BANKING AFFAIRS

Detailed explanation-1: -In the case of an order cheque, this section implies that the payment must be in due course; otherwise, the banker will be deprived of statutory protection, and the banker must confirm the endorsements are regular.

Detailed explanation-2: -(1) ]Where a cheque payable to order purports to be indorsed by or on behalf of the payee, the drawee is discharged by payment in due course.

Detailed explanation-3: -Negotiation by indorsement.-Subject to the provisions of section 58, a promissory note, bill of exchange or cheque 1[payable to order], is negotiable by the holder by indorsement and delivery thereof.

Detailed explanation-4: -The NI Act provides protection under Section 131 to the collecting banker in this respect provided the following conditions are satisfied: 1. The protection under the law is available only if he collects a crossed cheque for collection. No protection is available for uncrossed or open cheques.

Detailed explanation-5: -[(2) Where a cheque is originally expressed to be payable to bearer, the drawee is discharged by payment in due course to the bearer thereof, notwithstanding any endorsement whether in full or in blank appearing thereon, and notwithstanding that any such endorsement purports to restrict or exclude further negotiation.]