Negotiable Instrument Act 1881
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Questions and Answers
- 1.
To get protection under sec 138, payee has to give notice to the drawer within----------------- days' from the receipt of return memo with the reason " insufficient fund" and if payee does not pay within---------------------days, pay has to resort to legal action within------------------------days from-----------------------th. day of the receipt of the notice by the drawer.
- A.
30 , 15,30, 16th.
- B.
15, 15,30, 30th.
- C.
30, 30, 30th.16th
- D.
15, 15, 15th.16th
- E.
None
Correct Answer
A. 30 , 15,30, 16th. -
- 2.
If nothing is mentioned in a BOE about allowing grace period for determining Due date of an Usance Bill 3 days grace period is----------------------
Correct Answer
must
optional
not to be allowed
no such provision of grace period - 3.
Under Section 131 of N.I. Act, Collecting banker is protected from
Correct Answer
True owner
Conversion charge
No such protection
No such provision & bank will be always liable in spite of collecting cheque in coustomer's account with due diligenceExplanation
Under Section 131 of the N.I. Act, the collecting banker is protected from the true owner of the cheque. This means that even if the true owner claims that the cheque was collected without their authorization, the bank is protected from any liability. Additionally, the collecting banker is also protected from any conversion charges that may arise from the collection of the cheque. However, it is important to note that there is no specific protection provided under this section for the bank, and they will always be liable for collecting a cheque in the customer's account with due diligence, regardless of any provisions or protections mentioned.Rate this question:
- 4.
Bank has purchased a cheque of a customer & customer has got money before collection of the cheque, Bank stands as-----------------
Correct Answer
Holder for value
Holder
holder-in-due course
notional payee
bank can not credit customer's account before collection of the chequeExplanation
When a bank purchases a cheque from a customer and gives the customer money before the cheque is collected, the bank stands as a "holder for value". This means that the bank has become the legal holder of the cheque and has given value (money) to the customer in exchange for it. The bank can then collect the funds from the cheque when it is presented for payment. The terms "holder" and "holder-in-due course" also apply to the bank in this situation, as it is the legal owner of the cheque. "Notional payee" refers to the customer who originally wrote the cheque, but since the bank has purchased it, the customer is no longer the payee. Finally, the bank is not allowed to credit the customer's account before the cheque is collected, as this would create a risk of fraud or insufficient funds.Rate this question:
- 5.
Where there is only one endorsement which is blank or out of series of endorsements the last endorsement is blank, a cheque originally payable to order is converted to bearer and as such can be paid over the counter.
Correct Answer
yes
no
yes subject to proper identification of the payee
has to be credited to accountExplanation
The given answer states that when there is only one endorsement on a cheque and it is either blank or out of series, the last endorsement is blank. In this case, the cheque, which was originally payable to order, is converted to bearer and can be paid over the counter. This means that the cheque can be cashed by anyone presenting it, without the need for proper identification of the payee. However, it cannot be credited to an account.Rate this question:
- 6.
Which BOE requires Acceptance by the Drawee?
- A.
Demand
- B.
Usance
- C.
Clean
- D.
Demand Accommodation
- E.
Document against Payment
Correct Answer
B. UsanceExplanation
Usance refers to a credit term in which the payment for goods or services is deferred and the buyer is allowed a certain period of time to make the payment. In this case, the drawee, who is the buyer, needs to accept the usance bill of exchange (BOE) in order to acknowledge their obligation to make the payment at a later date. This acceptance is necessary for the BOE to become legally binding and enforceable. Therefore, usance is the correct answer as it requires acceptance by the drawee.Rate this question:
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- 7.
A cheque presented in a cash credit account returned unpaid with the reason " Exceeds Arrangement", Payee can get resort to section 138 of N.I. Act & can proceed criminally against the drawer subject to compliance of certain formalities as provided in N.I.Act
Correct Answer
yes
no
yes provided cheque is returned only with the reason " Insufficient Fund"
Never payee can proceed criminally against the drawerExplanation
The correct answer is yes. When a cheque presented in a cash credit account is returned unpaid with the reason "Exceeds Arrangement", the payee can resort to section 138 of the Negotiable Instruments Act and proceed criminally against the drawer, subject to compliance with certain formalities as provided in the Act. However, this is not applicable if the cheque is returned with the reason "Insufficient Fund".Rate this question:
- 8.
The Maxim "Once a bearer always bearer " holds good only when the cheque is expressly made payable bearer
Correct Answer
yes
not always
holds good even an order cheque is converted to bearer one by blank endorsement.Explanation
The explanation for the given answer is that the maxim "Once a bearer always bearer" means that a cheque that is initially made payable to the bearer remains payable to the bearer even if it is later converted to an order cheque by blank endorsement. This means that even if the cheque was originally intended to be payable to a specific person or entity (order cheque), it can still be converted to a bearer cheque through blank endorsement, making it payable to anyone who possesses it. Therefore, the maxim holds true in this scenario.Rate this question:
- 9.
At present total no. of sections in N.I. Act is-------------------------
- A.
145
- B.
146
- C.
147
- D.
148
- E.
149
- F.
150
Correct Answer
C. 147 -
- 10.
Which section to which section was incorporated in the last amendment of N.I.Act
- A.
138 to 142
- B.
143 to 147
- C.
142 to 149
- D.
143 to 149
- E.
143 to 148
Correct Answer
B. 143 to 147Explanation
The last amendment of the N.I.Act incorporated sections 143 to 147.Rate this question:
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- 11.
In the RTI Act 2005, PIO means Public Information Officer.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
The explanation for the given answer "False" is that in the RTI Act 2005, PIO actually stands for Public Information Officer. Therefore, the correct answer should be "True" instead of "False".Rate this question:
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- 12.
PIO can not seek the assistance of any other officer for the proper discharge of his/their duties.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
The statement is false because a PIO (Public Information Officer) can seek the assistance of other officers for the proper discharge of their duties. PIOs often collaborate with other officers, departments, or agencies to gather information and provide accurate and timely responses to information requests. This collaboration ensures that the duties of a PIO are carried out effectively and efficiently.Rate this question:
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- 13.
A bill dated 30th. November, 2012 payable 3 months after Date, the bill will be due for payment on----------------
- A.
28th. Feb. 2013
- B.
3rd. March,
- C.
29th. Feb, 2013
- D.
2nd March, 2013
- E.
None
Correct Answer
B. 3rd. March,Explanation
The bill is dated 30th November, 2012 and is payable 3 months after the date. Therefore, if we count 3 months from 30th November, 2012, we will reach 28th February, 2013. However, since February does not have 30 days, the bill will be due for payment on the next day, which is 1st March, 2013. Therefore, the correct answer is 3rd March.Rate this question:
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- 14.
PIO shall deal with people's requests seeking information and where the request can be made in writing, to render reasonable assistance to the person to reduce the same in writing.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The statement is true because PIO (Public Information Officer) is responsible for handling requests for information from the public. They are required to provide reasonable assistance to individuals who wish to make a written request for information, in order to facilitate the process. This implies that PIOs are expected to support and guide individuals in reducing their requests into writing, ensuring that the information sought is properly documented and recorded.Rate this question:
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- 15.
Drawer of a cheque issued in favour of a payee and subsequently before presentment of the cheque by the payee ro the bank, Drawer countermands the cheque and, thereafter, cheque is presented but returned due " cheque countermanded by the drawer" though the balance was insufficient to honour the cheque, Payee can not proceed under sec 138 against the Drawer
- A.
True since cheque is not returned due to insufficiency of fund
- B.
Depends on Court's discretion
- C.
False
- D.
Not specifically mentioned or decided in the Act / Court
Correct Answer
C. FalseExplanation
The given answer is False because the payee can proceed under section 138 against the drawer in this situation. Although the cheque was not returned due to insufficient funds, the act of countermanding the cheque by the drawer after it was issued in favor of the payee is considered an offense under section 138 of the Act. Therefore, the payee has the right to take legal action against the drawer for dishonoring the cheque.Rate this question:
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- 16.
PIo, within max. 30 days of receiving request either provide the information sought for on payment of requisite fees or reject the request for any of the reason specified in 8.8 or 8.9 of the RTI Act.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
According to the given statement, PIo (Public Information Officer) is required to either provide the requested information within 30 days of receiving the request and payment of fees, or reject the request for valid reasons specified in sections 8.8 or 8.9 of the RTI (Right to Information) Act. Therefore, the correct answer is true.Rate this question:
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- 17.
An order cheque--------------------
Correct Answer
can be payable over the counter provided payee's introduction is obtained
Never be payable over the counter
has to be deposited in account
noneExplanation
An order cheque can be payable over the counter provided payee's introduction is obtained. This means that the cheque can be cashed or exchanged for cash at the bank or financial institution without the need for it to be deposited into an account. However, this can only be done if the payee's introduction is obtained, which typically involves verifying the identity of the payee. On the other hand, a cheque should never be payable over the counter without the payee's introduction, as this could lead to potential fraud or unauthorized access to the funds. In general, cheques are usually required to be deposited into an account before the funds can be accessed.Rate this question:
- 18.
Crossing is a direction to collecting banker
Correct Answer
false
true
always direction to collecting banker & paying banker both
NoneExplanation
The given statement is false. Crossing refers to marking a check with two parallel lines, which indicates that the check must be deposited directly into the account of the payee and cannot be cashed over the counter. It is a direction to the collecting banker. However, the statement also mentions that crossing is always a direction to both the collecting banker and the paying banker, which is incorrect. Crossing only affects the collecting banker, not the paying banker. Therefore, the correct answers are false, true, always direction to collecting banker, and None.Rate this question:
- 19.
Two transverse parallel line has to be drawn to cross a cheque generally, positively on the left hand upper corner of the cheque
Correct Answer
false, crossing may be anywhere on the face of the instrument
true
two transverse parallel line is not compulsory for general crodding
noneExplanation
The given correct answer states that it is false that two transverse parallel lines have to be drawn to cross a cheque generally, positively on the left-hand upper corner of the cheque. The explanation for this is that crossing may be anywhere on the face of the instrument. Additionally, it is true that two transverse parallel lines are not compulsory for general crossing. The answer also states that there is no other information or options available.Rate this question:
- 20.
Special crossing is possible without two transverse parallel crossing
Correct Answer
true
falseExplanation
It is possible to have a special crossing without having two transverse parallel crossings. This means that a special crossing can occur even if there are not two lines that intersect each other at two points and are parallel to another line. Therefore, the statement "Special crossing is possible without two transverse parallel crossing" is true. However, without additional context or information, it is not possible to determine the truth value of the second statement, so the answer for that is "false".Rate this question:
- 21.
ATM failed transaction penalty Rs. 100 per day beyond----------------- (12, 15, 7, 10) days.
Correct Answer
7
10
12
15
noneExplanation
The correct answer is 7, 10, 12, 15, none. This answer includes all the possible options for the number of days beyond which the penalty is applicable for a failed ATM transaction. The question does not provide the specific number of days, so all the given options are valid possibilities.Rate this question:
- 22.
"A/c Payee Crossing" has not been defined anywhere in N.I. Act and as such it has no implication
Correct Answer
false
trueExplanation
The statement suggests that "A/c Payee Crossing" has no implication because it has not been defined in the N.I. Act. This implies that the statement is false. However, the given answer is "false, true" which means that the statement is false and true. Since the statement is false, the answer is incorrect.Rate this question:
- 23.
While crossing is a direction to paying banker, but a crossed cheque with the phrase " A/C payee" is a direction to
Correct Answer
both paying & collecting banker
only to collecting banker
only to paying banker
It bears no directionExplanation
A crossed cheque with the phrase "A/C payee" is a direction to both the paying and collecting banker. This means that the cheque can only be deposited into the account of the payee and cannot be cashed over the counter. The direction is to the paying banker to ensure that the cheque is not cashed, and to the collecting banker to ensure that it is deposited into the correct account. Therefore, the correct answer is both paying and collecting banker.Rate this question:
- 24.
Neft charges upto 1 lac, Rs.----------------
- A.
2 per 100
- B.
10
- C.
7
- D.
5
Correct Answer
C. 7Explanation
The correct answer is 7. This suggests that the Neft charges for up to 1 lakh rupees are 7 rupees.Rate this question:
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- 25.
Presumption of N.I. Act is provided under sec------------------& sec----------------------
- A.
115 & 116
- B.
116 & 117
- C.
118 & 119
- D.
119 & 120
- E.
None
Correct Answer
C. 118 & 119Explanation
The correct answer is 118 & 119. The presumption of the Negotiable Instruments Act is provided under sections 118 and 119. Section 118 states that until proven otherwise, it is presumed that every negotiable instrument was made or drawn for consideration, and that every party whose signature appears on the instrument had the capacity to contract. Section 119 states that until proven otherwise, it is presumed that consideration has been given for the instrument. These sections establish the legal presumptions regarding consideration and capacity in negotiable instruments unless proven otherwise.Rate this question:
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- 26.
RTGS time period for normal days-------------------------- & for saturdays-----------------------
Correct Answer
9.00 am to 4.30 pm / 9 am to 1.30 pm
9.30 am to 5.00 pm / 9,30 am to 2 pm
9.30 am to 5.00 pm / 9,30 am to 2 pmExplanation
The correct answer is 9.00 am to 4.30 pm / 9 am to 1.30 pm, 9.30 am to 5.00 pm / 9,30 am to 2 pm, 9.30 am to 5.00 pm / 9,30 am to 2 pm. This answer provides the correct RTGS time period for normal days and Saturdays. On normal days, the RTGS time period is from 9.00 am to 4.30 pm, with a break from 1.30 pm to 2.00 pm. On Saturdays, the RTGS time period is from 9.30 am to 5.00 pm, with a break from 2.00 pm to 2.30 pm.Rate this question:
- 27.
Holder can do--------------------------- crossing
Correct Answer
general as well as special
general only
special only
can not crossExplanation
The given question is incomplete and not readable. Therefore, an explanation cannot be generated.Rate this question:
- 28.
Interest subsidy for educational loan till-----------------------period
Correct Answer
moratorium
repayment
course
no interest subsidy availableExplanation
The correct answer is "moratorium, repayment, course, no interest subsidy available." This suggests that the interest subsidy for educational loans is available during the moratorium period, repayment period, and course duration. However, there is no interest subsidy available beyond these periods.Rate this question:
- 29.
Negotiation of bearer cheque is completed by-----------------------
Correct Answer
Delivery
Endorsement followed by delivery
only endorsement
only delivery
noneExplanation
The negotiation of a bearer cheque is completed by delivery, which means physically handing over the cheque to the recipient. Endorsement followed by delivery is also a valid method of negotiation, where the cheque is first endorsed by the payee and then delivered to the new holder. Only endorsement, without delivery, is not sufficient to complete the negotiation. Similarly, only delivery, without endorsement, is also not enough. None of the given options suggest that negotiation can be completed without either delivery or endorsement.Rate this question:
- 30.
Negotiability of bearer cheque and order cheque has been provided under section----------------- &----------------respecrively
Correct Answer
47 & 48
48 & 49
49 & 50
50 & 51
none, noneExplanation
The negotiability of bearer cheques is provided under section 47, while the negotiability of order cheques is provided under section 48. Therefore, the correct answer is 47 & 48. The other options, 48 & 49, 49 & 50, 50 & 51, and none, none, are incorrect as they do not correspond to the sections that govern the negotiability of bearer and order cheques.Rate this question:
- 31.
Holder-in-due course & holder have been defined under sec--------------------& ------------------respecrively
Correct Answer
9 & 8
8 & 9
9, &10
7 & 8
none & noneExplanation
The correct answer is 9 & 8. The explanation is that a holder-in-due-course is defined under section 9, while a holder is defined under section 8.Rate this question:
- 32.
Max.Punishment under sec 138 of N.I.Act for return of cheques due to "Insufficient Fund"
Correct Answer
Double the amount fine & 2 years' imprisonment
Equivalent amount of the Cheque is fine & two years imprisonment
Double the amount fine & one year's imprisonment
Only Equivalent amount of the cheque is fine
only Double the amount is fineExplanation
The correct answer is "Double the amount fine & 2 years' imprisonment." This is because Section 138 of the Negotiable Instruments Act states that if a cheque is returned due to insufficient funds, the defaulter can be punished with a fine of double the amount of the cheque and imprisonment for up to 2 years. This punishment is meant to deter individuals from issuing cheques without sufficient funds in their accounts.Rate this question:
- 33.
Payment in due course has been provided under section------------------ of N I Act
Correct Answer
10
11
12
13
14Explanation
Payment in due course has been provided under sections 10, 11, 12, 13, and 14 of the Negotiable Instruments Act. These sections outline the conditions under which a payment made by a person in good faith and without negligence, to the holder of a negotiable instrument, will be considered as payment in due course. These sections provide protection to the payer and ensure that they are not held liable if the instrument is later found to be invalid or defective.Rate this question:
- 34.
Right of holder (find the incorrect one)
Correct Answer
can obtained duplicate cheque of the lost instrument (Sec 45A of N.I.Act
No provision to get duplicate cheque
can get duplicate cheque subject to court order
can get duplicate cheque only by the holder -in- due courseExplanation
The correct answer is "can get duplicate cheque only by the holder-in-due course". This is because according to Section 45A of the Negotiable Instruments Act, a holder can obtain a duplicate cheque of a lost instrument. However, the other options mentioned in the question are incorrect. There is no provision to get a duplicate cheque, subject to a court order, and the duplicate cheque can be obtained by any holder, not just the holder-in-due course.Rate this question:
- 35.
Form of Conditional Endorsement-----------------
Correct Answer
"Pay to----------only"
"pay to------------or order"
"pay to----------------- or order (without liability)
NoneExplanation
The given answer lists the different forms of conditional endorsement. "Pay to----------only" means that the check can only be paid to the specified person or entity. "Pay to------------or order" allows the check to be paid to the specified person or to anyone they endorse it to. "Pay to----------------- or order (without liability)" means that the endorser is not liable for any further endorsements. "None" indicates that there is no specific form of conditional endorsement.Rate this question:
- 36.
Material alteration which is not apparently visible in a cheque not having drawer's confirmation, if paid by the bank, protection can be available as provided in section--------------------of N.I. Act
Correct Answer
89
88
58
85
85(1)
NoneExplanation
The correct answer is "89,88,58,85,85(1),None". This means that protection can be available under sections 89, 88, 58, 85, 85(1), and None of the Negotiable Instruments Act. These sections likely provide guidelines or provisions for cases where a material alteration is not apparent in a cheque without the drawer's confirmation but is still paid by the bank. The specific details of these sections and the protection they offer are not provided in the question.Rate this question:
- 37.
Forgery of drawer's signature where forgery is not visible even before hanovian lamp, if paid bank would get protection
Correct Answer
no
yes
not provided in N.I. ActExplanation
The explanation for the given answer is that if the forgery of the drawer's signature is not visible even before the Hanovian lamp, then the bank would not be able to detect it and would unknowingly pay the amount. In such a case, if the bank pays, they would still be protected because the forgery was not apparent. However, it is important to note that the specific provisions regarding this scenario are not provided in the Negotiable Instruments Act.Rate this question:
- 38.
A cheque is valid for 3 months from the-----------------------------of the cheque
Correct Answer
date of issue
date
if drawer put date below signature,which is different from the date in date field, from that date
it is not provided but mercantile practiceExplanation
A cheque is valid for 3 months from the date of issue. If the drawer puts a date below their signature, which is different from the date in the date field, the validity starts from that date. If the date is not provided, it is determined based on mercantile practice.Rate this question:
- 39.
A bill drawn in New Delhi made payable in London, by ramesh kumar, a resident indian is-------------------
Correct Answer
Inland Bill
Foreign Bill
Either Inland or Foreign
Neither Inland or ForeignExplanation
The bill drawn in New Delhi and made payable in London by a resident Indian can be classified as either an Inland Bill or a Foreign Bill. An Inland Bill refers to a bill that is drawn and payable within the same country, while a Foreign Bill refers to a bill that is drawn in one country and made payable in another. Since the bill in question is drawn in New Delhi (India) and made payable in London (UK), it can be categorized as either an Inland Bill or a Foreign Bill. Therefore, the correct answer is either Inland or Foreign.Rate this question:
- 40.
Which Section of N.I.Act 1881 deals with Electronic Cheque and Turncated Cheque?
- A.
Section 6 and 6(1)
- B.
Section 6(1)and 6(2)
- C.
Section 5 and 6
- D.
Section 4 and 5
- E.
None
Correct Answer
B. Section 6(1)and 6(2) -
- 41.
Section 11 of N.I.Act deals with:
- A.
Inland Bill
- B.
Foreign Bill
- C.
Inland Promissory Note
- D.
Foreign Promissory Note
- E.
None
Correct Answer
A. Inland BillExplanation
Section 11 of the Negotiable Instruments Act deals with Inland Bills. This section specifically outlines the rules and regulations regarding the payment, acceptance, and negotiation of inland bills of exchange. It provides a legal framework for the parties involved in the transaction and ensures the smooth functioning of the bill payment system within the country.Rate this question:
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- 42.
In case of Gift Cheque, 'Holder in Due Course' is not possible because:
- A.
Instrument is a Gift
- B.
Since there could be "holder', 'holder in due course' is also possible
- C.
There remains no Lawful Consideration
- D.
Gift cheque has no validity
- E.
None
Correct Answer
C. There remains no Lawful ConsiderationExplanation
In order for someone to be considered a "Holder in Due Course," there must be a valid and lawful consideration involved. However, in the case of a gift cheque, there is no lawful consideration because it is a gift and not a payment made in exchange for something of value. Therefore, the concept of "Holder in Due Course" does not apply in this situation.Rate this question:
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- 43.
Section 131 of N.I.Act deals with:
- A.
Protection to Paying Banker
- B.
Protection to Collecting Banker
- C.
Protection to Payee
- D.
Protection to Holder
- E.
Protection to Holder in Due Course
Correct Answer
B. Protection to Collecting BankerExplanation
Section 131 of the N.I. Act provides protection to the collecting banker. This means that if a banker collects payment on behalf of a customer in good faith and without negligence, they are protected from any claims or liabilities that may arise from the transaction. This section ensures that the collecting banker can carry out their duties without fear of legal repercussions, as long as they have acted in good faith and without negligence.Rate this question:
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- 44.
Minimum No. of Parties in a Promissory Note:
- A.
1
- B.
2
- C.
3
- D.
4
- E.
None
Correct Answer
B. 2Explanation
A promissory note is a legal document that outlines a promise to repay a debt. It typically involves two parties: the borrower who promises to repay the debt and the lender who is owed the money. Therefore, the minimum number of parties required in a promissory note is two.Rate this question:
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- 45.
Minimum Number(s) of Parties in a Bills of Exchange:
- A.
2
- B.
3
- C.
4
- D.
5
- E.
None
Correct Answer
B. 3Explanation
A bill of exchange is a financial instrument that is used in international trade to guarantee payment between parties. It involves three parties: the drawer who issues the bill, the drawee who is obligated to pay, and the payee who receives the payment. Therefore, the minimum number of parties required in a bill of exchange is three.Rate this question:
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- 46.
"A cheque is basically a Bills of Exchange drawn on a specified banker and made payable not otherwise than on Demand". It implies:
- A.
A Restrictive Bills of Exchange
- B.
A Sans recourse Bills of Exchange
- C.
A Conditional Bills of Exchange
- D.
Either (1) or (2)
- E.
None
Correct Answer
A. A Restrictive Bills of ExchangeExplanation
The given statement describes a cheque as a Bills of Exchange drawn on a specified banker and made payable not otherwise than on demand. This implies that a cheque can be considered as a restrictive Bills of Exchange, as it is drawn on a specified banker and can only be paid on demand. Therefore, the correct answer is "a Restrictive Bills of Exchange".Rate this question:
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- 47.
In terms of Section 26 of N.I.Act 1881, a Minor:
- A.
Can draw an Negotiable Instrument but he is not personally liable
- B.
Can endorse a negotiable instrument but he is not personally liable
- C.
Can be an endorsee of a negotiable instrument
- D.
Can be a payee of a negotiable instrument
- E.
All of the above are relevant
Correct Answer
E. All of the above are relevantExplanation
According to Section 26 of the N.I. Act 1881, a minor can draw a negotiable instrument, endorse a negotiable instrument, be an endorsee of a negotiable instrument, and be a payee of a negotiable instrument. However, it is important to note that a minor is not personally liable for any obligations or liabilities arising from these actions. Therefore, all of the options mentioned in the question are relevant in relation to a minor's involvement with negotiable instruments.Rate this question:
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- 48.
Protection to Paying Banker is provided in section----------------of N.I.Act
- A.
85
- B.
88
- C.
89
- D.
31
- E.
None
Correct Answer
A. 85Explanation
The correct answer is 85. Section 85 of the Negotiable Instruments Act provides protection to the paying banker. This section states that if a banker in good faith and without negligence pays a cheque that is crossed generally or specially, and the payment is made to the rightful owner, the banker will be protected from any liability. This section ensures that the paying banker is safeguarded when making payments in accordance with the provisions of the Act.Rate this question:
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- 49.
Protection to Paying Banker in case of a Bearer Cheque which is expressly made payble to Bearer on the face of the Instrument is provided in section---------------of N.I.Act 1881
- A.
85(1)
- B.
85(2)
- C.
89
- D.
88
- E.
None
Correct Answer
B. 85(2)Explanation
Section 85(2) of the Negotiable Instruments Act 1881 provides protection to the paying banker in the case of a bearer cheque that is expressly made payable to the bearer on the face of the instrument. This means that if the cheque is presented to the banker for payment and it is in order, the banker can make the payment without being held liable for any loss or damage that may arise from the cheque being a forgery or obtained through unlawful means. This section safeguards the paying banker and ensures that they are not held responsible for any fraudulent or unauthorized transactions involving bearer cheques.Rate this question:
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- 50.
Protection to Paying Banker in case of an order cheque is provided in section--------------of N.I.Act 1881
- A.
85
- B.
85(1)
- C.
85(2)
- D.
85A
- E.
None
Correct Answer
B. 85(1)Explanation
Section 85(1) of the N.I. Act 1881 provides protection to the paying banker in the case of an order cheque. This means that if the paying banker has acted in good faith and in accordance with the apparent tenor of the instrument, they will be protected from any liability. In other words, if the banker has paid the order cheque without negligence and in the ordinary course of business, they cannot be held responsible for any loss or damage caused by the payment. This provision ensures that paying bankers can carry out their duties without fear of legal repercussions.Rate this question:
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Sep 19, 2023Quiz Edited by
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Aug 11, 2013Quiz Created by
Bishnu1960
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