Law: Negotiable Instruments Act, 1881

Section: 4,5

Negotiable Instruments Act (XXVI of 1881)--- ----Ss. 4 & 5---Promissory note---Bill of exchange---Determination as to the nature of an instrument---Scope---To determine the nature of instrument where there was a promise to pay, the best way was to see intention of the parties and what the instrument in the common acceptance of men of business or persons among whom the same was commonly used---Ordinarily, in order to amount to a promissory note, an instrument must simply contain a promise to pay and nothing else and true import of words "on demand" was that the debt was due and payable immediately---Such endorsement did not mean that the same was not payable immediately or without any demand---Promissory note typically contained all terms pertaining to indebtedness, such as principal amount, interest rate, maturity date, date and place of issuance, and issuer's signature---Difference between a promissory note and a bill of exchange was that the latter was transferable and could bind one party to pay a third party that was not involved in its creation---Bills of exchange orders a debtor to pay a particular amount within a given period of time issued by a creditor and promissory note was issued by a debtor and was a promise to pay a particular amount of money in a given period---Bill of exchange must clearly detail the amount of money, the date, and the parties involved (including the drawer and drawee)---Bill of exchange ordered a drawee to pay as per the drawer's directions and promissory note, however, was not an order but a promise to pay---Liability of maker of a promissory note was absolute, while that of a drawer of a bill of exchange was conditional and promissory notes could not be payable to their makers, while the drawer and the payee in bills can be the same person. Muhammad Nawaz v. Abdul Sattar 2000 YLR 2927 distinguished. Sheikh Muhammad Shakeel v. Sheikh Hafiz Muhammad Aslam 2014 SCMR 1562 rel. THIS ORDER PASSED BY: MUHAMMAD ALI MAZHAR, JUSTICE:---.---This First Appeal under section 96 of the Civil Procedure Code has been brought to challenge the impugned dated 29.01.2013 and decree dated 06.02.2013 passed by the Vth Additional District and…

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