Skip to content

CSEET · Business Laws and Management · Elements of Law relating to Negotiable Instruments

Under the provisions of the Negotiable Instruments Act, 1881 on dishonour of a cheque for insufficiency of funds, the payee must send a written demand notice to the drawer within how many days of receiving information from the bank about the return of the cheque unpaid?

The notice must be given within thirty days of the payee receiving information from the bank about the unpaid return of the cheque. The fifteen-day period is a different one: it is the time allowed to the drawer to pay after receiving the notice.

  1. A15 days
  2. B30 daysCorrect
  3. C45 days
  4. D60 days

Explanation

Section 138 proviso (b) requires the payee or holder in due course to give written notice of demand to the drawer within thirty days of receiving information from the bank that the cheque was returned unpaid. Fifteen days is the period which the drawer gets to pay after receiving the notice, not the period for sending the notice.

Did you get it right without looking?

One question tells you little. A timed set on Elements of Law relating to Negotiable Instruments shows your real accuracy, how long you take and where you lose marks.

Practise Elements of Law relating to Negotiable InstrumentsFree diagnostic mock

More Elements of Law relating to Negotiable Instruments questions