Two parallel transverse lines drawn across the face of a cheque, without the name of any bank, amount to which kind of crossing?

The correct answer is B, cheque. Section 6 of the Negotiable Instruments Act, 1881 defines a cheque as a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. In plain words it is a written order by an account holder, the drawer, telling the bank, the drawee, to pay a stated sum to the payee named on it, which is exactly what the question describes.

Option A, cash, is money itself and needs no instruction to anyone. Option C, a passbook, is only a record of the entries in an account, so it proves what has happened but orders nothing. Option D, currency, is the legal tender issued by the Reserve Bank and the Government of India, again not an instruction to pay. Only a cheque is an instrument carrying an order to a banker, and that is why it is a negotiable instrument under Section 13 of the Act.

The correct answer is B, there are not sufficient funds in your account. NSF stands for not sufficient funds, and a bank writes it on the return memo when the balance in the drawer's account is less than the amount of the cheque. This is the ground that attracts Section 138 of the Negotiable Instruments Act, 1881, under which issuing such a cheque is an offence punishable with imprisonment up to two years, or a fine up to twice the amount, or both.

Option A describes a know your customer problem, which is dealt with separately and is not what NSF means. Option C, forgery, is returned with a remark about the signature differing or the instrument appearing altered, and material alteration is covered by Section 87. Option D is not a banking return reason at all. Only the shortage of balance is described by the letters NSF.

The correct answer is B, 1881. The Negotiable Instruments Act was enacted in 1881 and came into force on 1 March 1882. It codified the law on promissory notes, bills of exchange and cheques, and it remains the governing statute for cheques in India, amended several times, most notably in 2002 to bring in the electronic and truncated cheque and in 2018 to add Sections 143A and 148.

Option A, 1972, is not connected with this Act. Option C, 1957, is remembered for other laws such as the Copyright Act of that year. Option D, 1950, is the year the Constitution came into force. Candidates often confuse the 1881 Act with the Banking Regulation Act of 1949 and the Reserve Bank of India Act of 1934, so keep the three years separate: 1881 for negotiable instruments, 1934 for the Reserve Bank and 1949 for banking regulation.

The correct answer is A, at maturity. Section 22 of the Negotiable Instruments Act, 1881 says that the maturity of a promissory note or bill of exchange payable otherwise than on demand is the date on which it falls due, and the three days of grace are already counted in arriving at that date. Payment therefore becomes due on the date of maturity itself, and the holder may present the instrument on that day.

Option B, after maturity, is wrong because the instrument is already overdue then and the holder's rights against the earlier parties can be affected. Option C, before maturity, is wrong because no party is bound to pay ahead of the due date, though a bill may be discounted earlier by agreement. Option D is a distortion of the days of grace, which are added while computing maturity and are not a separate day of payment after it. So A alone states the rule correctly.

The correct answer is C, Section 6. Section 6 says a cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand, and it goes on to include the electronic image of a truncated cheque and a cheque in the electronic form, both added by the amendment of 2002.

Option A, Section 4, defines a promissory note, an unconditional undertaking signed by the maker to pay a certain sum. Option B, Section 5, defines a bill of exchange, an unconditional order directing a person to pay. Option D, Section 13, defines the expression negotiable instrument itself and names the three instruments covered by the Act. All four sections sit close together, which is why the paper offers them as a set, but the definition of a cheque is in Section 6.