Negotiable Instruments Act 1881 / Section 25

Section 25 of Negotiable Instruments Act 1881: When Day of Maturity Is a Holiday

Section 25 of the Negotiable Instruments Act, 1881 provides a specific rule where the maturity date of a promissory note or bill of exchange falls on a public holiday. In that situation, the instrument is deemed due on the next preceding business day.

Section 25: When Day of Maturity Is a Holiday

Section 25: When the day on which a promissory note or bill of exchange is at maturity is a public holiday, the instrument shall be deemed to be due on the next preceding business day.

General RuleFirst determine the date on which the promissory note or bill of exchange is at maturity under the applicable provisions of the Act.

Holiday RuleIf that maturity day is a public holiday, Section 25 shifts the due date backward to the next preceding business day.

Meaning of Public Holiday under Section 25

The Explanation to Section 25 states that the expression "public holiday" includes Sundays and any other day declared by the Central Government, by notification in the Official Gazette, to be a public holiday.

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 also provides the statutory rule of three days of grace for instruments that are not expressed to be payable on demand, at sight or on presentment.

How Section 25 Is Applied

Section 25 is applied after the maturity date has been determined under the relevant provisions of the Act. Where the instrument is payable after a stated number of months, Section 23 provides the calculation rule. Where it is payable after a stated number of days, Section 24 provides the calculation rule. If the resulting day of maturity is a public holiday, Section 25 then applies.

Example

If a promissory note is at maturity on a Sunday, Section 25 treats the instrument as due on the next preceding business day. The rule moves the due date to the preceding business day, not to the next working day after the holiday.

Promissory Note and Bill of Exchange

A promissory note is defined in Section 4 of the Act. A bill of exchange is defined in Section 5. Section 25 expressly applies when the day on which either such instrument is at maturity is a public holiday.

Related Maturity Provisions

Sections 21 and 22 explain expressions such as "at sight", "on presentment" and "after sight", and define maturity. Sections 23 and 24 provide calculation rules for instruments payable after stated periods. These provisions form the immediate statutory context for Section 25.

Official legal text: For the current statutory text and amendments, refer to the official India Code portal of the Government of India.