Osmania University · Faculty of Law
Law of Banking and Negotiable Instruments · May/June 2016
May/June 2016 · Law of Banking and Negotiable Instruments · Semester 5
PAPER - III : LAW OF BANKING AND NEGOTIABLE INSTRUMENTS
FACULTY OF LAW
LL.B. (3 YDC) III - Year V - Semester Examination, May / June 2016
Time : 3 Hours Max. Marks : 80
PART - A (5 x 6 = 30 Marks)
Answer any FIVE of the following :
1. Liquidity.
2. Bankers Clearing House.
3. Indigenous Bankers.
4. Promisory Note.
5. Conditional Endorsement.
6. Bankers Lien.
7. Account Payee.
8. Negotiable Instrument.
PART - B (2 x 15 = 30 Marks)
Answer any TWO of the following questions :
9. Define a "Bank". Discuss the law relating to Banking Business and its importance in modern times.
10. Explain the relationship between Banker and Customer in the changing scenario in India.
11. What are the legal presumptions of a Negotiable Instrument?
12. What is a "Letter of Credit"? Discuss the merits and demerits of making advances against stocks
and shares.
PART - C (2 x 10 = 20 Marks)
Answer any TWO of the following questions :
13. 'A', the holder of a bill, endorses it to "B or order" for the express purpose that 'B' get it
discounted. B negotiates the bill to 'C' who takes it bona fide and for value. Explain the position
of 'C'.
14. A, at the point of a pistol, forces 'B' to issue a bearer cheque in the name of 'A'. A afterwards
hands over the cheque to 'C' who takes it in good faith and for valuable consideration. Is 'C' a
holder in due course?
15. A customer of the Royal Bank drew an open cheque for Rs. 1000 payable to 'P'; the cheque was
stolen. The thief forged the payee's endorsement and presented the cheque for payment at the
branch upon which it was drawn. The bank cashier paid the cheque without asking for proof of
his identity. To whom is the bank liable for the cashier's action?
16. 'B' obtains A's acceptance to a bill by fraud. B endorses it to 'C' who takes it as a holder in due
course. 'C' endorses the bill to 'D' who knows of the fraud. Can 'D' recover from 'A'?