AIBE Prep › Papers › AIBE XVIII — December 2023 › Q.20
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Q.20
Contract, Specific Relief, Property & NI Act Medium Act + Section Given
Bare Act Negotiable Instruments Act, 1881 · Section 80

In the light of Negotiable Instruments Act, 1881, at what rate, interest will be charged if the rate of interest is not mentioned on the negotiable instruments?

A 6% per annum
B 10% per annum
✓ 18% per annum Answer
D 20% per annum
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Explanation & Strategy

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Section 80 NI Act prescribes 18% per annum as the statutory default interest rate when no rate is mentioned in the instrument. This is significantly higher than the TPA default of 9%.

  1. 1 Pick up NI Act.
  2. 2 Go to Section 80 — Interest when rate not specified.
  3. 3 Read: 'interest shall be calculated at the rate of eighteen per centum per annum.'
The text reads: Section 80: When no rate of interest is specified, interest shall be calculated at 18% per annum from the date payment was due.
At a Glance
Subject Contract, Specific Relief, Property & NI Act
Difficulty Medium
Act Negotiable Instruments Act, 1881
Section Section 80
Answer (C) Act + Section Given
Paper AIBE XVIII — December 2023
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📖 Open Book — Reading Mode Negotiable Instruments Act, 1881