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CS Executive · Jurisprudence, Interpretation and General Laws · Law relating to Negotiable Instruments

A foreign bill of exchange is drawn in a country whose law requires protest on dishonour. Under the Negotiable Instruments Act, 1881, when must such a foreign bill be protested for dishonour?

A foreign bill must be protested for dishonour when protest is required by the law of the place where it is drawn. Section 104 uses the place of drawing as the test, not the place of payment, and does not make protest compulsory in every case.

  1. AAlways, regardless of the law of any place
  2. BOnly when the bill is accepted in India
  3. CWhen protest is required by the law of the place where the bill is drawnCorrect
  4. DWhen protest is required by the law of the place where the bill is payable

Explanation

Section 104 says foreign bills of exchange must be protested for dishonour when the law of the place where they are drawn requires such protest. The place of payment is not the test under this section. Protest is therefore not universal.

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