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PAYMENT AND COLLECTION OF CHEQUES
What is a cheque as defined under the Negotiable Instruments Act, 1881?
A cheque is a bill of exchange drawn on a specified banker and payable on demand. It must be signed by the drawer and contain an unconditional order to pay a certain sum of money.
What is the meaning of 'payment in due course' under the NI Act?
Payment made in good faith without negligence to rightful holder.
What is the statutory period for presenting a cheque for payment in India?
A cheque is valid for 3 months from the date of issue as per RBI guidelines. After this period, it becomes stale and the bank is not obligated to honor it.
What is the liability of a banker who pays a cheque bearing a forged endorsement?
Banker is liable as no protection exists for forged endorsements.
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