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[Objective GK for Banking Examinations] Negotiable Instruments Quiz-4

1. When an endorser puts his signature on the back of the instrument without writing the name of the endorsee is termed as
[A]blank endorsement
[B]special endorsement
[C]conditional endorsement
[D]partial endorsement

blank endorsement
When an endorser puts his signature on the back of the instrument without writing the name of the endorsee is termed as general or blank endorsement.

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2. When an endorser puts his signature on the back of the instrument to pay the amount to, or to the order of a specified person is termed as
[A]Blank Endorsement
[B]General Endorsement
[C]Partial Endorsement
[D]Special Endorsement

Special Endorsement
When an endorser puts his signature on the back of the instrument to pay the amount to, or to the order of a specified person is termed as special or full endorsement.

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3. Consider the following statements in context of ‘ Holder in due course’:
a) If Mr. Das obtain the negotiable instrument before its maturity
b) If Mr. Das obtains negotiable instrument by way of gift
c) If Mr. Das obtains by some illegal method
d) If Mr. Das doesn’t obtain it bonafide
In which among the following statements, Mr. Das is not considered to be ‘Holder in due course’?
[A]a & b
[B]b, c & d
[C]a, c & d
[D]All follow

b, c & d
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.

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4. “Not Negotiable” written on a cheque crossing means
[A]the cheque must be paid into a bank
[B]the cheque is not presented by anyone other than the payee
[C]the cheque cannot be paid to any one but the payee
[D]the cheque can be paid to any one

the cheque is not presented by anyone other than the payee
Not Negotiable written on a cheque crossing means the cheque is not presented by anyone other than the payee.

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5. For Mr. Kaishav to be “Holder in due course” which among the following conditions must be satisfied?
a) the negotiable instrument must be in possession of Mr. Kaishav
b) He must be holder of valuable consideration
c) He must become a holder of the negotiable instrument before the date of maturity
d) He must become a holder of the instrument in good faith
Choose the correct option:
[A]a & d
[B]c & d
[C]b, c & d
[D]All follows

All follows
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.

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6. Which among the following is NOT a correct feature of Promissory Note?
[A]Promissory Note must be in writing
[B]Promissory Note must contain an undertaking or promise to pay
[C]Promissory Note must be conditional
[D]Parties to Promissory Note must be certain.

Promissory Note must be conditional.
Promissory Note must be unconditional. For ex:- if it is written ,” I promise to pay XYZ 5k after my brother’s marriage,” then it is not a Promissory Note

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7. Which among the following statements is / are true in context of noting (in case of dishonour of cheque)?
[A]it took place due to non acceptance or non payment of cheque
[B]Must be made within reasonable time after dishonour
[C]Must specify the date of dishonour
[D]All of the above

All of the above
When a promissory note or bill of exchange has been dishonoured due to non acceptance or non payment, the holder of such instrument may cause such dishonour to be noted by notary public that is called as “Noting. It must be made within reasonable time from the date of dishonour.

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