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

Under the Negotiable Instruments Act, 1881, when a delay in presentment for acceptance or payment is excused, which of the following must the holder show?

Delay in presentment is excused when it is caused by circumstances beyond the holder's control and is not attributable to his own default, misconduct or negligence. Once the cause of delay ends, presentment must be made within a reasonable time.

  1. AThe delay was caused by circumstances beyond his control and not imputable to his default, misconduct or negligenceCorrect
  2. BThe delay was agreed to orally by the drawee
  3. CThe delay was shorter than thirty days
  4. DThe delay occurred only because of a public holiday

Explanation

The Act excuses delay only when it arises from circumstances beyond the holder's control and is not due to his default, misconduct or negligence. An oral agreement by the drawee, a fixed thirty-day limit or a public holiday alone is not the statutory test.

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