News Dishonor Of Cheque
Section 92 of the Negotiable Instruments Act states that:
“A promissory note, nib of telephone substitution or banking concern fit is said to last dishonored yesteryear non-payment when the maker of the Federal Reserve annotation too acceptor of the nib makes default inward payment.”
Dishonour of banking concern fit is an offence.
Section 138 of the Negotiable Instruments Act states that, H5N1 banker shall furnish the banking concern fit when the coin standing to the credit of the line of piece of job concern human relationship holder is insufficient to honour the cheque.
Dishonour of banking concern fit is a criminal offence. The drawer shall last deemed to induce got committed an offence too such offence volition last punishable alongside imprisonment too alongside fine.(imprisonment shall last extend 1 years or fine twice the total of the banking concern fit or both).
Provisions of department 138 of the Act are applicable entirely if -
(a) The banking concern fit is issued for discharge of a liability only. H5N1 banking concern fit given every bit gift volition non autumn inward this category.
(b) The banking concern fit is presented to the banking concern for payment inside half-dozen months or its specific validity period, whichever is earlier.
(c)The payee or holder inward due class has given observe demanding payment inside thirty days of the receiving data of dishonour every bit regarding the insufficiency of funds.
(d) The drawer does non brand payment inside thirty days of the receipt of the notice. The complaint tin last made entirely yesteryear the payee/holder inward due course, inside 1 month.
When banker shall reject the payment.
A banker volition last justified or leap to dishonour a banking concern fit inward the next cases if-
(1) The banking concern fit is undated.
(2) The banking concern fit is stale i.e. it has non been presented inside the validity menstruum of the cheque.
(3)The musical instrument is inchoate (unclear or unformed or tentative) or non complimentary from reasonable doubt.
(4)The banking concern fit is post-dated too presented for payment before its ostensible date.
(5) Authority of the banker to honour a banking concern fit of his client is determined yesteryear the observe of the drawer’s death, lunacy too insolvency. However, whatever payment made prior to the receipt of the observe of croak is valid.
(6) Bank receives observe inward honour of closure of the account.
(7) The banking concern fit contains fabric alterations, irregular signature of irregular endorsement.
(8) The client has countermanded payment.
(9) Any departure betwixt the total of banking concern fit inward words too inward figures.
(10) Any irregular endorsements.
(11) The banking concern fit is mutilated.
(12) Signature of the drawer has been forged.