NEGOTIABLE INSTRUMENTS -- CONT.

SECTION 20 Inchoate stamped instrument
Where one person signs and delivers to another person a paper stamped in accordance with the aw relating to negotiable instrument then in force in India and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be , upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount.

SECTION 21 “At Sight” / “On presentment”/ “After Sight”
In a promissory note or bill of exchange the expressions “at sight” and “ on presentment” means “ on demand”. The expression “after sight” means, in a promissory note, after presentment for sight, and, in a bill of exchange after acceptance, or noting for non acceptance, or protest for non acceptance .

SECTION 22 Maturity
The maturity of a promissory note or bill of exchange is the due date at which it falls due.
Every promissory note or bill of exchange which is not expressed to be payable on demand, at sight or on presentment is at maturity on the third day after the day on which it is expressed to be payable.

SECTION 25 When maturity is a holiday
When the day on which a promissory note or bill of exchange is at maturity, is a public holiday, the instrument shall be deemed to be due on the next preceding business day.

SECTION 26 Minor
A minor may draw, endorse, deliver and negotiate such instruments so as to bind all parties except himself.

SECTION 30 Liability of Drawer
The drawer of a bill of exchange or cheque is bound in case of dishonor by the drawee or acceptor thereof, to compensate the holder, provided due notice of dishonor has been given to or received by the drawer as hereinafter provided.
SECTION 46 Delivery The making, acceptance or endorsement of a promissory note, bill of exchange or cheque is complete by delivery, actual or constructive.



SECTION 47 Negotiation by delivery
A promissory note, bill of exchange, or cheque, payable to bearer is negotiable by delivery thereof.


SECTION 48 Negotiation by Endorsement
A promissory note, bill of exchange, or cheque, payable to oredr is negotiable by the holder by endorsement and delivery thereof.

SECTION 49 Conversion of Endorsement in Blank in to full
The holder of a negotiable instrument, endorsed in blank may without signing his own name by writing above the endorser’s signature a direction to any other person as endorsee, convert the endorsement in blank into an endorsement in full.
SECTION 77
Liability of banker for negligently dealing with bill presented for payment. When a bill of exchange, accepted payable at a specified bank, has been duly presented there for payment and dishonored, if the banker so negligently or improperly keeps, deals with or delivers back such bill as to cause loss to the holder, he must compensate the holder for same
SECTION 85
Cheque payable to order Where a cheque is payable to order purports to be endorsed by or on behalf of the payee, the drawee is discharged by payment in due course.

SECTION 87
Effect of Material Alteration Any material alteration of a negotiable instrument renders the same void as against any one whom is a party thereto at the time of making such alteration and does not consent thereto, unless it was made in order to carry out the common intention of the original parties.

SECTION 115
Drawee in case of need Where a drawee in case of need is named in a bill of exchange or in any endorsement thereon, the bill is not dishonored until is has been dishonored by such drawee.

SECTION 123 Cheque crossed generally Where a cheque bears across its face an addition to th words “ and company” or any abbreviation thereof, between two parallel transverse line , or of two parallel transverse lines simply, either with or without the words “not negotiable”, that addition shall be deemed a crossing , and the chequue shall be deemed to be crossed generally.

SECTION 124 Cheque crossed specially
Where a cheque bears across its face an addition of the name of a banker either with or without the words “not negotiable”, that addition shall be deemed a crossing , and the cheque shall be deemed to be crossed specially and to be crossed to that banker.
SECTION 128
Payment in due course of crossed cheque Where the banker on whom a crossed cheque is drawn has paid the same in due course, the banker paying the cheque, and ( in case such cheque has come to the hands of the payee) the drawer thereof, shall respectively be entitled to the same rights, and be placed in the same position in all respects, as they would respectively be entitled to and placed in if the amount of the cheque had been paid to and received by the true owner thereof.
SECTION 129
Payment of crossed cheque out of due course Any banker paying a cheque crossed generally otherwise than to a banker, or a cheque crossed specially otherwise than to the banker to whom the same is crossed, or his agent for collection, being a banker, shall be liable to the true owner of the cheque for any loss he may sustaion owing to the cheque having been so paid.
SECTION 130
Not Negotiable A person taking a cheque crossed generally or specially, bearing in either case the words “not negotiable”, shall not have and shall not be capabe of giving, a better title to the cheque than that which the person from whom he took it had.
SECTION 131
Non liability of banker receiving payment of cheque A banker who has in good faith and without negligence received payment for a customer of a cheque crossed generally or specially to himself shall not, in case the title to the cheque proves defective, incur any liability to the true owner of the cheque by reason only of having received such payment.
SECTION 138
Dishonor of Cheque for insufficiency etc. of funds in the account. Where any cheque drawn by a person on 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 be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both.

Section 139 to 147
Recent amendments in Negotiable Instruments (amendment and Misc. Provisions) Act 2002. Fllowing are the recent amendments:-

1. Definition of a ‘cheque’ widened to include electronic image of a truncated cheque and a cheque in electronic forms.

2. Right of the banker who received payment on electronic image of a truncated cheque to retain the truncated cheques.
3.Certificate of on text of print out of electronic image of truncated cheque by paying Banker as proof of payment.
4. Doubling of the imprisonment term from one year to two years.
5.Doubling of penalty for the offence, i.e. upto twice the amount of the instrument.
6.Doubling of the period of time to issue demand notice to drawer
from 15 to 30 days.
8.Immunity from prosecution for nominee directors, who are nominated by virtue of holding any office or employment in Central Government or State Government or a financial corporation owned or controlled by the Central Government or State government.
9.Compounding of offence under the N.I.Act.
Empowering the magistrate to condone delay in filing complaint.

10. Bank’s slip or Memo having Bank’s Official mark denoting that the cheque has been dishonoured shall be presumed to be the fact of dishonour.

Amazing Facts about National Flag of India

Every free nation of the world has its own flag. It is a symbol of a free country. The National Flag of India was designed by Pingali Venkayyaand and adopted in its present form during the meeting of Constituent Assembly held on the 22 July 1947, a few days before India's independence from the British on 15 August, 1947. It served as the national flag of the Dominion of India between 15 August 1947 and 26 January 1950 and that of the Republic of India thereafter. In India, the term "tricolour" refers to the Indian national flag.

The National flag of India is a horizontal tricolor of deep saffron (kesari) at the top, white in the middle and dark green at the bottom in equal proportion. The ratio of width of the flag to its length is two to three. In the centre of the white band is a navy blue wheel which represents the chakra. Its design is that of the wheel which appears on the abacus of the Sarnath Lion Capital of Ashoka. Its diameter approximates to the width of the white band and it has 24 spokes.

Evolution of the Tricolour

It is really amazing to see the various changes that our National Flag went through since its first inception. It was discovered or recognised during our national struggle for freedom. The evolution of the Indian National Flag sailed through many vicissitudes to arrive at what it is today. In one way it reflects the political developments in the nation. Some of the historical milestones in the evolution of our National Flag involve the following:

Unofficial flag of India
in 1906


The Berlin committee
flag, first raised by
Bhikaiji Cama in 1907


The flag used during the
Home Rule movement
in 1917


The flag unofficially
adopted in 1921


The flag adopted in 1931.
This flag was also the
battle ensign of the
Indian National Army


The present Tricolour
flag of India

The first national flag in India is said to have been hoisted on August 7, 1906, in the Parsee Bagan Square (Green Park) in Calcutta now Kolkata. The flag was composed of three horizontal strips of red, yellow and green.

The second flag was hoisted in Paris by Madame Cama and her band of exiled revolutionaries in 1907 (according to some inl9OS). This was very similar to the first flag except that the top strip had only one lotus but seven stars denoting the Saptarishi. This flag was also exhibited at a socialist conference in Berlin.

The third flag went up in 1917 when our political struggle had taken a definite turn. Dr. Annie Besant and Lokmanya Tilak hoisted it during the Home rule movement. This flag had five red and four green horizontal strips arranged alternately, with seven stars in the saptarishi configuration super-imposed on them. In the left-hand top corner (the pole end) was the Union Jack. There was also a white crescent and star in one corner.

During the session of the All India Congress Committee which met at Bezwada in 1921 (now Vijayawada) an Andhra youth prepared a flag and took it to Gandhiji. It was made up of two colours-red and green-representing the two major communities i.e. Hindus and Muslims. Gandhiji suggested the addition of a white strip to represent the remaining communities of India and the spinning wheel to symbolise progress of the Nation.

The year 1931 was a landmark in the history of the flag. A resolution was passed adopting a tricolor flag as our national flag. This flag, the forbear of the present one, was saffron, white and green with Mahatma Gandhi's spinning wheel at the center. It was, however, clearly stated that it bore no communal significance and was to be interpreted thus.

On July 22, 1947, the Constituent Assembly adopted it as Free India National Flag. After the advent of Independence, the colours and their significance remained the same. Only the Dharma Charkha of Emperor Asoka was adopted in place of the spinning wheel as the emblem on the flag. Thus, the tricolour flag of the Congress Party eventually became the tricolour flag of Independent India.

Colours of the Flag:

In the national flag of India the top band is of Saffron colour, indicating the strength and courage of the country. The white middle band indicates peace and truth with Dharma Chakra. The last band is green in colour shows the fertility, growth and auspiciousness of the land.

The Chakra:

This Dharma Chakra depicted the "wheel of the law" in the Sarnath Lion Capital made by the 3rd-century BC Mauryan Emperor Ashoka. The chakra intends to show that there is life in movement and death in stagnation.

Flag Code

On 26th January 2002, the Indian flag code was modified and after several years of independence, the citizens of India were finally allowed to hoist the Indian flag over their homes, offices and factories on any day and not just National days as was the case earlier. Now Indians can proudly display the national flag any where and any time, as long as the provisions of the Flag Code are strictly followed to avoid any disrespect to the tricolour. For the sake of convenience, Flag Code of India, 2002, has been divided into three parts. Part I of the Code contains general description of the National Flag. Part II of the Code is devoted to the display of the National Flag by members of public, private organizations, educational institutions, etc. Part III of the Code relates to display of the National Flag by Central and State governments and their organisations and agencies.

There are some rules and regulations upon how to fly the flag, based on the 26 January 2002 legislation. These include the following:

The Do's:

• The National Flag may be hoisted in educational institutions (schools, colleges, sports camps, scout camps, etc.) to inspire respect for the Flag. An oath of allegiance has been included in the flag hoisting in schools.
• A member of public, a private organization or an educational institution may hoist/display the National Flag on all days and occasions, ceremonial or otherwise consistent with the dignity and honour of the National Flag.
• Section 2 of the new code accepts the right of all private citizens to fly the flag on their premises.

The Don'ts

• The flag cannot be used for communal gains, drapery, or clothes. As far as possible, it should be flown from sunrise to sunset, irrespective of the weather.
• The flag cannot be intentionally allowed to touch the ground or the floor or trail in water. It cannot be draped over the hood, top, and sides or back of vehicles, trains, boats or aircraft.
• No other flag or bunting can be placed higher than the flag. Also, no object, including flowers or garlands or emblems can be placed on or above the flag. The tricolour cannot be used as a festoon, rosette or bunting.

Courtesy: The National Portal of India

Indian Economic Survey 2009-10

Finance Minister Pranab Mukherjee Thursday 25 Februar, 2010 tabled a cautious but optimistic Economic Survey 2009-10 in Parliament, which predicted 7.2 percent growth for the current fiscal and a full recovery in 2011-12, while remaining concerned over inflation and fiscal deficit.

The Survey said Indian economy is well on a recovery track and is expected to expand by 8.25-8.75 percent in 2010-11 and even exceed 9 percent the year after.
Survey Highlights
Growth
● Economy seen growing 8.25-8.75 % in 2010-11
● Economy expected to return to 9% growth in medium term
● India FY11 growth seen 100 bps more than FY10
● Medeum term prospects of economic growth “really strong”
● India could be fastest growing economy in next four years
● Expect GDP growth to breach 9% mark in 2011-12
● Risk of second dip recession in advanced nations
● India seems to be returning to pre-crisis growth rate
● India medium, long-term growth prospects excellent
● No reason why India can’t achieve double-digit growth
● Clear Sign of recovery in industrial output
● Largely contained risk to growth from poor monsoon

Food Prices
● Food subsidy must be given directly to households
● Food coupons must replace existing PDS system
● Must identify poor for effective food coupon system
● Possible to switch to food coupons system by 2012
● India has ample stocks of wheat, rice
● Wheat prices may moderate on hope of better harvest
● Vegetable prices started to ease on rabi crop arrival
● Food suibsidy must be given directly to households
● Food coupons must replace existing PDS systems

Inflation
● Concern of higher than expected inflation in coming months
● Rapidly rising food inflation cause for concern
● WPI inflation in FY10 out of sync with trend in previous years
● Near-term supply pressure driving inflation outlook
● WPI inflation expected to stabilize due to government steps
● Signs food, fuel inflation spreading to other items
● Current petroleum prices not viable in long run
● Inflation largely due to supply-side bottlenecks
● Supply crunch in some commodities on poor monsoon
● Poor rain prevented seasonal food price fall post October
● Hype about khariff failure exacerbated WPI expectation
● Base effect, mild manufacturing WPI helped recovery
● Divergence between WPI, CPI inflation rates declining
● Food inflation may have peaked in December, seen easing
● What, rice price rise on inflationary expectations
● Low demand causing price moderation in mining FY10

Agriculture
● Agriculture sector continues to be cause of concern
● Need policy initiatives to raise farm growth to 4%
● Likely to end FY10 with sufficient wheat stocks
● Fear of pulses shortage may be causing price spurt
● Higher sowing area of pulses may tame prices
● Local sugar supply shortage causing price surge
● Global sugar price rise likely on big imports by India
● High inflation in milk from coarse cereals, oil cakes
● FCI should be allowed to keep flexible buffer norms
● Need to improve govt strategy for food releases
● Govt shouldn’t have any dealing with fertiliser companies
● Fertiliser companies should be allowed pricing freedom
● Provide fertiliser subsidy to farmers
● Introduce coupon system to subsidise fertilisers
● Hype about kharif failure encouraged hoarding
● Delay in release of imported sugar aided price rise
● High food grain stock putting stress on fiscal health
● Efficient stock management needs urgent attention
● Govt food grain stocks adequate to meet PDS needs
● FY10 farm GDP fall seen only 0.2% despite poor rains
● Apr-Dec rice, wheat off take 35.8 mln tn, up 43% on ry
● High MSP has potential to raise open market prices
● Support price benefit to small farmers doubtful
● Balancing needs to small farmers, consumers a challenge
● Govt wheat buy cost seen 1,504.39 rupee/100 kg FY10
● Govt rice buy cost seen 1,893.71 rupee/100 kg 2009-10
● Wheat open market sale scheme helped stabilise price
● Fall in sugar output put pressure on prices
● 2009-10 sugar output seen 16 mn tones
● 2009-10 edible oil import seen 10.1 mn tones
● India 2009-10 edible oil supply seen 18.3 mn tones
● India 2009-10 edible oil requirement seen 13.8 mln tn
● Apr-Dec farm futures volume 38% of commodity trade
● Kharif crop output loss may be partly made up in rabi
● Grain yield increase not enough to meet rising demand
● Research, better farm methods key to high crop yield
● Need to focus on states with low crop productivity
● Output, yield of pulses, oilseeds a growing concern
● Scope of pulses import limited to tight global supply
● Falling private investment in agriculture a concern
● Cheap, timely credit must to up private investment in farming
● Research on high yield seeds must to counter drought
● Food security, stock management priority areas
● Multi-cropping, raising yield key to higher output
● 2009-10 kharif grain area 66.8 mln ha, gown 4.6 mln on yr
● Fertiliser use at 128.6 kg/ha in 2008-09
● Oct-Dec post monsoon rains 8% above normal
● NAFED oilseed buy 64,802 tn till Jan 4 on govt account
● 2009-10 coffee output seen 290,000 tn, up 10.6% on yr
● Coconut palm insurance scheme to continue FY

Industry
● Industry sector “revival” evident post economic slowdown
● Indian industrial outlook “bright” in medium term
● Downward trend in IIP growth stands reversed
● Growth in capital goods segment below pre-2007 level
● Growth in consumer durables aiding industrial revival
● Textile exports continue to lag
● Fertilizer output hit by raw material availability
● Local steel industry revived from global slowdown
● Local steel outlook for 2010 remains positive
● Local steel demand back on “stable footing”
● Local steel demand seen up on real estate, auto growth
● FDI inflow in farm sector services grew highest in 2009-10
● Services sector attracted highest FDI inflow FY 10
● Govt mulling overseas urea, ammonia projects
● Contribution of food products in manufacturing WPI seen down
● Capacity addition in power, road sectors “lagging”
● Infrastructure impediment hampering industry growth

Fiscal Policies
● Indian economy has shown ‘V’-shaped recovery
● Broad-base revival gives room for gradual stimulus cut
● Fundamentals justify optimism for India in long run
● Consider Finance Ministry panel suggestion to shape FY11 fiscal goals
● Job losses seem to have reversed in recent months
● Expect domestic oil output to grow on new discoveries
● Food market condition, improved capital flow encouraging
● Manufacturing sector showing buoyancy in recent months
● Too early to say if buoyancy in manufacturing a trend
● Seen substantial pick-up in corporate earnings, margin
● Pace, shape of global recovery remains uncertain
● Global recovery losing steam on stimulus cut
● Transmission of monetary policy remains sluggish
● Higher government borrowing raised banks’ SLR investments
● Saving, investment rate good for medium term growth
● Savings rate expected to rise further
● Government should promote transparency in commodity futures
● Impact of current subsidy system questionable

Monetary
● RBI policy stance transmission to real sector critical
● Fiscal rectitude important for Indian economy
● Need to monitor credit flow to productive sectors
● Need to ensure medium, long-term growth on even keel
● RBI policy aims at expanding credit at viable rates
● RBI stance aimed at steady growth via credit quality
● States Market Borrowing Rs 106000 cr up to Jan 15
● Money market mostly orderly in FY 10 on high liquidity
● CBLO volumes over 80% of total money market volume FY 10
● Liquidity condition remained comfortable in 2010
● RBI’s Rs 57000 cr OMO buys FY 10 aided liquidity
● Monetary easing main theme of liquidity management FY 10
● RBI actively held apt liquidity via OMO, LAF, MSS FY 10

Banking
● Growth in bank credit remained low in FY 10
● Public sector banks better than private in credit growth
● Growth in food credit low so far in FY 10
● Need more transparency in micro-finance functioning
● Computerisation of banking sector in completion stage
● Rise in risk appetite increased capital inflows in 2009

Financial Institutions
● Need to extend NPS to central, state autonomous bodies
● Pension reforms made significant progress in India
● Challenge to expand distribution network of NPS
● Pension reforms to facilitate long-term savings
● Interdependence of corporate, MFs rising concern

Markets
● Govt intervention in markets should be minimal
● Govt shouldn’t impose outright commodity futures ban
● Equity market showed signs of recovery after April
● Regulatory steps taken to make markets sound, stable
● Seen revival in secondary market following stimulus
● Volumes in currency futures on BSE not significant
● Trading volumes in interest rate futures low
● Retail investor participation limited in corporate debt market
● Retail investor participation limited in mutual funds

Miscellaneous
● Unique identity system to come into0 effect in 2012
● Labour law reforms can improve Labour demand