Module: General Practice
Q78: As per Section 6 of the Negotiable Instruments Act, 1881, which of the following is the defining characteristic that distinguishes a "Cheque" from a standard Bill of Exchange?
✅ Correct Answer: A
The definition of a "Cheque" under Section 6 of the Negotiable Instruments Act serves as the foundational distinction in banking law.
A "Cheque" is technically a Bill of Exchange, but it has two specific non-negotiable characteristics: 1. Specified Banker: It must be drawn on a specified banker.
2. Payable on Demand: It must not be expressed to be payable otherwise than on demand.
This definition explicitly includes the "electronic image of a truncated cheque" and a "cheque in the electronic form." Unlike a standard Bill of Exchange (defined in Section 5), which often requires "acceptance" by the drawee and can be payable after a fixed period (usance), a cheque never requires acceptance and is always payable immediately upon presentation.
A "Cheque" is technically a Bill of Exchange, but it has two specific non-negotiable characteristics: 1. Specified Banker: It must be drawn on a specified banker.
2. Payable on Demand: It must not be expressed to be payable otherwise than on demand.
This definition explicitly includes the "electronic image of a truncated cheque" and a "cheque in the electronic form." Unlike a standard Bill of Exchange (defined in Section 5), which often requires "acceptance" by the drawee and can be payable after a fixed period (usance), a cheque never requires acceptance and is always payable immediately upon presentation.