Assertion (A): A banker who collects a cheque crossed 'Not Negotiable' for a customer who has a defective title is protected under Section 131 of the Negotiable Instruments Act, provided the banker acted in good faith and without negligence. Reason (R): The 'Not Negotiable' crossing does not prohibit the transferability of the cheque but only removes the core characteristic of negotiability, meaning the transferee cannot obtain a better title than the transferor.

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Law · Negotiable Instruments Act, 1881

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Answer 1

Both (A) and (R) are true, and (R) is the correct explanation of (A).

Answer 2

Both (A) and (R) are true, but (R) is not the correct explanation of (A).

Answer 3

(A) is true, but (R) is false.

Answer 4

(A) is false, but (R) is true.

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