Chapter II - Of Notes, Bills and Cheques
Section 11
Section 11: Inland instrument
Section 11 classifies an instrument as inland using where it was drawn or made and the statutory payment or residence connection with India.
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Need advice on Section 11?
This article is for general information. Refer to the Negotiable Instruments Act, 1881 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
A promissory note, bill of exchange or cheque drawn or made in India and made payable in, or drawn upon any person resident in, India shall be deemed to be an inland instrument.
Key rule and applicability
The instrument must be drawn or made in India. It must also be made payable in India or be drawn upon a person resident in India. Keep the initial place-of-making condition attached to either alternative.
Limits and related provisions
Indian currency, nationality or a commercial connection with India is not a substitute for the words of this test. Classification under section 11 does not by itself decide every applicable foreign-exchange, stamp or payment requirement.
Hypothetical business example
Hypothetical: a bill is drawn in India on a person resident in India, although its stated payment location is overseas. The resident-drawee alternative is relevant to its inland classification; other applicable cross-border requirements still need separate review.
Practical decision flow
Record where the instrument was drawn or made.
Identify its stated place of payment and the drawee’s residence.
Apply the India-making condition together with either statutory alternative.
Practical checklist
Do
- Record where the instrument was drawn or made.
- Identify its stated place of payment and the drawee’s residence.
- Apply the India-making condition together with either statutory alternative.
Avoid
- Indian currency, nationality or a commercial connection with India is not a substitute for the words of this test. Classification under section 11 does not by itself decide every applicable foreign-exchange, stamp or payment requirement.
Glossary
- Place of making
- Where the note, bill or cheque was drawn or made.
- Inland instrument
- An instrument satisfying section 11’s geographical test.
Frequently asked questions
Must the instrument be drawn or made in India?
Yes. That condition is part of the section 11 test.
Are payment in India and an Indian-resident drawee both required?
The section uses alternatives: payable in India or drawn upon a person resident in India, together with the initial making condition.
Does denomination in rupees settle the classification?
No. The statutory test refers to making, payment and residence rather than currency alone.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026