Skip to content

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

Under the Negotiable Instruments Act, 1881, which of the following is a negotiable instrument as defined in Section 13, provided it is payable either to order or to bearer?

The Act defines a negotiable instrument as a promissory note, bill of exchange or cheque payable either to order or to bearer. Documents such as railway receipts, bills of lading and insurance policies are not covered by this definition.

  1. AA promissory note, bill of exchange or chequeCorrect
  2. BA share warrant, railway receipt or bill of lading
  3. CA fixed deposit receipt, insurance policy or bill of lading
  4. DA dividend warrant, postal money order or railway receipt

Explanation

Section 13(1) states that a negotiable instrument means a promissory note, bill of exchange or cheque payable either to order or to bearer. The other options list documents such as railway receipts, bills of lading and insurance policies, which the Act's definition does not cover.

Did you get it right without looking?

One question tells you little. A timed set on Negotiable Instruments Act, 1881 shows your real accuracy, how long you take and where you lose marks.

Practise Negotiable Instruments Act, 1881Free diagnostic mock

More Negotiable Instruments Act, 1881 questions