N. S. Toor Solutions for Chapter: Banking Law and Practice, Exercise 9: TEST YOUR SELF

Mr. Surinder Prakash, Director of M/s Surya Limited, having a current account with your branch, comes to you at $4.40$ p.m. for encashment of a cheque, issued by his colleague from saving bank account in his name, of $Rs.5000$. The branch is normally closed for customer service at $3$ p.m. He insists for payment urgently needed by him for proceeding the same evening to Kolkata?

A cheque in favour of Lord Krishna or order is presented for payment:

A bearer cheque of $Rs.500$ is presented for payment in the saving bank account of Mr. Tarsem Chander who maintains substantial balance. The cheque bears two endorsements one by its payee 'Balbir Singh' reading Balveer Singh' and other by the first endorsee Mr. Shiva Parshad, reading 'Shiv Prasad ':

Popular Bank receives a request in writing from Mr Sehwag claiming himself to be the payee of an order cheque of $Rs.30000$ issued by a current account holder, that he has lost the cheque while he was travelling in a local train. He requests for stopping the payment of the cheque. What the bank should do?

Your branch maintains a current account of Mr Bachan Lal, for which a minimum balance of Rs.3000 is to be maintained as per terms of the account opening form. The account shows a balance of Rs.14570, and a cheque is presented for Rs.14570 through clearing. The cheque is returned since the minimum balance condition is not complied with on payment of the cheque. Bachan Lal claims damages from the bank for wrongful dishonour by the bank?

A cheque has been issued in favour of A or order. At his request the drawer converts the order to bearer and puts his initials to authenticate the cancellation?

Your branch maintains a saving bank deposit account of Mr. Sham Kumar showing balance of Rs.7800. Two cheques of Rs.4000 each, favouring LIC of India are received through clearing house for payment of premia. Which of these will be paid?

A payment to be treated as a 'payment in due course', must satisfy the following conditions:

(a) payment to the person in possession of the cheque

(b) payment as per apparent tenor

(c) payment in goodfaith without negligence