Procedure to transfer a bill of exchange-

The procedure to transfer a bill of exchange-

A bill of exchange is negotiated when it transferred from one person to another person. So it constitutes a transferee of the holder of the bill. A valid transferred always depends on the classes of the bill. If the bill is payable to the bearer there is a valid negotiation by means of delivery. The person who posses the bill & therefore the holder of the bill is entitled to sue on the bill in his own name. A bill is said to an order bill if it validly negotiates. The following condition must be fulfill-

(1)   There has been a endorsement by the prior holder. The name of the new possessor is specified on the reserves of the bill.

(2)   A conditional & partial endorsement shall be null and void.

(3)   The bill has been delivered to the possessor and physical possession must be given to the transferee.

Prerequisites for enforcement

If a bill is properly presented and refuses to acceptance the bill has been dishonored by non-acceptance or non-payment then an immediate right to recourse arises against the other parties to the bill. The right to recourse is lost if the prerequisites for the enforcement are not properly fulfilled.

1. Presentment of payment-A bill must be presented to the drawee or his authorized agent on the due date at the proper place. Presentation of bill is unnecessary where it has already been dishonored by non acceptance.
2. Notice of dishonor- A notice of dishonor must be given to the drawer and to the endorser, to preserve their liability within a reasonable time.
3. Protest-After the notice of dishonor additional step should be taken in case of foreign bill. The bill must be protest by the holder. Protest means obtaining a legal proof of dishonor.

Remedies of dishonor of a Bill of Exchange.

When a bill of exchange is dishonored by non-acceptance or non-payment the holder can sue against all the parties liable for the bill. Notice of dishonor must be given to the concerning parties before filling the suit. The notice shall contain the fact of dishonored, the date of dishonor, the reason of dishonor. When the bill is dishonor the holder passes the bill to a notary public who again presents the bill for payment, if dishonor then the notary public will drawn up an official certificate for evidencing such dishonor.

1. If the drawee refuses to accept the bill when it is presented before him for acceptance, it is called dishonor by non-acceptance.     
2. If the drawer has accepted the bill, but on the due date, he refuses to make payment of the bill, it is called dishonor by non-payment
   
   General Crossing and Special Crossing in cheques
   

    What is a promissory note? What are the essentials of Promissory Notes

    What is a bill of exchange?

    Essentials of a bill of exchange

    Characteristic of a Bill of Exchange

    The procedure for transfer a bill of exchange-

    Difference between a promissory note and a bill of exchange.

    Dishonour of cheques
   

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