Negotiable Instruments Act Section 13 — “Negotiable instrument”
CHAPTER II OF NOTES, BILLSAND CHEQUES
General
Summary
A negotiable instrument is a written document like a promissory note, bill of exchange, or cheque that can be paid either to a specific person or to whoever holds it. A document is payable to order if it says it is payable to a particular person and does not say it cannot be transferred. It is payable to bearer if it says so, or if the last endorsement on it is blank, meaning no specific person is named. If a document is made payable to a named person's order, that person can choose to receive payment themselves or pass it on to someone else. Such an instrument can also be made payable to two or more people together, or to any one of several people.
Official Text
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(1) A “negotiable instrument” means a promissory note, bill of exchange or cheque payable either to order or to bearer. Explanation (i)—A promissory note, bill of exchange or cheque is payable to order which is expressed to be so payable or which is expressed to be payable to a particular person, and does not contain words prohibiting transfer or indicating an intention that it shall not be transferable. Explanation (ii)—A promissory note, bill of exchange or cheque is payble to bearer which is expressed to be so payable or on which the only or last indorsement is an indorsement in blank. Explanation (iii)—Where a promissory note, bill of exchange or cheque, either originally or by indorsement, is expressed to be payable to the order of a specified person, and not to him or his order, it is nevertheless payable to him or his order at his option.] 4[
(2) A negotiable instrument may be made payable to two or more payees jointly, or it may be made payable in the alternative to one of two, or one or some of serveral payees.]