Q1: 1. What is the effect of indorsing an instrument in blank according to Section 54 of the Negotiable Instruments Act 1881?

• A) A) It becomes payable to the indorser
• B) B) It becomes payable to any holder
• C) C) It becomes non-negotiable
• D) D) It becomes void

Q2: 2. If a promissory note is indorsed in blank, who can fill in the name of the transferee?

• A) A) Only the original payee
• B) B) Only the indorser
• C) C) Any subsequent holder
• D) D) The bank only

Q3: 3. True or False: An instrument indorsed in blank can be transferred multiple times without the need to re-indorse it.

• A) A) True
• B) B) False
• C) Correct answer: A) True
• D)

Q4: 4. Which of the following is NOT a consequence of indorsing an instrument in blank?

• A) A) Easy negotiability
• B) B) Increased risk of loss or theft
• C) C) Limited liability for the indorser
• D) D) Restricted transferability

Q5: 5. In a real-life scenario, if a cheque is indorsed in blank and then stolen, who can claim the payment?

• A) A) The original payee
• B) B) The thief who stole the cheque
• C) C) Any holder in due course
• D) D) The bank only

Q6: 6. What happens if an instrument indorsed in blank is lost or stolen?

• A) A) The instrument becomes void
• B) B) The holder loses all rights to the instrument
• C) C) The person who finds it can claim the payment
• D) D) The finder or thief cannot claim payment

Q7: 7. How does indorsing a cheque in blank affect its negotiability?

• A) A) It enhances negotiability
• B) B) It restricts negotiability
• C) C) It renders the cheque non-negotiable
• D) D) It limits the number of times the cheque can be transferred

Q8: 8. If a bill of exchange is indorsed in blank, who becomes the holder of the instrument?

• A) A) The original drawer
• B) B) The banker of the payee
• C) C) Any subsequent holder
• D) D) The indorser

Q9: 9. In a business context, why might a company choose to indorse a promissory note in blank?

• A) A) To limit its liability
• B) B) To restrict the transferability of the note
• C) C) To simplify the process of negotiation
• D) D) To complicate the process of payment

Q10: 10. What is the significance of indorsing a bearer cheque in blank?

• A) A) The cheque becomes payable to the bearer
• B) B) The cheque becomes non-negotiable
• C) C) The drawer loses all rights to the cheque
• D) D) The cheque can only be cashed by the bank

Q11: 11. When an instrument is indorsed in blank, who has the authority to fill in the name of the transferee?

• A) A) Only the original payee
• B) B) Only the indorser
• C) C) Any subsequent holder
• D) D) The bank only

Q12: 12. How does indorsing an instrument in blank impact its transferability?

• A) A) It limits the number of times the instrument can be transferred
• B) B) It allows for multiple transfers without re-indorsement
• C) C) It renders the instrument non-negotiable
• D) D) It restricts the negotiation to a specific person

Q13: 13. In a legal dispute involving an indorsed blank cheque, who has the burden of proving payment?

• A) A) The original payee
• B) B) The indorser
• C) C) The holder in due course
• D) D) The bank

Q14: 14. How does indorsing a promissory note in blank affect the liability of the indorser?

• A) A) It increases the liability of the indorser
• B) B) It decreases the liability of the indorser
• C) C) It shifts the liability to the payee
• D) D) It absolves the indorser of any liability

Q15: 15. If a bearer cheque is indorsed in blank and then stolen, who can claim the payment?

• A) A) The original drawer
• B) B) The thief who stole the cheque
• C) C) Any holder in due course
• D) D) The bank only

Q16: 16. What is the primary purpose of indorsing an instrument in blank?

• A) A) To restrict its negotiability
• B) B) To complicate the negotiation process
• C) C) To enhance its transferability
• D) D) To invalidate the instrument

Q17: 17. In a scenario where a promissory note is indorsed in blank and subsequently misplaced, who can claim rights to the note?

• A) A) The original payee
• B) B) The finder of the note
• C) C) Any holder in due course
• D) D) The bank only

Q18: 18. How does indorsing a negotiable instrument in blank facilitate ease of transfer?

• A) A) It limits the number of times the instrument can be transferred
• B) B) It allows for direct payment to the indorser
• C) C) It enables subsequent holders to fill in their own names
• D) D) It restricts the negotiation to a specific person

Q19: 19. What is the legal implication of indorsing a cheque in blank?

• A) A) The cheque can only be cashed by the bank
• B) B) The drawer loses all rights to the cheque
• C) C) The cheque becomes payable to any holder
• D) D) The cheque becomes non-negotiable

Q20: 20. When an instrument indorsed in blank is presented for payment, who is entitled to receive the payment?

• A) A) The original payee
• B) B) The indorser
• C) C) Any holder in due course
• D) D) The bank

Q21: 21. In a case where an instrument indorsed in blank is damaged and illegible, how can the holder establish ownership?

• A) A) By providing a copy of the original instrument
• B) B) By obtaining a new indorsement from the payee
• C) C) By presenting a valid identification document
• D) D) By proving possession and tracing the origin of the instrument

Q22: 22. What is the primary advantage of indorsing a promissory note in blank?

• A) A) Limited liability for the indorser
• B) B) Enhanced negotiability and transferability
• C) C) Increased security against fraud
• D) D) Simplified payment process for the drawer

Q23: 23. If an instrument indorsed in blank is misplaced and subsequently found by a third party, what rights does the finder have?

• A) A) Full ownership rights to the instrument
• B) B) No rights as the instrument is void
• C) C) The right to claim payment as a holder in due course
• D) D) The obligation to return the instrument to the original payee

Q24: 24. How does indorsing a cheque in blank impact the risk of fraud or misuse?

• A) A) It reduces the risk of fraud
• B) B) It increases the risk of fraud
• C) C) It has no impact on the risk of fraud
• D) D) It makes the cheque non-negotiable

Q25: 25. In a scenario where an indorsed blank cheque is wrongfully filled out for a larger amount, who bears the liability for the excess amount?

• A) A) The original payee
• B) B) The indorser
• C) C) The bank
• D) D) The drawer