Introducing our Negotiable Instruments Act in Law Top 100 MCQ with Free Exam! The Negotiable Instruments Act is a legislation that governs the transferability of certain financial instruments, such as promissory notes, bills of exchange, and cheques.

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Negotiable Instruments Act Law 100 MCQ With Free Exam SET:-1

Q1. BATNA Stands for:

(A) Bilateral agreement to negotiation and arbitration
(B) Best alternative to a negotiated agreement
(C) Bilateral Trade negotiated agreement
(D) None of the above

Answer: Best alternative to a negotiated agreement

Q2. As per the provisions of section 26 of the Negotiable Instruments Act:

(A) A minor may draw instrument so as to bind all parties including himself
(B) A minor shall not draw instrument so as to bind any party
(C) A minor may draw instrument so as to bind all parties except himself
(D) A minor shall not indorse instruments

Answer: A minor may draw instrument so as to bind all parties except himself

Q3. In which court, the complainant has to file an appeal against the order of acquittal under Section 138 of the Act ?

(A) Court of session
(B) High Court
(C) Chief Judicial Magistrate
(D) Either Court of Session or High Court

Answer: Court of session

Q4. What is the term used to describe an endorsement in which the endorser excludes his own liability on the negotiable instrument in case of dishonour of the instrument ?

(A) Partial endorsement
(B) Sans recourse endorsement
(C) Restrictive endorsement
(D) Conditional endorsement

Answer: Sans recourse endorsement

Q5. Section 16 of Negotiable Instruments Act defines

(A) Restrictive endorsement
(B) Conditional endorsement
(C) Indorsement “in full” and Indorsement “in blank”
(D) All the above

Answer: Indorsement “in full” and Indorsement “in blank”

Q6. For the purposes of Section 141 Negotiable Instruments Act a company does not mean or include

(A) A body corporate
(B) A firm
(C) A proprietary concern
(D) An association of individuals

Answer: A proprietary concern

Q7. What are the defences available against proceedings under section 138 of Negotiable Instruments Act ?

(A) Absence of a legally enforceable debt or liability
(B) Absence of legal notice of 15 days
(C) Lack of jurisdiction
(D) All of the above

Answer: All of the above

Q8. Which written instrument signed by the maker is promissory note ?

(A) Mr. ‘B’ I owe you one thousand rupees
(B) Mr. ‘B’ I will pay you ten thousand rupees after my marriage
(C) Mr. ‘B’ I will pay you money on demand
(D) Mr. ‘B’ I will pay you one thousand rupees on demand

Answer: Mr. ‘B’ I will pay you one thousand rupees on demand

Q9. Drawee in case of need’ has been defined under the Negotiable Instruments Act, 1881 in

(A) Section 6
(B) Section 9
(C) Section 7
(D) Section 8

Answer: Section 7

Q10. Negotiable Instruments Act:- “I promise to pay B Rs. 500, and all other sums which shall be due to him.” This is a –

(A) Promissory note
(B) Bill of exchange
(C) An ambiguous instrument under section 17
(D) None of these

Answer: None of these