Judiciary Mcqs Of The Day: Negotiable Instruments Act, 1881

Q1. In which of the following sections describe that “bank’s slip prima facie evidence of certain facts.”
a) Section 146
b) Section 145
c) Section 144
d) Section 143-A
 
Answer – a) Section 146
Explanation - 
Section 146 of the Negotiable Instruments Act, 1881, states that a bank’s slip or memo is considered prima facie evidence of certain facts, particularly in relation to the dishonor of a negotiable instrument. This means that the bank's slip can be used as initial proof without further evidence to support the claim of dishonor.
The section reduces the burden on the complainant to prove dishonor by allowing the bank's slip or memo to be accepted as evidence. This helps in expediting trials related to cheque dishonor by avoiding the need for extensive proof and corroboration regarding the dishonor of the cheque.
Q2. Where the dispute is settled between the parties, conviction and sentence of the defaulter can be set aside in view of the fact that the ………. Act allows compounding the offence.
 
a) Section 138
b) Section 139
c) Section 141
d) Section 147
 
Answer – d) Section 147
Explanation –
Section 147 of the Negotiable Instruments Act, 1881, allows for the compounding of offences under this Act. This means that if the dispute between the parties is settled, the offence can be compounded, leading to the conviction and sentence of the defaulter being set aside.
This section encourages the settlement of disputes out of court, promoting a conciliatory approach over litigation.
It provides flexibility to the parties to resolve their disputes amicably, which can save time and resources for both the judiciary and the parties involved.

Q3. In which of the following the hon’ble supreme court held that in a case arising from Negotiable instruments act, successive sentences maybe directed to run concurrently if both transactions are part of single transaction?
a) Damodar s Prabhu vs Sayed babalat H
b) Don Ayengia vs State of Assam & ors
c) Mahindra & Mahindra financial services Ltd. & Anr. Vs. Rajiv Dubey
d) Shyam pal vs dayawati besoya & or
 
Answer- d) Shyam pal vs dayawati besoya & or
 Explanation:
In the case of Shyam Pal vs Dayawati Besoya & Ors, the Hon’ble Supreme Court of India addressed the issue of whether successive sentences arising from different complaints under Section 138 of the Negotiable Instruments Act, 1881, should run concurrently or consecutively. The court held that if the transactions form part of a single transaction, it is permissible for the sentences to run concurrently.
This case is significant as it provides clarity on the execution of sentences in cases involving multiple cheque bounces that are part of the same transaction or series of transactions. The court emphasized the principle of fairness and judicial discretion in such matters.
If the offenses are part of the same transaction or are interlinked in such a way that they form a single transaction, the court may direct that the sentences run concurrently. This is to ensure fairness and avoid unduly harsh punishment.
The court highlighted the need for judicial discretion in deciding whether sentences should run concurrently or consecutively. The decision should be based on the facts and circumstances of each case.

 
Q4. The offences under chapter XVII of Negotiable Instrument Act, 1881 shall be tried by
a) Judicial magistrate second class
b) Judicial magistrate first class 
c) Metropolitan magistrate 
d) Both b and c
 
Answer- d) Both b and c
 Explanation:
Chapter XVII of the Negotiable Instruments Act, 1881, deals with penalties in cases of dishonor of certain cheques for insufficiency of funds, including Section 138.
These magistrates have the jurisdiction to try offenses under the Negotiable Instruments Act, including those in Chapter XVII. The dishonor of cheques under Section 138 is punishable by imprisonment, which falls within their jurisdiction.
In metropolitan areas, offenses under Chapter XVII can be tried by Metropolitan Magistrates who have equivalent jurisdiction and powers as the Judicial Magistrates First Class.
 
Q5- In which judgement, the Hon’ble supreme court laid down that a complaint based on a second or successive dishonor of cheque is maintainable, if no complaint based on an earlier dishonor of cheque followed by statutory notice issued on the basis thereof had been filed:
a) M.S.R Leathors Vs S. Palaniappan & Anr
b) Sadanandan Bhadran Vs Madhavan Sunil Kumar
c) Sil Import USA Vs Exim Aides Silk Exporters Banglore 
d) Krishna Exports & Ors vs Raju Das
 
Answer – a) M.S.R Leathors Vs S. Palaniappan & Anr
 Explanation: 
In this case, the Hon’ble Supreme Court of India clarified that a complaint based on a second or successive dishonor of a cheque is maintainable, provided that no complaint was filed based on an earlier dishonor of the cheque followed by the issuance of a statutory notice.
The court established that the Negotiable Instruments Act does not prevent the payee from presenting the cheque multiple times within the validity period. If the cheque is dishonored each time it is presented and no prior complaint was filed after an earlier dishonor, a new complaint can be lodged.
 
 
Q6. Under section 143 of the Negotiable Instrument Act the trials shall be liable to conclude after filing of complaint within what period?
a) 2 months 
b) 6 months 
c) 1 year 
d) 2 year
 
Answer- b) 6 months
 Explanation:
Under Section 143 of the Negotiable Instruments Act, 1881, the trial of cases related to the dishonor of cheques should be conducted as expeditiously as possible, and efforts should be made to conclude the trial within 6 months from the date of filing the complaint. This provision aims to ensure a speedy resolution of cheque dishonor cases, providing timely justice to the aggrieved party


Q7. Which of the following conditions to be fulfilled to constitute an offence under 138 of the Negotiable Act, 1881?
 a) The cheque must have been issued in discharge of a legally enforceable debtor liability .
b) The cheque must have been presented to the drawee bank, either personally or through a collecting banker 
c) The drawer must have failed to make the payment within 20 days of receipt of the notice 
d) Both a and b 
 
 Answer – d) Both a and b 
Explanation:
To constitute an offence under Section 138 of the Negotiable Instruments Act, 1881, the following conditions must be fulfilled-
The cheque must have been issued in discharge of a legally enforceable debt or liability. This means the cheque must be issued to settle an obligation that is legally binding.
The cheque must have been presented to the drawee bank, either personally or through a collecting banker. This ensures that the cheque has been formally submitted for payment.
 
 Q8. What is the statutory limit for a holder to file a complaint for dishonor of cheque under the Negotiable Instrument Act?
a) 30 days 
b) 45 days 
c) 60 days 
d) 90 days
 

Answer- a) 30 days
 Explanation: 
Under the Negotiable Instruments Act, 1881, the statutory limit for a holder to file a complaint for the dishonor of a cheque is 30 days. This period begins from the date the holder receives information from the bank regarding the return of the cheque unpaid. The holder must then issue a demand notice to the drawer, demanding payment within 15 days. If the drawer fails to make the payment within those 15 days, the holder has an additional 30 days to file a complaint in the appropriate court.
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 Q9. A _______ is a bill of exchange drawn on a specified banker and not express to be a payable otherwise than on demand
a) Promissory note 
b) Cheque 
c) Bill of exchange 
d) None of the above
 
Answer- b) Cheque
 Explanation: 
A cheque is a bill of exchange drawn on a specified banker and is not expressed to be payable otherwise than on demand. This means that a cheque is a type of bill of exchange that orders a bank to pay a specific amount from a person’s account to the person in whose name the cheque has been issued.
A cheque is specifically drawn on a banker and is always payable on demand. It is an order to the bank to pay a certain amount of money from the drawer’s account to the person named on the cheque, the payee. Unlike promissory notes, cheques are drawn on a bank and cannot be post-dated to be payable at a future date. 
 
Q10. Check bouncing cases charged U/s 138 of Negotiable instruments Act is trialed by-
a) Bank tribunal 
b) consumer forum 
c) magistrate court 
d) session court
 
Answer- c) magistrate court
Explanation:
Check bouncing cases under Section 138 of the Negotiable Instruments Act, 1881, are tried by a Magistrate Court. This section deals with the dishonor of cheques due to insufficient funds or other reasons, and the jurisdiction to try such offences lies with the Judicial Magistrate of the First Class or a Metropolitan Magistrate, ensuring that the legal process for dishonored cheques is handled efficiently and within the proper judicial framework.