1. Short Title, Extent and Commencement: This Act may be called “Negotiable Instruments Act, 2034” (1977).
(2) This Act shall extend to all over the Nepal.
(3) This Act shall come into force from such date as Government of Nepal may, by a Notification published in the Nepal Gazette, appoint.
Unless the subject or context otherwise requires, in this Act,-
(a) “Bank” means the bank established pursuant to the prevailing laws.
(b) “Bankers” means the organization performing the banking occupation and this term also includes the post office operating the functions of a saving bank.
(c) “Security” means the property or document relating to it which is kept or to be kept as security while taking or giving loans.
(d) “Negotiation” means the act of transfer of Negotiable Instruments to any person so as to constitute that person the holder thereof.
(e) “Negotiable Instruments” means a Promissory Note and Bill of Exchange.
(f) “Promissory Note” means an instrument in writing except government or Bank note containing an unconditional
undertaking, signed by the maker, to pay a certain sum of money to, or to the order of, a certain person, or to the bearer of the instrument. Provided that, this word shall not include the document prepared pursuant to the Chapter of Transaction of the Muluki Ain (General Code).
(g) “Bill of Exchange” means an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money to, or to the order of a certain person or to the bearer of the instrument in a certain date or after certain period of time or at the demand.
(h) “Cheque” means a Bill of Exchange drawn on a certain Bank payable on demand.
(i) “Draft” means a Bill of Exchange drawn by a Bank payable on This Act is commenced from the date 2039/3/14 ( June 28, 1982 ) (Nepal Gazette2039/3/14 (June 28, 1982). demand from its one Office to another Office to, or to the order of a certain person.
(j) “Payee” means the person named in the instrument to whom or to whose order the money is by the instrument directed to be paid.
(k) “Holder” means a person entitled in his own name to the posession of a Negotiable Instrument and to recieve the amount due on it.
(l) “Drawer” means a person who makes or draws a Bill of Exchange.
(m) “Drawee” means a person thereby directed for the payment of the Bill of Exchange.
(n) “Alternative Drawee” means a person mentioned or endorsed in the Bill of Exchange, to be contacted in case the Drawee does not accept the Bill of Exchange or gives the payment.
(o) “Holder in due Course” means a person having entitlement upon the Negotiable Instrument according to law, in the case of a Negotiable Instrument payable to a bearer, and the Payee or a person endorsed by him, in the case of a Negotiable Instrument payable to the ordered perosn. Provided that, such entitlement must have received or
endorsed before the maturity of such Negotiable Instrument without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title.
(p) “Payment in due Course” means payment in accordance with the apparent tenor of the Negotiable Instrument in good faith and without negligence to any person in possession thereof.
(q) “Endorsement” means the act of signing on the Negotiable Instrument for the purpose of Negotiation, on the face or back or on the document or a slip of paper annexed thereto.
(r) “Endorsement in Blank” means the Endorsement having signed only the name of the endorser.
(s) “Endorsement in Full” means the Endorsement which contains the direction to pay the amount mentioned in the instrument to, or to the order of a specified person.
(t) “Bill of Exchange Payable on Demand” means a Bill of Exchange which is payable on demand or at sight or on presentment.
(u) “Maturity” means the date at which a Bill of Exchange falls due.
(v) “Public Holiday” means the day declared by Government of Nepal to be a public holiday and it includes the day on which the Banking business does not take place.
(w) “Notary Public” means a person appointed or designated pursuant to Section 106.
(x) “Prescribed” or “as Prescribed” means prescribed or as prescribed in this Act or Rules made thereunder.