A bill of exchange may be an Inland bill.or a Foreign bill. Originally, bill was a means by which a trader in one country paid a debt in another country without the transmission of coin. An Inland bill is drawn and payable in India or drawn in India upon some person resident in India, even though it is made payable in a foreign country. A bill which is not Inland is a Foreign Bill(Types of Bill of Exchange)
Bill in Sets
Foreign bills are generally drawn in sets of three each. According to S. 132, bill of exchange may be drawn in parts, each part being numbered and containing a provision that it shall continue to be payable so long as the other part remains unpaid. All the parts together make a set but the whole set constitutes one bill and is extinguished when one of the parts, if a separate bill, would be extinguished.(Types of Bill of Exchange)
The bills are drawn in sets, in foreign trade in order to facilitate prompt and easy presentation for acceptance and payment. It also reduces the risk of loss in course of transit.
A demand draft is a bill of exchange drawn by a bank on another bank, or by itself on its own branch, and is a negotiable instrument. It is like a cheque but differs in certain respects. First, it can be drawn only by a bank on another bank and not by a private individual as in the case of cheques. As against a cheque, it cannot be countermanded easily either by its purchaser or by the bank to which it is presented. Finally, it cannot be made payable to bearer. These days it is a popular mode of making payments. Banks charge a nominal amount of commission for this service.(Types of Bill of Exchange)
Rights to Duplicate Bill
Where the bill is not overdue but has been lost, the person who was holder of it may apply to the drawer, to give him another bill of the same tenor, giving security to the drawer if required, to indemnify him against all persons whatever in case the bill alleged to have been lost shall be found again. If the drawer refuses to give such duplicate bill may be compelled to do so by means of a suit. Holder is the person who can ask for a duplicate.(Types of Bill of Exchange)
Legitimately speaking, an accommodation bill is not a bill as such. It is simply a mode of accommodating a friend in business. For example, A may be in want of money and approach his friend B and C who, instead of lending the money directly, propose to draw an ‘Accommodation Bill’ in his favour. A promises to reimburse C before the period of the bill is up (which is generally 3 months). If the credit of B and C is good, this device enables A to get an advance from his banker at the commercial rate of discount. The real debtor in this case is not C, the acceptor, but A the payee who has engaged to find the money for its ultimate payment, and A is here the principal debtor and the others merely sureties. Thus, as between the original parties to the bill the one who would prima facie be principal is in fact, the surety whether he be drawer, acceptor or indorser, that bill is an accommodation bill.(Types of Bill of Exchange)