Negotiable Instruments Act • Official Statutory Text & Practice Guide
Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1881
Section 132 of Negotiable Instruments Act: Set of bills
Official Bare Act Text
Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary
Bills of exchange may be drawn in parts, each part being numbered and containing a provision that it shall continue payable only so long as the others remain unpaid.
All the parts together make a set; but the whole set constitutes only one bill, and is extinguished when one of the parts, if a separate bill, would be extinguished.
Section 132 regulates bills of exchange drawn in sets, enacting that bills of exchange may be drawn in parts, each part being numbered and containing a provision that it shall continue payable only so long as the others remain unpaid.
Bills in Sets of Two or Three: Common in international maritime trade, where three identical parts (First, Second, Third of Exchange) are mailed via separate routes.
Single Contractual Obligation: All parts together constitute one bill; payment or acceptance of any one part extinguishes the whole bill.
Condition of Extinguishment: Each part must state: 'pay this First of Exchange (Second and Third of the same tenor and date unpaid)'
Key Landmark Precedents:
Kearney v. West Granada Mining Co. (1856) 1 H & N 412: The classical authority establishing that payment of one part of a bill in a set discharges the entire commercial obligation across all parts.
Holdsworth v. Hunter (1830) 10 B & C 449: Discussed the rights of holders acquiring different parts of a bill in a set in international commerce.
Courtroom Practice & Strategic Litigation Guidance:
When handling international trade finance documentation under UCP 600 or commercial bills in sets, ensure the drawee accepts ONLY ONE physical part. If an acceptor negligently accepts two separate parts, they are liable on both parts under Section 132(2) if held by different holders in due course.
Legal Commentary & Landmark Judgments: Section 132
Section 132 regulates bills of exchange drawn in sets, enacting that bills of exchange may be drawn in parts, each part being numbered and containing a provision that it shall continue payable only so long as the others remain unpaid.
When handling international trade finance documentation under UCP 600 or commercial bills in sets, ensure the drawee accepts ONLY ONE physical part. If an acceptor negligently accepts two separate parts, they are liable on both parts under Section 132(2) if held by different holders in due course.