NEGOTIABLE ACT 1881
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Banking Regulations and Business Laws — CAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is the primary legislation governing negotiable instruments in India?
The Negotiable Instruments Act, 1881 governs promissory notes, bills of exchange, and cheques in India. It lays down the rights and liabilities of parties to such instruments.
What is the time limit for issuing a notice under Section 138 of the NI Act after cheque dishonour?
Notice must be issued within 30 days of dishonour.
Which three instruments are specifically defined as negotiable instruments under the NI Act, 1881?
Promissory notes, bills of exchange, and cheques are the three negotiable instruments defined under the NI Act, 1881.
What is the time limit for the drawer to make payment after receiving notice under Section 138?
Drawer must pay within 15 days of receiving notice.
How does Section 13 of the NI Act define a negotiable instrument?
Section 13 defines a negotiable instrument as a promissory note, bill of exchange, or cheque payable either to order or to bearer.
Within what period must a complaint be filed under Section 142 for cheque dishonour?
Complaint must be filed within one month of cause of action.
What is a promissory note as defined under Section 4 of the NI Act, 1881?
A promissory note is an instrument in writing (not being a bank note or 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.
What is the maximum punishment prescribed under Section 138 of the NI Act for cheque dishonour?
Imprisonment up to two years or fine up to twice the cheque amount.
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