Section 60 NI Act: Instrument negotiable till payment or satisfaction

Negotiable Instruments Act, 1881

Section 60 NI Act at a Glance

Section 60 NI Act allows a negotiable instrument to be negotiated until it is paid or satisfied at or after maturity by the maker, drawee, or acceptor. However, the maker, drawee, or acceptor cannot negotiate the instrument after maturity.

Section 60 NI Act Bare Act Text

60. Instrument negotiable till payment or satisfaction.
A negotiable instrument may be negotiated (except by the maker, drawee or acceptor after maturity) until payment or satisfaction thereof by the maker, drawee or acceptor at or after maturity, but not after such payment or satisfaction.

Section 60 NI Act in Simple Words

Section 60 NI Act sets the time limit up to which a negotiable instrument remains open to negotiation. As a general rule, a negotiable instrument may be negotiated until payment or satisfaction of the instrument by the maker, the drawee, or the acceptor at or after maturity. Once the maker, drawee, or acceptor pays or satisfies the instrument at or after maturity, the instrument cannot be negotiated after such payment or satisfaction.

Section 60 NI Act also contains a specific exception regarding who may negotiate the instrument once maturity has passed. While other holders may negotiate an unpaid instrument after maturity, the maker, the drawee, or the acceptor cannot negotiate the instrument after maturity, even if the instrument has not yet been paid or satisfied.

When Section 60 NI Act Applies

A negotiable instrument may be negotiated until payment or satisfaction by the maker, drawee, or acceptor at or after maturity.
As an exception, the maker, drawee, or acceptor cannot negotiate the instrument after maturity.
After payment or satisfaction of the instrument by the maker, drawee, or acceptor at or after maturity, the instrument cannot be negotiated.

Example of Section 60 NI Act

Jatin in Thiruvananthapuram is the acceptor of a bill of exchange for ₹90,000 that has passed maturity without being paid. Bhavna holds the overdue bill and negotiates the bill to Arjun in Mangaluru before Jatin pays or satisfies the bill, which Section 60 NI Act permits because Bhavna is neither the maker, the drawee, nor the acceptor. However, if the overdue bill comes back into the hands of Jatin after maturity, Section 60 NI Act bars Jatin, as the acceptor, from negotiating the bill after maturity. Once Jatin pays or satisfies the ₹90,000 at or after maturity, no person can negotiate the bill any further.

FAQs on Section 60 NI Act

What is Section 60 NI Act?▼

Section 60 NI Act provides that a negotiable instrument may be negotiated until payment or satisfaction of the instrument by the maker, drawee, or acceptor at or after maturity, and not after such payment or satisfaction. Section 60 NI Act also prohibits the maker, drawee, or acceptor from negotiating the instrument after maturity.

Can a negotiable instrument be negotiated after payment or satisfaction at or after maturity under Section 60 NI Act?▼

No. Section 60 NI Act expressly states that a negotiable instrument cannot be negotiated after payment or satisfaction of the instrument by the maker, drawee, or acceptor at or after maturity.

Can the maker, drawee, or acceptor negotiate a negotiable instrument after maturity under Section 60 NI Act?▼

No. Section 60 NI Act excludes the maker, drawee, and acceptor from negotiating a negotiable instrument after maturity.

Until what event can holders other than the maker, drawee, or acceptor negotiate an instrument under Section 60 NI Act?▼

Until payment or satisfaction of the instrument by the maker, drawee, or acceptor at or after maturity.

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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) ·