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CMA Foundation · Fundamentals of Business Laws and Business Communication · Negotiable Instruments Act, 1881

A promissory note states the maker will pay Rs. 10,000 to Vikram but specifies no time for payment. Under the Negotiable Instruments Act, 1881, the note is:

The note is payable on demand. Section 19 states that a promissory note or bill of exchange in which no time for payment is specified, and also a cheque, are payable on demand, so the omission does not invalidate it.

  1. AInvalid because time of payment is essential
  2. BPayable after one year from its date
  3. CPayable on demandCorrect
  4. DPayable only after the maker's death

Explanation

Section 19 provides that a promissory note or bill of exchange in which no time for payment is specified, and a cheque, are payable on demand. The note therefore remains valid. No period such as one year is prescribed by this section.

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