A payee of a cheque of Rs.25000 endorses the cheque for Rs.16000 in favour of his elder son and Rs.9000 in favour of his younger son. Endorsement of an instrument transferring amount to more than one endorsees separately shall be

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	Valid
B	it is a partial endorsement
C	valid if not objected to by the bank
D	Invalid

Explanation:

Detailed explanation-1: -"For the purposes of Section 138 of the Negotiable Instruments Act, 1881, the cheque should be towards the discharge of either the whole debt or part of the debt. If the cheque is for more than the amount of the debt due, Section 138 cannot be attracted."

Detailed explanation-2: -There are three parties involved in a cheque transaction. The drawer is the person or organisation that issues the cheque, the drawee is the financial institution, and the payee is the person or organisation that receives the cheque.

Detailed explanation-3: -25. When day of maturity is a holiday.-When the day on which a promissory note or bill of exchange is at maturity is a public holiday, the instrument shall be deemed to be due on the next preceding business day.

Detailed explanation-4: –A banker who has in good faith and without negligence received payment for a customer of a cheque crossed generally or specially to himself shall not, in case the title to the cheque proves defective, incur any liability to the true owner of the cheque by reason only of having received such payment.

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