Skip to content

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

Which of the following is the maximum punishment prescribed by Section 138 for dishonour of a cheque for insufficiency of funds?

Section 138 prescribes imprisonment which may extend to two years, or a fine which may extend to twice the amount of the cheque, or both. The court may impose either punishment or both together, subject to the provisos being satisfied.

  1. AImprisonment up to one year, or fine up to the amount of the cheque, or both
  2. BImprisonment up to two years, or fine up to twice the amount of the cheque, or bothCorrect
  3. CImprisonment up to three years, or fine up to three times the amount of the cheque, or both
  4. DImprisonment up to six months only, with no fine

Explanation

Section 138 provides imprisonment for a term which may extend to two years, or fine which may extend to twice the amount of the cheque, or both. The one-year and cheque-amount options understate the penalty.

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