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Parties to a Bill of Exchange

There are three parties to a bill of exchange:
  1. 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 maker of the bill of exchange.
  2. Drawee is the person upon whom the bill of exchange is drawn. Drawee is the purchaser or debtor of the goods upon whom the bill of exchange is drawn.
  3. Payee is the person to whom the payment is to be made. The drawer of the bill himself will be the payee if he keeps the bill with him till the date of its payment.
The payee may change in the following situations:
  1. In case the drawer has got the bill discounted, the person who has discounted the bill will become the payee;
  2. In case the bill is endorsed in favour of a creditor of the drawer, the creditor will become the payee.
Normally, the drawer and the payee is the same person. Similarly, the drawee and the acceptor is the person.


For example, Mamta sold goods worth Rs.10,000 to Jyoti and drew a bill of exchange upon her for the same amount payable after three months. Here, Mamta is the drawer of the bill and Jyoti is the drawee. If the bill is retained by Mamta for three months and the amount of Rs. 10,000 is received by her on the due date then Mamta will be the payee. If Mamta gives away this bill to her creditor Ruchi, then Ruchi will be the payee. If Mamta gets this bill discounted from the bank then the bankers will become the payee.

In the above mentioned bill of exchange, Mamta is the drawer and Jyoti is the drawee. Since Jyoti has accepted the bill, she is the acceptor. Suppose in place of Jyoti the bill is accepted by Ashok then Ashok will become the acceptor.


Mamta                                                                                     NewDelhi

Rs.10,000                                                                            April 01,2006


Three months after date pay to me or my order, the sum of Rupees Ten Thousand only, for value received.



(signed)                                                                                     (Signed)

Jyoti                                                                                              Mamta

1.4.2006                                                                               196, Karol Bagh

73-B, Mahipalpur                                                                        New Delhi

New Delhi 110 037



                                                                                                 73-B, Mahipalpur

New Delhi 110 037

Figure 8.1: Showing specimen of bills of exchange

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