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

Ritu's cheque to Sanjay is dishonoured on 5 March. The bank's return memo reaches Sanjay the same day. Sanjay wishes to prosecute Ritu for dishonour. Within what period must he first send a written demand notice to Ritu for payment?

Sanjay must send the written demand notice within 30 days of receiving the bank's information about the dishonour. After receiving it, Ritu gets 15 days to pay, and only then can a complaint follow.

  1. AWithin 15 days of receiving information of dishonour from the bank
  2. BWithin 30 days of receiving information of dishonour from the bankCorrect
  3. CWithin 60 days of the date of the cheque
  4. DWithin 3 months of receiving the return memo

Explanation

The payee must give a written demand notice to the drawer within 30 days of receiving information from the bank about the dishonour. The drawer then has 15 days from receiving the notice to pay. Option A confuses this with the drawer's payment period.

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