Question

The term 'Negotiable instrument' is defined in the Negotiable Instruments Act, 1881, under section:

• A. Section 12
• B. Section 13
• C. Section 13A
• D. Section 13B

Hint:

Section 13 of the Negotiable Instruments Act is fundamental—memorize it, as it defines the three key instruments: promissory notes, bills of exchange, and cheques.

Answer 1

The Correct Option is B

Step 1: Understanding the Definition:
A negotiable instrument is a written document that guarantees the payment of a specific amount of money either on demand or at a fixed future time. The payment can be made to the person named in the document, to their order, or to the bearer.
Step 2: Legal Reference:
Section 13 of the Negotiable Instruments Act, 1881, defines a negotiable instrument as a promissory note, bill of exchange, or cheque payable either to order or to bearer. These instruments are transferable by endorsement or delivery.
Step 3: Analysis of Options:
- (A) Section 12: Deals with instruments payable on demand.
- (B) Section 13: Correct, as this section provides the definition of a negotiable instrument.
- (C) Section 13A: Deals with provisions related to certain amendments and additional definitions, not the primary definition.
- (D) Section 13B: Not related to the definition; introduced later for procedural additions.
Step 4: Final Conclusion:
The correct answer is (B) Section 13, as it explicitly defines the term ‘Negotiable Instrument’ under the Act.