Section 134 NI Act: Law governing liability of maker, acceptor or endorser of foreign instrument

Section 134 of Negotiable Instruments Act: Law governing liability of maker, acceptor or endorser of foreign instrument

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

In the absence of a contract to the contrary, the liability of the maker or drawer of a foreign promissory note, bill of exchange or cheque is regulated in all essential matters by the law of the place where he made the instrument, and the respective liabilities of the acceptor and indorser by the law of the place where the instrument is made payable.

Statutory Defined Terms in this Section: (Click any term for official legal definition)

Promissory Note Sec 4 Bill Of Exchange Sec 5 Cheque Sec 6 Drawer Sec 7

Legal Commentary & Landmark Judgments: Section 134

Section 134 provides private international law rules governing foreign instruments, enacting that the liability of the maker or drawer is determined by the law of the place where the instrument was made, and the liability of the acceptor and indorser by the law of the place where it is payable.

Lex Loci Contractus for Drawer: The contract of the maker or drawer is governed by the law of the country where the note was made or bill was drawn.
Lex Loci Solutionis for Acceptor: The contract of the acceptor and indorser is governed by the law of the place where the instrument is made payable.
Choice of Law Harmonization: Resolves cross-border conflicts of law in international trade finance and cross-border bank drafts.

Key Landmark Precedents:

British India Steam Navigation Co. v. Shanmughavilas Cashew Industries (1990) 3 SCC 481: The Supreme Court analyzed the conflict of laws and jurisdiction governing international shipping documents and bills under Section 134.
Bradlaugh v. De Rin (1868) LR 3 CP 538: The foundational English authority establishing that the validity of an indorsement on a foreign bill is governed by the law of the place of payment.

Courtroom Practice & Strategic Litigation Guidance:

When litigating cross-border commercial paper in Indian courts, audit where the bill was drawn and where it was payable. Under Section 134, an Indian court will apply the foreign jurisdiction's law to determine the drawer's capacity and formal validity if drawn abroad.

Section 134: Law governing liability of maker, acceptor or endorser of foreign instrument

Section 134 of Negotiable Instruments Act: Law governing liability of maker, acceptor or endorser of foreign instrument

Legal Commentary & Landmark Judgments: Section 134