What is Bill of exchange? Bill of exchange is defined under Section 5 of Negotiable Instruments Act 1881
A "bill of exchange" is an instrument in writing
containing an unconditional order, signed by the
maker, directing a certain person to pay a certain
sum of money only to, or to the order of, a certain
person or to the bearer of the instrument.
A promise or order to pay is not "conditional"
within the meaning of this section and section 4, by
reason of the time for payment of the amount or any
installment thereof being expressed to be on the
lapse of a certain period after the occurrence of a
specified event which, according to the ordinary
expectation of mankind, is certain to happen,
although the time of its happening may be uncertain.
The sum payable may be "certain", within the meaning of this section and section 4, although it includes future interest or is payable at an indicated rate of exchange, or is according to the course of exchange, and although the instrument provides that, on default of payment of an installment, the balance unpaid shall become due.
The person to whom it is clear that the direction is given or that payment is to be made may be "certain person", within the meaning of this section and section 4, although he is misnamed or designated by description only.
Negotiable Instruments Act 1881
CHAPTER II NOTES, BILLS AND CHEQUES
Section 9 - Holder in Due Course
Section 10 - Payment in due Course
Section 11 - Inland Instrument
Section 12 - Foreign Instrument
Section 13 - Negotiable Instrument
Section 16 - Endorsement in blank and in full endorsee
Section 17 - Ambiguous instruments
Section 18 - Where amount is stated differently in figures and words