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Judiciary Exams Exam  >  Judiciary Exams Tests  >  Criminal Law for Judiciary Exams  >  Test: The Negotiable Instruments Act, 1881 - Judiciary Exams MCQ

Test: The Negotiable Instruments Act, 1881 - Judiciary Exams MCQ


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10 Questions MCQ Test Criminal Law for Judiciary Exams - Test: The Negotiable Instruments Act, 1881

Test: The Negotiable Instruments Act, 1881 for Judiciary Exams 2024 is part of Criminal Law for Judiciary Exams preparation. The Test: The Negotiable Instruments Act, 1881 questions and answers have been prepared according to the Judiciary Exams exam syllabus.The Test: The Negotiable Instruments Act, 1881 MCQs are made for Judiciary Exams 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: The Negotiable Instruments Act, 1881 below.
Solutions of Test: The Negotiable Instruments Act, 1881 questions in English are available as part of our Criminal Law for Judiciary Exams for Judiciary Exams & Test: The Negotiable Instruments Act, 1881 solutions in Hindi for Criminal Law for Judiciary Exams course. Download more important topics, notes, lectures and mock test series for Judiciary Exams Exam by signing up for free. Attempt Test: The Negotiable Instruments Act, 1881 | 10 questions in 10 minutes | Mock test for Judiciary Exams preparation | Free important questions MCQ to study Criminal Law for Judiciary Exams for Judiciary Exams Exam | Download free PDF with solutions
Test: The Negotiable Instruments Act, 1881 - Question 1
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What is the significance of a negotiable instrument being "Holder's Title Free from Defects"?

Detailed Solution for Test: The Negotiable Instruments Act, 1881 - Question 1
The concept of "Holder's Title Free from Defects" in a negotiable instrument holds significant importance as it provides protection to the holder against any defects in the title of the instrument. This means that when a holder possesses a negotiable instrument and meets the criteria for being a holder in due course, they are entitled to enforce the instrument without being affected by any defects in the title that may have occurred prior to their possession. This feature enhances the reliability and trustworthiness of negotiable instruments in commercial transactions.
Test: The Negotiable Instruments Act, 1881 - Question 2
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What is the significance of the parties involved in a Promissory Note as outlined in Section 4?

Detailed Solution for Test: The Negotiable Instruments Act, 1881 - Question 2
The parties involved in a Promissory Note, namely the Maker and the Payee, play crucial roles in ensuring the legality and enforceability of the note. The Maker is the individual who promises to pay a certain sum of money, while the Payee is the individual to whom the payment is to be made. Identifying these parties is vital as it determines the obligations and rights associated with the note. For instance, if either party is unclear or misrepresented, it could lead to disputes and legal issues regarding the note's validity.
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Test: The Negotiable Instruments Act, 1881 - Question 3
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What liability does a minor typically hold in relation to an instrument obtained by unlawful means or unlawful consideration?

Detailed Solution for Test: The Negotiable Instruments Act, 1881 - Question 3
A minor generally holds limited liability concerning an instrument obtained by unlawful means or unlawful consideration. Minors are not typically held fully accountable for such transactions due to their age and legal capacity. This limited liability is a protective measure recognizing the minor's status and guarding against potential exploitation in financial matters.
Test: The Negotiable Instruments Act, 1881 - Question 4
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What is the primary purpose of endorsement in negotiable instruments?
Detailed Solution for Test: The Negotiable Instruments Act, 1881 - Question 4
Endorsement in negotiable instruments primarily serves to transfer ownership of the instrument from one party to another. This endorsement signifies the intention to transfer the rights to the instrument to another individual or entity. It is a crucial aspect of negotiable instruments, enabling the free flow of such instruments in commercial transactions.
Test: The Negotiable Instruments Act, 1881 - Question 5
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In the context of a bill of exchange or a promissory note, what is the impact of a forged indorsement on the acceptor's liability?
Detailed Solution for Test: The Negotiable Instruments Act, 1881 - Question 5
When a forged indorsement occurs on a bill of exchange or a promissory note, the acceptor typically remains liable. Despite the forgery in the indorsement, the acceptor is usually still responsible for honoring the instrument as per its terms. This emphasizes the importance of due diligence in verifying the authenticity of endorsements to prevent fraudulent activities in financial transactions.
Test: The Negotiable Instruments Act, 1881 - Question 6
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When is presentment for acceptance unnecessary in the context of bills of exchange?
Detailed Solution for Test: The Negotiable Instruments Act, 1881 - Question 6
Presentment for acceptance of bills of exchange is considered unnecessary when the bill is payable at sight or on demand. In such cases, the bill does not need to be presented for acceptance because the payment is due immediately upon presentation or on demand. This exception to the general rule of presentment for acceptance simplifies and expedites the payment process for bills that are meant to be paid promptly.
Test: The Negotiable Instruments Act, 1881 - Question 7
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What is the penalty a drawer may face under Section 138 in the case of dishonour of a cheque?
Detailed Solution for Test: The Negotiable Instruments Act, 1881 - Question 7
Under Section 138, the drawer of a dishonored cheque may face imprisonment for up to 2 years, a fine up to twice the amount of the cheque, or both. This legal provision aims to ensure the credibility and integrity of financial transactions, emphasizing the seriousness of issuing cheques without sufficient funds to cover them.
Test: The Negotiable Instruments Act, 1881 - Question 8
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According to negotiable instruments law, how can parties be discharged from liability?
Detailed Solution for Test: The Negotiable Instruments Act, 1881 - Question 8
In negotiable instruments law, parties can be discharged from liability through various methods, including cancellation, release, or payment. This means that once the payment of the amount due on a promissory note, bill of exchange, or cheque is made to the holder of the instrument, the parties involved can be discharged from their liabilities. This ensures that transactions involving negotiable instruments can be effectively concluded and obligations met.
Test: The Negotiable Instruments Act, 1881 - Question 9
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What does Section 139 of the dishonor of cheques relate to?
Detailed Solution for Test: The Negotiable Instruments Act, 1881 - Question 9
Section 139 of the dishonor of cheques establishes a legal presumption in favor of the holder of the cheque. This provision places the burden of proof on the drawer to demonstrate that the cheque was issued for a valid debt or liability, highlighting the protection provided to holders of dishonored cheques under the law.
Test: The Negotiable Instruments Act, 1881 - Question 10
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What is a key feature of the National Electronic Funds Transfer (NEFT) system?
Detailed Solution for Test: The Negotiable Instruments Act, 1881 - Question 10
The National Electronic Funds Transfer (NEFT) system operates on a batch-based processing mechanism. This implies that transactions are processed in batches at specific intervals throughout the day, unlike Real Time Gross Settlement (RTGS), which settles transactions individually in real time. This batch processing characteristic of NEFT allows multiple transactions to be accumulated and processed together at set times, which can lead to slight delays in fund transfers compared to RTGS.
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