Liability of the Paying Bank – Section 31
According to Section 19. of the NI Act 1889, A promissory note or bill of exchange, in which no time for payment is specified, and a cheque, are payable on demand. Section 31 of the Negotiable Instruments Act, 1881 covers the liability of the drawee of a cheque. The section states that the drawee of…
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General and special crossing of cheques
Crossing a cheque gives financial institution-specific instructions on how to handle cash. Since Crossed Cheques can only be paid through a bank account. When simply two parallel transverse lines either with or without any words appearing on the face of a cheque, that cheque is called a crossed cheque. Normally cheques are crossed on the…
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Some Notable Cases Pertaining to the PMLA Act: Insights for Banking and Legal Enthusiasts
The Prevention of Money Laundering Act (PMLA) has been a powerful tool in combating financial crimes in India. Several landmark cases have helped shape the interpretation and enforcement of this legislation. This article highlights some crucial cases that put a spotlight on the complexities and evolving jurisprudence around PMLA. 1. Vijay Madanlal Choudhury v. Union…
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Understanding some important terms related to bills of exchange
A Bill of exchange is a written, unconditional order by one party (the drawer) to another party (the drawee) to pay a specified sum of money to a third party (the payee) at a predetermined date or on demand. The bill of exchange serves as a promise to pay and acts as a credit instrument,…
Read article What is a forged instrument? (Cheque/bill/Promissory note)
A negotiable instrument like a cheque, bill of exchange, or promissory note is called a forged instrument when forgery takes place in the signature of the drawer, the signature of the endorser, alteration in name of the payee, alteration in amount, alteration in date, etc. If the forged endorsement is a nullity, then it will…
Protection available to Collecting banker and responsibility of collecting banker
A banker collects a cheque for his customer in the capacity of an “agent for collection”, the banker collects the cheque on behalf of his customer, which also when presented to him. If a customer gives an open cheque i.e. a cheque uncrossed, the banker has to cross the cheque before it is sent for…
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