Question

Classification of Negotiable Instruments
A promissory note, bill of exchange or cheque is payable to bearer when -.

• A. it is expressed to be payable to a particular person
• B. it is expressed to be further transferable
• C. the only or last endorsement on the instrument is an endorsement in blank
• D. if the holder obtains it in due course

Answer 1

Answer: (C)

the only or last endorsement on the instrument is an endorsement in blank

As per section 13 of the Negotiable Instruments Act, 1881, a “negotiable instrument” means a promissory note, bill of exchange or cheque payable either to order or to bearer. Also, the explanation (ii) of the section provides for that a promissory note, bill of exchange or cheque is payble to bearer which is expressed to be so payable or on which the only or last indorsement is an indorsement in blank.