B.A. LL.B. (Five Years) Sem 10 Law of Banking and Negotiable Instruments Apr 2011 Question Paper - Mumbai University | munotes

Questions asked in this paper

• N.B: Figures to the right indicate full marks assigned to the questions.

Q.1 Q.1: Answer the following in not more than two sentences (20 Marks - 2 marks each)

1. (a) What is a Promissory Note?
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2. (b) What does the expressions "at sight" and "on presentment" mean in a Bill of Exchange or Promissory Note.
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3. (c) When the day on which a Promissory Note or Bill of Exchange is at maturity is a public holiday, the instrument shall be deemed to be due?
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4. (d) What is noting and who does it?
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5. (e) What is the effect on payment of a cheque crossed generally and specially?
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6. (f) What are the obligations of Government of India and Reserve Bank of India in respect of rupee coin?
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7. (g) What is a "Bank Rate" as per Reserve Bank of India, Act?
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8. (h) What is the interpretation of the term "Banking" as per the Banking Regulation Act, 1949?
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9. (i) What is interpretation of the term "demand and time liabilities" as per BR Act, 1949?
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10. (j) What is the qualification for appointment as Chair Person of Appellate Tribunal under the "Recovery of Debts due to Banks and Financial Institutions Act, 1993".
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Q.2 Q.2: Write short notes on any four (20 Marks - 5 marks each)

1. (a) Inchoate stamped instruments.
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2. (b) Inland and Foreign bills.
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3. (c) Kinds of endorsements.
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4. (d) The bankers Books Evidence Act, 1891.
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5. (e) Assets and liabilities of the Issue department of Reserve Bank.
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6. (f) Licensing of banks and their branches.
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Q.3 Q.3: Answer the following by giving reasons, any two (12 Marks - 6 marks each)

1. (a) State giving reasons whether drawee bank is justified in refusing the payment of a cheque. (i) The cheque is dated 01-03-2011 and presented for payment on 01-04-2011. The drawer of the cheque died on 15-03-2011 and the drawee bank had a notice of his death on 25-03-2011. (ii) In respect of an account held by a customer A, the bank received on 1-04-2001, two cheques one dated 20-3-2011 for Rs. 50,000/- and another dated 25-3-2011 for Rs. 60,000/- respectively. On that day i.e. 01-04-2011 the account had a balance of Rs. one lakh only. (iii) On 01-04-2011 the drawee bank received a cheque dated 01-03-2011 for Rs. 20,000 in respect of an account held by customer A. On 15-03-2011 the bank received a notice that the customer A has become person of unsound mind.
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2. (b) State giving reasons whether the drawee bank is justified in refusing the payment of a crossed cheque: (i) The cheque is crossed generally and presented to the drawee bank across the counter for payment in cash. (ii) The cheque is crossed specially to a banker A and presented to the drawee bank by a banker B for collection. (iii) The cheque is crossed specially to two banks i.e. A and B and presented to drawee bank by a bank A alone for collection.
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3. (c) Analyze the following under the relevant provisions of the Banking Regulation Act, 1949: (i) Can a banking company carry on its business of banking in India without using the words 'bank', 'banker' or 'banking' as part of its name? (ii) A foreign banking company incorporated outside India desires to commerce banking business in India and applies for a license to Reserve Bank. But the Government of that country does not allow opening of banks/branches by Indian banking companies.
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Q.4 Q.4: Answer the following, any four (48 Marks - 12 marks each)

1. (a) State the various rules as laid down under the Negotiable Instrument Act, 1881 relating to presentment for acceptance and presentment for payment. When presentment is unnecessary?
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2. (b) Define Bill of Exchange: What are the essential ingredients of a valid Bill of Exchange? How does it differ from Promissory Note? Compare Bill of Exchange cheque and draft.
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3. (c) "Dishonour of cheque for insufficient funds is a criminal offence." Critically examine referring to the appropriate provisions of N.I. Act, 1881.
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4. (d) Discuss the provisions of the R.B.I. Act, 1934 relating to: (i) the business which the Reserve Bank may transact (under sections 17 and 18 of the Act) (ii) the business which the Reserve Bank may not transact (Section 19 of the Act).
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5. (e) Discuss the various provisions of the Banking Regulation Act relating to: (i) Acquisition of the undertaking of the banking companies in certain cases (ii) Suspension of business and winding up of the banking companies.
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6. (f) Explain how the B.R. Act, 1949 seeks to regulate managerial structure of the banking companies in matters of composition appointment and removal of the directors of the board chairman and other staff.
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