Question

Kinds of Negotiable Instruments
Kavita draws a bill on Shyam for Rs.30,000. Kavita endorsed it to Ram. Ram endorsed it to Rahim. The payee of the bill will be _______

• A. Ram
• B. Kavita
• C. Shyam
• D. Rahim

Answer 1

Answer: (D)

Rahim

There are certain common parties to the negotiable instruments

1. Maker: the person who signs the promissory notes.

2. Drawer: the maker of the Bill of Exchange or a Cheque is called Drawer.

3. Drawee: the person who is directed to pay on whom the bill is drawn.

4. Payee: the person who will receive the money.

5. Acceptor: when the drawee signs on the bill for the consent, he becomes acceptor.

In this case as Kavita is drawing the bill, therefore, she is the drawer whereas Shyam is the drawee, Ram is the endorser and finally the sum is payable to Rahim so he is the payee.