Section 23 NI Act: Calculating maturity of bill or note payable so many months after date or sight
Negotiable Instruments Act, 1881
Section 23 NI Act at a Glance
Section 23 NI Act sets the rule for finding when the stated period of months ends in calculating the maturity of a promissory note or bill of exchange payable months after date, after sight, or after a certain event.
Section 23 NI Act Bare Act Text
23. Calculating maturity of bill or note payable so many months after date or sight.
In calculating the date at which a promissary note or bill of exchange, made payable a stated number of months after date or after sight, or after a certain event, is at maturity, the period stated shall be held to terminate on the day of the month which corresponds with the day on which the instrument is dated, or presented for acceptance or sight, or noted for non-acceptance, or protested for non-acceptance, or the event happens, or, where the instrument is a bill of exchange made payable a stated number of months after sight and has been accepted for honour, with the day on which it was so accepted. If the month in which the period would terminate has no corresponding day, the period shall be held to terminate on the last day of such month.
Illustrations
(a) A negotiable instrument, dated 29th January, 1878, it made payable at one month after date. The instrument is at maturity on the third day after the 28th February, 1878.
(b) A negotiable instrument, dated 30th August, 1878, it made payable three months after date. The instrument is at maturity on the 3rd December, 1878.
(c) A promissory note or bill of exchange, dated 31st August, 1878, is made payable three months after date. The instrument is at maturity on the 3rd December, 1878.
Section 23 NI Act in Simple Words
Section 23 NI Act explains how to find the end of the stated period of months when calculating the maturity date of a promissory note or a bill of exchange made payable a stated number of months after date, after sight, or after a certain event.
Under Section 23 NI Act, the stated period of months terminates on the day of the month that corresponds with the day on which the instrument is dated, presented for acceptance or sight, noted for non-acceptance, or protested for non-acceptance, or the day on which the specified event happens. Where the instrument is a bill of exchange made payable a stated number of months after sight and has been accepted for honour, the stated period terminates on the day of the month that corresponds with the day on which the bill was accepted for honour.
If the month in which the stated period would terminate has no corresponding day, the period terminates on the last day of that month.
Section 23 NI Act gives three illustrations of maturity dates. Under Illustration (a), a negotiable instrument dated 29th January, 1878, made payable at one month after date, is at maturity on the third day after 28th February, 1878. Under Illustration (b), a negotiable instrument dated 30th August, 1878, made payable three months after date, is at maturity on 3rd December, 1878. Under Illustration (c), a promissory note or bill of exchange dated 31st August, 1878, made payable three months after date, is at maturity on 3rd December, 1878. In each illustration the maturity date is 3 days after the end of the period, because of the days of grace in Section 22 NI Act. The official text prints "promissary note" in the opening words and "it made payable" in Illustrations (a) and (b); the sense is "promissory note" and "is made payable".
When Section 23 NI Act Applies
- The instrument is a promissory note or a bill of exchange.
- The instrument is made payable a stated number of months after date, after sight, or after a certain event.
- The stated period terminates on the day of the target month corresponding with the day of the date, presentment for acceptance or sight, noting or protest for non-acceptance, occurrence of the event, or acceptance for honour of a bill payable after sight.
- If the target month has no corresponding day, the stated period terminates on the last day of that month.
Example of Section 23 NI Act
FAQs on Section 23 NI Act
What is Section 23 NI Act?▼
Section 23 NI Act sets the rule for calculating when the stated period of months terminates for the maturity of a promissory note or bill of exchange payable a stated number of months after date, after sight, or after a certain event. Section 23 NI Act also provides the rule when the target month has no corresponding day and gives three illustrations of maturity dates.
How is the end of the stated period of months found under Section 23 NI Act?▼
On the corresponding day of the target month. Under Section 23 NI Act, the stated period terminates on the day of the month that corresponds with the day on which the instrument is dated, presented for acceptance or sight, noted or protested for non-acceptance, or on which the event happens.
What happens under Section 23 NI Act if the month in which the period ends has no corresponding day?▼
The period ends on the last day of that month. Section 23 NI Act states that if the month in which the period would terminate has no corresponding day, the period terminates on the last day of that month.
How does Section 23 NI Act apply to a bill of exchange payable after sight that is accepted for honour?▼
The period is counted from the date of acceptance for honour. Where a bill of exchange is made payable a stated number of months after sight and has been accepted for honour, the stated period terminates on the day of the month corresponding with the day on which the bill was accepted for honour.
When is a negotiable instrument dated 29th January, 1878 and payable one month after date at maturity under Section 23 NI Act?▼
On the third day after 28th February, 1878. Illustration (a) to Section 23 NI Act states that a negotiable instrument dated 29th January, 1878 and made payable at one month after date is at maturity on the third day after 28th February, 1878.
When is a promissory note dated 31st August, 1878 and payable three months after date at maturity under Section 23 NI Act?▼
On 3rd December, 1878. Illustration (c) to Section 23 NI Act states that a promissory note or bill of exchange dated 31st August, 1878 and made payable three months after date is at maturity on 3rd December, 1878.
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Sources: Bare Act Text, Negotiable Instruments Act, 1881 (India Code) ·