Question

Kinds of Negotiable Instruments
Foreign bill of exchange must be protested for dishonour.

• A. True
• B. False
• C. Partly true
• D. Partly false

Answer 1

Answer: (A)

True

Negotiable instruments may be inland or foreign. A bill of exchange is an inland bill because it is both drawn and payable within India or drawn within the British Isles on a person resident in India. When a negotiable instrument is dishonoured, it should be noted for non-acceptance or non payment (as the case may be). This is where the notary presents the dishonoured instrument to the defaulting party for acceptance or payment and recording on the instrument the reason for dishonour. Noting must take place at a reasonable time of day on the date due date or the next succeeding business day.

A foreign negotiable instrument as opposed to an inland negotiable instrument which is dishonoured, i.e. not accepted or paid by the due date, must be protested in order for action to be taken on it.