UPSC Mains Law Paper Topic : Negotiable Instruments Act, 1881

UPSC Mains Law Paper Topic : Negotiable Instruments Act, 1881

  1. A cheque payable to A or his order is endorsed by B forging the signature of A. The drawee bank pays the amount. What is the legal position of the bank? If the forged signature were that of the drawer would the legal position of the bank , change? (93/II/4b/30)
  2. What constitutes ‘material alternation’ of a negotiable instrument and what are its effects? (93/II/4a/30)
  3. Discuss the various ways under the Negotiable Instruments Act in which the liability on a ‘negotiable instrument’  is discharged. (94/II/8b/30)
  4. A draws a cheque payable to bearer and hands it over to B. B crosses it and endorses it in favour of C and delivers it to him. D steals the cheque from C and presents it for payment before the bank which makes the payment over the counter. C sues the bank. Decide. (95/II/8b/30)
  5. “The greatest element of negotiability is the acquisition of property by your own conduct, not by another’s, that if you can take it bonafide and for value, nobody can deprive you of it.” Examine. (96/II/8a/30)
  6. A sold a television by auction . It was knocked down in favour of B/ who was allowed to take it on the condition that he would give a cheque for the price and the ownership would pass only when the cheque was cleared. The cheque given by B was not cleared, but in the meanwhile B sold the television to C. Discuss the validity of the title to C. (96/II/7b/30)
  7. The plaintiff bank made payment of certain crossed cheques to the defendant bank. The latter informed their customer-payee of the cheques that the payment had been received for the cheques. It then turned out that the cheques were forged. The plaintiff used the defendant bank and his customer to recover back the amount contending that the payment had been made under the mistaken belief that the cheques were genuine. Decide. (97/II/6b/30)
  8. “A cheque is a bill of exchange drawn on a specific banker and is not expressed to be payable otherwise than on demand” Examine. (97/II/5d/20)
  9. What is the legal validity of a negotiable instrument where the promisor of the  81 (Main) Law—Topic Wise Paper note simply signs a stamp paper for a promissory note of Rs. 5,000 but he did not write anything excepting merely signing on a blank stamp paper? (98/II/5d/20)
  10. Explain, citing relevant case law, whether he penal provisions of Section 138 of the Negotiable Instruments Act cover a case where a cheque is dishonoured by a bank on the ground that the drawer of the cheque has closed the particular account on which he has drawn the cheque. (99/II/5d/20)
  11. A banker’s cheque is a peculiar sort of instrument in many respects resembling a bill of exchange, but in some entirely different. Expalin, highlighting the distinctive features of these two instruments. (99/II/8a(i)(/15)
  12. The plaintiff bank paid cash over the counter on a crossed cheque on which the defendant had forged the payee’s endorsement. Can they claim return of the money by contending that it was paid by mistake? (99/II/6b(ii)/15)
  13. A cheque is drawn payable to “B or order” and delivered to B. It is stolen and B’s endorsement is forged. The Bank pays the cheque and debits the drawer’s account. B uses the Bank and the drawer. Decide. “ (99/II/8a(ii)/15)
  14. “ A dismissed his servant B from service and for his wages gave him a draft in the following words “Mr. X will much oblige Mr. A by paying to Mr. B or order Rs. 200 on his account - A”. Is this draft a bill of exchange? (00/II/6b(ii)/15)
  15. What is forgery? What are the effect of forged indorsement on a negotiable instrument? (00/II/8a(i)/15)
  16. What is meant by material alternation of a negotiable instrument? What is the legal effect of such material alternation?  (00/II/6b(i)/15)
  17. Discuss the circumstances in which a bill of exchange is said to be dishonoured. What are the consequences of such dishonour? (01/II/8a/30)
  18. “Once a bearer instrument is always a bearer instrument.” Discuss. (01/II/5d/20)
  19. What conditions an instrument must possess to become negotiable? How do you distinguish negotiability from endorsement? Explain with illustrations. (02/II/7a/30)
  20. “A cheque marked ‘not negotiable’ is nevertheless negotiable.” Discuss. (03/II/5c/20)
  21. Examine the reasons which make it necessary that there should be a concept like “holder in due course” in the law of negotiable instruments. State the characteristics of a “holder in due course” and his privileges and protections under the Negotiable Instruments Act, 1881. (03/II/7a/30)
  22. Distinguish between Holder and Holder in due Course. Support your answer with decided cases. (04/II/6a/30)
  23. “Any material alteration of a negotiable instrument renders the same void.” Discuss. (06/II/5d/20)
  24. What is meant by ‘material alteration’ in the negotiable instrument? Under what circumstances an alteration in the negotiable instrument may be treated as material alteration under the Negotiable Instruments Act, 1881? State the effect of such alteration. (07/II/8b/30)
  25. Who can make negotiable instrument? Whether a promissory note duly executed in favour of minor is void? Give reasons. (07/II/8a/30)
  26. “The object of Sec. 138 of the Negotiable Instruments Act, 1881 is to inculcate  (Main) Law—Topic Wise Paper 82 faith in the efficacy of banking operations and credibility in transacting business on negotiable instruments.” Elucidate with the help of the latest Supreme Court cases. (08/II/ 7a/ 30)
  27. Explain the concept of ‘Holder’ and ‘Holder in due course’ as envisaged in the Negotiable Instruments Act and also examine the privileges and protections to which they are entitled under the Act. Illustrate your answer with decided cases. (09/II/7b/30)
  28. “A cheque marked ‘not negotiable’ is neverthless negotiable”. Comment. (09/II/5c/20)
  29. “Tort is concerned with the allocation on prevention of losses which are bound to occur in society.” Discuss. (11/II/1c/15)
  30. “The great element of negotiability is the acquisition of property by your own conduct, not by another’s, that if you take it bonafide and for value nobody can deprive you of it.” Explain. (11/II/1c/15)
  31. “Once an instrument passes through the hands of a holder in due course, it is purged of all defects, it is true like a current coin.” Explain (13/II/5e/10)






Printed Study Material for IAS PRE cum Mains General Studies