Section 24 of Negotiable Instruments Act 1881: Calculating Maturity After a Stated Number of Days
Section 24 of the Negotiable Instruments Act, 1881 provides the rule for calculating maturity where a promissory note or bill of exchange is payable a certain number of days after its date, after sight, or after a certain event. The relevant starting day is excluded when counting the stated number of days.
Section 24: Calculation of Maturity After Days
Section 24: In calculating the date at which a promissory note or bill of exchange made payable a certain number of days after date or after sight or after a certain event is at maturity, the day of the date, or of presentment for acceptance or sight, or of protest for non-acceptance, or on which the event happens, shall be excluded.
How to Calculate the Period under Section 24
- Identify the stated number of days for payment under the promissory note or bill of exchange.
- Identify the relevant starting point: the date of the instrument, presentment for acceptance or sight, protest for non-acceptance, or the occurrence of the specified event.
- Exclude that starting day from the calculation, as expressly required by Section 24.
- Count the stated number of days beginning with the following day.
- Then apply the statutory rules on maturity and days of grace under Section 22, where applicable, and the public-holiday rule under Section 25.
Example of the Section 24 Rule
If a promissory note is made payable a stated number of days after its date, the date written on the instrument is not counted as the first day. Counting begins from the next day. The eventual date of maturity must also be determined with reference to the applicable provisions on maturity and days of grace.
Meaning of Maturity
Section 22 provides that the maturity of a promissory note or bill of exchange is the date at which it falls due. It further provides the rule of three days of grace for every promissory note or bill of exchange that is not expressed to be payable on demand, at sight or on presentment.
Meaning of After Sight
Section 21 explains the expression "after sight". In a promissory note it means after presentment for sight. In a bill of exchange it means after acceptance, or noting for non-acceptance, or protest for non-acceptance. Section 24 then provides the counting rule when payment is fixed a certain number of days after sight.
Section 23 and Section 24: Difference
Section 23 deals with an instrument payable a stated number of months after date, sight or a certain event and uses the corresponding-day rule. Section 24 deals with an instrument payable a stated number of days and requires exclusion of the relevant starting day.
Promissory Note and Bill of Exchange
A promissory note is defined in Section 4 as an instrument satisfying the statutory requirements for an unconditional undertaking to pay. A bill of exchange is defined in Section 5 as an instrument satisfying the statutory requirements for an unconditional order to pay. Section 24 applies to these instruments where payment is fixed a certain number of days after date, sight or a certain event.
When the Day of Maturity Is a Public Holiday
Section 25 provides the rule where the day on which a promissory note or bill of exchange is at maturity is a public holiday. That provision should therefore be checked after calculating the maturity date under Sections 22 to 24.
Official legal text: The current text of the Negotiable Instruments Act, 1881 can be checked on the official India Code portal maintained by the Government of India.