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Question

Drawer of a bill of exchange is generally a _________.

A
creditor
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B
debtor
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C
both of the above
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D
none of the above
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Solution

The correct option is A creditor
According to the Negotiable Instruments Act, 1881, a bill of exchange is defined as an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument. There are three parties to a bill of exchange. Drawer is the maker of the bill of exchange. A seller/creditor who is entitled to receive money from the debtor can draw a bill of exchange upon the buyer/debtor. The drawer after writing the bill of exchange has to sign it as a maker of the bill of exchange.

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