SLO

[Objective GK for Banking Examinations] Negotiable Instruments Quiz-3

1. If a cheque is refused by the State Bank of India (SBI) due to inadequacy of funds for the cheque to clear, then it is said to be
[A]Bounced cheque
[B]Cancelled cheque
[C]Either a or b
[D]Both a and b

Bounced cheque
If a cheque is refused by the State Bank of India (SBI) due to inadequacy of funds for the cheque to clear, then it is said to be bounced cheque.

.

2. Due to inadequacy of money in Ms. Tanu’s bank account, the cheque got bounced, then what legal action she has to face?
[A]Imprisonment
[B]Fine
[C]Imprisonment or fine or both
[D]Both a and b

Imprisonment or fine or both
Due to inadequacy of money in Ms. Tanu’s bank account, the cheque got bounced, then legal action she has to face is imprisonment for a term which can be extended to one year or fine which may extend to twice the amount of cheque or with both.

.

3. As per which section of the Negotiable Instrument Act, 1881, the legal action has to taken when the cheque got bounced due to inadequcy of money in one’s bank account?
[A]Section 138
[B]Section 420
[C]Section 118
[D]Section 76

Section 138
As per section 138 of the Negotiable Instrument Act, 1881, the legal action has to taken when the cheque got bounced due to inadequcy of money in one’s bank account.

.

4. If a cheque is bounced from Mr.Warsi’s bank account, then in which of the following cases the notice of dishonour of cheque is not necessary to take legal action against him by Mr.Das ?
a) When the party entitled to notice cannot be found after due search
b) When both are partners of bill of exchange
c) When Mr. Warsi caught in accident or died
d) When Mr. Warsi has countermanded payment
Choose the correct option:
[A]Only a
[B]a & c
[C]b & d
[D]All of the above

All of the above
If a cheque is bounced from Mr.Warsi’s bank account, then the notice of dishonour of cheque is not necessary to take legal action against him by Mr.Das in the following cases: a) When the party entitled to notice cannot be found after due search b) When both are partners of bill of exchange c) When Mr. Warsi caught in accident or died d) When Mr. Warsi has countermanded payment

.

5. As per which section of the Negotiable Act 1881, ” holder in due course” define?
[A]Section 9
[B]Section 8
[C]Section 7
[D]Section 6

Section 9
As per section 9 of the Negotiable Instrument Act, 1881, ” holder in due course” means a person who must have the possession of the instrument viz. promissory note, bill of exchange or cheque in good faith.

.

6. As per which section of the Negotiable Instrument Act 1881, ” holder” is defined?
[A]Section 9
[B]Section 7
[C]Section 6
[D]Section 8

Section 8
As per Section 8 of the Negotiable Instruments Act, 1881, any person who is entitled in his own name to the possession of the negotiable instrument and has right to receive or recover the amount from the parties thereto.

.

7. As per which section of the Negotiable Act 1881, Endorsement defines?
[A]Section 15
[B]Section 11
[C]Section 14
[D]Section 17

Section 15
As per section 15 of the Negotiable Act 1881, Endorsement defines when the maker or holder writes his name on the back or on the face of the negotiable instrument and put his signatures thereto for the purpose of signature.

.

8. Consider the following statements in context of ‘Endorsement’:
a) its an order to pay
b) transfer of a negotiable instrument form one person to another
c) defined in section 15 of the Negotiable instrument Act, 1881
Choose incorrect option:
[A]Only a
[B]Only b
[C]Only c
[D]All are true

All are true
An endorsement is a legal term that refers to the signing of a document that allows for the legal transfer of a negotiable instrument from one party to another.

.

9. When a cheque bears across its face an addition of the name of a banker, either with or without the words not negotiable, the cheque is considered to have been crossed
[A]specially
[B]generally
[C]normally
[D]either a or b or c

specially
As per section 124, the Cheque crossed specially signifies that a cheque bears across its face an addition of the name of a banker, either with or without the words not negotiable that addition shall be deemed a crossing and the cheque shall be deemed to be crossed specially and to be crossed to that banker.

.

10. When an endorser willing to transfer to an endorsee only a part of the amount of the instrument, then it is which type of endorsement?
[A]Restrictive endorsement
[B]Conditional endorsement
[C]Special endorsement
[D]Partial endorsement

Partial endorsement
When an endroser willing to transfer to an endorsee only a part of the amount of the instrument, then it is known as partial endorsement. Such an endorsment does not operate as a negotiation of the instrument.

.

Comments