Section 1 of NIA : Section 1: Short Title

Explanation using Example

Imagine that a business owner in Mumbai issues a cheque to a supplier based in Kolkata. The cheque is a negotiable instrument, and the transaction is governed by the Negotiable Instruments Act, 1881, which applies to the whole of India. This means that the rules regarding the cheque's validity, endorsement, and payment are consistent across all Indian states.

However, if the supplier also accepts hundis (a traditional Indian financial instrument) and there is a local custom in Kolkata that affects the hundi's negotiation, this local usage will not be overridden by the Act, provided it is in an oriental language and not explicitly excluded by the terms of the hundi itself. If the hundi includes a clause stating that it is subject to the Negotiable Instruments Act, then the Act's provisions would apply over the local custom.