Page 113 - DMGT407Corporate and Business Laws

Corporate and Business Laws

Notes 6. “Issuing of a cheque that bounces is an offence”. Comment.
7. P signs a promissory note in favour of M. Who is liable to make payment on the note?
Why?

8. Who has the primary liability to pay to the holder in the case of a cheque? Why?
9. Cheques crossed ‘not negotiable’ are nevertheless transferable. Do you agree? Justify.
10. D draws a bill of exchange on A, payable to P. Who is liable to P
(a) Until the acceptance is made by A.

(b) If A accepts the bill of exchange.
(c) If A does not accept the bill of exchange.
11. D draws a bill of exchange on A, payable to P. P transfers it to X, X to Y & Y to Z. The bill
is dishonoured. Who has to give notice of dishonour to whom? Who may transmit the
notice to the other parties? Comment.
12. S draws a cheque for ` 5000 though he had a credit balance of ` 1000/- only. No notice of
dishonour is given to D. Can he avoid liability on the cheques? Comment.

Answers: Self Assessment

1. holder in due course 2. Ambiguous
3. maker 4. acceptance
5. specified 6. mirror image

7. holder 8. maturity
9. 47 10. endorsement in full
11. payment. 12. maturity

13. holder 14. protest
15. open 16. Special
17. maturity 18. electronic image
19. four 20. made payable

4.14 Further Reading

Book S.S. Gulshan, Business Law, Excel Books, New Delhi, 2006.

Online links www.sudhirlaw.com/Business4.html
www.vakilno1.com/bareacts/negoinstruact/negoinstruact.htm

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