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    Question

    The maker, acceptor or indorser respectively of a negotiable instrument is discharged from liability by

    I.        Cancellation

    II.        Release

    III.        Payment

    A Only III Correct Answer Incorrect Answer
    B Both I and II Correct Answer Incorrect Answer
    C Both II and III Correct Answer Incorrect Answer
    D All I, II, III Correct Answer Incorrect Answer

    Solution

    Section 82 of Negotiable Instrument Act - Discharge from liability.—The maker, acceptor or indorser respectively of a negotiable instrument is discharged from liability thereon— (a) by cancellation.—to a holder thereof who cancels such acceptor's or indorser’s name with intent to discharge him, and to all parties claiming under such holder; (b) by release.—to a holder thereof who otherwise discharges such maker, acceptor or indorser, and to all parties deriving title under such holder after notice of such discharge; (c) by payment.—to all parties thereto, if the instrument is payable to bearer, or has been indorsed in blank, and such maker, acceptor or indorser makes payment in due course of the amount due thereon.

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