26. Mr Jabbar, a retailer in Bogura, receives from different customers a bank-drawn bill of exchange payable to order, a promissory note payable to bearer on demand (which is in a form that is not a banknote), a postal order, a share certificate and a hundi drawn in a local script and honoured in his district by long usage. He is unsure which of these he may negotiate by delivery or indorsement so that a holder in due course could acquire a good title free of earlier defects. His accountant refers to the list of instruments recognised by statute and by usage and to the manual's list of non-negotiable documents, and Jabbar asks which of the documents are negotiable instruments. (Select THREE.)

Multiple response
A) Postal orders
B) Share certificates
C) Promissory notes
D) Bills of exchange
E) Hundis, as recognised by usage or custom

Correct: C, D, E complex Definitions of promissory note, bill of exchange and cheque

Option A is wrong: postal orders are not negotiable. Option B is wrong: share certificates are not negotiable instruments. Option C is correct: recognised by statute. Option D is correct: recognised by statute. Option E is correct: recognised by usage or custom.

27. A cheque for Tk 1m is drawn by Mr Zaman on his current account at Prime Bank in favour of Ms Zeba. She indorses it to Mr Yusuf for goods and he presents it for payment. The manager of Prime Bank wants to confirm the position about cheques, bills and the days of grace and presentment, and the position of the drawer if Mr Yusuf delays. For each statement, select Yes if it is correct and No if it is not.

Yes/No grid

1. A cheque is payable on demand and does not require acceptance.   Yes

2. A bill of exchange is entitled to days of grace.   Yes

3. The drawer of a cheque is automatically discharged by any delay in presenting it for payment.   No

4. If a cheque is not presented within a reasonable time and the bank fails, the drawer is discharged to the extent of the damage he suffers.   Yes

5. A promissory note can be accepted conditionally.   No

Correct: Y, Y, N, Y, N difficult Definitions of promissory note, bill of exchange and cheque

(1) Yes: Yes. A cheque is payable on demand. (2) Yes: Yes. Per the manual, days of grace apply to bills. (3) No: No. Only to the extent of damage caused by the delay. (4) Yes: Yes. The drawer is discharged to the extent of actual damage. (5) No: No. A bill may be accepted conditionally but a note cannot be made conditionally.

28. Mr Ghani is sued on a promissory note by a holder, Ms Hena, who took it from Mr Ismail, the payee, who obtained the note from Mr Ghani by fraud. Ms Hena gave value two days before maturity and had no notice of the fraud. The court is considering the special rules of evidence under the Act, and the position of the defendant maker. For each statement, select Yes if it is correct and No if it is not.

Yes/No grid

1. Every negotiable instrument is presumed to have been made or drawn for consideration.   Yes

2. It is presumed that every transfer of an instrument was made before maturity.   Yes

3. The holder is presumed to be a holder in due course, even where the instrument was obtained by fraud from the maker.   No

4. A maker of a promissory note cannot, against a holder in due course, deny the validity of the instrument as originally made.   Yes

5. An indorser can deny the signature of a prior party in a suit by a subsequent holder.   No

Correct: Y, Y, N, Y, N complex Presumptions and estoppels

(1) Yes: Yes. Section 118(a). (2) Yes: Yes. Section 118(d). (3) No: No. Where obtained by fraud, the holder must prove that he is a holder in due course. (4) Yes: Yes. Section 120. (5) No: No. An indorser is estopped from denying prior signatures.

29. Mr Kamran is the manager of a firm that draws and accepts bills. He asks about drawers, acceptors, drawees and notice of dishonour after the firm's bill, drawn on Ms Lamia, was accepted and indorsed to a bank and later dishonoured. Consider the position under the Act. For each statement, select Yes if it is correct and No if it is not.

Yes/No grid

1. Until the drawee has signed assent on the bill, she is called the drawee, and after assent she is called the acceptor.   Yes

2. The acceptor of a bill is bound to pay at or after maturity on demand to the holder.   Yes

3. An acceptor who knew at the time of acceptance that an indorsement was forged is relieved from liability because of the forgery.   No

4. The acceptor of a bill cannot deny his liability by proving that the drawer is fictitious, when a holder in due course shows the signature of the supposed drawer and first indorsement are in the same hand.   Yes

5. The maker of a promissory note is secondarily liable and cannot be sued until the payee has first sued the indorsers.   No

Correct: Y, Y, N, Y, N complex Liability of parties

(1) Yes: Yes. Per the manual's explanation of parties. (2) Yes: Yes. Section 32. (3) No: No. Under s 41 an acceptor who knew of the forgery is not relieved. (4) Yes: Yes. That is the rule on fictitious drawers. (5) No: No. The maker's liability is primary and unconditional.

30. A firm, Orient Traders, deals with several instruments, and the manager wants to confirm what happens when instruments are lost, delivered conditionally or obtained by fraud. A cheque payable to bearer was delivered to a customer on condition that it should not take effect unless a shipment arrived. The shipment did not arrive, and the customer negotiated the cheque to a third party for value without notice of the condition. For each statement, select Yes if it is correct and No if it is not.

Yes/No grid

1. A bearer instrument is negotiable by mere delivery.   Yes

2. An instrument payable to order is negotiable by indorsement and delivery.   Yes

3. A finder of a lost instrument can pass good title to any person who takes it, whether or not that person is a holder in due course.   No

4. An instrument delivered on condition that it is not to take effect except in a certain event is not negotiable unless the event happens, except in the hands of a holder for value without notice of the condition.   Yes

5. Where a negotiable instrument is obtained by fraud, a possessor or indorsee who claims through the fraudster can never recover from the maker, even if a holder in due course.   No

Correct: Y, Y, N, Y, N difficult Negotiation and indorsement

(1) Yes: Yes. Section 47. (2) Yes: Yes. Section 48. (3) No: No. The finder gets no title, and only a holder in due course claiming through him can recover. (4) Yes: Yes. The exception to s 47 protects a holder for value without notice. (5) No: No. A holder in due course may recover.

31. Ranjit Ltd draws a bill on Sagar Ltd for Tk 1.2m payable 60 days after sight and delivers it to Taj Ltd. Taj Ltd presents it for acceptance on 3 March. Sagar Ltd's manager writes the word 'accepted' across the bill but does not sign, and tells Taj Ltd's clerk that the managing director is out of the country and will sign later. The managing director never signs. On maturity, Taj Ltd sues Sagar Ltd as acceptor. What is the position?

A) Sagar Ltd is liable as acceptor because the word 'accepted' on the bill and the manager's oral assurance are sufficient in law
B) Sagar Ltd is liable as acceptor if it holds funds of the drawer, since possession of funds amounts to acceptance of the bill
C) Sagar Ltd is not liable as acceptor, because acceptance requires the drawee's signature on the bill
D) Sagar Ltd is liable as acceptor once the bill has been delivered to Taj Ltd, whether or not the acceptance is signed

Correct: C complex Acceptance and acceptance for honour

Option C is correct. Acceptance must be written on the bill and signed by the drawee. The word 'accepted' without a signature is not an acceptance, and the drawee does not become liable on the bill until acceptance. Option A is wrong: the signature is essential. Option B is wrong: possession of funds does not make the drawee liable. Option D is wrong: delivery without a signed acceptance does not complete it.

32. A bill for Tk 800,000 drawn by Mr Alam on Mr Bashar, with Mr Chand named as drawee in case of need, is presented to Mr Bashar for acceptance on 10 March. He refuses. The holder immediately gives notice of dishonour to the drawer and indorsers without presenting the bill to Mr Chand. The drawer says the bill was properly dishonoured by non-acceptance and the holder says the drawee in case of need need not be approached. Which statement is correct?

A) The bill is dishonoured as soon as the original drawee refuses to accept, whatever the existence of a drawee in case of need
B) The bill is dishonoured only after the holder has first sued the drawer and indorsers and obtained a decree against them
C) The bill is dishonoured only after the holder has obtained the written consent of the drawer to treat the bill as dishonoured
D) The bill is not dishonoured until it has been dishonoured by the drawee in case of need, so the notice was premature

Correct: D complex Dishonour, notice, noting and protest

Option D is correct. Under s 115, where a drawee in case of need is named in a bill or in any indorsement, the bill is not dishonoured until it has been dishonoured by such drawee. Option A is wrong: the drawee in case of need must also dishonour. Option B is wrong: no prior suit is required. Option C is wrong: the drawer's consent is not needed.

33. A promissory note for Tk 500,000 payable on 1 April was held by Dhaka Leasing Ltd, which indorsed it to Eastern Finance Ltd on 25 March. Eastern Finance presented it to the maker, who refused to pay on 1 April. Eastern Finance gave notice of dishonour to Dhaka Leasing Ltd on 15 May, six weeks after dishonour, without any reasonable explanation for the delay, and to no one else. It sues Dhaka Leasing Ltd as indorser. What is the position?

A) Notice must be given within a reasonable time after dishonour, and the unexplained delay may discharge the indorser
B) Notice may be given at any time before the claim is time barred, so the indorser remains liable however long the delay was
C) Notice is not required in the case of promissory notes, so the indorser is liable whether or not any notice was given
D) Notice to the maker is required in every case, and the indorser is discharged only if the maker was not notified

Correct: A difficult Dishonour, notice, noting and protest

Option A is correct. A notice of dishonour must be given within a reasonable time after dishonour. If the holder omits to give due notice to a party entitled to it, that party is discharged, unless one of the s 98 excuses applies. Option B is wrong: notice must be within a reasonable time. Option C is wrong: notice of dishonour is required to charge the indorser of a note. Option D is wrong: notice need not be given to the maker.

34. A cheque for Tk 300,000 drawn by Mr Delwar on his account with a bank in favour of Mr Emon was returned unpaid because Mr Delwar had countermanded payment. Mr Emon had indorsed it to Mr Firoz, who now sues Mr Delwar as drawer. Mr Delwar pleads that he never received notice of dishonour. Which statement is correct?

A) Notice of dishonour is essential in every case, and the drawer is discharged in the absence of notice, whatever the circumstances
B) Notice of dishonour is not necessary because the drawer, by countermanding payment, put an impediment in the way of the holder
C) Notice of dishonour is required but may be given orally, and only to the indorser, since the drawer is never entitled to notice
D) Notice is required unless the holder waives the cheque, which he cannot do without the written consent of the bank concerned

Correct: B complex Dishonour, notice, noting and protest

Option B is correct. Under s 98, a drawer who has countermanded payment is not entitled to notice of dishonour. Also, for a cheque, want of assets in the banker's hands is sufficient notice. Option A is wrong: s 98 excuses notice on countermand. Option C is wrong: the drawer is a party to whom notice would be due except in the excused cases. Option D is wrong: waiver is by the party entitled to notice, not by the holder.

35. A bill of exchange for Tk 1m is dishonoured by non-payment on 1 July. The holder, Mr Gazi, wants to establish dishonour with evidence which a court will recognise without further proof against a drawer living in Singapore. His lawyer recommends noting and protest. Which statement correctly describes their effect?

A) Protest is compulsory for all inland bills, and failure to protest discharges the drawer and all indorsers from liability on the bill
B) Noting must be made by the holder personally within seven days of dishonour, and no notary public need be involved in the procedure
C) Protest, based on the noting, is a notary's certificate of dishonour, on proof of which the court presumes dishonour
D) Protest is a written notice from the drawee to the drawer explaining why payment was refused, and has no evidential effect in court

Correct: C complex Dishonour, notice, noting and protest

Option C is correct. Section 99 permits noting by a notary public, and s 100 defines protest as the formal certificate of dishonour based on noting. Under s 119, the court on proof of protest presumes the fact of dishonour. Option A is wrong: protest is not compulsory for inland bills. Option B is wrong: noting is made by a notary public. Option D is wrong: protest is a notary's certificate and is evidence under s 119.

36. A bill has been accepted by Mr Haque, a merchant who has now become insolvent before maturity. The holder, Ms Ismat, fears that the bill will not be paid and has the bill protested for better security. Mr Haque refuses to give any further security. Ms Ismat claims she may immediately sue the drawer and indorsers for the full amount. What is the effect of protest for better security?

A) Protest for better security entitles the holder to sue the drawer and indorsers at once for the full amount without waiting for maturity
B) Protest for better security discharges the acceptor and transfers liability to the drawer who must give the security to the holder
C) Protest for better security is not permitted where the acceptor has become insolvent, since a bill then becomes a nullity
D) The acceptor is not bound to give security, and the holder has no immediate right of action against the drawer and indorsers

Correct: D difficult Dishonour, notice, noting and protest

Option D is correct. Protest for better security allows the holder to demand security, but the acceptor is not bound to give it and the holder must wait until maturity before suing the drawer and indorsers. It enables acceptance for honour. Option A is wrong: there is no immediate right of action. Option B is wrong: the acceptor is not discharged. Option C is wrong: protest is allowed for insolvency or suspension of payment.

37. Ms Jahanara draws a bill on Mr Kalam and a stranger, Mr Latif, who is not a party to the bill, offers to accept it for the honour of the drawer after the bill was protested for non-acceptance. The holder consents. Mr Latif writes his acceptance on the bill. Which of the following states a condition of valid acceptance for honour that is satisfied here?

A) The bill was noted or protested for non-acceptance, the holder consented and Mr Latif is not already liable
B) The bill was protested, which alone makes acceptance by any person valid, even a party already liable on the bill itself
C) The acceptance was made by a stranger, which alone is sufficient and no protest or holder's consent is necessary at all
D) The acceptance was written on the bill, which alone is sufficient since only writing on the bill is essential to such an acceptance

Correct: A complex Acceptance and acceptance for honour

Option A is correct. Acceptance for honour requires prior noting or protest, the holder's consent, writing on the bill, and acceptance by a person not already liable. Option B is wrong: a party already liable cannot accept for honour. Option C is wrong: protest and consent are both required. Option D is wrong: writing is one of several conditions.

38. Mr Mahboob, a holder, receives a Tk 600,000 bill from the drawee after the drawee accepts 'payable at the Dhaka branch of the Sonali Bank only' rather than at any bank as the bill provided. The holder accepts without telling the prior parties. When the bill is dishonoured, the holder sues the drawer and an earlier indorser, Mr Naeem. What is the effect of acquiescing in this acceptance?

A) A local acceptance is a general acceptance, and all parties remain liable because the place of payment does not affect liability
B) A local acceptance is a qualified acceptance, and prior parties who did not consent are discharged as against the holder
C) A local acceptance discharges the acceptor only, and the drawer and prior indorsers remain liable in full to the holder
D) A local acceptance operates as a material alteration of the bill, which is void against every party as against all persons

Correct: B complex Discharge from liability

Option B is correct. If a holder acquiesces in a qualified acceptance, all previous parties whose consent is not obtained are discharged. Qualified acceptances include conditional, partial, local, as to time, and by some of the drawees only. Option A is wrong: a local acceptance is a qualified acceptance. Option C is wrong: it is the prior parties who are discharged, not the acceptor. Option D is wrong: acquiescing in qualified acceptance is not a material alteration which voids the bill.

39. Mr Omar holds a bill of exchange accepted by Mr Pasha and payable on 1 October. On 5 October, Mr Omar writes on the bill 'I release Mr Pasha completely from all liability' without reserving any rights against the drawer or the indorsers. Mr Omar then claims against the drawer on 10 October. What is the position?

A) The release discharges Mr Pasha only, and the drawer and indorsers remain liable because their liability is separate from the acceptor's
B) The release is void because a holder cannot renounce his rights against an acceptor, whatever the date or terms of the renunciation
C) The release of the acceptor at or after maturity discharges the bill, and the drawer and indorsers are discharged
D) The release is effective only if made before maturity, because a renunciation after maturity does not discharge any party

Correct: C difficult Discharge from liability

Option C is correct. Where the holder absolutely and unconditionally renounces his rights against the acceptor at or after maturity, the bill is discharged. If the holder releases the acceptor without reserving rights, the sureties (drawer and indorsers) are discharged (s 39). Option A is wrong: release of the principal debtor discharges the sureties unless rights are reserved. Option B is wrong: renunciation is a recognised mode of discharge. Option D is wrong: the renunciation must be at or after maturity to discharge.

40. Shirin, a holder of a Tk 900,000 bill accepted by Hasan Ltd, strikes out the name of the indorser Rafiq Ltd with the intention of cancelling it, and the cancellation is apparent on the face of the bill. The bill is later dishonoured. Shirin sues the earlier indorser, Tahir, and Rafiq Ltd, and a later indorser, Umar. Which of the following is the effect of the cancellation?

A) Rafiq Ltd alone is discharged, and Umar and all other parties remain liable on the bill as if nothing had happened
B) Every party to the bill is discharged, because cancelling any name destroys the instrument as against everyone on it
C) Tahir, being prior, is discharged and Rafiq Ltd and Umar remain liable, since cancellation operates backwards in time
D) Rafiq Ltd and all persons subsequent to it are discharged, but Tahir, who is prior, is not

Correct: D complex Discharge from liability

Option D is correct. Intentional cancellation apparent on the face of the instrument discharges the party whose name is cancelled and all persons subsequent to him whose liability depends on his. Prior parties are not discharged. Option A is wrong: subsequent indorsers are also discharged. Option B is wrong: the cancellation of an indorser's name does not discharge prior parties. Option C is wrong: the discharge operates forwards to subsequent parties, not backwards.

41. Zafar issues a promissory note for Tk 200,000 payable to Wahid on 1 June. Wahid changes the date of payment to 1 September and increases the sum to Tk 250,000 without Zafar's knowledge, then indorses the note to Yusuf, who takes it for value without notice of the alteration. On 1 September, Yusuf presents it and Zafar refuses to pay. What is the position?

A) The note is discharged by material alteration as against Zafar, who did not consent to it
B) Yusuf can enforce the note as originally drawn against Zafar, since he is a holder in due course without notice of the alteration
C) The note is valid for Tk 250,000, because the holder in due course takes an instrument free from every defect, including alteration
D) The alteration is immaterial because only a change in the name of the payee amounts to a material alteration of an instrument

Correct: A complex Discharge from liability

Option A is correct. The instrument is avoided by material alteration made without the consent of a party. Alteration of date, sum or time of payment is material, and it is void against every party to the instrument at the time of the alteration who did not consent. Option B is wrong: material alteration without consent discharges the maker, even against a holder in due course in the manual's account. Option C is wrong: that protection does not extend to material alteration. Option D is wrong: alteration of date or sum is material.

42. Ms Zubaida holds a cheque for Tk 1.5m dated 1 March, drawn on Metro Bank by Mr Anis. She presents it on 10 May and it is returned for insufficiency of funds. She sends a legal notice to Mr Anis on 5 June and files a criminal complaint on 28 June. Mr Anis argues that the complaint was premature. Which is correct?

A) The complaint was in time, because the offence was complete on 10 May when the cheque was returned to Ms Zubaida by the bank
B) The complaint was premature, because Mr Anis was entitled to thirty days from receipt of the notice to pay
C) The complaint was in time because a complaint may be made at any time after notice is sent, without waiting for the drawer to reply
D) The complaint was premature only because the cheque should have been presented within three months of the date of the cheque

Correct: B difficult Dishonour of cheques for insufficiency of funds

Option B is correct. Section 138 requires the drawer to fail to pay within thirty days of receipt of the notice. If the notice was received about 5 June, the thirty days ran to about 5 July, so a complaint on 28 June was premature, since the cause of action had not arisen. Option A is wrong: the cause of action requires the thirty-day period to have expired. Option C is wrong: the drawer must be given the opportunity to pay within thirty days. Option D is wrong: presentment within six months is the requirement.

43. Mr Quamrul's cheque for Tk 400,000 to Mr Rony was dishonoured. Mr Rony served a notice on 20 January and the 30-day payment period expired on 20 February without payment. The cause of action under s 138 thus arose on 21 February. Mr Rony files the complaint on 15 April. Under s 141, as described in the manual, what is the position?

A) The complaint is in time because the period for making a complaint is six months from the date on which the cheque was drawn
B) The complaint is in time because the one month runs from the date the cheque was presented rather than the cause of action
C) The complaint is out of time, since it must be made within one month of the date on which the cause of action arises
D) The complaint is in time because there is no time limit for a complaint on a dishonoured cheque as the offence is a continuing one

Correct: C complex Dishonour of cheques for insufficiency of funds

Option C is correct. Section 141 provides that no court shall take cognizance except upon a written complaint made by the payee or holder in due course within one month of the date on which the cause of action arises, and a court inferior to a Metropolitan Magistrate or first class Magistrate shall not try the offence. Option A is wrong: one month from the cause of action, not six months from drawing. Option B is wrong: one month runs from the cause of action. Option D is wrong: s 141 sets a one-month limit.

44. Zenith Garments Ltd, a company, issued a cheque for Tk 5m which was dishonoured for insufficient funds. The chairman, Mr Salim, who controlled the company's finances, the finance director, Mr Tariq, who took no part in the business, and the company secretary, Mr Uddin, who merely recorded the board minutes, are all named in the criminal complaint. Mr Tariq says that he was never involved in the business of the company and was unaware of the cheque. Under s 140, what is the position?

A) Only the company is liable under s 138, and no director or officer can be liable in any case for the cheque of the company
B) Every director, manager and secretary is automatically guilty regardless of knowledge, because liability under s 140 is absolute
C) Only the signatory of the cheque is liable, and the company and other officers cannot be proceeded against for any offence under the Act
D) Persons in charge of and responsible for the business are guilty, but a person who proves no knowledge or due diligence is not liable

Correct: D complex Dishonour of cheques for insufficiency of funds

Option D is correct. Section 140 makes the company and every person in charge of and responsible for its business at the time liable, but a person is not liable if he proves that the offence was committed without his knowledge or that he exercised all due diligence. Directors or officers are also liable where the offence was committed with their consent or connivance or is attributable to their neglect. Option A is wrong: s 140 extends liability to officers in charge. Option B is wrong: knowledge and due diligence are defences. Option C is wrong: the company and others in charge may also be liable.

45. Mr Sultan, who resides in Dhaka, is liable on a dishonoured inland bill of Tk 1m payable in Chattogram, and an indorser, Mr Taher, who resides in Khulna, paid the amount due to the holder. Mr Taher now claims compensation from Mr Sultan, the party liable. Under s 117, what may Mr Taher recover?

A) The sum paid, six per cent interest from payment, and the expenses of dishonour
B) Only the principal amount paid, without interest or expenses, because s 117 provides compensation only for the face value
C) The amount paid with interest at twelve per cent per annum from the date of dishonour, plus double the expenses incurred
D) Nothing, because an indorser who pays the holder has no right of recovery from the prior parties liable on the instrument

Correct: A difficult Compensation on dishonour

Option A is correct. Under s 117, an indorser who, being liable, has paid the amount due is entitled to the amount paid with interest at six per cent per annum from the date of payment until tender or realisation, plus all expenses caused by the dishonour and payment. Option B is wrong: interest and expenses are recoverable. Option C is wrong: the rate is six per cent from payment. Option D is wrong: the paying indorser is entitled to compensation.

46. A bill for Tk 700,000 was drawn in Dhaka on a Singapore merchant and payable in Singapore. Under Singapore law, the notice of dishonour must be given within seven days. The holder gave notice in Dhaka after ten days, which would be reasonable under Bangladesh law. The drawer pleads discharge. Under the rules on foreign instruments in the manual, what law governs?

A) The law of the place where the bill was drawn governs the necessity and sufficiency of notice of dishonour in every case
B) The law of the place of payment governs the need for and sufficiency of notice
C) Bangladesh law governs the notice of dishonour because the holder and the drawer are both resident in Bangladesh
D) The law of the place of the court hearing the dispute governs notice of dishonour whatever the place of payment of the bill

Correct: B complex Foreign instruments and conflict of laws

Option B is correct. The law of the place of payment determines the liability of all parties, the duties of the holder, the date of maturity, what constitutes dishonour, the necessity and sufficiency of protest or notice of dishonour, and payment questions. Option A is wrong: the place of payment, not drawing, governs notice. Option C is wrong: residence of the parties is not the test. Option D is wrong: the lex fori is not the test.

47. Mr Wahab accepts a bill in a set of three parts, signing his acceptance on two of the three parts. The two accepted parts go into the hands of different holders in due course, Rashed and Sabbir, each of whom presents his part at maturity. Mr Wahab pays Rashed, who first presented his part. Sabbir demands payment on his part. What is the position?

A) Mr Wahab is not liable to Sabbir because payment on one part of a bill drawn in a set discharges the whole set in every case
B) Mr Wahab is liable on the first part only, and Sabbir has no claim against him on his part, which is void
C) Mr Wahab is liable on every part he accepted as if each were a separate bill, and Sabbir may sue
D) Mr Wahab is liable on one part only, because a set constitutes a single bill and the acceptor cannot be made liable twice

Correct: C complex Inchoate, accommodation and fictitious instruments

Option C is correct. If an acceptor accepts more than one part of a set and they come into the hands of different holders in due course, he is liable on every such part as if it were a separate bill. Acceptance should be on one part only. Option A is wrong: he is liable on each part accepted and endorsed to holders in due course. Option B is wrong: both parts bind him. Option D is wrong: the exception in the set rules applies to this case.

48. A company, Alpha Ltd, wants to know the circumstances in which the holder of a dishonoured bill need not give notice of dishonour to a party. The accountant lists several. The bill was accepted by Beta Ltd and drawn by Alpha Ltd, who countermanded payment. One indorser lives abroad at an unknown address, despite the holder's reasonable efforts to find him. A second indorser has expressly waived notice. Which of the following are circumstances in which notice of dishonour is unnecessary under s 98? (Select THREE.)

Multiple response
A) Where notice is expressly waived by the party entitled to it
B) Where the holder has simply forgotten to send notice to an indorser
C) Where the party charged could not suffer damage for want of notice
D) Where the drawer has countermanded payment
E) Where the bill is for a large sum of money

Correct: A, C, D difficult Dishonour, notice, noting and protest

Option A is correct: express waiver is an excuse. Option B is wrong: forgetfulness is not an excuse. Option C is correct: no damage is an excuse. Option D is correct: countermand is an excuse. Option E is wrong: the size of the bill is irrelevant.

49. A merchant, Mr Zakaria, is told that his instrument has been discharged in some way and wants to know the lawful modes of discharge of a negotiable instrument. Three possible events have occurred: payment in due course by the maker, cancellation by the holder of the acceptor's name, and a slight delay of two days in presenting a note payable on demand. Which of the following are modes of discharge? (Select THREE.)

Multiple response
A) A delay of two days in presenting a promissory note payable on demand
B) Intentional cancellation apparent on the face of the instrument
C) The holder changing his place of business
D) Payment in due course
E) Material alteration without the consent of the party concerned

Correct: B, D, E complex Discharge from liability

Option A is wrong: a short delay does not discharge a note. Option B is correct: a recognised mode. Option C is wrong: such change has no effect on discharge. Option D is correct: a recognised mode. Option E is correct: a recognised mode.

50. Mr Rubel wants to establish when he is a holder in due course. He took a bearer cheque for Tk 600,000 in payment for goods supplied to the drawer's agent, before it was overdue, and without any notice of a defect. The agent had obtained the cheque from a thief. Which of the following are conditions for a person to be a holder in due course? (Select THREE.)

Multiple response
A) He took the instrument with sufficient cause to believe that a defect existed in the title of the transferor
B) He is the original maker of the instrument
C) He became the possessor of an instrument payable to bearer, or payee or indorsee if payable to order
D) He became the holder before the amount became payable
E) He became the possessor for consideration

Correct: C, D, E complex Holder in due course

Option A is wrong: he must take without notice of the defect. Option B is wrong: the maker is not a holder in due course of his own note. Option C is correct: the possession must be in the right capacity. Option D is correct: the instrument must not be overdue. Option E is correct: consideration is required.