Section 1 NI Act: Short title

Negotiable Instruments Act, 1881

Section 1 NI Act at a Glance

Section 1 NI Act gives the short title of the Negotiable Instruments Act, 1881, states that it extends to the whole of India, sets its commencement date as 1 March 1882, and saves local usages for instruments in an oriental language.

Section 1 NI Act Bare Act Text

1. Short title.

This Act may be called the Negotiable Instruments Act, 1881.

Local extent. Saving of usages relating to hundis, etc.—It extends to the whole of India *** but nothing herein contained affects the Indian Paper Currency Act, 1871 (3 of 1871), section 21, or affects any local usage relating to any instrument in an oriental language:

Provided that such usages may be excluded by any words in the body of the instrument which indicate an intention that the legal relations of the parties thereto shall he governed by this Act;

Commencement.—and it shall come into force on the first day of March, 1882.

Amendments to this section
  • The words "except the State of Jammu and Kashmir", which were subs. by Act 3 of 1951, for "except Part B States", omitted by Act 62 of 1956, s. 2 and the Sch.
  • Rep. by the Indian Paper Currency Act, 1923 (10 of 1923). See now the Reserve Bank of India Act, 1934 (2 of 1934), s. 31.

Section 1 NI Act in Simple Words

Section 1 NI Act sets out the short title, territorial extent, saving of local usages, and commencement date of the Negotiable Instruments Act, 1881. It states that the Act may be called the Negotiable Instruments Act, 1881, and that it came into force on the first day of March, 1882.

Section 1 NI Act extends to the whole of India. Act 62 of 1956 omitted the words "except the State of Jammu and Kashmir", which Act 3 of 1951 had put in place of "except Part B States".

Section 1 NI Act also contains a saving clause stating that nothing contained in the Negotiable Instruments Act, 1881 affects Section 21 of the Indian Paper Currency Act, 1871 (3 of 1871), or affects any local usage relating to any instrument in an oriental language. Under the proviso to Section 1 NI Act, the parties to an instrument in an oriental language may exclude such local usages by including words in the body of the instrument that indicate an intention for the legal relations of the parties to be governed by the Negotiable Instruments Act, 1881. The official text prints "shall he governed"; the sense is "shall be governed".

The Indian Paper Currency Act, 1871 was itself repealed by the Indian Paper Currency Act, 1923 (10 of 1923). The footnote to the official text points to section 31 of the Reserve Bank of India Act, 1934 (2 of 1934) instead.

Example of Section 1 NI Act

Arjun and Sunil in Indore execute a written instrument in an oriental language for a payment transaction. Under the saving clause in Section 1 NI Act, nothing in the Negotiable Instruments Act, 1881 affects any local usage relating to that instrument in an oriental language. However, Arjun and Sunil write a clause in the body of the instrument stating their intention that the legal relations of the parties to the instrument are to be governed by the Negotiable Instruments Act, 1881. Under the proviso to Section 1 NI Act, those words in the body of the instrument exclude the local usages, and the Negotiable Instruments Act, 1881 governs the legal relations between Arjun and Sunil.

When Section 1 NI Act Does Not Apply

  • Nothing in the Negotiable Instruments Act, 1881 affects Section 21 of the Indian Paper Currency Act, 1871 (3 of 1871).
  • Nothing in the Negotiable Instruments Act, 1881 affects any local usage relating to any instrument in an oriental language, unless the body of the instrument contains words indicating an intention that the legal relations of the parties to the instrument are to be governed by the Negotiable Instruments Act, 1881.

FAQs on Section 1 NI Act

What is Section 1 NI Act?▼

Section 1 NI Act gives the short title of the Negotiable Instruments Act, 1881, states that the Act extends to the whole of India, and sets 1 March 1882 as its commencement date. Section 1 NI Act also states that nothing in the Act affects Section 21 of the Indian Paper Currency Act, 1871 or any local usage relating to an instrument in an oriental language, unless words in the body of the instrument indicate an intention that the Act governs the legal relations of the parties.

When did the Negotiable Instruments Act, 1881 come into force under Section 1 NI Act?▼

1 March 1882. Section 1 NI Act states that the Negotiable Instruments Act, 1881 comes into force on the first day of March, 1882.

Does Section 1 NI Act apply to the whole of India?▼

Yes. Section 1 NI Act states that the Negotiable Instruments Act, 1881 extends to the whole of India. Act 62 of 1956 omitted the words "except the State of Jammu and Kashmir".

Does the Negotiable Instruments Act, 1881 affect local usages for instruments in an oriental language under Section 1 NI Act?▼

No. Under Section 1 NI Act, nothing in the Act affects any local usage relating to any instrument in an oriental language. However, the proviso to Section 1 NI Act allows the parties to exclude such usages by writing words in the body of the instrument indicating an intention that their legal relations be governed by the Act.

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Sources: Bare Act Text, Negotiable Instruments Act, 1881 (India Code) ·