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

Ravi Traders holds a bill of exchange that was dishonoured by non-payment. Which of the following is a correct statement about the steps of noting and protest under the Act?

Where protest is required within a specified time, it is enough that the bill was noted before that time ended. The formal protest can be drawn later and is treated as made on the date of noting. The other statements misstate the Act.

  1. AWhere protest is required within a time, noting before that time is sufficient and the formal protest may follow, dated as of the notingCorrect
  2. BNoting is valid only if made after the formal protest has been drawn up
  3. CProtest of a foreign bill is never required, whatever the law of the place of drawing
  4. DProof of protest makes the dishonour conclusive and cannot be rebutted

Explanation

Under Section 104A noting within the time suffices and the formal protest can be extended later as of the date of noting. Noting after formal protest reverses the sequence. Section 104 requires protest of foreign bills where the law of the place of drawing so requires, and Section 119 raises only a rebuttable presumption.

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