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CMA Intermediate · Business Laws and Ethics · Negotiable Instruments Act, 1881

A bill must be protested within a specified time. The holder has it noted for protest before that time expires, but the formal protest is drawn up only after the time has passed. Under the Act, what is the position?

Noting before the specified time expires is sufficient. The formal protest may be drawn up at any later time and is treated as made on the date of noting. The holder therefore does not lose rights merely because the formal protest came after the deadline.

  1. AThe noting is sufficient and the formal protest may be extended later as of the date of the notingCorrect
  2. BThe bill is discharged because the formal protest was made late
  3. CThe holder must note the bill again after the formal protest is drawn up
  4. DThe noting has no effect and the holder loses the right to recover from prior parties

Explanation

Section 104A says it is sufficient that the bill was noted for protest before the specified time expired or the further proceeding was taken. The formal protest may be extended at any time afterwards as of the date of the noting. Hence late formal protest does not defeat the holder.

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