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      Question

      The presumption that the holder of a negotiable

      instrument is a holder in due course arises under which clause of Section 118?
      A Clause (a) - of consideration Correct Answer Incorrect Answer
      B Clause (b) - as to date Correct Answer Incorrect Answer
      C Clause (e) - as to order of indorsements Correct Answer Incorrect Answer
      D Clause (f) - as to stamp Correct Answer Incorrect Answer
      E Clause (g) - that holder is a holder in due course Correct Answer Incorrect Answer

      Solution

      Section 118(g) provides the presumption that the holder of a negotiable instrument is a holder in due course. However, the proviso shifts the burden onto the holder to prove he is a holder in due course where the instrument was obtained by an offence, fraud, or for unlawful consideration. The other presumptions in Section 118 cover consideration (a), date (b), time of acceptance (c), time of transfer (d), order of indorsements (e), and stamp (f).

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