Most important Mcqs of Negotiable Instruments Act,1881- Indian Judiciary -Free PDF Download

Q1-In a Promissory Note, how many parties are involved

1. One
2. Two
3. Three
4. Four

Correct Option: c
Three

• Every promissory note always comprises of three important parties. These include the maker, the payee as well as the holder.

Q2-The Negotiable Instruments Act, 1881 is an Act to define and amend the law relating to:

1. Cheques.
2. bills of exchange.
3. promissory notes.
4. All of the above.

Correct Option: D
 Q3-Section 5 of the NI Act deals with

1. Bills of Exchange.
2. Holder in due course.
3. Cheque.
4. Promissory Note.

Correct Option: A
Bills of Exchange

• “Bill 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.

Q4-Section 35 of the Negotiable Instruments Act,1881 deals with_______?

1. Liability of endorser
2. Surety ship.
3. Liability of the maker of note and acceptor of a bill.
4. Negotiation by delivery.

Ans-A. Liability of indorser
Section 35 in The Negotiable Instruments Act 1881.

Title:  Liability of indorser.

• Description: In the absence of a contract to the contrary, whoever indorses and delivers a negotiable instrument before maturity without, in such it indorsement, expressly excluding or making conditional his own liability, is bound thereby to every subsequent holder, in case of dishonour by the drawee, acceptor or maker, to compensate such holder for any loss or damage caused to him by such dishonour, provided due notice of dishonour has been given to, or received by, such indorser as hereinafter provided. Every indorser after dishonour is liable as upon an instrument payable on demand.

Q5- In an appeal by the drawer against conviction under section 138, the Appellate Court may order the appellant to deposit such sum which shall be a minimum of or compensation awarded by the trial Court.

1. Ten per cent of the fine.
2. Fifteen per cent of the fine.
3. Twenty per cent of the fine.
4. Twenty five per cent of the fine.

Correct Option: C

• In an appeal by the drawer against conviction under section 138, the Appellate Court may order the appellant to deposit such sum which shall be a minimum of twenty per cent.

Q6-A cheque is a ……………………….drawn upon a specified banker and payable on demand

1. Bill of exchange
2. Hundi
3. Promissory note
4. None of the above

Correct Option: A

• A “cheque” is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.

Q7-In case of an accepted bill, the liability of drawee is __________

1. Primary and unconditional
2. Primary and conditional
3. Secondary and conditional
4. None of these

Ans A

1. Primary and unconditional

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