Q1: 1. What does Section 14 of the Negotiable Instruments Act 1881 deal with?

• A) A) Endorsement
• B) B) Acceptance
• C) C) Negotiation
• D) D) Presentment

Q2: 2. In the context of negotiation under Section 14, who is the transferor?

• A) A) Payee
• B) B) Drawer
• C) C) Endorser
• D) D) Holder in due course

Q3: 3. Which of the following is a requirement for a valid negotiation under Section 14?

• A) A) Signature of the payee
• B) B) Delivery of the instrument
• C) C) Written consent of the bank
• D) D) Endorsement by the drawer

Q4: 4. In a real-life scenario, if a payee endorses a cheque to a third party, what is this process called?

• A) A) Acceptance
• B) B) Protest
• C) C) Negotiation
• D) D) Presentment

Q5: 5. Under Section 14, what happens when a negotiable instrument is transferred without endorsement?

• A) A) It becomes void
• B) B) It remains valid
• C) C) It requires revalidation
• D) D) It is returned to the drawer

Q6: 6. When can a holder be considered a holder in due course under Section 14?

• A) A) When the instrument is post-dated
• B) B) When the instrument is dishonored
• C) C) When the holder acquires the instrument for value
• D) D) When the holder is a minor

Q7: 7. In a case where an instrument is payable to bearer, how can it be negotiated under Section 14?

• A) A) By endorsement and delivery
• B) B) By acceptance and payment
• C) C) By acknowledgment of debt
• D) D) By filing a legal claim

Q8: 8. What is the significance of negotiation in the context of negotiable instruments?

• A) A) It transfers the ownership of the instrument
• B) B) It cancels the instrument
• C) C) It requires additional stamp duty
• D) D) It invalidates the instrument

Q9: 9. Under Section 14, what is the effect of negotiation on the rights of the transferee?

• A) A) It extinguishes all rights
• B) B) It transfers the rights of the transferor
• C) C) It creates new liabilities for the transferee
• D) D) It requires reissuance of the instrument

Q10: 10. In a real-life scenario, if a bearer instrument is lost and found by someone else, who has the right to negotiate it?

• A) A) Finder
• B) B) Original holder
• C) C) Police
• D) D) Bank

Q11: 11. What is the legal implication if an instrument is negotiated without the consent of the holder?

• A) A) It becomes non-negotiable
• B) B) It is considered a forgery
• C) C) It remains valid
• D) D) It requires court intervention

Q12: 12. When does the liability of an endorser cease under Section 14?

• A) A) Upon dishonor of the instrument
• B) B) Upon acceptance of the instrument
• C) C) Upon negotiation of the instrument
• D) D) Upon maturity of the instrument

Q13: 13. What is the role of negotiation in ensuring the free circulation of negotiable instruments?

• A) A) It imposes restrictions on circulation
• B) B) It facilitates easy transfer of ownership
• C) C) It requires registration of each transfer
• D) D) It increases the transaction costs

Q14: 14. In a real-life scenario, if a promissory note is negotiated without endorsement, who bears the risk of loss?

• A) A) Original payee
• B) B) New holder
• C) C) Bank
• D) D) Government

Q15: 15. What action can a holder take if an instrument is dishonored after negotiation?

• A) A) Cancel the instrument
• B) B) Sue the endorser
• C) C) Return the instrument to the drawer
• D) D) Negotiate it again

Q16: 16. How does negotiation affect the transfer of title in a negotiable instrument?

• A) A) It requires approval from the court
• B) B) It transfers title without any formalities
• C) C) It invalidates the instrument
• D) D) It requires a witness signature

Q17: 17. What is the significance of delivery in the process of negotiation under Section 14?

• A) A) It signifies acceptance of the instrument
• B) B) It ensures the transfer of possession
• C) C) It indicates the maturity date
• D) D) It cancels the instrument

Q18: 18. In a scenario where an instrument is payable to order, who has the power to negotiate it?

• A) A) Any holder in possession
• B) B) Only the drawer
• C) C) Only the payee
• D) D) Bank representative

Q19: 19. How does negotiation differ from mere transfer of a negotiable instrument?

• A) A) Negotiation requires written consent
• B) B) Transfer requires endorsement
• C) C) Negotiation involves consideration
• D) D) Transfer involves delivery

Q20: 20. In a case where an instrument is negotiated without delivery, what is the legal status of the negotiation?

• A) A) Valid
• B) B) Invalid
• C) C) Conditional
• D) D) Reversible

Q21: 21. What happens if an instrument is negotiated after it has been dishonored?

• A) A) It becomes non-negotiable
• B) B) It loses its value
• C) C) It can still be negotiated
• D) D) It requires re-issuance

Q22: 22. How does negotiation impact the liability of the endorser?

• A) A) It increases the liability
• B) B) It reduces the liability
• C) C) It shifts the liability to the drawer
• D) D) It nullifies the liability

Q23: 23. What is the consequence of negotiation without endorsement under Section 14?

• A) A) The instrument becomes void
• B) B) The instrument remains valid
• C) C) The instrument requires revalidation
• D) D) The instrument is returned to the drawer

Q24: 24. In a real-life scenario, if an instrument is lost during negotiation, who bears the risk of loss?

• A) A) Holder
• B) B) Endorser
• C) C) Drawer
• D) D) Bank

Q25: 25. How does negotiation protect the rights of the transferee in a negotiable instrument?

• A) A) By providing immunity from liability
• B) B) By ensuring clear transfer of ownership
• C) C) By requiring multiple endorsements
• D) D) By mandating registration with the bank