Interpretation-clause
Section 3 of the Negotiable Instruments Act, 1881 deals with interpretation-clause. In this Act-- 1* * * * * Banker.[banker includes any person acting as a banker and any post office savings bank;] 3* * * * * The Act came into force on 01 Mar 1882.
In this Act--
1* * * * *
Banker.2[banker includes any person acting as a banker and any post office savings bank;]
3* * * * *
Section 3, The Negotiable Instruments Act, 1881 (Act 26 of 1881).
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Pradeep Kumar vs Post Master General
Court's Decision & Legal Precedent
When a negotiable instrument (including Kisan Vikas Patras) is presented for encashment at a post office, the post office must verify that the person presenting the instrument is the 'holder' as defined under Section 8 of the Negotiable Instruments Act, 1881, by following the prescribed rules and procedures including verification of identity slip and obtaining written application from the actual holder. Payment made to a person in possession of the instrument but not entitled to receive payment in his name is not a valid discharge under Section 78 or Section 82(c) of the NI Act. Such payment constitutes negligence and violates the requirement of 'payment in due course' under Section 10 of the NI Act. The post office is vicariously liable for fraudulent acts of its employees committed during the course of employment, and such liability cannot be avoided by claiming that the employee acted in individual capacity or that the fraud was committed by a third party.
On this section: Defines 'banker' to include any post office savings bank, establishing that the Post Office is a banker under the NI Act
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Ishar Alloy Steels Ltd. vs Jayaswals Neco LTD
Court's Decision & Legal Precedent
The term 'the bank' in Clause (a) of the proviso to Section 138 of the Negotiable Instruments Act, 1881, refers exclusively to the drawee-bank on which the cheque is drawn. For criminal liability to attach to the drawer under Section 138, the cheque must be presented to this specific drawer's bank within six months from the date of issue or within the validity period, whichever is earlier. Presentation to any other bank, including the collecting bank of the payee, does not satisfy this statutory requirement. The payee may present the cheque through any bank, but that bank is obliged to present it to the drawer's bank within the prescribed period. Non-presentation to the drawee-bank within six months absolves the drawer of criminal liability, though civil liability may persist.
On this section: Definition of 'banker' as any person acting as a banker and any post office saving bank; distinction between indefinite article 'a' and definite article 'the'
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Questions about Section 3
What have the courts held on Section 3 of the Negotiable Instruments Act?
Pradeep Kumar vs Post Master General (07 Feb 2022) is the leading judgment on this section among those set out below: Defines 'banker' to include any post office savings bank, establishing that the Post Office is a banker under the NI Act. Another 1 judgment on this section is set out below, all of them from the Supreme Court. They run from 2001 to 2022.
How do I find court cases under Section 3 of the Negotiable Instruments Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: NI Act 3, section 3 NI Act, section 3 of the Negotiable Instruments Act. People searching for it also type ni act 148 3. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 2 reported judgments on this section are set out on this page, beginning with Pradeep Kumar vs Post Master General (07 Feb 2022).
When did Section 3 of the Negotiable Instruments Act come into force?
Section 3 of the Negotiable Instruments Act, cited as NI Act 3, came into force on 01 Mar 1882, having been enacted on 09 Dec 1881. It is in force as at the date shown on this page.
Other sections of this Act
- 138. Dishonour of cheque for insufficiency, etc., of funds in the account312 words
- 142A. Validation for transfer of pending cases299 words
- 143. Power of Court to try cases summarily297 words
- 143A. Power to direct interim compensation291 words
- 142. Cognizance of offences290 words
- 141. Offences by companies287 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 18 Oct 2026. This page is not a substitute for legal advice.