Unit III:Negotiable Instruments Act -

1881:

• Negotiable Instruments- Promissory Note, Bills of Exchange, &Cheque, and their definitions and characteristics, Types ofendorsements, Holder- Holder in due course, Discharge of Parties.

• Cyber Crime and the Legal Landscape-the world-Why do we needcyber laws in tha indian context-The indina IT act-challenges toindian Law and cyber crime scenarion in india. (Refer Nina Godbole& Sunit Belapure)

Negotiable instruments act 1881

• It is a document guaranteeing the payment of a specific amount of money either on demand or at a fixed time and is also frequently transferrable from person to person.

• It is a document consisting of a contract which promises the payment of money

Characteristics:

• It must be in written form and signed by the maker.

• It must contain unconditional promise to pay the money.

• It must be payable on demand or at a definite time.

• It must be payable either to a person or order of the person or to the bearer of the instrument.

• It must be freely transferrable from person to person.

Types of negotiable instruments

• Promissory note (Section 4)

• Bill of exchange (Section 5)

• Cheque (Section 6)

Characteristics of Promissory Note

1. It is an instrument in writing

2. It is promise to pay

3. The undertaking to pay is unconditional

4. It should be signed by maker

5. The maker must be certain.

6. The pay must be certain

7. The promise should be to pay money only.

8. The amount of payment should be certain.

Characteristics of Bills of exchange

1. It must be in writing

2. It must be signed by the drawer.

3. The drawer, the drawee and payee must be certain.

4. The sum payable must be certain.

5. It must contain an order to pay money only

6. There are three parties in a bill of exchange

• Drawer

• Drawee

• Payee

Characteristics of Cheque

1. It was always drawn on a specified banker.

2. It was always payable on demand.

Types of Endorsements:

• General or blank

• Endorsement in full

• Partial endorsement

• Restrictive endorsement

• Condition endorsement

Holder

• The holder of a negotiable instrument means any person entitled to thepossession of the instrument in his own name and to receive or recoverthe amount due there on from the parties liable thereto. Thus, in orderto be called a ‘holder’ a person must satisfy the following twoconditions: (Sec. 8).

Two Conditions are

• He must be entitled to the possession of the instrument in his ownName. Actual possession of the instrument is not essential. What isrequired is a right to possession under some legal or valid title. Heshould be a ‘de jure holder’ and not necessarily ‘de facto holder’.

• He must be entitled to receive or recover the amount due there on fromthe parties liable thereto. In order to be called a holder, besides beingentitled to the possession of the instrument in his own name, theperson must also have the right to receive or recover the amount of theinstrument and give a valid discharge to the payer.

Holder in due course

• According to Section 9 “Holder in due course” means any person whofor consideration became the possessor of a promissory note, bill ofexchange or cheque if payable to bearer, or the payee or endorseethereof, if payable to order, before the amount mentioned in it becamepayable and without having sufficient cause to believe that any defectexisted in the title of the person from whom he derived his title.

Essential qualifications of a “holder in due course”

• He must be a holder for valuable consideration. All the prerequisite of consideration should be met so as to result in a valuable consideration.

• That he became the holder of the instrument before its maturity. Thus the person who takes a negotiable instrument after maturity does not become a holder in due course.

• That the instrument should be complete and regular on the fact of it. Face here includes the back also.

Conti…

• The last requirement is that the holder should have received theinstrument in “good faith”. There are two methods of ascertaining aperson’s good faith, “subjective” and objective”. In subjective test theCourt has to see the holder’s own mind and the only question is “didhe take the instrument honestly”? In objective test, on the other hand,we have to go beyond the holder’s mind and see whether he exercisedas much care in taking the security as a reasonably careful personought to have done. Subjective test requires “honesty”, objective “duecare and caution”. Good faith indicates a person takes the instrumentwithout sufficient cause to believe that any defect existed in the title ofthe person from whom he derived his title.

Cyber Crime and the Legal Landscape

• Cyber law is the part of the overall legal system that deals with the Internet, cyberspace, and their respective legal issues. Cyber law covers a fairly broad area, encompassing several subtopics including freedom of expression, access to and usage of the Internet, and online privacy.

Need of Cyber laws

• Bleeding edge technology: Bleeding edge refers to technology that has been released but is still not ready for the general public due to the fact that it has not been reliably tested. The term bleeding edge was formed as an allusion to the similar terms "leading edge" and "cutting edge".

• Big data analytics: it is the process of collecting, organizing and analyzing large sets of data (big data) to discover useful information.

• Air gapping: Air gapping is a security measure that involves isolating a computer or network and preventing it from establishing an external connection. An air gapped computer is physically segregated and incapable of connecting wirelessly or physically with other computers or network devices.

• Emphasis on cloud computing techniques.

• Offensive cyber operations and strengthened cyber security.

Cyber law Awareness program

chapter 1 - Preliminary

chapter 2 - Digital and electronic signature

chapter 3 - Electronic governance

chapter 4 - Attribution, acknowledgement and despatch of electronic records

chapter 5 - Secure electronic records and secure digital signatures

chapter 6 - Regulation of certifying authorities

chapter 7 -Electronic signature certificates

chapter 8 - Duties of subscribers

chapter 9 - Penalties and adjudication

chapter 10 - The cyber regulations appellate tribunal

chapter 11 - Offences

chapter 12 - Network service providers not to be liable in certain cases

chapter 12 a - Examiner of electronic evidence

chapter 13 - Miscellaneous