Q1: 1. How is acceptance for honour made in the Negotiable Instruments Act 1881?

• A) A) By verbal agreement
• B) B) By written confirmation
• C) C) By signature on the bill
• D) D) By email notification

Q2: 2. In a real-life scenario, if a bill of exchange is dishonored by the drawee, who can make acceptance for honour?

• A) A) Any third party
• B) B) Only the drawer
• C) C) Only the drawee
• D) D) Only the endorser

Q3: 3. What is the requirement for the acceptance for honour to be valid under Section 109 of the Negotiable Instruments Act?

• A) A) It must be made within 30 days of dishonor
• B) B) It must be communicated to the holder
• C) C) It must be made in the presence of a notary public
• D) D) It must be done in writing

Q4: 4. If a bill is dishonored and accepted for honour, who becomes responsible for payment?

• A) A) The original drawee
• B) B) The acceptor for honour
• C) C) The drawer
• D) D) The endorser

Q5: 5. Which of the following is a valid reason for making acceptance for honour under Section 109?

• A) A) Financial hardship of the drawer
• B) B) Dispute between the drawer and drawee
• C) C) Inability of the drawee to pay
• D) D) Unauthorized endorsement

Q6: 6. In a case of need, who can accept a bill for honor under Section 109?

• A) A) Any authorized agent of the drawee
• B) B) Any reputable banker
• C) C) Any close relative of the drawer
• D) D) Any legal advisor of the holder

Q7: 7. Which of the following statements is true regarding acceptance for honour in the Negotiable Instruments Act 1881?

• A) A) It can only be done by the drawee
• B) B) It must be done in the presence of a magistrate
• C) C) It can be made by any person not a party to the bill
• D) D) It is only applicable to promissory notes

Q8: 8. What happens if the acceptor for honour fails to pay the bill after accepting it for honor?

• A) A) The liability reverts back to the original drawee
• B) B) The bill becomes invalid
• C) C) The holder can take legal action against the acceptor for honour
• D) D) The bill is considered paid in full

Q9: 9. In what circumstances can a bill be accepted for honour?

• A) A) If the drawer is out of the country
• B) B) If the drawee refuses to accept the bill
• C) C) If the bill is lost in transit
• D) D) If the bill is dishonored by non-acceptance

Q10: 10. Who bears the cost of acceptance for honour in case of need under Section 109?

• A) A) The original drawer
• B) B) The acceptor for honour only
• C) C) The holder of the bill
• D) D) The drawee

Q11: 11. What is the significance of acceptance for honour in negotiable instruments?

• A) A) It absolves the original parties from liability
• B) B) It ensures prompt payment of the bill
• C) C) It transfers the liability to the acceptor for honour
• D) D) It invalidates the bill

Q12: 12. Which of the following parties can initiate acceptance for honour in case of need?

• A) A) Drawer's legal representative
• B) B) Holder of the bill
• C) C) Endorser of the bill
• D) D) Drawee's spouse

Q13: 13. How does acceptance for honour differ from regular acceptance in negotiable instruments?

• A) A) Regular acceptance is mandatory, while acceptance for honour is optional
• B) B) Regular acceptance requires a stamp duty, while acceptance for honour does not
• C) C) Regular acceptance is valid for all bills, while acceptance for honour is limited to specific cases
• D) D) Regular acceptance can only be done by the drawee, while acceptance for honour can be done by any third party

Q14: 14. What action can the holder take if the bill is dishonored by non-acceptance and no acceptance for honour is made?

• A) A) Sue the drawer for damages
• B) B) Cancel the bill and issue a new one
• C) C) Notify the drawee of the dishonor
• D) D) Endorse the bill to another party

Q15: 15. Under what circumstances can acceptance for honour be revoked?

• A) A) If the bill is lost before payment
• B) B) If the acceptor for honour becomes bankrupt
• C) C) If the drawee pays the bill in full
• D) D) If the holder refuses the acceptance for honour

Q16: 16. Who can demand acceptance for honour in case of need as per Section 109 of the Negotiable Instruments Act?

• A) A) Only the drawee
• B) B) Only the drawer
• C) C) Only the holder of the bill
• D) D) Any party to the bill

Q17: 17. If the bill is accepted for honour, who should be notified of the acceptance?

• A) A) The drawee
• B) B) The drawer
• C) C) The endorser
• D) D) The holder of the bill

Q18: 18. What is the effect of acceptance for honour on the other parties to the bill?

• A) A) It releases them from liability
• B) B) It transfers the liability to the acceptor for honour
• C) C) It voids the bill
• D) D) It cancels any previous endorsements

Q19: 19. When can a bill be accepted for honour in case of need?

• A) A) Only after the drawee has been notified
• B) B) Only after the bill has been dishonored for non-payment
• C) C) Only during banking hours
• D) D) Only with the consent of all parties involved

Q20: 20. What is the role of a banker in accepting a bill for honour under Section 109?

• A) A) To provide a loan to the holder
• B) B) To guarantee payment on behalf of the drawee
• C) C) To endorse the bill as a co-acceptor
• D) D) To negotiate a lower payment amount with the holder

Q21: 21. In a scenario where a bill is dishonored by non-acceptance, who can intervene by accepting for honour?

• A) A) Any party mentioned in the bill
• B) B) Any notary public
• C) C) Any reputable banker
• D) D) Any legal advisor of the holder

Q22: 22. If the acceptor for honour fails to specify the party for whose honor the acceptance is made, what is the consequence?

• A) A) The acceptance is invalid
• B) B) The holder can choose the party
• C) C) The acceptance is deemed for the drawee's honor
• D) D) The holder must specify the party

Q23: 23. What should the holder do after receiving acceptance for honour in case of need?

• A) A) Cancel the original bill
• B) B) Notify all parties involved
• C) C) Return the bill to the drawee
• D) D) Endorse the bill to the acceptor for honour

Q24: 24. In a situation where a bill is dishonored by non-acceptance and subsequently accepted for honour, who is primarily liable for payment?

• A) A) The drawer
• B) B) The drawee
• C) C) The acceptor for honour
• D) D) The endorser

Q25: 25. Why is acceptance for honour important in the negotiation of bills of exchange?

• A) A) It ensures the authenticity of the bill
• B) B) It provides a secondary payment guarantee
• C) C) It eliminates the need for endorsements
• D) D) It speeds up the payment process