Section 18 NI Act: Where amount is stated differently in figures and words

Negotiable Instruments Act, 1881

Section 18 NI Act at a Glance

Section 18 NI Act resolves conflicts between figures and words on an instrument. If the amount undertaken or ordered to be paid is stated differently in figures and in words, the amount stated in words is the amount payable.

Section 18 NI Act Bare Act Text

18. Where amount is stated differently in figures and words.

If the amount undertaken or ordered to be paid is stated differently in figures and in words, the amount stated in words shall be the amount undertaken or ordered to be paid.

Section 18 NI Act in Simple Words

Section 18 NI Act sets the rule for deciding the payable amount when the numbers (figures) and the words written on an instrument do not match. An instrument may contain either an undertaking to pay an amount (such as a promissory note) or an order to pay an amount (such as a bill of exchange or a cheque).

Under Section 18 NI Act, if the amount undertaken or ordered to be paid is stated differently in figures and in words, the amount stated in words prevails. That amount in words is treated in law as the amount undertaken or ordered to be paid.

When Section 18 NI Act Applies

  • An amount is undertaken to be paid or ordered to be paid in the instrument.
  • The amount is stated both in figures and in words on the instrument.
  • The amount stated in figures differs from the amount stated in words.
  • The amount stated in words is taken as the amount undertaken or ordered to be paid.

Example of Section 18 NI Act

Nasreen in Madurai draws a bill of exchange ordering payment to Faisal. On the bill of exchange, Nasreen writes the amount in words as 'Fifty thousand rupees only' but writes the amount in figures as '₹5,000'. Under Section 18 NI Act, because the amount ordered to be paid is stated differently in figures and in words, the amount stated in words controls. Therefore, the amount ordered to be paid on the bill of exchange is ₹50,000.

FAQs on Section 18 NI Act

What is Section 18 NI Act?▼

Section 18 NI Act states which amount applies when there is a mismatch between figures and words on a negotiable instrument. If the amount undertaken or ordered to be paid is stated differently in figures and in words, the amount stated in words is the amount undertaken or ordered to be paid.

Which amount is valid under Section 18 NI Act if the figures and words on an instrument differ?▼

The amount stated in words. Section 18 NI Act provides that when the amount undertaken or ordered to be paid is stated differently in figures and in words, the amount in words is the amount payable.

Does Section 18 NI Act apply to both an undertaking to pay and an order to pay?▼

Yes. Section 18 NI Act explicitly covers both an amount undertaken to be paid and an amount ordered to be paid.

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Disclaimer: This is for informational purposes only. Always consult a qualified advocate for legal advice.

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