Question

An Inland Bill of Exchange is drawn in India and if payable in India, it can be paid by ----.

• A. only a resident
• B. a foreigner only if they have a special permit
• C. a resident or a foreigner
• D. only a financial institution

Answer 1

Answer:

C. a resident or a foreigner

Different Types Of Bills:

1. Sight Bill:

• Bills which are payable on demand: (At sight or on presentment)  

2. Usance Bill / Time Bill:

• Bill payable after a specified period of time (After sight) 

• Time Bill is paid in future pre-decided time.

3. Documentary Bill

• Bills accompanied by documents of title of goods called Documentary Bill 

4. Clean Bills:

• Bills without any document of title of goods is called clean Bill.

5. Trade Bill:

• Bill, drawn from a genuine trade transaction. Discounting of Bill of Exchange is possible in a Genuine trade Bill. 

6. Accommodation Bill| Kite Bill / Fictitious Bill / Cross, fire / wind Bill:

• It is a Bill of Exchange Drawn and accepted without any genuine trade transaction. It is drawn and accepted without any consideration. 

7. Re-Draft

• In case the original bill is dishonoured, a new bill can be drawn for the sum of liquidated damage. This new bill is called the Re-draft. 

8. Inland Bill:

• An Inland Bill of Exchange is one which should be drawn in India and if it is payable in India, it can be paid by a resident or a foreigner.

• If it is payable abroad, it should be paid by a resident in India. 

• An Inland Bill is drawn in India. 

9. Foreign Bill

• As per sec 12, any Bill of Exchange which is not an inland bill, is a foreign bill.

• Prepared in 3 sets, each copy is called 'via'. 

• The drawer and the acceptor live in different countries, then such Bill of Exchange is known as a Foreign bill of Exchange. 

• If a Bill is drawn abroad, then it can be made payable by a resident or a foreigner.

• Whereas, If a bill is drawn in India, it should be payable by a Foreigner.