🔥 20 ULTRA-TRICKY MCQs (CASE-STUDY BASED)
Q1. Blank Cheque
A gives B a signed blank cheque as security. B fills amount later. Dishonoured.
Which is correct?
A. Cheque invalid
B. No offence, misuse proved
C. Offence under S.138
D. Civil liability only
✅ Answer: C
📌 Bir Singh v. Mukesh Kumar
Q2. Donation Cheque
Cheque issued as charitable donation, dishonoured.
A. S.138 applies
B. S.138 does not apply
C. Only fine payable
D. Civil suit maintainable
✅ Answer: B
📌 Indus Airways v. Magnum Aviation
Q3. Stop Payment
Drawer issues stop-payment before presentation.
A. No offence
B. Offence only if mala fide proved
C. S.138 applies
D. Notice unnecessary
✅ Answer: C
📌 Modi Cements v. Kuchil Kumar Nandi
Q4. Time-Barred Debt
Cheque issued for debt barred by limitation.
A. Presumption applies
B. S.138 applies
C. S.138 not applicable
D. Only civil remedy
✅ Answer: C
📌 Sasseriyil Joseph v. Devassia
Q5. Post-Dated Cheque
Cheque dated 3 months later; dishonoured on presentation.
A. Invalid cheque
B. S.138 applies
C. Notice invalid
D. Cause of action incomplete
✅ Answer: B
📌 Goaplast Pvt. Ltd. v. Chico Ursula
Q6. Notice Returned “Unclaimed”
Legal notice returned unclaimed.
A. Notice invalid
B. Complaint barred
C. Deemed service
D. Fresh notice mandatory
✅ Answer: C
📌 C.C. Alavi Haji v. Palapetty
Q7. Payment After 15 Days
Drawer pays after 15 days but before complaint.
A. No offence
B. Offence cured
C. Offence complete
D. Complaint barred
✅ Answer: C
📌 MSR Leathers v. Palaniappan
Q8. Multiple Presentations
Cheque presented 3 times; complaint after 3rd dishonour.
A. Not maintainable
B. Maintainable
C. Limitation barred
D. Abuse of process
✅ Answer: B
📌 MSR Leathers v. Palaniappan
Q9. Security Cheque
Cheque issued as security; liability exists on presentation.
A. No offence
B. S.138 applies
C. Presumption rebutted
D. Only civil suit
✅ Answer: B
📌 Sripati Singh v. State of Jharkhand
Q10. Signature Mismatch
Cheque dishonoured due to “signature differs”.
A. No offence
B. S.138 applies
C. Banker liable
D. Notice unnecessary
✅ Answer: B
📌 Laxmi Dyechem v. State of Gujarat
Q11. Account Closed
Cheque dishonoured due to “account closed”.
A. No offence
B. Only civil remedy
C. S.138 applies
D. Notice invalid
✅ Answer: C
📌 Laxmi Dyechem v. State of Gujarat
Q12. Director Resigned
Director resigned before cheque issued.
A. Liable
B. Not liable
C. Liable if signature present
D. Joint liability
✅ Answer: B
📌 Harshendra Kumar D. v. Rebatilata Koley
Q13. Company Not Arrayed
Complaint against director without company.
A. Maintainable
B. Not maintainable
C. Maintainable with permission
D. Curable defect
✅ Answer: B
📌 Aneeta Hada v. Godfather Travels
Q14. Oral Loan
Cheque issued for oral loan without document.
A. Presumption not applicable
B. S.138 applies
C. Complaint barred
D. Burden on complainant
✅ Answer: B
📌 Rangappa v. Sri Mohan
Q15. Accused Admits Signature
Signature admitted, liability denied.
A. Acquittal
B. Presumption applies
C. Burden on complainant
D. Notice invalid
✅ Answer: B
📌 Basalingappa v. Mudibasappa
Q16. Jurisdiction
Cheque drawn in Delhi, dishonoured in Mumbai, payee bank in Ahmedabad.
Jurisdiction lies at:
A. Delhi
B. Mumbai
C. Ahmedabad
D. Any place
✅ Answer: C
📌 Bridgestone India Pvt. Ltd. v. Inderpal Singh
Q17. Mens Rea
Mens rea required under S.138?
A. Yes
B. No
C. Only in companies
D. Only in stop payment
✅ Answer: B
📌 Kaushalya Devi Massand v. Roopkishore
Q18. Compounding
Compounding under NI Act can be done:
A. Only before trial
B. Only after conviction
C. At any stage
D. Only with court leave
✅ Answer: C
📌 Damodar S. Prabhu v. Sayed Babalal
Q19. Drawer Dies After Notice
Drawer dies after notice, before complaint.
A. Complaint maintainable
B. Abates
C. Legal heirs liable
D. Only civil remedy
✅ Answer: B
📌 Shankar D. G. v. State of Karnataka
Q20. Cheque Given Under Coercion
Accused proves cheque obtained under coercion.
A. Presumption stands
B. Presumption rebutted
C. Conviction mandatory
D. Fine only
✅ Answer: B
📌 Kumar Exports v. Sharma Carpets
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Q1. Blank Signed Cheque
A gives a signed blank cheque to B to fill amount later. B fills ₹5 lakh and presents it. Cheque dishonoured. A pleads misuse.
Issue: Whether offence under S.138 made out?
Answer:
✔️ Yes, offence attracted.
Reason:
-
Filling of details by holder does not invalidate cheque.
-
Presumption under S.139 applies.
Case-law:
📌 Bir Singh v. Mukesh Kumar (2019)
Q2. Cheque Issued as Gift
X issues cheque as a birthday gift. Cheque dishonoured.
Answer:
❌ No offence under S.138.
Reason:
-
Gift ≠ legally enforceable debt.
Case-law:
📌 Indus Airways v. Magnum Aviation
Q3. Stop Payment Instruction
Drawer issues stop-payment instruction before presentation.
Answer:
✔️ Still offence under S.138.
Case-law:
📌 Modi Cements v. Kuchil Kumar Nandi
Q4. Post-dated Cheque
Cheque issued today, dated after 3 months. Presented after due date and dishonoured.
Answer:
✔️ Valid; offence attracted.
Reason:
-
Post-dated cheque becomes cheque on date mentioned.
Case-law:
📌 Goaplast Pvt. Ltd. v. Chico Ursula D’Souza
Q5. Time-Barred Debt
Cheque issued for debt barred by limitation. Dishonoured.
Answer:
❌ No offence.
Reason:
-
Time-barred debt not legally enforceable.
Case-law:
📌 Sasseriyil Joseph v. Devassia
Q6. Security Cheque
Cheque issued as security; liability arises later; dishonour occurs after liability accrues.
Answer:
✔️ Offence attracted.
Case-law:
📌 Sripati Singh v. State of Jharkhand
Q7. Notice Returned “Unclaimed”
Legal notice returned with endorsement “unclaimed”.
Answer:
✔️ Deemed service.
Case-law:
📌 C.C. Alavi Haji v. Palapetty Muhammed
Q8. Payment Made After 15 Days
Drawer pays cheque amount after 15 days but before filing complaint.
Answer:
✔️ Offence still complete.
Case-law:
📌 MSR Leathers v. Palaniappan
Q9. Multiple Presentations of Cheque
Cheque presented thrice; dishonoured each time. Complaint filed after third dishonour.
Answer:
✔️ Maintainable.
Case-law:
📌 MSR Leathers v. Palaniappan
Q10. Director Resigned Before Cheque Date
Director resigns before cheque issued. Prosecution launched against him.
Answer:
❌ Not liable.
Case-law:
📌 Harshendra Kumar D. v. Rebatilata Koley
Q11. Cheque Drawn on Closed Account
Account closed before cheque presented.
Answer:
✔️ Offence attracted.
Case-law:
📌 Laxmi Dyechem v. State of Gujarat
Q12. Oral Loan Without Proof
Cheque issued for oral loan; no written agreement.
Answer:
✔️ Presumption applies.
Case-law:
📌 Rangappa v. Sri Mohan
Q13. Partnership Firm – Partner Not in Charge
Partner not involved in business prosecuted.
Answer:
❌ Not liable.
Case-law:
📌 SMS Pharmaceuticals v. Neeta Bhalla
Q14. Cheque Dishonoured Due to Signature Mismatch
Cheque dishonoured for “signature differs”.
Answer:
✔️ S.138 applies.
Case-law:
📌 Laxmi Dyechem v. State of Gujarat
Q15. Accused Admits Signature but Denies Liability
Signature admitted; debt denied.
Answer:
✔️ Presumption stands unless rebutted.
Case-law:
📌 Basalingappa v. Mudibasappa