Payment in due course refers to making payment according to the terms of a negotiable instrument, such as a check or promissory note, in good faith and without negligence to the person in possession of the instrument. It is defined in Section 10 of the Negotiable Instruments Act as payment made in accordance with the apparent terms of the instrument and satisfies conditions like being made in good faith, without negligence, and to the person in possession. A bank or other party making payment in due course according to this definition will be protected and obtain a valid discharge against the holder of the instrument.

2. Payment in due
course
SHIVASWAMY M
Assistant Professor
Department of Commerce
Government First Grade
College Gundlupete

3. Introduction :
Payment in due course is mainly consisting of
two basic word,
Payment
In due Course

4. In everyday we are going to make
payment for many activities.
What is
payment?
Whom to
pay?
Why to
pay?
What are
forms?

5. Payment
• Is a process of paying someone or something
.
• Is an obligation of one person to another.
• Discharge of responsibility.

6. Forms of Payment

7. Current forms of Payment

8. In due Course
Some time in future when it is the right time,
but not before.

9. Payment in due course:
• ThetermcomesinNegotiableInstrumentsAct1881.
• NI–meansadocumenttransferablefromoneperson
toanother.
• Sec10definePaymentindueCourse
• Apayingbankermakingpaymentinduecourseis
protected.

10. Section 10 says,
"Payment in due course" defines
– payment in accordance with the
– apparent tenor of the
– instrument in
– good faith and without negligence to
– any person in possession.

11. Continue.....
Any person legally responsible to
make payment under negotiable
instrument must make the payment of
the amount due under in due course with
the purpose of obtaining a valid discharge
against the holder.

12. Essential condition must be
satisfied:
Payment made in accordance with
apparent tenor of an instrument.
Payment made in good faith and
without negligence
Payment must be made to the person
possession of instrument
payment made under circumstances
which do not afford a reasonable
ground believing.
Payment must be in money.

13. Conclusion
Payment at right time helps to parties
improve business activities.

14. References:
 Official Gazette Notification -
Negotiable instrument act 1881, pp
10.
 Revised Shrinivas Guptha, The
Negotiable Instruments Act, 21st
Revised Edition, Page No-125
 ICAI study material- The
Negotiable Instrument Act, page no
2.12
 ICSI study material- ECONOMIC,
BUSINESS AND COMMERCIAL
LAWS, page no-607

15. Assignment
1. Identify the terminologies of Payment in due
course.
2. What are the consequences of Payment in
Due Course?
3. Think the appropriate conditions of Payment
in due course with suitable examples.

16. Questions?
1. Payment is a _________ of paying
something.[ Process/ Function]
2. In due course refers to ____________.
3. What are the important terms in Payment in
Due Course?
4. What do you mean Instrument?
5. List out Current forms of payment?