Which item is not a bill of exchange within the meaning of the Negotiable Instruments Act, 1881?
Section 5 of the Negotiable Instruments Act, 1881 treats a bill of exchange as an unconditional written payment order. An equity share is an ownership interest in a company.…
Choose your answer
Which item is not a bill of exchange within the meaning of the Negotiable Instruments Act, 1881?
Answer and explanation
Correct answer A
Section 5 of the Negotiable Instruments Act, 1881 treats a bill of exchange as an unconditional written payment order. An equity share is an ownership interest in a company.
A bank demand draft and an accepted trade bill contain payment orders. A post-dated cheque can operate as a bill of exchange before its date.
Option feedback
Option A
The share represents an equity interest and contains no unconditional order to pay a certain sum.
Option B
The bank draft is an unconditional payment order. Section 85A expressly deals with the stated form of draft.
Option C
Before its date a post-dated cheque can operate as a bill of exchange.
Option D
A fixed-date trade bill remains a bill of exchange after acceptance.
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