1. Easy transferability:

The property (ownership) in a negotiable instrument is transferred by mere delivery, if the instrument is payable to bearer, by delivery and endorsement if payable to order.

2. Transferee’s title free from all defects:

The transferee, who takes its bona fide for value and before maturity (called holder in due course) gets a good title even if the title of the transfer was defective.


3. Transferee can use in his own name:

A transferee can sue upon a negotiable instrument in his own name.

4. Notice of transfer not necessary:

The transferee is not required to give a notice of transfer to the persons liable to pay the instrument.


5. Presumptions:

There are number of presumptions which are applied to a negotiable instrument unless the contrary is proved. As such these presumptions would not arise if the contrary is proved. Sees. 118 and 119 deal with the following presumptions:

1. Consideration:

It is presumed that every negotiable instrument was made or drawn, accepted, endorsed, negotiated or transferred for consideration. As such the holder need not prove consideration. However, this presumption would not arise if it is proved that the instrument was obtained from its owner by any offence, fraud, or for unlawful consideration.


2. Date:

Every negotiable instrument is presumed to have been made on the date which it bears.

3. Time of acceptance:

It is presumed that every accepted bill was accepted within a reasonable time and before its maturity.


4. Time of transfer:

It is presumed that every transfer was made before maturity.

5. Order of endorsements:

The endorsements are presumed to have been made in the same order in which they appear.


6. Stamp:

In case an instrument is lost, it is presumed that it was duly stamped and the stamp was duly cancelled.

7. Every holder is a holder in due course:

Every holder is presumed to be a holder in due course.


8. Dishonour of instrument:

In case a suit is filed for dishonour of an instruments the Court, on the proof of protest presumes that the instrument was dishonoured.

It should be noted that where the promisor denies the execution of the promissory note taking the plea that he signed on a blank paper, then the burden is on the plaintiff to prove execution. (Sri Khetramohan Ray Udaya narayan Panda & Another).

It should be noted further that presumption, as consideration, is not conclusive. If execution of promissory note is proved, then burden to prove lack of consideration is on the defendant. (Marimuthm Rounder v Radha Krishn and Others).