Mumbai University Solved Question Papers
Law of Banking and Negotiable Instruments
Previous Year Question Paper with Solution
LLB 3 years · Sem 6
Nov 2010 Examination
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LLB 3 years Sem 6 Law of Banking and Negotiable Instruments Nov 2010 Question Paper with Solutions
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First published on munotes.in on 24 October 2026.
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Model answers written and edited by the munotes.in editorial desk.
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The question paper reproduced here is the paper as set by the University of Mumbai at the Nov 2010 examination.
Contents
The questions below are the paper as the University of Mumbai set it at the Nov 2010 examination, in the order it was set.
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the Nov 2010 examination, reproduced as the University of Mumbai set them, in the order it set them. Nothing has been reworded, added or left out. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 100 · 18 questions answered
Instructions printed on the paper
- N.B: Figures to the right indicate full marks assigned to the questions.
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q.1
Q.1: Answer the following
20 Marks - 2 marks each
(a)What is an "Ambiguous Instrument"?[2]
Answer
The rule. Section 17 of the Negotiable Instruments Act, 1881 says: "Where an instrument may be construed either as a promissory note or bill of exchange, the holder may at his election treat it as either, and the instrument shall be thenceforward treated accordingly."
Meaning. An ambiguous instrument is one whose form allows it to be read either as a promissory note or as a bill of exchange. A note is a promise to pay (section 4), and a bill is an order to pay (section 5). Some writings could be read as either.
Examples.
- A "bill" that a person addresses to himself, so that the drawer and the drawee are the same person. It reads as much like his own promise to pay as like an order.
- Any writing so worded that it can fairly be read either as the signer's own promise or as an order to another to pay.
The holder's choice.
- He elects. The holder decides whether to treat the instrument as a note or as a bill.
- The choice is final. Once he has chosen, the instrument is "thenceforward treated accordingly". He cannot later switch to the other reading.
- Why it matters. The rules differ. A bill needs presentment for acceptance in some cases, and notice of dishonour is needed to charge the drawer. The maker of a note is liable as the principal debtor.
Why the rule exists. It protects the holder. A defect of form that the maker or drawer created should not defeat the holder's claim.
Conclusion. An ambiguous instrument is one that may be read as either a note or a bill. The holder may treat it as either, and his choice binds from then on (section 17).
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