Read the given statements and choose the correct option. Statement 1:Un- der the Negotiable Instruments Act, 1881, a negotiable instrument made, drawn, accepted, or transferred without consideration creates no obligation of payment between the parties to the transaction.Statement 2:According to the same Act, if the consideration for which a negotiable instrument was issued fails in part, the holder in immediate relation is entitled to recover only the proportionate amount corresponding to the consideration actually received.In the context of the above statements under the Negotiable Instruments Act, 1881, which one of the following is correct?
Explanation & Strategy
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Statement 1: Under the NI Act, a promissory note must contain an unconditional undertaking to pay. Statement 2: A cheque is always payable on demand and drawn on a specified banker. Both are correct statutory definitions under Sections 4 and 6 of the NI Act respectively.