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Under section 118 of the Negotiable Instruments Act, 1881, subject to its proviso and until the…

Section 118(b) presumes a dated instrument was made or drawn on its stated date. Clause (e) presumes that indorsements were made in the order in which they appear, and…

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Under section 118 of the Negotiable Instruments Act, 1881, subject to its proviso and until the contrary is proved, which set of matters is covered by its presumptions?

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Answer and explanation

Correct answer A

Section 118(b) presumes a dated instrument was made or drawn on its stated date. Clause (e) presumes that indorsements were made in the order in which they appear, and clause (g) ordinarily presumes holder-in-due-course status.

The proviso places the burden of proving that status on the holder where the instrument was obtained from its lawful owner or lawful custodian by offence or fraud, or from the maker or acceptor by offence, fraud or unlawful consideration.

Option feedback

Option A

The three matters are addressed by clauses (b), (e) and (g), with clause (g) subject to the proviso.

Option B

Clause (e) presumes the order in which indorsements were made, without presuming their absence.

Option C

Section 118 does not presume the validity of every signature.

Option D

Section 118 does not presume that the instrument was paid at maturity.

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