Q. A cheque for Rs 500/- is issued by the drawer leaving space before the amount in words &
figures. Payee of the cheque changed the amount to Rs 5500/- . Cheque is presented for
payment and honoured by you. Please justify your action.
Answer In this case, the amount of the cheque has been changed which is a material alteration. Therefore, it requires drawer authentication. It also appears from the case that the payee had been to able to make such change due to negligence of the drawer in writing the cheque and that the material alteration may not be apparently clear. Under Sec 89 of NI act statutory protection is available to the paying banker in case of payment of cheques which have been materially altered provided the alteration is not apparently clear and payment is made in due course. In the present case, both the conditions appear to be fulfilled as there is no ground to believe that payment has not been made in due course. Therefore, paying banker can seek protection under the said act.
Answer In this case, the amount of the cheque has been changed which is a material alteration. Therefore, it requires drawer authentication. It also appears from the case that the payee had been to able to make such change due to negligence of the drawer in writing the cheque and that the material alteration may not be apparently clear. Under Sec 89 of NI act statutory protection is available to the paying banker in case of payment of cheques which have been materially altered provided the alteration is not apparently clear and payment is made in due course. In the present case, both the conditions appear to be fulfilled as there is no ground to believe that payment has not been made in due course. Therefore, paying banker can seek protection under the said act.
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