(A) A Cheque Which Had Originally Been Crossed Is Presented To You For Payment at The Counter Bearing The Remark "Crossing Cancelled" Below The Crossing Under The Drawer's Initials
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The document contains solutions to problems regarding cheque payments.
Problem 1 discusses a crossed cheque that was altered to say "Crossing cancelled" below the crossing with only the drawer's initials. Payment would not be made as the material alteration requires the drawer's full signature.
Problem 2 involves a cheque payable to a minor that was endorsed and presented by a third party. Payment would be made since a minor can endorse but is not liable for the payment.
Problem 3 describes a customer with Rs. 2,000 balance and three simultaneously presented cheques totaling more than the balance. The largest cheque would be paid first, then the smallest.
The document contains solutions to problems regarding cheque payments.
Problem 1 discusses a crossed cheque that was altered to say "Crossing cancelled" below the crossing with only the drawer's initials. Payment would not be made as the material alteration requires the drawer's full signature.
Problem 2 involves a cheque payable to a minor that was endorsed and presented by a third party. Payment would be made since a minor can endorse but is not liable for the payment.
Problem 3 describes a customer with Rs. 2,000 balance and three simultaneously presented cheques totaling more than the balance. The largest cheque would be paid first, then the smallest.
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(A) A Cheque Which Had Originally Been Crossed Is Presented To You For Payment at The Counter Bearing The Remark "Crossing Cancelled" Below The Crossing Under The Drawer's Initials
The document contains solutions to problems regarding cheque payments.
Problem 1 discusses a crossed cheque that was altered to say "Crossing cancelled" below the crossing with only the drawer's initials. Payment would not be made as the material alteration requires the drawer's full signature.
Problem 2 involves a cheque payable to a minor that was endorsed and presented by a third party. Payment would be made since a minor can endorse but is not liable for the payment.
Problem 3 describes a customer with Rs. 2,000 balance and three simultaneously presented cheques totaling more than the balance. The largest cheque would be paid first, then the smallest.
crossed is presented to you for payment at the counter bearing the remark “Crossing cancelled” below the crossing under the drawer’s initials. Solution- • No, Payment will not be made. • In this case, the material of the cheque has been altered, as the remark changed to “Crossing Cancelled”. The material alteration is only possible when the cheque will contain drawer’s approval his/her full signature. • As paying banker I will not make the payment because the cheque is presented to me with only “drawer’s initials” Problem No 7
(b) An order cheque payable to a minor aged 17
years bearing his endorsement is presented to you for payment by a third party. Solution- • Yes, I will make the payment. • In this case, a cheque is presented to me by the third party with a minor endorsement. As a paying banker, I will make the payment because according to the section 26, minor can endorse but s/he cannot be held liable for this kind of payment. Problem No 7 (b) Acustomer has a credit balance of Rs. 2,000 in his current account at your branch, Three cheques for Rs. 1,000, Rs. 500 and Rs. 1,200 respectively are simultaneously presented for payment through clearing. Solution- • The cheque holds the biggest amount will be paid fast, after that the cheque with smallest amount will be paid because the customer’s credit balance is not sufficient to make payment all the three cheques. Besides, the three cheques are presented to me simultaneously. Problem No 7 • (d) A cheque is drawn payable to Ramakant Patel or order (the word bearer on the cheque form is crossed out and changed to order). At the request of the payee the word order is crossed out by the drawer under his initials. Should the cheque by considered payable to bearer? Solution- • No, the payment of the cheque is not possible because it is against section 87, the material alteration of cheques. Problem-8 • Your account holder finds, on scrutiny of the entries in his pass book, one entry of Rs. 10,000 representing payment of a cheque. According to him the cheque was for Rs. 1,000 only. On examination of the cheque under ultra violet machine by the bank, it is observed that the amount was altered from Rs. 1,000 to Rs. 10,000. Your customer demands refund of Rs. 9,000. Solution- • No, the refund of this cheque is not possible. As a paying banker, I am not liable to refund because I made the payment in due course.