Meaning of Bill of ExchangeAccording to the Negotiable Instruments Act 1881, a bill of exchange is defined as œan 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. Important PointsParties Of Bill of Exchange(1) Drawer:The drawer is the maker of a bill of exchange. The bill is signed by Drawer. A creditor who is entitled to receive payment from the debtor can draw a bill of exchange. (2) Drawee:Drawee is the person upon whom the bill of exchange is drawn. Drawee is the debtor who has to pay the money to the drawer. He is also known as Acceptor. (3) Payee:The payee is the person to whom payment has to be made. The payee may be the drawer himself or a third party. Therefore, now it is clear that the bill of exchange is drawn by the creditor and not a debtor. Hence, the false statement is Option 4 i. e. Bill of exchange is drawn by the debtor.