Page 123 - DCOM404_CORPORATE_LEGAL_FRAMEWORK

Corporate Legal Framework

Notes 15. An …………… is the mode of negotiating a negotiable instrument

16. A negotiable instrument is said be ……………… by non-payment.
17. The ……………… is the formal notarial certificate attesting the dishonour of the bill and

based upon the noting.
18. A cheque having the cross mark such as ‘X’ is not generally regarded as a …………….

19. …………… is a banker upon whom a cheque is drawn.
6.14 Review Questions

1. What do you mean by negotiable instruments?
2. Name the instruments which are recognized as negotiable instruments by the Negotiable
Instruments Act, 1881.
3. What is a bill of exchange? Describe its characteristics. How does a promissory note differ
from a bill of exchange?
4. “A cheque is a bill of exchange drawn on a banker”. Comment

5. Define the term ‘holder’, ‘holder for value’ and ‘holder in due course’.
6. What do you mean by negotiation? How it differs from assignment?
7. Explain the provisions relating to ‘Noting’ and ‘Protesting’ of a bill which has been
dishonoured by the acceptor.

8. Describe briefly the meaning of ‘general’ and ‘special’ crossing and “crossing after the issue
of a cheque”.
9. “Issue of a cheque that bounces is an offence”. Comment.

10. What are the provisions of the Negotiable Instruments Act, 1881, regard international law
concerning negotiable instruments?

Answers: Self Assessment

1. False 2. False
3. True 4. True

5. False 6. False
7. False 8. False
9. True 10. False
11. A holder in due course 12. ambiguous instrument
13. incomplete 14. holder in due course

15. endorsement 16. dishonoured
17. protest 18. paying banker
19. Crossed cheque

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