NI Act MCQ Quiz in मल्याळम - Objective Question with Answer for NI Act - സൗജന്യ PDF ഡൗൺലോഡ് ചെയ്യുക

Last updated on Mar 11, 2025

നേടുക NI Act ഉത്തരങ്ങളും വിശദമായ പരിഹാരങ്ങളുമുള്ള മൾട്ടിപ്പിൾ ചോയ്സ് ചോദ്യങ്ങൾ (MCQ ക്വിസ്). ഇവ സൗജന്യമായി ഡൗൺലോഡ് ചെയ്യുക NI Act MCQ ക്വിസ് പിഡിഎഫ്, ബാങ്കിംഗ്, എസ്എസ്‌സി, റെയിൽവേ, യുപിഎസ്‌സി, സ്റ്റേറ്റ് പിഎസ്‌സി തുടങ്ങിയ നിങ്ങളുടെ വരാനിരിക്കുന്ന പരീക്ഷകൾക്കായി തയ്യാറെടുക്കുക

Latest NI Act MCQ Objective Questions

Top NI Act MCQ Objective Questions

NI Act Question 1:

Who has jurisdiction to try the offenses specified in Chapter XVII of the Negotiable Instruments Act, 1881?

  1. High Court Judge
  2. Judicial magistrate first class
  3. Metropolitan magistrate
  4. Both 2 and 3

Answer (Detailed Solution Below)

Option 4 : Both 2 and 3

NI Act Question 1 Detailed Solution

The correct answer is Option 4.

Key Points

  • Chapter XVI of the Negotiable Instrument Act deals with penalties in case of dishonour of cheques for insufficiency of funds in the accounts.
  • Section 142(1)(c) of the act says no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under section 138.
  • In simple words, if the bank refuses to pay the amount mentioned in the cheque due to the lack of funds in the account, it is called dishonour of cheque.
  • Section 138 of the act makes the dishonour of a cheque an offence.

NI Act Question 2:

Section 120 of the Negotiable Instrument Act, 1881 provides that: 

  1. Estoppel against denying capacity of payee to indorse.
  2. Estoppel against denying original validity of instrument.
  3. Estoppel against denying signature or capacity of prior party
  4. Presumption on proof of protest

Answer (Detailed Solution Below)

Option 2 : Estoppel against denying original validity of instrument.

NI Act Question 2 Detailed Solution

The correct answer is Option 2.

Key Points

  • Section 120: Estoppel against denying original validity of instrument.—
    • No maker of a promissory note, and no drawer of a bill of exchange or cheque, and no acceptor of a bill of exchange for the honour of the drawer shall, in a suit thereon by a holder in due course, be permitted to deny the validity of the instrument as originally made or drawn. 

Additional Information

  • Section 119: Presumption on proof of protest
  • Section 121: Estoppel against denying capacity of payee to indorse
  • Section 122: Estoppel against denying signature or capacity of prior party

NI Act Question 3:

Which of the following Section of the Negotiable Instruments Act, 1881, provides for the presumptions on proof of protest ? 

  1. Section 118 
  2. Section 119 
  3. Section 121 
  4. Section 122

Answer (Detailed Solution Below)

Option 2 : Section 119 

NI Act Question 3 Detailed Solution

The correct answer is Option 2.

Key PointsSection 119: Presumption on proof of protest.—

  • In a suit upon an instrument which has been dishonoured, the Court shall, on proof of the protest, presume the fact of dishonour, unless and until such fact is disproved. 

Additional Information

  • Section 118: Presumptions as to negotiable instruments
  • Section 121:  Estoppel against denying capacity of payee to indorse
  • Section 122: Estoppel against denying signature or capacity of prior party

NI Act Question 4:

Mark the correct statements : 

  1. A bill of exchange can be drawn on anyone, including a banker, unlike a cheque, which is drawn on a banker.
  2. Acceptance is necessary for a cheque, but it is not necessary for a bill of exchange.
  3. One can cross a cheque to make it non-negotiable, but one cannot cross a bill of exchange.
  4. Both (1) and (3) 

Answer (Detailed Solution Below)

Option 4 : Both (1) and (3) 

NI Act Question 4 Detailed Solution

The correct answer is Option 4.

Key PointsDifference between cheque and bill-of-exchange

  1. A bill of exchange can be drawn on anyone, including a banker, unlike a cheque, which is drawn on a banker.
  2. According to Section 19 of the Negotiable Instruments Act of 1881, a cheque is always payable immediately; a bill of exchange, however, is either payable immediately or after a certain amount of time.
  3. One can cross a cheque to make it non-negotiable, but one cannot cross a bill of exchange.
  4. Acceptance is not necessary for a cheque, but it is necessary for a bill of exchange.

Additional Information

  • Section 5 of the Negotiable Instruments Act, 1881:  Bill of Exchange 
  • Section 6 of the Negotiable Instruments Act, 1881:  Cheque  

NI Act Question 5:

In which judgment, under the Negotiable Instruments Act, 1881 the Hon'ble Supreme Court held that though compounding requires consent of both the parties, but even in absence of such consent, the Court can, in the interest of justice, on being satisfied that the complainant has been duly compensated, in its discretion, close the proceedings and discharge the accused?

  1. Madhya Pradesh State Legal Service Authority v. Prateek Jain 2015 (1) SCC (Cri) 211
  2. Meters and Instruments Private Limited v. Kanchan Mehta AIR 2017 SC 4594
  3. JIK Industries Ltd. v. Amarlal V. Jumani & Anr. AIR 2012 SC 1079
  4. Damodar S. Prabhu v. Sayyed Bala Lal H. AIR 2010 SC 1907.

Answer (Detailed Solution Below)

Option 2 : Meters and Instruments Private Limited v. Kanchan Mehta AIR 2017 SC 4594

NI Act Question 5 Detailed Solution

The correct answer is option 2.Key Points

  •  In the case of M/S Meters and Instruments Private Limited & Anr. Vs Kanchan Mehta 2018 (1) SCC 560, Hon'ble Supreme Court laid following observations:
    • The nature of offence under section 138 of the N.I Act is primarily related to a civil wrong and has been specifically made a compoundable offence.
    • Though compounding requires consent of both the parties, but even in absence of such consent, the Court can, in the interest of justice, on being satisfied that the complainant has been duly compensated, in its discretion, close the proceedings and discharge the accused.

NI Act Question 6:

What action defines a person as an "indorser" of a negotiable instrument?

  1. Signing the instrument in any manner
  2. Signing the instrument on the back or face for negotiation purposes
  3. Attaching a slip of paper to the instrument
  4. Stamping the instrument with the intention to complete it as negotiable

Answer (Detailed Solution Below)

Option 2 : Signing the instrument on the back or face for negotiation purposes

NI Act Question 6 Detailed Solution

The correct answer is Option 2.

Key Points

  • Section 15 of the NI Act 1881 deals with Indorsement.
  • When the maker or holder of a negotiable instrument signs it, not in their original capacity but for the purpose of negotiation, either on the back or face of the instrument or on an annexed slip of paper, they are considered to have indorsed the instrument.
  • The act of indorsing a negotiable instrument is specifically for the purpose of facilitating its negotiation or transfer to another party.
  • The key criterion that defines someone as an "indorser" is the act of signing the instrument, not in the capacity of the original maker or holder, but specifically for the purpose of negotiation.

NI Act Question 7:

The Negotiable Instruments Act, 1881, does not apply to:

  1. Bank drafts
  2. Promissory notes
  3. Bills of exchange
  4. All of them

Answer (Detailed Solution Below)

Option 1 : Bank drafts

NI Act Question 7 Detailed Solution

The correct answer is Option 1.

Key Points

  • Bank drafts are regulated by the banking laws and are not explicitly covered under the Negotiable Instruments Act, although they function similarly to other negotiable instruments.
  • Section 13 of the Negotiable Instrument Act 1881 says, a “negotiable instrument” means a promissory note, bill of exchange or cheque payable either to order or to bearer.
  • A negotiable instrument may be made payable to two or more payees jointly, or it may be made payable in the alternative to one of two, or one or some of several payees.

NI Act Question 8:

The offence under section 138 shall be inquired into and tried only by a court within whose local jurisdiction: 

  1. If the cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course, as the case may be, maintains the account, is situated. 
  2.  if the cheque is presented for payment by the payee or holder in due course, otherwise through an account, the branch of the drawee bank where the drawer maintains the account, is situated.
  3. Any court having jurisdiction may entertain such a case.
  4. Both a and b 

Answer (Detailed Solution Below)

Option 4 : Both a and b 

NI Act Question 8 Detailed Solution

The correct answer is Option 4.

Key PointsAccording to Section 142(2) of the NI Act, 1881:  The offence under section 138 shall be inquired into and tried only by a court within whose local jurisdiction,—
(a) if the cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course, as the case may be, maintains the account, is situated; or
(b) if the cheque is presented for payment by the payee or holder in due course, otherwise through an account, the branch of the drawee bank where the drawer maintains the account, is situated.
Explanation.—For the purposes of clause (a), where a cheque is delivered for collection at any branch of the bank of the payee or holder in due course, then, the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or holder in due course, as the case may be, maintains the account.

  • Example: A has account with Cannaught Place, New Delhi Branch of ABC Bank. He issues cheque payable at per in favour of B. B has an account with M.G road, Meerut Branch of XYZ Bank. B deposit the said cheque at indirapuram, Ghaziabad Branch of XYZ Bank. The cheque is dishonoured. In this case, complaint will have to filed before the court having local jurisdiction where M.G road, Meerut branch of XYZ is situated. 

NI Act Question 9:

S. ___________ of the Negotiable instruments Act deals with 'noting'. 

  1. 100
  2. 101
  3. 102
  4. 99

Answer (Detailed Solution Below)

Option 4 : 99

NI Act Question 9 Detailed Solution

The correct answer is 99

Key PointsSection 99. Noting.—When a promissory note or bill of exchange has been dishonoured by non-acceptance or non-payment, the holder may cause such dishonour to be noted by a notary public upon the instrument, or upon a paper attached thereto, or partly upon each. Such note must be made within a reasonable time after dishonour, and must specify the date of dishonour, the reason, if any, assigned for such dishonour, or, if the instrument has not been expressly dishonoured, the reason why the holder treats it as dishonoured, and the notary’s charges.

NI Act Question 10:

When a negotiable instrument is delivered conditionally or for a special purpose as a collateral security or for safe custody only, and not for the purpose of transferring absolutely property therein, it is called  

  1. Fictitious Bill 
  2. Inchoate instrument 
  3. Escrow
  4. Clean Bill 

Answer (Detailed Solution Below)

Option 3 : Escrow

NI Act Question 10 Detailed Solution

The correct answer is Option 3. 

Key Points A negotiable instrument that is delivered conditionally or for a special purpose, such as collateral security or safe custody, is called an escrow. In this case, the instrument is not delivered for the purpose of transferring its ownership. 
An escrow is a type of security. It allows a transaction to be carried out safely without the risk of losing money.

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