Multiple choice

Which of the following instruments cannot be endorsed in favour of a third party?

  1. A fixed deposit receipt

  2. A bank draft

  3. A promissory note

  4. Bill of exchange

  5. None of these
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A Correct answer
Explanation

Fixed deposit is not governed by Negotiable Instruments Act which deals with endorsement. Fixed deposit is payable to the depositor only either on maturity or on premature payment. As such, fixed deposit receipt cannot be endorsed in favour of a third party.

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