1. The Negotiable Instrument Act, 1881 came into force on
a. 9th December, 1881
b. 9th December, 1881
c. 19th December, 1881
d. 1st March, 1882
2. Under NI Act "Bill of Exchange" is defined under
a. Section 5
b. Section 10
c. Section 12
d. Section 13
Section 5: Bills of Exchange - A "bill of Exchange" is 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.
A promise or order to pay in not "conditional", within the meaning of this section and section 4, by reason of the time for payment of the amount or any instalment thereof being expressed to be on the lapse of a certain period after the occurrence of a specified even which, according to the ordinary expectation of mankind, is certain to happen, although the time of its happening may be uncertain.
The sum payable may be 'certain', within the meaning of this section and section 4, although it includes future interest or is payable at an indicated rate of exchange, or is according to the course of exchange, and although the instrument provides that, on default of payment of an instalment, the balance unpaid shall become due.
The person to whom it is clear that the direction is given or that payment is to be made may be a "certain person", within the meaning of this section and section 4, although he is mis-named or desinated by description only.
Section 10 of NI Act: Payment in due course - Payment in due course means payment in accordance with the apparent tenor of the instrument in good faith and without negligence to any person in possession thereof under circumstances which do not afford a reasonable ground for believing that he is not entitled to receive payment of the amount therein mentioned.
Section 12 of NI Act: Foreign instrument - Any such instrument not so drawn, made or made payable shall be deemed to be a foreign instrument.
Section 13 of NI Act: Negotiable instrument - (1) A 'negotiable instrument' means a promissory note, bill of exchange or cheque payable either to order or to bearer.
Explanation (i) - A promissory note, bill of exchange or cheque is payable to order which is expressed to be so payable or which expressed to be payable to a particular person, and does not contain words prohibiting transfer or indicating an intent that it shall not be transferable.
Explanation (ii) - A promissory note, bill of exchange or cheque is payable to bearer which is expressed to be so payable or on which the only or last indorsement is an indorsement in blank.
Explanation (iii) - Where a promissory note, bill of exchange or cheque, either originally or by indorsement, is expressed to be payable to the order of a specified person, and not to him or his order, it is nevertheless payable to him or his order at his option.
(2) A negotiable instrument may be made payable to two or more payees jointly, or it may be made payable in the alternative to one of two, or one or some of several payees.
3. Under which Act public holidays are declared:
a. Negotiable Instruments Act, 1881
b. Contract Act, 1872
c. Public Employees Act, 1967
d. Specific Relief Act.
4. What is the punishment for offence under Section 13 of the NI Act?
a. 2 years imprisonment or fine which may extend to twice the amount of cheque or both.
b. 2 years imprisonment and fine upto twice the amount of cheque.
c. Imprisonment not less than 2 years and with fine of Rs. 10,000
d. Imprisonment for not less than 2 years of fine of Rs. 10,000 or both
5. 'A' signs an instrument in writing as under 'on demand, I promised, I promise to pay 'B' the sum of Rs. 10,000. What is this called
a. Bills of Exchange.
b. Simple note.
c. Promissory note.
d. Cheque
6. Which written instrument signed by the maker is promissory note?
a. Mr. B I owe you one thousand rupees.
b. Mr. B I will pay you ten thousand rupees after my marriage.
c. Mr. B I will pay you money on demand.
d. Mr. B I will pay you one thousand rupees on demand.
7. Which is not a negotiable instrument?
a. Bond
b. Promissory note.
c. Bill of exchange
d. Cheque
8. NI Act, 1881: If an amount written in an instrument is stated differently in figures and words, the amount stated in:
a. Figures shall be paid.
b. Words shall be paid.
c. No amount shall be paid.
d. None of these.
9. NI Act. - "I promise to pay B Rs. 500, and all other sums which shall be due to him." This is a ---
a. Promissory Note.
b. Bills of Exchange
c. An ambigous instrument under Section 17.
d. None of these
10. Which of the following is not a Bill of Exchange?
a. Share
b. Demand Draft
c. Post dated Cheque
d. None of these.
11. "The term 'Protest" used under the NI Act, 1881 in Section 100 includes noting also.
The statement is
a. False
b. Half true and Half false
c. True
d. None of the above
Section 100 of NI Act: Protest - when a promissory note or bill of exchange has been dishonoured by non-acceptance or non-payment, the holder may, within a reasonable time, cause such dishonour to be noted and certified by a notary public. Such certificate is called a protest.
12. Cheque is a
a. Promissory Note.
b. Bill of Exchange
c. Both a and b.
d. None of the above.
13. The term 'a cheque in the electronic form" is defined in the NI Act, 1881 under:
a. Section 6(a)
b. Section 6(b)
c. Explanation 1(a) of Section 6
d. None of the these
14. The term "NI" Act is defined in the NI Act, under
a. Section 2(d)
b. Section 12
c. Section 13
d. Section 13A
15. The term negotiation of the Negotiable Instruments Act, 1881 refers to
a. The transfer of a bill of exchange, promissory note or cheque to any person, so as to constitute the person the holder there of
b. The payment by a bank on a negotiable instrument after due verification of the instrument.
c. the bargaining between the parties to a negotiable instrument
d. All of the above.
16. Which section of the Negotiable Instruments Act defines "Negotiable Instruments"
a. Section 4
b. Section 6
c. Section 11
d. Section 13
17. If a minor draws, indorses, delivers or negotiates an instrument, such instrument binds.
a. All parties to the instrument including the minor
b. Only the minor and not other parties to the instrument
c. All parties to the instrument except the minor.
d. None of the above
18. The NI Act, 1881 become operative from the date of
a. 9th December, 1881
b. 31st December, 1881
c. 1st March, 1881
d. 31st March, 1881
19. Drawee in case of need' has been defined under the Negotiable Instruments Act, 1881 in
a. Section 6
b. Section 9
c. Section 7
d. Section 8
Section 7 of NI Act - Drawer, Drawee - The maker of a bill of exchange or cheque is called the "drawer"; the person thereby directed to pay is called the "drawee".
20. The Negotiable Instrument Act provides for payment of interim compensation by the drawer of the cheque to the complainant. Such interim compensation should not exceed........... of the amount of the cheque.
a. 10%
b. 20%
c. 25%
d. 15%
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