Question

S.------ of the Negotiable instruments Act deals with 'noting'.

• A. 100
• B. 101
• C. 102
• D. 99

Hint:

Remember the sequence of events upon dishonour of a bill/note: 1. Dishonour (by non-acceptance or non-payment). 2. Noting (S. 99): Recording the fact of dishonour by a notary public. 3. Protesting (S. 100): A formal certificate by the notary based on the noting, which serves as formal evidence of dishonour.

Answer 1

The Correct Option is D

Step 1: Understanding the Concept:
In the context of the Negotiable Instruments Act, 1881, 'noting' is a formal step taken when a promissory note or bill of exchange is dishonoured. It is the authentic and official record of the fact of dishonour.
Step 2: Detailed Explanation:
Section 99 of the Negotiable Instruments Act, 1881, deals with 'Noting'.
It states that when a promissory note or bill of exchange has been dishonoured by non-acceptance or non-payment, the holder may cause such dishonour to be noted by a notary public upon the instrument, or upon a paper attached thereto, or partly upon each.
This noting must be made within a reasonable time after dishonour and must specify the date of dishonour, the reason (if any) assigned for such dishonour, or, if the instrument has not been expressly dishonoured, the reason why the holder treats it as dishonoured, and the notary’s charges.
Noting is a preliminary step to 'protesting' (Section 100). While noting is not mandatory for inland bills, it is a formal requirement for foreign bills to preserve the holder's right of action against prior parties.