Negotiable Instruments Act, 1881 MCQ Quiz in मराठी - Objective Question with Answer for Negotiable Instruments Act, 1881 - मोफत PDF डाउनलोड करा

The correct answer is option 2, i.e. Section 5.

• Negotiability means transfer of an instrument from a person / entity to another person / entity.
• Negotiable instruments are documents meant for making payments, the ownership of which can be transferred from one person to another many times before the final payment is made.
• According to section 13 of the Negotiable Instruments Act, 1881, a negotiable instrument means “promissory note, bill of exchange, or cheque, payable either to order or to bearer”
• According to the Negotiable Instruments Act, 1881 there are just three types of negotiable instruments i.e., promissory note, bill of exchange and cheque.
• However many other documents are also recognized as negotiable instruments on the basis of custom and usage, like hundis, treasury bills, share warrants, etc., provided they possess the features of negotiability.
• There are 147 different sections in this act.  
• Key sections of this act are as follows:
  • Section 4 deals with Promissory notes
  • Section 5 deals with Bill of Exchange
  • Section 6 deals with Cheque
  • Section 15 deals with Endorsements
• As per Section 5 of the Negotiable Instruments Act, 1881 defines a bill of exchange 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’.

The correct answer is option 1, i.e. Section 4.

• Negotiability means transfer of an instrument from a person / entity to another person / entity.
• Negotiable instruments are documents meant for making payments, the ownership of which can be transferred from one person to another many times before the final payment is made.
• According to section 13 of the Negotiable Instruments Act, 1881, a negotiable instrument means “promissory note, bill of exchange, or cheque, payable either to order or to bearer”
• According to the Negotiable Instruments Act, 1881 there are just three types of negotiable instruments i.e., promissory note, bill of exchange and cheque.
• However many other documents are also recognized as negotiable instruments on the basis of custom and usage, like hundis, treasury bills, share warrants, etc., provided they possess the features of negotiability.
• There are 147 different sections in this act.  
• Key sections of this act are as follows:
  • Section 4 deals with promissory notes
  • Section 5 deals with Bill of Exchange
  • Section 6 deals with Cheque
  • Section 15 deals with Endorsements
• Section 4 of the Negotiable Instruments Act, 1881 defines a promissory note as ‘an instrument in writing (not being a bank note or a currency note) containing an unconditional undertaking, signed by the maker, to pay a certain sum of money only to or to the order of a certain person or to the bearer of the instrument’

Section 131 of the Negotiable Instruments Act grants protection to a collecting banker and reads as follows:

1. Non-liability of a Banker Receiving payment of Cheque: A banker, who has, in good faith and without negligence, received payment for a customer of a cheque crossed generally or specially to himself shall not, in case the title to the cheque proves defective, incurany liability to the true owner of the cheque by reason only of having received such payment.

Explanation: A banker receives payment of a crossed cheque for a customer within the meaning of this section not withstanding that he credits his customer’s account with the amount of the cheque before receiving payment thereof. 

As per section 6 of the Negotiable Instrument Act, 1881, “cheque” is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form. 

In case of Gift cheques, the payee cannot be a holder in due course.

In this case the “stop payment” instruction to the bank can be given by the senior co-partner of the Hindu Undivided Family (HUF). 

In this case the bank would not pay the cheque as the true owner of such a cheque would be the official receiver.

Material altercation is constituted in case when the holder changes the date of the instrument.

As per provisions contained under section 138 of the Negotiable Instrument Act, 1881 the drawer of a cheque can be made liable, provided the cheque is issued in discharge of a debt or liability.

On the dishonor of a cheque, the payee must give a notice to the drawer within 30 days of the receipt of information from the bank.