"Negotiable Instruments is an instrument which is freely transferable from one person to another by mere delivery or by endorsement and delivery."…

Negotiable Instruments: Negotiable Instruments is an instrument which is freely transferable from one person to another by mere delivery or by endorsement and delivery. The property in such an instrument pass to a Bonafide transferee for value. Classification of Negotiable Instruments according to manner in which it is made in terms of the Negotiable Instruments Act,1881 (the Act). (1) “Bearer Instrument” and “Order Instrument” [Section 13] Bearer Instrument: It is an instrument where the name of the payee is blank or where the name of payee is specified with the words “or bearer” or where the last indorsement is blank. Such instrument can be negotiated by mere delivery. Order Instrument: It is an instrument which is payable to a person or Payable to a person or his order or Payable to order of a person or where the last indorsement is in full, such instrument can be negotiated by indorsement and delivery. (2) “Inland Instrument” and “Foreign Instrument” [Sections - 11 &₹ 12] “Inland Instrument”: A promissory note, bill of exchange or cheque drawn or made in India and made payable in, or drawn upon any person resident in India shall be deemed to be an inland instrument. “Foreign Instrument”: A foreign instrument is one which is not an inland instrument. (3) Inchoate and Ambiguous Instruments Inchoate Instrument: It means an instrument that is incomplete in certain respects. The drawer/ maker/ acceptor/ endorser of a negotiable instrument may sign and deliver the instrument to another person in his capacity leaving the instrument, either wholly blank or having written on it the word incomplete. Ambiguous Instrument: As per Section 17, where an instrument may be construed either as a promissory note or bill of exchange, the holder may at his election treat it as either and the instrument shall be thenceforward treated accordingly.