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NEGOTIABLE INSTRUMENT ACT
#1
The NI Act,1881 lays down the law relating to payment of a customer's cheque by the banker and the protection available to a banker. the relationship between a banker and customer being debtor-creditor relationship the banker is bound to pay the cheques drawn by his customer.

section 10,85,85A,89 and 128 of the NI act 1881, grant protection to a paying banker.

payment in due course: payment in due course means payment in accordance with the apparent tenor of the instrument in good faith and without negligence to any person in possession thereof under circumtances which does not afford a reasonable ground for believing that he is not entitled to receive payment of the amount therein mentioned.

Section 85 of the NI act 1881 grants protection to a banker on his making payment of a cheque.
under this act
1. where a cheque payable to order purports to be endorsed by or on behalf of the payee, the drawee is discharged by payment in due course.

2. where a cheque is originally expressed to be payable to bearer, the drawee is discharged by payment in due course to the bearer thereof,not withstanding any endorsement whether in full or in blank.

Section 89 of the NI act states the effect of making payment on instrument on which alteration is not apparent.

liability of paying banker when customer's signature on the cheque is forged comes under section 128 of NI act.
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