Q1: 1. What is the key characteristic of a cheque payable to order under Section 85 of the Negotiable Instruments Act 1881?

• A) A) It can only be transferred by endorsement
• B) B) It can only be transferred by delivery
• C) C) It can be transferred by both endorsement and delivery
• D) D) It cannot be transferred

Q2: 2. In a real-life scenario, if a cheque payable to order is transferred by mere delivery without endorsement, what legal implications may arise?

• A) A) The transfer is valid
• B) B) The transfer is invalid
• C) C) The transferee has no rights to the cheque
• D) D) The transferee can negotiate the cheque freely

Q3: 3. Who is authorized to negotiate a cheque payable to order under Section 85?

• A) A) Only the payee mentioned on the cheque
• B) B) Only the drawer of the cheque
• C) C) Only the holder in due course
• D) D) Both the payee and subsequent holders

Q4: 4. If a cheque payable to order is lost or stolen, what action should the rightful payee take to prevent unauthorized transfer?

• A) A) Report the loss to the bank and request a new cheque
• B) B) File a police report and inform the drawer of the cheque
• C) C) Endorse the cheque and transfer it to a trusted party
• D) D) Ignore the loss and hope for the best

Q5: 5. Can a cheque payable to order be negotiated by a person not named as the payee on the cheque?

• A) A) Yes, with endorsement by the payee
• B) B) No, only the named payee can negotiate it
• C) C) Yes, with approval from the bank
• D) D) No, it is strictly non-negotiable

Q6: 6. In case of a dispute regarding the negotiation of a cheque payable to order, which party has the burden of proving the validity of the transfer?

• A) A) The drawer of the cheque
• B) B) The payee mentioned on the cheque
• C) C) The holder in due course
• D) D) The transferee

Q7: 7. Under Section 85, what legal protection does a holder in due course of a cheque payable to order enjoy?

• A) A) Immunity from any defects in the title of the transferor
• B) B) Limited liability in case of dishonor of the cheque
• C) C) Automatic entitlement to double the amount on the cheque
• D) D) Ability to negotiate the cheque without endorsement

Q8: 8. If a cheque payable to order is dishonored by the bank, what recourse does the holder in due course have against the drawer?

• A) A) Legal action for double the amount of the cheque
• B) B) Legal action for the full amount of the cheque
• C) C) No recourse as the bank is solely responsible
• D) D) Request a replacement cheque from the bank

Q9: 9. What is the significance of the endorsement on a cheque payable to order under Section 85?

• A) A) It signifies the approval of the bank for negotiation
• B) B) It transfers the ownership rights to the endorsee
• C) C) It voids the cheque if not done by the payee
• D) D) It is optional and does not impact negotiation

Q10: 10. How does the negotiation process of a cheque payable to order differ from a cheque payable to bearer?

• A) A) Cheque payable to order requires endorsement, while bearer cheque does not
• B) B) Cheque payable to bearer requires endorsement, while order cheque does not
• C) C) Both types require endorsement for negotiation
• D) D) Neither type requires endorsement for negotiation