Q1: 1. What is the purpose of the Preamble in the Negotiable Instruments Act 1881?

• A) A) To define the scope of negotiable instruments
• B) B) To provide an overview of the key provisions of the Act
• C) C) To establish the authority of the Act
• D) D) All of the above

Q2: 2. The Preamble of the Negotiable Instruments Act 1881 serves as

• A) A) A guideline for drafting negotiable instruments
• B) B) A statement of legislative intent
• C) C) A definition of negotiability
• D) D) A historical background of the Act

Q3: 3. Which section of the Negotiable Instruments Act 1881 deals with the Interpretation-clause?

• A) A) Section 1
• B) B) Section 2
• C) C) Section 3
• D) D) Section 4

Q4: 4. The Interpretation-clause in the Negotiable Instruments Act 1881 defines

• A) A) The term 'negotiable instrument'
• B) B) The criteria for determining negotiability
• C) C) The roles of parties involved in a negotiable instrument
• D) D) The penalties for non-compliance with the Act

Q5: 5. According to the Interpretation-clause, a negotiable instrument must

• A) A) Be signed by the issuer
• B) B) Be payable to a specific person
• C) C) Be transferable by endorsement or delivery
• D) D) All of the above

Q6: 6. In real life, a cheque issued by a company to pay its suppliers would be considered a

• A) A) Negotiable instrument
• B) B) Non-negotiable instrument
• C) C) Promissory note
• D) D) Bill of exchange

Q7: 7. The Interpretation-clause helps in determining the validity of a negotiable instrument based on

• A) A) Its date of issuance
• B) B) The signatures of the parties involved
• C) C) The amount mentioned on the instrument
• D) D) All of the above

Q8: 8. Which of the following is NOT a characteristic of a negotiable instrument as defined in the Interpretation-clause?

• A) A) Transferability
• B) B) Unconditional promise to pay
• C) C) Fixed maturity date
• D) D) Issued in writing

Q9: 9. A promissory note is an example of a negotiable instrument because it

• A) A) Contains an order to pay a specific amount
• B) B) Is payable to a specified person
• C) C) Is transferable by endorsement
• D) D) None of the above

Q10: 10. The Interpretation-clause in the Negotiable Instruments Act 1881 clarifies the legal implications of

• A) A) Dishonor of a negotiable instrument
• B) B) Unauthorized alteration of an instrument
• C) C) Forgery of signatures
• D) D) All of the above

Q11: 11. A bill of exchange differs from a promissory note in that

• A) A) It involves three parties
• B) B) It is payable on demand
• C) C) It does not require acceptance
• D) D) It does not require stamping

Q12: 12. When a negotiable instrument is dishonored, the holder can take legal action against

• A) A) The issuer only
• B) B) The endorser only
• C) C) Both the issuer and endorser
• D) D) The bank of the issuer

Q13: 13. The Negotiable Instruments Act 1881 applies to negotiable instruments such as

• A) A) Cash
• B) B) Bank drafts
• C) C) Digital wallets
• D) D) Gift cards

Q14: 14. In a real-life scenario, a person can use a negotiable instrument like a cheque to

• A) A) Transfer ownership of a car
• B) B) Pay for groceries at a supermarket
• C) C) Redeem a gift voucher
• D) D) None of the above

Q15: 15. The Interpretation-clause helps in determining the rights and obligations of the parties involved in a negotiable instrument, such as

• A) A) The drawer
• B) B) The payee
• C) C) The endorser
• D) D) All of the above

Q16: 16. Which of the following statements is true about negotiable instruments according to the Interpretation-clause?

• A) A) They must be payable on a specific date
• B) B) They can be issued by individuals only
• C) C) They must be in writing
• D) D) They are not transferable

Q17: 17. A travel agency issuing a ticket to a customer is an example of

• A) A) A negotiable instrument
• B) B) A non-negotiable instrument
• C) C) A bill of exchange
• D) D) A promissory note

Q18: 18. The Interpretation-clause plays a crucial role in

• A) A) Enforcing the Act's provisions
• B) B) Regulating digital payment methods
• C) C) Defining the penalties for fraud
• D) D) None of the above

Q19: 19. A cheque that is post-dated falls under the category of

• A) A) Negotiable instrument
• B) B) Non-negotiable instrument
• C) C) Promissory note
• D) D) Bill of exchange

Q20: 20. The Interpretation-clause helps in resolving disputes related to negotiable instruments by

• A) A) Defining the legal responsibilities of the parties
• B) B) Imposing criminal sanctions on defaulters
• C) C) Providing guidelines for negotiability
• D) D) None of the above

Q21: 21. An endorsement on a negotiable instrument signifies

• A) A) The transfer of ownership rights
• B) B) Cancellation of the instrument
• C) C) Non-payment
• D) D) None of the above

Q22: 22. The Interpretation-clause in the Act ensures that negotiable instruments are

• A) A) Easily forged
• B) B) Secure and reliable
• C) C) Restricted to paper-based transactions
• D) D) Exempt from stamp duty

Q23: 23. A company issuing bonds to raise capital would typically use

• A) A) A bill of exchange
• B) B) A promissory note
• C) C) A debenture
• D) D) A cheque

Q24: 24. The Negotiable Instruments Act 1881 aims to

• A) A) Regulate negotiable instruments
• B) B) Ban the use of promissory notes
• C) C) Promote cash transactions
• D) D) None of the above

Q25: 25. In a court case involving a dishonored cheque, the burden of proof lies with

• A) A) The issuer
• B) B) The payee
• C) C) The endorser
• D) D) The bank