Q1: 1. What action constitutes dishonour by non-payment of a negotiable instrument under Section 92 of the Negotiable Instruments Act 1881?

• A) A) Failure to present the instrument for payment
• B) B) Failure to make the payment within the specified time after presentment
• C) C) Failure to endorse the instrument
• D) D) Failure to stamp the instrument

Q2: Correct answer: B) Failure to make the payment within the specified time after presentment

• A)
• B)
• C)
• D)

Q3: 2. In a real-life scenario, if a cheque is presented to the bank for payment and the drawer does not have sufficient funds to cover the amount, what is the likely outcome?

• A) A) The cheque will be honoured
• B) B) The cheque will be dishonoured due to non-payment
• C) C) The bank will cover the insufficient funds
• D) D) The drawer will be informed to deposit the required amount

Q4: Correct answer: B) The cheque will be dishonoured due to non-payment

• A)
• B)
• C)
• D)

Q5: 3. Under Section 92 of the Negotiable Instruments Act 1881, what is the consequence of dishonour by non-payment of a promissory note?

• A) A) The payee must reissue a new promissory note
• B) B) The holder can initiate legal action against the drawer
• C) C) The instrument becomes invalid
• D) D) The bank is responsible for the payment

Q6: Correct answer: B) The holder can initiate legal action against the drawer

• A)
• B)
• C)
• D)

Q7: 4. If a bill of exchange is dishonoured by non-payment, who can be held liable under Section 92 of the Negotiable Instruments Act 1881?

• A) A) The acceptor of the bill
• B) B) The drawee of the bill
• C) C) The endorser of the bill
• D) D) The payee of the bill

Q8: Correct answer: A) The acceptor of the bill

• A)
• B)
• C)
• D)

Q9: 5. When a promissory note is dishonoured by non-payment, what legal recourse does the holder have under Section 92 of the Negotiable Instruments Act 1881?

• A) A) File a complaint with the police
• B) B) Initiate civil proceedings against the drawer
• C) C) Tear up the promissory note
• D) D) Request a refund from the bank

Q10: Correct answer: B) Initiate civil proceedings against the drawer

• A)
• B)
• C)
• D)

Q11: 6. In a situation where a cheque is dishonoured due to non-payment, what is the responsibility of the holder as per Section 92 of the Negotiable Instruments Act 1881?

• A) A) Re-present the cheque for payment
• B) B) Cancel the cheque immediately
• C) C) Inform the bank to ignore the dishonour
• D) D) Send a legal notice to the drawer

Q12: Correct answer: A) Re-present the cheque for payment

• A)
• B)
• C)
• D)

Q13: 7. If a bill of exchange is dishonoured by non-payment, what is the usual course of action for the holder under Section 92 of the Negotiable Instruments Act 1881?

• A) A) Destroy the bill of exchange
• B) B) Demand payment from the drawee
• C) C) Seek compensation from the bank
• D) D) Send a notice of dishonour to the drawer

Q14: Correct answer: D) Send a notice of dishonour to the drawer

• A)
• B)
• C)
• D)

Q15: 8. What is the significance of giving notice of dishonour in case of non-payment of a negotiable instrument under Section 92 of the Negotiable Instruments Act 1881?

• A) A) To waive the right to seek payment
• B) B) To inform the bank of the dishonour
• C) C) To hold all parties liable for the payment
• D) D) To preserve the holder's right to take legal action

Q16: Correct answer: D) To preserve the holder's right to take legal action

• A)
• B)
• C)
• D)

Q17: 9. In a real-life scenario, if a promissory note is dishonoured by non-payment, what steps should the holder take as per Section 92 of the Negotiable Instruments Act 1881?

• A) A) Ignore the dishonour and wait for payment
• B) B) Send a notice of dishonour to the drawer
• C) C) Destroy the promissory note
• D) D) Report the matter to the police

Q18: Correct answer: B) Send a notice of dishonour to the drawer

• A)
• B)
• C)
• D)

Q19: 10. When a bill of exchange is dishonoured due to non-payment, what legal remedies are available to the holder under Section 92 of the Negotiable Instruments Act 1881?

• A) A) Cancel the bill of exchange
• B) B) Seek damages from the bank
• C) C) Initiate legal proceedings against the acceptor
• D) D) Request a refund from the drawer

Q20: Correct answer: C) Initiate legal proceedings against the acceptor

• A)
• B)
• C)
• D)

Q21: 11. What is the time limit for giving notice of dishonour in case of non-payment of a negotiable instrument under Section 92 of the Negotiable Instruments Act 1881?

• A) A) Within 24 hours of dishonour
• B) B) Within 48 hours of dishonour
• C) C) Within 72 hours of dishonour
• D) D) Within 7 days of dishonour

Q22: Correct answer: A) Within 24 hours of dishonour

• A)
• B)
• C)
• D)

Q23: 12. In a real-life scenario, if a cheque is dishonoured by non-payment and the holder fails to give notice of dishonour within the prescribed time, what consequences may arise?

• A) A) The drawer will be automatically liable for the payment
• B) B) The holder loses the right to take legal action
• C) C) The bank will cover the amount
• D) D) The cheque becomes invalid

Q24: Correct answer: B) The holder loses the right to take legal action

• A)
• B)
• C)
• D)

Q25: 13. Under Section 92 of the Negotiable Instruments Act 1881, what information must be included in the notice of dishonour for non-payment?

• A) A) Holder's bank account details
• B) B) Reason for dishonour
• C) C) Drawer's phone number
• D) D) Endorser's signature

Q26: Correct answer: B) Reason for dishonour

• A)
• B)
• C)
• D)

Q27: 14. If a promissory note is dishonoured by non-payment and the holder fails to give notice of dishonour to the drawer, what impact does it have on the holder's legal rights?

• A) A) No impact
• B) B) Holder loses the right to sue the drawer
• C) C) Holder is entitled to double the amount
• D) D) Holder can request the bank to pay

Q28: Correct answer: B) Holder loses the right to sue the drawer

• A)
• B)
• C)
• D)

Q29: 15. What is the purpose of providing notice of dishonour in case of non-payment of a negotiable instrument under Section 92 of the Negotiable Instruments Act 1881?

• A) A) To inform the bank of the dishonour
• B) B) To seek compensation from the endorser
• C) C) To hold the drawer liable for payment
• D) D) To waive the right to take legal action

Q30: Correct answer: C) To hold the drawer liable for payment

• A)
• B)
• C)
• D)

Q31: 16. In a real-life scenario, if a bill of exchange is dishonoured by non-payment and the holder fails to give notice of dishonour, what rights does the holder lose?

• A) A) Right to re-present the bill for payment
• B) B) Right to initiate legal action against the acceptor
• C) C) Right to seek help from the bank
• D) D) Right to cancel the bill of exchange

Q32: Correct answer: B) Right to initiate legal action against the acceptor

• A)
• B)
• C)
• D)

Q33: 17. How does the process of dishonour by non-payment impact the relationships between the parties involved in a negotiable instrument transaction?

• A) A) Strengthens trust and cooperation
• B) B) Leads to legal disputes and tensions
• C) C) Promotes transparency and efficiency
• D) D) Enhances financial security

Q34: Correct answer: B) Leads to legal disputes and tensions

• A)
• B)
• C)
• D)

Q35: 18. What steps should a holder take upon receiving notice of dishonour by non-payment of a negotiable instrument under Section 92 of the Negotiable Instruments Act 1881?

• A) A) Ignore the notice
• B) B) Return the instrument to the drawer
• C) C) Initiate legal proceedings against the drawer
• D) D) Notify the bank to cover the amount

Q36: Correct answer: C) Initiate legal proceedings against the drawer

• A)
• B)
• C)
• D)

Q37: 19. In a real-life scenario, if a promissory note is dishonoured by non-payment and the holder gives notice of dishonour to the drawer, what options does the drawer have to rectify the situation?

• A) A) Ignore the notice
• B) B) Pay the amount immediately
• C) C) Destroy the promissory note
• D) D) Request an extension from the holder

Q38: Correct answer: B) Pay the amount immediately

• A)
• B)
• C)
• D)

Q39: 20. How does the concept of dishonour by non-payment in negotiable instruments impact the credibility and reliability of such instruments in commercial transactions?

• A) A) Enhances credibility and trustworthiness
• B) B) Reduces the reliance on negotiable instruments
• C) C) Raises concerns about payment security
• D) D) Improves efficiency in financial transactions

Q40: Correct answer: C) Raises concerns about payment security

• A)
• B)
• C)
• D)

Q41: 21. What legal rights does the holder of a dishonoured negotiable instrument have under Section 92 of the Negotiable Instruments Act 1881?

• A) A) Right to demand double the amount from the drawer
• B) B) Right to cancel the instrument immediately
• C) C) Right to take legal action against the parties involved
• D) D) Right to seek compensation from the bank

Q42: Correct answer: C) Right to take legal action against the parties involved

• A)
• B)
• C)
• D)

Q43: 22. In a scenario where a bill of exchange is dishonoured by non-payment, what recourse does the holder have if the acceptor refuses to make the payment?

• A) A) Seek assistance from the bank
• B) B) Re-present the bill for payment
• C) C) Initiate legal proceedings against the acceptor
• D) D) Cancel the bill of exchange

Q44: Correct answer: C) Initiate legal proceedings against the acceptor

• A)
• B)
• C)
• D)

Q45: 23. How does the process of dishonour by non-payment impact the financial obligations of the parties involved in a negotiable instrument transaction?

• A) A) Relieves the parties from payment responsibilities
• B) B) Shifts the burden of payment to the bank
• C) C) Clarifies the payment obligations of each party
• D) D) Creates legal liabilities for non-payment

Q46: Correct answer: D) Creates legal liabilities for non-payment

• A)
• B)
• C)
• D)

Q47: 24. What are the implications of dishonour by non-payment on the reputation and creditworthiness of the drawer of a negotiable instrument?

• A) A) Enhances reputation and creditworthiness
• B) B) Reduces credibility and trustworthiness
• C) C) Has no impact on reputation
• D) D) Improves financial stability

Q48: Correct answer: B) Reduces credibility and trustworthiness

• A)
• B)
• C)
• D)

Q49: 25. In a real-life scenario, if a cheque is dishonoured by non-payment and the holder decides to take legal action, what steps should the holder follow as per Section 92 of the Negotiable Instruments Act 1881?

• A) A) File a complaint with the police
• B) B) Send a notice of dishonour to the drawer
• C) C) Request the bank to cover the amount
• D) D) Destroy the dishonoured cheque

Q50: Correct answer: B) Send a notice of dishonour to the drawer

• A)
• B)
• C)
• D)