Bailment, Pledge and Negotiable Instruments
Bailment
Delivery of goods by one person to another for a purpose, to be returned or disposed of when the purpose is done (s.148). Delivery may be actual or constructive. The bailee must take reasonable care under s.151 - the care of an ordinary prudent person, consistent with the nature of the bailment (s.152). Unauthorised use (s.154) makes the bailee liable for damage even without negligence. Particular lien under s.170 covers services involving skill; general lien for bankers, factors, wharfingers, attorneys and policy-brokers under s.171. A finder of goods (s.168) bears similar obligations.
Pledge
Bailment of goods as security for a debt (s.172). The pawnee has a right of retainer and, on default, a right to sell after giving reasonable notice (s.176); the sale must be bona fide and any surplus returned. The pawnee cannot ordinarily buy the goods himself without the pawnor's consent.
Negotiable Instruments Act, 1881
A promissory note is an unconditional promise to pay a sum certain (s.4); a bill of exchange is an unconditional order to pay (s.5); a cheque is a bill drawn on a banker payable on demand (s.6). Negotiation is by delivery or endorsement; a holder in due course takes free of defects (ss.9, 58). Crossings (ss.123-131B) route payment through a bank.
Section 138
Dishonour for insufficiency of funds or exceeding arrangement is an offence. The demand notice must be sent within 30 days of the dishonour memo; the drawer has 15 days to pay; a complaint must be filed within one month thereafter.
Worked example
A cheque is returned on 1 March. Notice issued on 31 March is within 30 days. The drawer receives it on 5 April and pays nothing for 15 days, so the cause of action arises; a complaint filed by 20 May is in time.
Traps
Section 138 requires presentation within the cheque's validity; failure to give notice is fatal; "reasonable notice" under s.176 has no fixed period but is mandatory.