Negotiable Instruments Act

Section 31 – The banker is bound to pay the cheques drawn by customer i,e, to honor his customer?s mandate
Section 10,85,89,128 – Grants protection to paying banker
Section 6 – Cheque is defined as bill of exchange. Protection to Paying Banker if payment is in due course
Section 10 – Payment In Due Course
Section 85 – Grants protection to a Paying banker, but it is not absolute Banker can seek protection under section 85 only where payment has been made to the holder, his servant or his agent, i.e. payment must be made in due course. Payment to a person who had nothing to do with the firm or a payment to an agent of the bank would not be payment in due course.
Section 89 – Payment of instrument on which alternation is not apparent The material alteration on both the cheques are visible and since they were not authenticated by the drawers initials, the payment made by the bank was not according to apparent tenor of the instrument and as such bank cannot claim protection under section 89 When the customers Signature on the cheque is forged there is no mandate to the bank to pay. As such banker is not entitled to debit the customers account on such forged cheque. In a Joint account if one of the signature is forged then there is no mandate and banker cannot make payment.
Section 244A – Indian companies Act : An official liquidator was required to open an account with a bank and pay therein moneys received by him in the course of the liquidation. Paying bank was bound to keep an ultraviolet ray lamp and to scrutinize the cheque under the said lamp.

Accounting & Finance for Banking

Principles & Practices of Banking Module E Pdf

Module E PPB ePDFs available in our android app. Get them all at

Accounting and Finance for Banking Module A Pdf

Accounting and finance for bankers all ePDFs are available in our an app. Get them all at

Accounting and Finance for Banking Module A Pdf

Accounting and finance for bankers all ePDFs are available in our an app. Get them all at
Learning Sessions
Btech, JAIIB CAIIB and a tutor. Have taken more than 900+ hours online classes with more than 1,25,000 students


Free Live Classes


More from author

What next after CAIIB? IIBF Certifications at a Glance

What next after CAIIB? 15 Certificate Exams in Finance and Banking useful for Bankers:: Introduction As per the IBA settlement, bankers who have passed JAIIB and CAIIB...

JAIIB Mega Mock Test for Free | Principles and Practices of Banking

ppb mock test:- Jaiib Exam 2020 dates will be announced soon for May 2020 by iibf. It is high time for preparing for all...

JAIIB Study Material Principles and Practices of Banking Live Class Previous Year Questions Jaiib Study Material PDF Notes Papers Mock Tests - In this post you can get JAIIB Study Material PDF files as shared by other...

Principles and Practices of Banking – PPB Most important Questions

Hello friends, today in this article by the learning sessions we will share important questions and memory called topics of PPB that is principles...