CA Foundation · Accounting & Mercantile Law

Negotiable Instruments & Advanced Mercantile Law Applications

10 practice questions, each with the answer and an explanation.

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Random questions from this topic, one at a time. You see the answer and the explanation straight after each one.

All 10 questions

  1. Under Section 138 of the Negotiable Instruments Act 1881, what is the limitation period for the drawer to make payment after receiving the statutory demand notice?
  2. What is the legal effect of crossing a cheque with the words Not Negotiable under Section 130 of the Negotiable Instruments Act?
  3. Under Section 9 of the Negotiable Instruments Act, which condition must be fulfilled for a person to qualify as a Holder in Due Course?
  4. What is an Inchoate Stamped Instrument under Section 20 of the Negotiable Instruments Act?
  5. What is Noting under Section 99 of the Negotiable Instruments Act 1881?
  6. Under Section 87 of the Negotiable Instruments Act, what is the consequence of a Material Alteration made without the consent of all parties?
  7. A cheque bearing the words Account Payee Only between its parallel transverse lines has what legal consequence for the collecting banker?
  8. Which of the following is an example of an Ambiguous Instrument under Section 17 of the Negotiable Instruments Act?
  9. What is the maximum term of imprisonment prescribed under Section 138 of the Negotiable Instruments Act for cheque dishonour?
  10. Under Section 36 of the Negotiable Instruments Act, who is liable to a Holder in Due Course upon a dishonoured instrument?

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