21. Which of the following statements is false?
a. The defence of non est factum was evolved by the judiciary to save the position of a person who signed a document but could not read it due to his blindness or illiteracy.
b. In course of time, the defence of non est factum came to be applied to other areas also besides blindness and illiteracy.
c. The doctrine of non est factum applies in case of a misrepresent inducing a mistaken belief regarding the class and charachter of a supposed document.
d. The doctrine originally applied to the negotiable instruments but it came under criticism and after being overhauled by the House of Lords, it applies only to contracts.
22. A minor borrowed some money on a promissory note. After attaining majority, he executed another promissory note in respect of the original loan plus the accrued interest. The creditor filed a suit to recover the money on the basis of the second promissory note. The suit is liable
a. To be dismissed as the money was not advanced to the minor for necessaries.
b. To be dismissed as the first promissory note being void cannot constitute a valid consideration
c. To be decreed as the second promissory note was executed when the debtor had become major.
d. To be decreed as the loan given under the first promissory note constitutes past consideration and the past consideration is valid under the Indian law.
23. Which one of the following is not the essential requirement to fulfil an instrument intended to be a promissory Note?
a. The instrument must contain a promise to pay.
b. A mere acknowledgement of indebtedness is sufficient.
c. The sum of money to be paid must be certain.
d. Promise to pay must be unconditional.
24. Who is 'holder in due course'?
a. A person who holds negotiable instrument in the name of his spouse
b. A person who holds negotiable instrument in his name.
c. A person who becomes possessor of negotiable instrument without consideration.
d. A person who becomes possessor of negotiable instrument payable to bearer for consideration.
25. Negotiable instrument is defined under
a. Section 25 of RBI
b. Section 13 of Banking Regulation Act
c. Section 13 of NI Act
d. Section 3 of Banking Instrument Act.
26. Which of the following is not a negotiable instrument.
a. Promissory note.
b. Fixed Deposit Receipt
c. BOE
d. A cheque
27. Which of the following is not an example of NI?
a. Promissory Note.
b. Bill of Exchange
c. Share Certificate
d. Cheque
28. According to Section 13 of the NI Act, which is not a "Negotiable Instrument"?
a. Instrument of Debt
b. Promissory Note
c. Bill of exchange
d. Cheque
29. In which section of the NI Act "holder in due course" is defined
a. Section 7
b. Section 10.
c. Section 9.
d. Section 13
30. If a cheque amount ordered to be paid is written differently in figure and in words.
a. The cheque will be void.
b. The amount written in words shall be undertaken or ordered to be paid.
c. It will be presumed that it was altered.
d. None of these.
31. In which section of NI Act, "Public Holiday" is explained?
a. Section 21
b. Section 22
c. Section 24
d. Section 25.
32 A signs instruments in the following terms, which instruments are promissory note under Section 4 of the NI Act, 1881?
a. I promise to pay B or order Rs. 500/- to be paid on demand.
b. I promise to pay B Rs. 5000/- and all other some which shall be due to him.
c. I promise to pay B Rs. 5000/- first deducting there out money which he may own me.
d. I promised to pay B Rs. 5000/- ten days after my marrige with C.
33. Under Section 11 of the NI Act, a promissory note, bill of exchange or cheque drawn or made payable in, or drawn upon any person resident in India is
a. Inland instrument
b. Foreign instrument
c. Negotiable instrument.
d. Indorsement.
34. If the indorser signs his name and adds a direction to pay the amount mentioned in the instrument to a specified person, the indoresement is said to be:
a. Indorsement in blank
b. Indorsement in full
c. Indorsement in part.
d. Indorsement in specific.
35. A takes a loan from B with promise to pay it back within six months. It is also stipulated that on the failure to pay within six months. A will be liable to pay double the amount borrowed.
a. It is in the nature of penalty so only a reasonable rate of interest can be claimed.
b. It is in the nature of liquidated damages, so the stipulated amount can be claimed.
c. It is a valid agreement, so A is liable to pay double the amount borrowed.
d. It is an unconscionable clause and renders the entire agreement void.
36. Given below are two statements
Assertion (A): A negotiable instrument' means a promissory note, bill of exchange or cheque payable either to order or to bearer.
Reason (R): Because it is said so under Section 13 of the NI Act, 1881.
Codes:
a. Both A and R are correct and R is the correct explanation of A.
b. A is false, but R is true.
c. Both A and R are false.
d. A is true, but R is false.
37. A draws a cheque in favour of B, a minor. B endorses it in favour of C and C endorses in favour of D. The cheque is dishonoured. Which of the following is not correct about liabilities of the parties?
a. C and D can claim from B
b. C can claim payment from A
c. D can claim against C and A
d. C and D cannot claim from B
38. In which of the following cases, did the Hon'ble SC decide the issue of territorial jurisdiction of the court to entertain a complaint under the Negotiable Instruments Act in reference to the Amending Ordinance of 2015?
a. (2016) 2 SCC 75, Bridgestone India Pvt. Ltd. v. Inderpal Singh
b. (2016) 11 SCC 105, K.S. Joseph v. Philip Carbon Bank Ltd. and Ors.
c. (2016) 1 SCC (Cri) 173, Ultratech Cement Ltd v. Rakesh Kumar Singh and Anr.
d. None of the above
39. As per the provisions of section 26 of the NI Act:
a. A minor may draw instrument so as to bind all parties including himself.
b. A minor shall not draw instrument so as to bind any party.
c. A minor may draw instrument so as to bind all parties except himself.
d. A minor shall not indorse instruments.
40. Where a promissory note is payable by instalments, and two or more instalments have become due, and the holder of the note sues only of the instalments and omits to sue for the other instalments.
a. He can afterwards sue for these instalments.
b. He cannot afterwards sue for these instalments.
c. Either (a) or (b)
d. None of these
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