A draws a bill on B for INR 500 payable to the order of A B accepts the bill but subsequently dishon...........

Commercial and Business Laws Negotiable Instrument Act

A draws a bill on B for INR 500 payable to the order of A. B accepts the bill, but subsequently dishonour it by non – payment. A sues B on the bill but B proves that it was accepted for value as to INR 400, and as an accommodation to the plaintiff as to the residue. Thus, as per the provisions of the Negotiable Instruments Act, 1881, A can only recover the following amount:

900

500

400

100

छोटे Courses बड़े Results

Master Negotiable Instrument Act

Prepare through Micro-courses

Try Now

Explanation:

- Option 1: 900

- Not possible. The bill was only for INR 500.

- Option 2: 500

- A cannot recover INR 500 because part of the bill (INR 100) was an accommodation for A. B is only liable for the portion accepted for value.

- Option 3: 400

- Correct. As per the Negotiable Instruments Act, 1881, B can only be held liable for the amount accepted for value. Therefore, A can recover INR 400.

- Option 4: 100

- Incorrect. Since this amount was for A’s accommodation, it is unrecoverable from B.