involving the dishonor of an instrument, the Court will, on production of the proof of its having been duly protested, presume that the negotiable instrument was dishonored, unless it is proved otherwise.
HISTROY
The history of the present Act is a long one. The Act was originally drafted in 1866 by the 3rd India Law Commission and introduced in December, 1867 in the Council and it was referred to a Select Committee. Objections were raised by the mercantile community to the numerous deviations from the English Law which it contained. The Bill had to be redrafted in
14 1877. After the lapse of a sufficient period for criticism by the Local Governments, the High Courts and the chambers of commerce, the Bill was revised by a Select Committee. In spite of this Bill could not reach the final stage. In 1880 by the Order of the Secretary of State, the Bill had to be referred to a new Law Commission.
On the recommendation of the new Law Commission the Bill was re-drafted and again it was sent to a Select Committee which adopted most of the additions recommended by the new Law Commission. The draft thus prepared for the fourth time was introduced in the Council and was passed into law in 1881 being the Negotiable Instruments Act, 1881. The most important class of Credit Instruments that evolved in India were termed Hundi. Their use was most widespread in the twelfth century, and has continued till today. In a sense, they represent the oldest surviving form of credit instrument. These were used in trade and credit transactions; they were used as remittance instruments for the purpose of transfer of funds from one place to another. In Modern era Hundi served as Travelers’ Cheques.
Modern Era
We prefer to carry a small piece of paper known as Cheque rather than carrying the currency worth the value of the Cheque. Before 1988 there being no provision to restrain the person issuing the Cheque without having sufficient funds in his account. Of course on Dishonored cheque there is a civil liability accrued. In order to ensure promptitude and remedy against the defaulters of the Negotiable Instrument a criminal remedy of penalty was inserted in Negotiable Instruments Act, 1881 by amending it with Negotiable Instruments Act, 1988.
With the insertion of these provisions in the Act the situation certainly improved and the instances of dishonor have relatively come down but on account of application of different interpretative techniques by different High Courts on different provisions of the Act it further compounded and complicated the situation although on dishonor of cheques the trends of the verdicts of the Supreme Court of India THE NEGOTIABLE INSTRUMENTS ACT, 1881
PROMISSORY NOTE SECTION 4 “There is no greater fraud than a promise not kept”
15 Dutch Proverb
Meaning under SECTION 4 Section 4 of the Negotiable Instruments Act, 1881 defines a promissory note as ‘an instrument in writing (not being a bank note or a currency note) containing an unconditional undertaking, signed by the maker, to pay a certain sum of money only to or to the order of a certain person or to the bearer of the instrument’. Suppose you take a loan of Rupees Five Thousand from your friend Ramesh. You can make a document stating that you will pay the money to Ramesh or the bearer on demand. Or you can mention in the document that you would like to pay the amount after three months. This document, once signed by you, duly stamped and handed over to Ramesh, becomes a negotiable instrument. Now Ramesh can personally present it before you for payment or give this document to some other person to collect money on his behalf. He can endorse it in somebody else’s name who in turn can endorse it further till the final payment is made by you to whosoever presents it before you. This type of a document is called a Promissory Note.
Illustrations Vivek signs an instrument in the following terms: "I promise to pay Amit or order Rs. 500." "I acknowledge myself to be indebted to Chintan in Rs. 1,000 to be paid on demand, for value received." “I promise to pay Sumedh Rs. 500 and all other sums which shall be due to him." “I promise to pay Tushar Rs. 500, first deducting there out any money which he may owe me."
Parties involved for Promissory Notes The Maker or Drawer The person who makes the note and promises to pay the amount stated therein.
The Payee The person to whom the amount is payable.
16 The Endorser The person who endorses the note in favour of another person.
The Endorsee The person in whose favour the note is negotiated by endorsement.
Requisites of a Promissory Note A promissory note must be in writing, duly signed by its maker and properly stamped as per Indian Stamp Act.
It must contain an undertaking or promise to pay. Mere acknowledgement of indebtedness is not enough. For example, if someone writes ‘I owe Rs. 5000/- to Aadya’, it is not a promissory note.
The promise to pay must not be conditional. For example, if it is written ‘I promise to pay Suresh Rs 5,000/- after my sister’s marriage’, is not a promissory note.
It must contain a promise to pay money only. For example, if someone writes ‘I promise to give Amit a Maruti car’ it is not a promissory note.
The parties to a promissory note, i.e. the maker and the payee must be certain and a promissory note may be payable on demand or after a certain date. For example, if it is written ‘three months after date I promise to pay Chintan or order a sum of rupees Five Thousand only’ it is a promissory note.
17 Specimen of a Promissory Note
Dishonor of Promissory Notes SECTION 93 When a promissory note, bill of exchange or cheque is dishonored by non-acceptance or non-payment, the holder thereof, or some party thereto who remains liable thereon, must give notice that the instrument has been so dishonored to all other parties whom the holder seeks to make severally liable thereon, and to some one of several parties whom he seeks to make jointly liable thereon. Nothing in this section renders it necessary to give notice to the maker of the dishonored promissory note, or the drawee or acceptor of the dishonored bill of exchange or cheque.
18 BILLS OF EXCHANGE SECTION 5 “It I only by not paying one’s bills that one can hope to live in the memory of the commercial classes” Oscar Wilde
Meaning under SECTION 5 An unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed or determinable future time, a sum certain in money to or to the order of a specified person, or to bearer. It is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, with the payer named on the document. More specifically, it is a document contemplated by or consisting of a contract, which promises the payment of money without condition, which may be paid either on demand or at a future date. The term can have different meanings, depending on what law is being applied and what country it is used in and what context it is used in.
Need for Bills of exchange No business wants to sell goods on credit to his customers who may prove unable or unwilling to pay their debts. Today, however, in every field of retail trade it appears that sales and profits can be increased by selling goods on credit basis. The manufacturers and the wholesalers sell goods mostly on credit. Credit is a very powerful instrument to promote sales, so most of the business transactions, in most business concerns, are carried on credit basis. A bill of exchange is a method of payment used between businessmen which has certain advantages over other methods of payment
19 Parties involved in Bills of Exchange 1) The Drawer: The person who draws a bill of exchange is called the drawer.
2) The Drawee: The party on whom such bill of exchange is drawn and who is directed to pay is called the drawee.
3) The Acceptor: The person who accepts the bill is known as the acceptor. Normally the drawee is the acceptor. But a stranger can also accept a bill on behalf of the drawee.
4) The Payee: The person to whom the amount of the bill is payable is called the payee.
5) The Endorser: When the holder transfers or endorses the instrument to any other person the holder becomes the Endorser.
6) The Endorsee: The person to whom the bill is endorsed is called the endorsee.
Requisites of a Bills of Exchange. There are 3 parties to a bill The bill must be in writing It must contain an unconditional order to pay The bill must be duely signed by the drawer & accepted by the drawee. The bill must order payment of a sum certain in money, not in goods or services The bill must be payable on demand or at a fixed or determinable future time. The bill must be payable to or to the order of a specified person.
Types of Bills of Exchange:
Types of bill of exchange on the Basis of Period: 1) Demand Bills of Exchange:
20 There is no fixed date for the payment of such bill. They become payable at any time, when they are presented before payee by the holder.
2) Term Bills of Exchange: These bills are payable after specified period of time. The period after which these bills become due for payment is called tenor.
Types of Bills of Exchange on the Basis of Object: 1) Trade Bills: These bills are drawn and accepted against the sale and purchase of goods on credit. These are drawn by the seller (creditor) and accepted by the buyer (debtor).
2) Accommodation Bills: Such bills do not involve any sale and purchase of goods; rather they are drawn without any consideration. The purpose of such bills is to help one party or both the parties financially.
Classification of Bills of Exchange: Inland Bill: These bills are drawn in a country upon person living in the same country or made payable in the same country. Both drawer and the drawee reside in the same country.
Foreign Bills: These bills are drawn in one country and accepted and payable in another country, e.g. a bill drawn in England and accepted and payable in India.
Discounting and Endorsement of Bill of Exchange Discounting of bill of exchange If the drawer of the bill does not want to wait till the due date of the bill and is in need of money, he may sell his bill to a bank at a certain rate of discount. The bill will be
21 endorsed by the drawer with a signed and dated order to pay the bank. The bank will become the holder and the owner of the bill. After getting the bill, the bank will pay cash to the drawer equal to the face value less interest or discount at an agreed rate for the number of days it has to run. This process is known as discounting of a bill of exchange.
Endorsement of bill of exchange: If the holder of the bill puts his signature on the back of the bill with a view to transfer the property contained in it (right to receive money from the acceptor), then he becomes endorser, and the person to whom the bill of exchange is transferred will become endorsee. This procedure by which a bill is transferred from one person to another person for the settlement of debts is called "endorsement".
Bill sent to Bank for collection:
If a business has numerous bills he got from various debtors he may send these bills to his banker for collection purposes. It should be remembered that, this is not discounting of a bill of exchange. The bill is sent for safety and collection purposes. The bank keeps the bill in its custody till the due date and on the due date; the bank will present the bill to acceptor. After collecting the amount, the bank transfers the amount to the account of its customer (by giving credit to his account). The bank charges some nominal fee from the customer for service he rendered. This is an expense for the customer and revenue for the bank.
DISHONOR OF BILL OF EXCHANGE: A bill of exchange is said to be dishonored when its acceptor refuses to pay the amount of the bill to the holder of the bill on its maturity. The bill then becomes useless and
22 the party from whom it has been received will be liable to pay for the amount. It is very important to know that, when a bill is dishonored, in whose possession it was. Because when a bill is dishonored, all the parties involved are affected and books of accounts of all the parties have to be adjusted.
Accommodation bill of exchange:
Generally a bill of exchange is drawn by a creditor on his debtor to settle a trade debt. A creditor is a person who has sold goods on credit basis and a debtor is a person who has purchased goods on credit basis. Thus, a bill which is drawn by a creditor and accepted by a debtor is known as a trade bill of exchange. On the other hand, a bill of exchange which is drawn to oblige a friend or to give him a temporary assistance or to provide him a loan or to accommodate one or more parties is called an "accommodation bill of exchange".
Such a bill is drawn and accepted without any sale and purchase of goods. As the bill is drawn to fulfil the temporary need of money, there is no question of retaining this bill by the drawer until the due date. The bill will be discounted and cash will be received immediately. The drawer before maturity date is required to provide the acceptor with funds so that he may need his acceptance on the due date.
CHEQUE
23 SECTION 6 “Any general statement is like a cheque drawn on a bank. Its value depends on what is there to meet it” Ezra Pound
Meaning under SECTION 6 A Cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand but it is invariably drawn as a demand bill of exchange only, herein the drawee is always a specific branch of a specified bank and the drawer is the account holder of the same branch of the bank. It also includes the electronic image of a truncated cheque, as also a cheque in the electronic form.
Cheque in Electronic Form It means a cheque which contains the exact mirror image of a paper cheque, and is generated, written and signed in a secure system ensuring the minimum safety standards with the use of digital signature (with or without biometrics signature) and asymmetric crypto system. Electronic checks can be used to make a payment for any transaction that a paper check can cover and are governed by the same laws that apply to paper checks.
Cheque in Truncated Form It means a cheque which is truncated during the course of a clearing cycle, either by the clearing house or by the bank whether paying or receiving payment, immediately on generation of an electronic image for transmission, substitute in the further physical movement of the cheque in writing. In cheque truncation the physical movement of a paper cheque issued stops and electronic flow begins while the electronic cheque is issued electronically and no paper is involved. In cheque truncation, at some point in the flow of the cheque, the physical cheque is replaced with an electronic image of the cheque and that image moves further.
Parties involved for Cheque 1) Drawer:
24 A drawer is a person who issues a cheque, fills the details on the cheque like the name of the payee, date and amount and signs it thereby ordering the drawee to issue the said amount for the payee
2) Payee: The payee is a recipient of the given cheque which he will get from the drawee by the order of drawer.
3) Drawee bank: The drawee will invariably be a bank and bank alone. Alternatively speaking a cheque will invariably be drawn on a bank and bank only.
Example 5 Chintan has a savings account in Vijaya Bank and issues a cheque of Rs. 10,000 to Vinay. In this case Chintan is Drawer, Vinay is Payee, and Drawee is Vijaya Bank.
CHINTAN VIJAYA BANK VINAY
DRAWER DRAWEE PAYEE
NOTE: Drawer and payee can be the same person if it is a self cheque
Example 6 Sumedh makes a bearer cheque in his name as mentioned, ‘PAY TO SELF’ for Rs, 25,000 from his own savings account in SBI, then Sumedh is the Drawer as well as the Payee, whereas SBI is the Drawer. Requisites of a Cheque. 1) Instrument in Writing: A cheque must be writing. It can be written in ink, typed or even printed. The ink used should not be easily erasable. Overwriting or alteration will make the cheque dishonor. Oral orders are not considered as cheques.
25 2) Unconditional Order: In cheque there must contain an order by a depositor (drawer) on its bank (drawee) for paying money to the holder (payees) and order should be unconditional. A cheque containing conditional order is dishonored by the bank.
3) Payable on Demand: A cheque when presented for payment must be paid on demand. If cheque is made payable after the expiry of certain period of times then it will not be a cheque.
4) Certain Sum of Money: Cheque must be for money only and it must be written in words and figures. If the amount in words and figured will differ from each other or if there will be insufficient balance in the account then the cheque will be dishonored.
5) Payee must be certain: The payee of the cheque should be certain person i.e. either real person or artificial person e.g. Joint Stock Company. The name of payee must be written on the cheque or it can be made payable to bearer.
6) Avoidance of cancellations: There shouldn’t be any cancellations on the negotiable instrument. Any cancellations found must be rectified by the signature of the drawer. Failure to do so will cause the instrument to be of no value as it will come under the case of forgery
Different Kinds / Types of Cheques 1) Bearer Cheque
26 When the words "or bearer" appearing on the face of the cheque are not cancelled, the cheque is called a bearer cheque. The bearer cheque is payable to the person specified therein or to any other else who presents it to the bank for payment. However, such cheques are risky; this is because if such cheques are lost, the finder of the cheque can collect payment from the bank.
2) Order Cheque
When the word "bearer" appearing on the face of a cheque is cancelled and when in its place the word "or order" is written on the face of the cheque, the cheque is called an order cheque. Such a cheque is payable to the person specified therein as the payee, or to any one else to whom it is endorsed (transferred).
3) Uncrossed / Open Cheque
27 When a cheque is not crossed, it is known as an "Open Cheque" or an "Uncrossed Cheque". The payment of such a cheque can be obtained at the counter of the bank. An open cheque may be a bearer cheque or an order one. The holder of an open cheque can receive payment over the counter at the bank or deposit the cheque in his own account.
4) Crossed Cheque Crossing of cheque means drawing two parallel lines on the face of the cheque with or without additional words like "& CO." or "Account Payee" or "Not Negotiable". A crossed cheque cannot be encased at the cash counter of a bank but it can only be credited to the payee's account.
5)
Anti-Dated Cheque If a cheque bears a date earlier than the date on which it is presented to the bank, it is called as "anti-dated cheque". Such a cheque is valid up to six months from the date. 6) Post-Dated Cheque
28 If a cheque bears a date which is yet to come (future date) then it is known as post- dated cheque. A postdated cheque cannot be honored earlier than the date on the cheque. 7) Stale Cheque
If a cheque is presented for payment after six months from the date of the cheque it is called stale cheque. A stale cheque is not honored by the bank.
8) Multilated cheque If a cheque is torn into two or more pieces such cheque is Mutilated Cheque. If it presented for payment, such a cheque the bank will not make payment against such a cheque without getting confirmation of the drawer. In case, if a cheque is torn at the corners and no material fact is erased or cancelled, the bank may make payment against such a cheque.
9) E-Cheque Electronic cheque (e-cheque) is the image of a normal paper cheque generated, written and signed in a secure system using digital signature and asymmetric crypto system. Simply said an electronic cheque is nothing more than an ordinary cheque produced on a computer system and instead of signing it in ink, it is signed using the digital equivalent of ink. After the coming into force of The Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002, legal recognition has been accorded to e-cheques and they have been brought at par with the normal cheques. Now, a ‘cheque’ includes an e- cheque. Types of Cheque Crossing General Crossing under SECTION 123 & 126
29 Where a cheque bears across its face an addition of the words ‘and Company’ or ‘& Co.”, between two parallel transverse lines, or simply two parallel transverse lines, either with or without the words ‘not negotiable’, such crossing is referred to as a ‘General Crossing’. The example of general crossing are where the following words are written simply or between two parallel transverse lines
Blank
Crossing The basic type of crossing which converts a bearer cheque to crossed cheque.
& Co. Such crossing just means that this cheque can be paid not in cash but only through the credit of any bank account, that is, to the account of the individual company.
A/C Payee It means that the title to the cheque cannot be transferred to anyone else by endorsement and that such cheque can be paid only by credit to the account of the payee named.
Not Negotiable Such crossing does not restrict its transferability in any manner. Such cheque can well be transferred by endorsement and delivery in the case of an order cheque, and merely by delivery in the case of a bearer cheque. Such crossing is just by way of a safeguard and any of the endorsement happens to be unauthorized or illegal. Special Crossing under SECTION 124& 126
30 A ‘Special Crossing’ bears across the face of the cheque the name of a banker. Drawing of two parallel lines is not necessary in case of a specially crossed cheque. The purpose of special crossing is to instruct the drawee i.e. the banker to make the payment of the cheque only it is presented for payment through that particular bank, as mentioned thereon, and not otherwise. This way the payment of the cheque is made even safer.
State Bank of India Such crossing restricts the payment of the cheque at any of the branch, but only of the specified bank, viz of the State Bank of India, in the present case.
State Bank of India A/C Payee It means the cheque will be credited to the specific account number of the specified person at this specified bank. Such cheques are the safest mode of payment, ensuing that it can be credited to the account of the specific person stated (specific) in the cheque
State Bank of India Not Negotiable Such crossing does not restrict its transferability in any manner. Such cheque can well be transferred by endorsement and delivery in the case of an order cheque, and merely by delivery in the case of a bearer cheque. Such crossing is just by way of a safeguard and any of the endorsement happens to be unauthorized or illegal for that articular bank only.
31 Decoding the Cheque
1) Date line: Here we enter the date in this space. It's best to enter the current date so that we know when we really wrote the cheque.
2) Or Bearer / or Order: The words "or bearer" appearing on the face of the cheque are not cancelled, the cheque is called a bearer cheque. The bearer cheque is payable to the person specified therein or to any other else who presents it to the bank for payment. If the words “or bearer” are cancelled then it becomes an Order Cheque.
3) Payee line: In this section, we specify who will receive funds from our account. We write the name of the person or organization that we wish to pay. Only the named payee is allowed to negotiate the cheque.
4) Rupee box: Here we write the amount in numerical format. This box is sometimes called the "courtesy box" because it appears on the cheque as a courtesy or convenience. When writing a check, it's best to put the numbers in the amount box as far to the left as possible. 5) Amount in words: On this line, we should write the amount of the cheque using words.
32 6) Account Number: It is our account number which makes it easier for the drawee to perform transactions.
7) Signature line: Here the cheque is signed at the line on the bottom right hand corner.
8) Drawee contact information and logo: Our bank's name appears on every cheque so that recipients know who to contact. A phone number and address may be included, or they might just see the bank's logo.
9) IFSC: Indian Financial System Code is an alphanumeric code that uniquely identifies a bank-branch participating in the two main Electronic Funds Settlement Systems in India: the Real Time Gross Settlement (RTGS) and the National Electronic Funds Transfer (NEFT) Systems.
Real time gross settlement systems (RTGS) are specialist funds transfer systems where transfer of money or securities takes place from one bank to another on a "real time" and on "gross" basis. Settlement in "real time" means payment transaction is not subjected to any waiting period.
National Electronic Funds Transfer (NEFT) is to establish an electronic funds transfer system to facilitate an efficient, secure, economical, reliable and expeditious system of funds transfer and clearing in the banking sector throughout India, and to relieve the stress on the existing paper based funds transfer and clearing system.
10) Cheque Number: The first set of number represents the cheque number. It is a six digit number.
33 11) MICR Code It stands for Magnetic Ink Character Recognition. This number helps a bank to recognize the bank and branch that issued the cheque. We might think that this can be done just by looking at the cheque, but banks have to process hundreds of cheques daily. Going through each and every cheque is a cumbersome process. Instead, the cheques are sorted through a cheque reading machine which uses this number to identify the bank and branch a cheque belongs to. This makes the process faster.
The MICR number is a nine digit number, which consists of three parts- A. City Code: The first three digits represent the city code and are same as the first three digit of the PIN code of that city. For e.g., a bank in Hyderabad will have first three digits of MICR code as 500 (since PIN code for Hyderabad starts with 500)
B. Bank Code: The next three digits represent the bank code. Every bank has a unique code assigned to it. For e.g., ICICI bank’s code is 229, for HDFC it is 240 and so on.
C. Branch Code: The last three digits represent the branch code.
12) Bank account Number The third set of six digit numbers represents your account number (It consists of a few digits of your account number). But if you pick an old cheque book, issued probably before CBS (Core Banking Solution) was introduced, you won’t find this set of number present.
13) Transaction ID The last two digits tells whether a cheque is a local cheque our payable at par cheque. 29, 30 and 31 represents payable at par cheque, while 09, 10 and 11 represents local cheque. Payable at par cheque is a cheque that can be cashed at any branch of the issuing bank, while local cheque can be cashed only at the issuing branch. So, if you deposit a cheque in your bank, with code 10 written at the bottom of the cheque, it’ll take a few days for the money to
34 come in your account. However since most of the branches these days are CBS (Core Banking Solution) enabled, so the cheques are generally payable at par.
DISHONOR OF CHEQUES SECTION 138
Sections 138 to 142 of the N.I. Act were brought into existence by way of amendment by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988.
Dishonor of cheque for insufficiency, etc., of funds in the account: Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honor the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless; 1) The cheque has been, presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier
2) The payee or the holder in due course. of the cheque as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid
3) The drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
35 Grounds for Dishonor of Cheque 1) Insufficient Funds: The amount of money standing to the credit of the account of the drawer on which the cheque is drawn is insufficient to honor the cheque, the cheque amount exceeds the amount that can be paid by the bank under an arrangement entered into between the bank and the drawer of the cheque.
2) Account Closed: It is an offence under section 138 of the Act – Closure of account would be an eventuality after the entire amount in the account is withdrawn. It means that there was no amount in the credit of ‘that account’ on the relevant date when the cheque was presented for honoring the same”
3) Stop Payment’ instructions: “Once the cheque has been drawn and issued to the payee and the payee has presented the cheque, ‘stop payment’ instructions will amount to dishonor of cheque.
4) Not a clearing member: “Cheque returned with endorsement ‘not a clearing member’. To attract the provisions of section 138 NI Act, the cheque should be presented with the bank on which it I drawn- If the cheque is not presented to the bank on which it is drawn, then provisions of sec 138 would not be attracted. If bank on which the cheque is drawn is not a clearing member of the Reserve Bank of India – unpaid return of the cheque would not attract section 138.”
5) Post Dated Cheque: Postdated cheque is not a “cheque” on the date it is drawn – It becomes a “cheque” only on the date written on it – Till that date post-dated cheque remains a bill of exchange. The post-dated cheque becomes a cheque within the meaning of section 139 on the date which is written thereon and not the 6 months period is to be reckoned for the purposes of proviso (a) to sec 138 from the date. Thus in case of a pot-dated cheque, six months period is to be reckoned from the date mentioned on the face of the cheque and not any earlier date on which the cheque was made over by the drawer to the drawee.
36 6) Blank Cheque: Respondent issued a blank cheque without mentioning the date and amount and sent it with a letter requesting complainant to present it after a month – Question whether blank cheque will come within the definition of cheque? – If the cheque is not drawn for a specified amount it would not fall within a definition of bill of exchange - Act of complainant in filling up amount portion and date was a material change and it could not be enforced even though it was issued for a legal liability.
7) Admission of signature on the cheque is not equivalent with admission of execution Right of the accused to contend that a blank signed cheque was mis-utilised by the payee cannot be taken away by such mere admission of signature. Cheque Forgery Forgery is the process of making, adapting, or imitating objects, statistics, or documents with the intent to deceive or earn profit by selling the forged item. Copies, studio replicas, and reproductions are not considered forgeries, though they may later become forgeries through knowing and willful misrepresentations.
Types of Forgery seen: To write (copy and forge) the signature of a real (existing) person on the instrument so cleverly with the fraudulent intention that it may pass as a genuine signature of a real person. To write (copy and forge) the signature even of a fictitious (non-existing) person on the instrument, with such fraudulent intention. Even if a person has signed his own name on the instrument, it may as well be deemed as a forgery. CHAPTER V Revolution in Negotiable Instruments
PAYMENT SYSTEMS IN INDIA 1) Digital Cash A ‘digital coin’ or digital cash consists of a message issued by a bank or other entity and encrypted by its Private Key. The message contains the serial number of the cash, the identity of the issuer and its Internet address, the amount of the cash and an expiry date. This
37 serial number is unique to bank and can be decrypted by bank only this serial cannot be altered unless message is tweaked i.e. it is permanent in nature and once set cannot be changed Example When Ganesh has bought a book from online retailer and wants to make payment in digital cash then for the given price, digital-cash code that is associated with the requested digital-cash value i.e. book price generated from Ganesh, bank who provides him digital cash service this code Is then communicated to online retailer ,the retailer will confirm the code from bank whether it is correct value and there is no multiple transaction and then enter the encrypted code with retailers bank account code to transfer money into retailer’s account.
2) Smart Card A smart card is like an "electronic wallet". It is a standard credit card-sized plastic intelligent token within which a microchip has been embedded within its body and which makes it smart. Amongst other things, the card can be used to store money, or a value of money, including digital coins Example Rajesh had gone out of station at his cousin marriage for 5 days to Delhi. He had gone out for shopping in a mall. He purchases clothes, shoes and perfume for his cousin marriage. He saw that cash he was carrying in his wallet was not enough to pay the bill. So he thought rather of withdrawing cash from A.T.M he would pay directly by using his credit card. This will save his time and easy to do the transaction.
3) Electronic Fund Transfer Electronic Funds Transfer (EFT) is the electronic exchange or transfer of money from one account to another, either within a single financial institution or across multiple institutions, through computer-based systems. The primary modes of funds transfer at present are demand draft, mail transfer and telegraphic transfer. The time taken by these modes of transfer for transferring the money from sender to beneficiary is around 8 to 10 days. In the case of Electronic fund transfer, fund reaches the beneficiary either on the same day or the next day. Example
38 Suppose there are two parties party A and party B entered into to a contract. If party A wants to make payment to party B through Electronic Funds Transfer then party A will approach his bank to make the payment to party B. Party A will give all the details of party A and party B required for making an Electronic Fund Transfer to his bank and then the bank of party A will make the payment to the bank of party B. The bank of party B then will make the payment to party B.
4) Digital Cheque Digital cheque is a form of payment used in Ecommerce. A digital cheque functions in the same way as a paper cheque. It acts as a message to a bank to transfer funds to a third party; however, it has a number of security advantages over conventional cheques since the account number can be encrypted, a digital signature can be employed, and digital certificates can be used to validate the payer, the payer's bank, and the account. Example A company that is depending on the received cheque clearing in time to use the funds to manage an employee payroll will appreciate the speed that the electronic cheque deposit method provides in comparison to waiting several days for paper cheque to clear.
5) Biometrics It consists of methods for uniquely recognizing humans based upon one or more intrinsic physical or behavioral traits. The traits that are considered include fingerprints, retina and iris patterns, facial characteristics and many more. Biometrics is used as a form of identity access management and access control”. The meaning of Biometrics is “life measurement" which measure a particular set of a person's vital statistics in order to determine identity. Example: Identify individuals in groups are means of identity access management & A PIN on an ATM system at a bank is means of access control.
Biometric characteristics can be divided in two main classes Behavioral Biometrics: It basically measures the characteristics which are acquired naturally over a time. It is generally used for verification. Examples:
39 Speaker Recognition - analyzing vocal behavior Signature - analyzing signature dynamics Keystroke - measuring the time spacing of typed words
Physical Biometric: It measures the inherent physical characteristics on an individual. It can be used for either identification or verification. Examples: Fingerprint - analyzing fingertip patterns Facial Recognition - measuring facial characteristics Hand Geometry - measuring the shape of the hand Iris Scan - analyzing features of colored ring of the eye Retinal Scan - analyzing blood vessels in the eye DNA - analyzing genetic makeup
Advantages of Biometrics in Negotiable Instruments: Increase security - Provide a convenient and low-cost additional tier of security. Reduce fraud by employing hard-to-forge technologies and materials. For example, minimize the opportunity for ID fraud, buddy punching. Eliminate problems caused by lost IDs or forgotten passwords by using physiological attributes. For example, prevent unauthorized use of lost, stolen or "borrowed" ID cards. Reduce password administration costs. Replace hard-to-remember passwords which may be shared or observed.
Comparison between India and Australia on bases of Negotiable Instruments
Sr. No Points India Australia
40 Bills of Exchange Act 1909 Promissory notes
Negotiable Instruments Act, th Governing Cheques before 7 July 1987. 1 1881. act Cheques Act 1986. Controlled by Indian Govt. Controlled by ‘Australian Securities and Investments Commission (ASIC)’
Bills of exchange Bills of Exchange Promissory notes Cheques 2 Contents Promissory Notes Treasury notes Cheques Certificate of Deposits
Understand meaning, essential characteristics and types of negotiable instruments Provide uniformity of law in Australia in relation to bills of Describe the meaning and exchange and promissory marketing of cheques, crossing notes. of cheques and cancellation of crossing of a cheque Provide legal certainty by confirming the nature of bills Objectives of Explain capacity and liability of exchange and promissory 3 governing act parties to a negotiable notes as negotiable instruments instruments.
Understand various provisions Promote efficiency in the of negotiable instrument Act, marketplace that utilizes bills 1881 regarding negotiation, of exchange and promissory assignment, endorsement, notes through the concept of negotiability acceptance, etc. of negotiable instruments
Changing face of Trade and Commerce
International trade finance deals with money lent to sellers, i.e., exporters, and buyers, i.e., importers. In international trade transactions, when it comes to negotiable instruments
41 there is always the “chicken and egg” question of payment to the seller versus shipping and delivery of the goods to the purchaser. If a seller requires payment in advance, then their sales may suffer since purchasers would rightfully fear that they might pay in advance and the seller not ship the goods. Likewise, if the seller ships the goods and trusts the buyer to pay, then the seller runs the risk that the purchaser may not pay.
In order to address this recurring situation, banks step in as an intermediary and provide various types of negotiable instrument financing that attempt to address the concerns of both the buyer and the seller. For example, the buyer's bank may provide a letter of credit to the seller, or the seller’s bank, providing for payment upon presentation and approval of certain specified documents, such as a bill of lading. The Seller's bank may make a loan by advancing funds to the seller on the basis of the sales contract. These are some of the latest styles of payment acting as negotiable instruments though they are not included in the act by the Central Government.
There are four basic methods of trade finance by way of negotiable instruments: 1. Advance Payment: The buyer pays up front and trusts that the seller will forward the goods. This method is the most secure for the seller and the least secure for the buyer.
2. Direct Payment: The Seller ships the goods and the Buyer pays the Seller directly. This offers the most security for the Buyer and the least security for the Seller.
3. Documentary Collection: An international trade financing procedure in which a bank in the buyer’s country acts as a fiduciary on behalf of the seller in collecting and remitting payment for a shipment of goods.
4. Documentary Credit: This covers letter of credit transactions wherein the buyer has his bank provide a letter of credit that effects the payment for the goods purchased. In effect, the seller is comforted by substituting the credit worthiness of the bank for the creditworthiness of the buyer. These transactions are subject to UCP 600 and are more fully explained in the following section.
Letters of Credit as a Negotiable Instrument
42 The first thing to understand about Letters of Credit is that there are many different variations that have been crafted over the years to meet the requirements of Buyers and Sellers. However, there is a generally accepted format that permeates all Letter of Credit transactions, and that framework will be explained here. The basic purpose of a Letter of Credit is to comfort buyers and sellers in an international trade transaction by essentially replacing the credit of the buyer with the financial backing of the bank that issues the letter of credit.
Two basic types of letter of credit are used: Commercial Letter of Credit: This is the basic payment document guaranteeing the payment for the goods that are being sold and shipped. Also called a Documentary Letter of Credit. An issuing bank issues (or opens) a commercial letter of credit at the request of one of its customers, authorizing the advising or confirming bank, to make a specified payment to the seller or shipper, known as the beneficiary. The letter of credit is the bank’s commitment to fund draws covered by the credit. In effect, the credit of the issuing bank replaces the credit of the bank's customer as the party obligated to make the payments under the letter of credit.
Standby Letter of Credit Whereas a commercial letter of credit is a payment mechanism for a particular international trade transaction, a standby letter of credit serves as a secondary or back-up means of payment. Issuing banks issue standby letters of credit in order to provide comfort to other parties that the bank’s customer can perform some financial obligation to the beneficiary. Usually, it is not expected that the issuing bank will ever be called upon to fund the standby letter of credit.
CHAPTER VI. PRIMARY RESEARCH ON SCOPE OF NEGOTIABLE INSTRUMENTS
43 Preliminary Research on Knowledge of Negotiable Instruments Sample Questionnaire
Survey on Knowledge of Negotiable Instruments.
(Please tick wherever applicable and fill in the required information)
1. Please fill the following details: Name: Age: Gender: Occupation:
2. Do you think you are fully aware of all Negotiable Instruments and their use? Strongly Agree: Agree: Not Sure: Disagree: Strongly Disagree:
3. Which of the following negotiable instruments you use often? Hundi: Bills of Exchange: Promissory Notes: Cheques:
4. Are you aware of what the digits at the bottom of the cheque indicate? Yes: No:
5. Are you aware of the consequences of dishonoring a negotiable instrument? Yes: No: 6. Do you prefer Internet Banking on Physical Banking Transactions?
Yes: No:
7. Are you aware of the different kinds of frauds that take place with respect to negotiable instruments?
44 Yes: No:
8. Have there been cases where multiple payments have happen from your account due to internet connectivity issues while dealing in Internet Banking? Yes: No:
9. Are you aware of the kind of negotiable instruments like smart dcards, digital Cheques, biometrics, etc ? Yes: No:
10. Would you like to be made awarefor the new types of negotiable instruments? Yes: No:
11. What are your suggestions and inputs in safeguarding and improvements on the Negotiable Instruments in India?
Research Methodology and Interpretation Database
Objectives of this Research. To find the degree of knowledge,of customers with regards to Negotiable Instruments. To know the majority used Negotiable Instrument. To find out cybercrimes arising out of Internet Banking. To know about the customer satisfaction and their viewpoints. To understand the future needs of customer in terms of Negotiable Instruments.
Research Design. Survey design:
45 The study is a cross sectional study because the data was collected at a single point of time. This type of study utilizes different groups of people who differ in the variable of interest, but share other characteristics. For the purpose of present study a related sample of population was selected on the basis of convenience.
Sample Size and Design: A sample of 30 people was taken on the basis of our convenience. The actual people were interviewed on the basis of random sampling. Convenient Random Sample was used in this research.
Research Period: The Research work was carried for a week.
Research Instrument: This work was carried out through self-administered questionnaires. The questions included were closed ended and some also offered multiple choices.
Primary Data Collection: The data, which was collected for the purpose of study, was majorly primary in nature which comprises of information collected through college students. The data has been collected directly from respondents with the help of structured questionnaires.
Analysis of Questionnaire
46 Interview with Allahabad Bank Manager
Interview with Allahabad bank manager (Reclamation Branch) with respect to
Q1:- Can you please brief us on negotiable instruments? Ans- According to NI act basically there are three types of negotiable instruments, promissory notes, bills of exchange and cheques. But now days we are mainly dealing with cheques only. Bills of exchange and promissory notes have become obsolete. Due to evolution of many types of cheques and easy accessibility made it more popular.
47 Q2:- Are bills of exchange and promissory notes still in use? Ans- Yes, they are in use but in very limited manner.
Q3:- What are ‘HUNDIS’? Ans- In earlier time hundis were the only type of negotiable instrument. There were so many types of hundis. But now none of them exist, even though features of hundis are now covered under Travellers cheque. Information on various types of hundis and there uses, you can easily find on Google.
Q4:- What are various types of cheques? Ans:-Bearer Cheque, Order Cheque, Uncrossed / Open Cheque, Crossed Cheque, Anti-Dated Cheque, Post-Dated Cheque, Stale Cheque, Mutilated cheque, E-Cheque etc.
Q5:- Why we cross cheques? Ans:-This is done to prevent it from being directly encashed. The crossed cheque must be deposited into a bank account. If the cheque has been stolen, it is easily traced by locating the account it was deposited into. Type of crosses on cheque you can get on Google.
Q6:-How many cheque frauds you’ll come across? Ans:-Few years before there were many cases of cheque frauds, but now the number have reduced drastically.
Q7:-What has led to reduction of cheque frauds? Ans: - Main reason for reduction in frauds was awareness, strict rules implemented on 1988 and banking going digital.
Q8:- What procedure do you follow when cheque is dishonored? Ans: - Now whole procedure of clearing the cheque is centralized. We don’t have to do it manually since the cheques in truncated form evolved. We have to put all cheque details in bank software and then it goes for clearance. If cheque dishonors then we get an acknowledgement from clearing house then according RBI both the parties are penalized for the same. But the call to go for legal actions is completely on payee.
48 Q9:- What do you think will be the future of negotiable instruments? Ans: - I think it would be completely digitalized. Instead of cheques you may have some electronic tokens which would be coded. You don’t even need to carry your cheque books. You may create future dated transaction on NEFT in advance so that on particular future date amount will automatically transferred to payee’s account. And if the due amount is not present in drawer’s account then there will be similar laws applicable as dishonor of negotiable instruments.
Statistical Data on Disposal and Pendency of Negotiable Instruments
Year Institution Disposal Pendency 2013 8096 8202 19831 2012 7700 7072 18972 2011 7761 7750 16943
Institution, Disposal and Pendency of Negotiable Instrument Cases Act in
49 19831 18972 20000 16943 18000
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10000 77617750 7700 80968202 7072 8000
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0 2011 2012 2013 Institution Disposal Pendency
The Supreme Court
Institution, Disposal and Pendency of Negotiable Instrument Act Cases in Four High Courts
HIGH COURT Institution Disposal Pendency MUMBAI 10670 12139 34616 DELHI 1988 2372 6415 MADRAS 20819 17724 54126 CALCUTTA 7189 6514 30591
50 DELHI
Institution; 18%
Pendency; 60% Disposal; 22%
MUMBAI
Institution; 19%
Pending; 60% Disposal; 21%
51 MADRAS
Institution; 22% Disposal; 19% Pendency; 58%
CALCUTTA
Institution; 16%
Disposal; 15%
Pendency; 69%
CHAPTER VII CONCLUSION
52 10 YEARS GOING FORWARD New technologies are opening up new opportunities for businesses to offer new kinds of payment and new forms of currency. Some of these will fail in the market and some will stay. By 2030, we will all be used to paying for things in a variety of new ways, and authenticating payments in new ways too. This paper looks at some of the changes. Many believe could be coming along and the key factors that will determine which ones will have a lasting impact.
Technology generally succeeds or fails depending how well it meets our everyday social needs, so it is a good idea to look at these. Then, expanding on one important area of these, security, we will address some other key factors that will affect adoption. We will consider how all this could play out in the 5 and 15 years periods, leading up to an overview of how payments will look in 2030. 2030 has been chosen for this report because it is far enough away for technology to have time to develop and mature, and for society to adopt or reject the various types of contenders, but not so far in the future that predictions are just guesswork or science fiction.
A Negotiable Instrument is nothing but written documents, signed by the maker or the drawer containing an unconditional promise to pay or an order to pay a certain sum of money at a definite time to the bearer or to the order. Negotiable Instruments can either be negotiable or non-negotiable. But, they must come under one of the two categories. An instrument becomes negotiable either by statute or by mercantile usage. Among all other negotiable instruments, bills of exchange, cheque and promissory notes are the three important negotiable instruments which are widely used in international trade.
As these Instruments started becoming an integral part of business, there also felt a need to unify them. These Instruments, so as to be used for trade and commerce, were needed to be well defined. It became imperative that a set of rules were to be established to set a common ground for the usage of these instruments, thereby accepted by all those affected by them. Negotiable Instruments like Cheque and Promissory note, also aided non traders with their money transactions. For instance, people could lend money to others without having to worry about the risk of non-payment by the lending party. On the grounds of negotiable instruments, it became easy to collect money from debtors.
53 As trade and commerce evolved through ages, so did negotiable instruments. Advancement of technology brought advancement in the usage of these instruments. CTS i.e. cheque truncation is one of such examples. This system prevents the actual physical movement of cheque between banks and sending the required information via electronic medium thus saving time, efforts and money. Similarly, the concept of digital money, where money is electronically transferred from one account to another, acts as a replacement for instrument like cheque. Digital cheque also works on similar grounds thus giving the same set of advantages. Also, with respect to promissory notes and bill of exchange, e-promissory note and e-bill of exchange may act as probable advancement for these instruments as we saw in the document. Also with the use biometric system the use of Negotiable Instruments promises to be more safe and clean. Use of such advance technologies, has indeed brought a revolution in the realm of Negotiable Instruments, this revolution is rightly called as the ‘Electronic Revolution’, changing the face of these instruments.
Even though electronic revolution has brought about many changes in the present world, but negotiable instruments are still in use. The electronic revolution is considered as the next major step which replaces the negotiable instruments. For this the future could improve and develop the problems which prevail in e-revolution. In the present world, people in all fields of profession are getting used to e-revolution. The present world, need to be train to get used to this system of working with e-revolution. It still takes time for the next generation to be ready to use the e-revolution with no difficulties.
Globally, there are many options to dematerialize these financial instruments, but a very few can provide guaranteed security to the user’s information and money. In order to maintain the security level & to save the time; Government needs to use more resources, do research about the latest facilities, test them, regularize it & spread awareness about these facilities.
SUGGESTIONS
54 Social networking and Negotiable Instruments Twitter: There are 121 million social network users in India and some of the leading banks of India have planned to take full advantage of this situation. The investment in such kind of program is really less as you don’t need to build a new website and promote your website/product on different platforms. Plus operating internet banking is not that user friendly, hence using social networking for the purpose of transaction can prove a game changer for banking sector. For example if you need to recharge your mobile then you need not download the banking app or use internet banking, you only need to have a twitter account and type #Mobile Recharge
Email: You can simply type in the email id and mobile number of the recipient. You need not know the account number of the recipient. The other party will receive email with OTP and a link. There he can mention his account number followed by the OTP and the money will be transferred to his account.
Facebook: The feature mentioned above for “Email Transaction” is also used on Facebook but for that you need to have the other party in your friends list
Mobile wallets: The entire banking sector is worried with the emergence of the Mobile wallets. Airtel became the first company to bring mobile wallets in India, Vodafone followed by their “M- pesa”. Paytm has also come up with their mobile wallet system. The money which is available in Paytm wallet can be used for transaction on many other websites such as BookMyShow. So far there has not been any such facility where you can transfer money to an individual through wallet but soon the same will come to reality as the years go by and more and more people will start to use digital wallet system.
Biometrics:
55 NFC for mobile payments has struggled with adoption. Not least because the user needs to have an NFC-enabled phone in order to be able to make these contactless payments in addition to the retailer itself being set up to accept NFC payments. Hence what can be better way than using your own fingerprint as the way of transaction. Fingerprint will store all the data such as your credit card number, account number, it will work as OTP, and password as it can be the safest way of transaction.
Interesting fact is consumers want to use their mobile device for payments. According to Pew Research, 90% of U.S. adults have a mobile phone, 58% have smartphones and 42% have tablets. An Accenture survey revealed that 71% of in-store shoppers are interested in paying by mobile phone but only 9% of retailers have mobile wallet capabilities. Even though users must access and log in to the Starbucks payment app, the coffee titan reports that 15% of its in-store transactions in the U.S. are mobile payments. Until making a mobile payment becomes faster than using a credit card, mobile payments will be stuck in low gear. And the key to making mobile payments fast is to use biometrics to solve the authentication problem and eliminate the need for consumers to enter a password.
We often think of biometrics as being leading technology, but in fact, biometrics has been around since 1858 when Sir William Herschel used handprints to identify Civil Service of India employees from others who might claim to be employees on payday. And consumers are becoming more comfortable with biometrics in the form of voice and fingerprints. Research firm Frost and Sullivan estimates that the number of global biometrics smartphone users will reach 471.11 million in 2017. The banking industry is experimenting with biometrics and payments. In February, U.S. Bank announced that employees are piloting software that allows them to use their voice to login and access a credit card account on a mobile device.
Barclays recently announced the Barclay’s Biometric Reader for its corporate banking customers in the U.K. beginning in 2015. The reader uses Finger Vein Authentication Technology (VeinID) from Hitachi to allow users to scan their finger to authorize payments and access online accounts. Apparently, vein patterns are more difficult to spoof than even fingerprints. Along with the launch of iPhone 6, Apple announced Apple Pay which uses near-field communication (NFC) and Touch ID.
56 RECOMMENDATIONS
Future Prospects on Transactions Governments and some companies are moving away from strictly financial assessments of wealth and incorporating more quality of life measures, and social strengths are big components. Far future companies will become much more integrated into the fabric of communities. This makes community cash forms and direct peer-to-peer payment systems more viable, but also means social networks will keep companies in check and punish those that misbehave. As social entrepreneurs continue to make clever use of the web and phones, some social network based payment systems could be developed that are free of commission and fees, and if so, they will provide strong competition for today’s payment systems, which charge retailers a percentage of each transaction. Governments would encourage this since removing fees and commission will be an economic stimulus equivalent to reducing VAT. Tribal social networks will therefore be a key driver of change for banks, credit card companies and phone based cash providers. This will also make it hard for walled gardens to survive, where companies try to take a slice of each transaction on their systems. People will demand the ability to spend their own cash on any platform without having to pay commissions and social entrepreneurs will deliver the means to do so. Companies that try to resist will suffer and likely see people simply boycott their platforms.
5 YEARS FORWARD The next five years are critical for the success of electronic payments, particularly Near Field Communication (NFC), the technology used on contactless cards or NFC-enabled mobile phones. Rival Smartphone operating systems will battle for supremacy with supposedly safer ‘walled garden’ versions such as Apple’s iPhone iOS where the company that created the software can restrict access to non-approved applications or content, competing with open but supposedly risky ones such as Google’s Android. Many new payment systems are emerging, hoping to grab market share, often using the phone as both proof of presence and to run the app that processes transactions.
57 Some of these payment systems will be cross platform, while others won’t, echoing the battle over Smartphone operating systems. Security will be critical for all of these emerging payment systems – the next five years will thoroughly test them with imaginative and sophisticated attacks. Low battery life and signal coverage problems will combine with security issues to guarantee the continuation of physical cash. Particularly at stake are biometric based systems such as face, voice, fingerprint and iris recognition – security fears will either be confirmed or proven misplaced, and that will determine the longer term future. Battery drain on phones will remain a problem, particularly when people have to use many applications that rely on continuous access to wireless common positioning systems.
CASE STUDIES
58 CASE STUDY 1 VIJAY MALLYA CHEQUE BOUNCE
Vijay Mallya vs. Delhi International Airport
PETITIONER: Delhi International Airport RESPONDENT: Vijay Mallya DATE OF JUDGMENT: 29/01/2015 CHEQUE AMOUNT: Rs 7.5 crore
Delhi High Court did not hear liquor baron Vijay Mallya's plea challenging summons issued to him by a trial court in several cheque-bouncing cases in which he had to appear on February 20, 2012. Justice Sunil Gaur fixed May 8 for hearing of the matter after the counsel for the parties requested adjournment. The trial court had summoned Mallya as an accused after GMR-led Delhi International Airport (DIAL), which operates the capital's Indira Gandhi International Airport, had moved the trial court after a cheque amounting to Rs one crore issued by Kingfisher Airlines Ltd on February 22, 2012 was returned to them a month later containing the remarks "fund insufficient".
Delhi International Airport filed four cases against Mallya for dishonor of cheques for a total amount of Rs 7.5 crore. The airline had issued the cheques towards payment for services availed by them at the IGI airport here. Mallya, who was denied permission by the government to be re-elected as managing director of the now-grounded Kingfisher Airlines, has approached the court seeking direction to quash the September 2, 2014 and January 13, 2014 orders of the trial court by which he was summoned as an accused in the case.
He also sought direction for quashing of the complaint of 2012 pending before the Metropolitan Magistrate here. Metropolitan Magistrate in January last had asked Mallya to appear before him as an accused and defend himself in trial. In September last year, the sessions judge had dismissed a revision application against the previous order.
CASE STUDY 2 P.N. KHANNA CHEQUE FORGERY
59 P.N. Khanna vs. Bank of India
PETITIONER: Bank of India RESPONDENT: P.N. Khanna DATE OF JUDGMENT: 15/01/2015
Brief facts of the case are that complainant/ appellant had one account with opposite party/ respondent and one account with Allahabad Bank. He filled cheque No. 839595 of Allahabad Bank in his name for Rs. 8,16,000/- and handed over the cheque to Officer of the opposite party for clearance, who in turn called his peon Rajiv Kumar and got the cheque dropped in the drop box and counter slip was given to the complainant. Amount of this cheque was not credited in his account and on enquiry from Allahabad Bank, he came to know that the cheque has been cleared for Rs. 28,16,000/- and has been credited in the name of one Satnam Singh in State Bank of India.
Alleging deficiency on the part of opposite party, complainant filed complaint before the State Commission. Opposite party resisted complaint and submitted that cheque dropped in the drop box was not found and report was lodged to the Police and investigation is pending. It was further, submitted that cheque was forged by Satnam Singh and got it collected through State Bank of India against KYC norms. Complainant has not impleaded Allahabad Bank, State Bank of India and Satnam Singh as party, hence, complaint was not maintainable and prayed for dismissal of complaint. Learned State Commission after hearing both the parties dismissed complaint as referred above, against which this appeal has been filed. Admittedly, complainant has not impleaded Allahabad Bank, State Bank of India and Satnam Singh as opposite parties in the complaint and criminal investigation is also pending in the matter. As there are allegations of theft, forgery and clearance of forged cheque by the Bank, Learned State Commission rightly dismissed complaint and directed complainant to approach Civil Court for redressal of his grievances.
CASE STUDY 3 BRITANNIA INDUSTRIES LTD BILLS OF EXCHANGE FORGERY
60 Britannia Industries Ltd vs Punjab National Bank
PETITIONER: Punjab National Bank RESPONDENT: Britannia Industries Ltd DATE OF JUDGMENT: 17/04/2013
Claim of the appellant-plaintiff: It is based on a purported bill of exchange for a sum of Rs. 1 crore only.
Bill of exchange was accepted by M/s Lgee Enterprise (not made a party to the suit) further shown to be accepted by Punjab National Bank. Then shown to be endorsed by respondent no. 2 (Metropolitan Construction ) in favour of the appellant-plaintiff and was delivered to it, who, thus, claims to have become the endorsee (Britannia Industries Ltd.) and the holder of the bill of exchange in question.
The bill of exchange was presented for payment, but respondent no. 1 (PNB) refused to make payment, thereby dishonoring the bill. The appellant-plaintiff filed the suit – for recovery of the amount of the bill of exchange along with statutory interest. The suit summons were not served on defendant nos. 2, 3 & 4 and they never contested the suit at any stage. Lgee Enterprise (Mumbai) - beyond the jurisdiction of the Calcutta High Court. So, the contest was directly with PNB which was described in the plaint as the acceptor of the bill. PNB (respondent no.1) completely denied the case of the appellant- plaintiff as, the bill of exchange was never accepted by it; that A.B. Das, who was the Branch Manager of PNB Zakaria Street Branch, Calcutta and who was shown to have accepted the bill of exchange was not authorized to accept any bill of exchange on behalf of the Bank. The co-acceptance of the bill of exchange by A.B. Das in Bombay was not in discharge of his official duty as Branch Manager of a branch in Calcutta. The co-acceptance of the bill of exchange shown to have been made by A.B. Das was fraudulent and not binding on the Bank.
CASE STUDY 4 AZHARRUDIN CHEQUE BOUNCE
61 Mohd Azharuddin vs. Sanjay Solanki
PETITIONER: Sanjay Solanki RESPONDENT: Mohd Azharuddin DATE OF JUDGMENT: 01/03/2012 CHEQUE AMOUNT: Rs 4.5 crore
The Delhi court issued a fresh non-bailable warrant (NBW) against cricketer-turned Congress MP Mohd Azharuddin after he failed to appear before it in connection with a cheque bounce case. Metropolitan magistrate Vikrant Vaid issued the warrant against the former captain of the Indian cricket team for March 7 after he failed to appear before it in pursuance of the earlier NBW issued against him on February 18.
The court issued the NBW, dismissing an application for exemption from personal appearance to Azharuddin. The application was filed by Azharuddin's counsel, who said his client was busy with election campaigning in the ongoing Uttar Pradesh assembly polls. On the earlier date of hearing, the magisterial court had issued a NBW against Azharuddin for March 1, after he repeatedly failed to appear before it and also rejected his plea for exemption.
According to the complaint against Azharuddin, he wanted to sell his Mumbai-based property worth around Rs 4.5 crore, jointly owned by him and his estranged wife Sangeeta Bijlani. The complainant Sanjay Solanki, a Delhi-based businessman, approached Azharuddin to purchase the property and the deal was finalized after which Solanki paid Rs 1.5 crore in advance to Azharuddin
But after some time, due to some marital dispute, Azharuddin refused to sell the property and agreed to pay the money back to Solanki as per the agreement. The former captain issued a cheque of Rs 1.5 crore to Solanki in 2008 but it was dishonored by the bank, the complainant said. After Azharuddin's cheques were dishonored again twice, once in 2009 and later in 2010, Solanki approached a court with a complaint against Azharuddin. BIBLIOGRAPHY
62 Business Law by Satish B Mathur Business Law by Bulchandani
WEBLIOGRAPHY
http://www.scribd.com/doc/213870059/Negotiable-Law http://en.wikipedia.org/wiki/Negotiable_Instruments_Act,_1881 http://en.wikipedia.org/wiki/Certificate_of_deposit www.ddegjust.ac.in/studymaterial/mcom/mc-207-f.pdf http://indiacode.nic.in/incodis/whatsnew/Negotiable.htm http://www.scribd.com/doc/213870059/Negotiable-Law http://archive.indianexpress.com/news/azharrudin-issued-nbw-in-rs-4.5-cr-cheque- bounce-case/918753/ http://www.hcmadras.tn.nic.in/jacademy/e%20journal/2011/eMay%202011.pdf http://www.ddegjust.ac.in/studymaterial/mcom/mc-207-f.pdf http://www.indiankanoon.org/docfragment/1465663/?formInput=S.%20Gopal%20Vs. %20D.%20Balachandran http://supremecourtofindia.nic.in/ http://www.business-standard.com/article/pti-stories/cheque-bounce-hc-defers- hearing-on-mallya-s-plea-on-summon-115012901166_1.html http://www.statista.com/statistics/278407/number-of-social-network-users-in-india/ https://www.kotakjifi.com/hashtag-banking-help.htm http://www.airtel.in/about-bharti/media-centre/bharti-airtel-news/mobile/airtel- money-makes-cashless-payments-a-reality-for-customers-in-delhi-ncr http://www.accenture.com/Microsites/retail-research/Pages/consumer-research- results.aspx#item-2014-feature-topics-mobility-shopping http://ww2.frost.com/news/press-releases/frost-sullivan-biometrics-can-be-alternative- conventional-authentication-technologies-mobiles/
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