Section 17 of NIA : Section 17: Ambiguous Instruments

Explanation using Example

Imagine that John receives a written document from Mary that states, "I owe you $1000, and I will pay you on demand." This document does not clearly indicate whether it is a promissory note, where Mary promises to pay John, or a bill of exchange, where Mary would be instructing a third party to pay John. Under Section 17 of The Negotiable Instruments Act, 1881, John has the choice to treat this ambiguous document as either a promissory note or a bill of exchange. Once he decides, the document will be considered as the type of instrument he has chosen for all legal purposes.