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CA Foundation · Business Laws · The Negotiable Instruments Act, 1881

Ramesh draws a bill on Suresh payable 45 days after sight. Ramesh hands it to Mahesh, the payee, on 1 March. Mahesh wants to hold Ramesh liable on the bill. Which step is essential before the bill can mature for payment?

The holder must present a bill payable after sight to the drawee for acceptance within a reasonable time. This is required because the due date can only be fixed from the date of acceptance or noting, so payment cannot be demanded until acceptance occurs.

  1. AMahesh must present it to Suresh for acceptance within a reasonable timeCorrect
  2. BMahesh must present it to Suresh for payment on the day of drawing
  3. CMahesh must get it noted by a notary before presenting it to Suresh
  4. DMahesh must obtain Ramesh's fresh consent before presenting it to Suresh

Explanation

A bill payable after sight must be presented for acceptance, as its due date cannot be fixed until it is accepted or noted for non-acceptance. The holder must present it within a reasonable time after drawing. Presentment for payment cannot be made on the drawing date, since the bill is not yet due. Noting by a notary is only for dishonour, and no fresh consent from the drawer is required.

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